House of Representatives
13 November 1951

20th Parliament · 1st Session

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

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– I wish to ask the Prime Minister a question in relation to the proposed sale by the Joint Coa! Board of certain of its assets, which were’ intended for lease or hire, to private coal-mining companies. Will the right honorable gentleman inform me whether the report to that effect is correct! Will he state whether the Government of New South Wales has joined in that proposal as a matter of policy under the Coal Industry Act ? Will the Parliament be given an opportunity to express its views upon such a proposal before it is given effect?

Prime Minister · KOOYONG, VICTORIA · LP

– I shall ask the Minister for National Development to prepare a full statement covering the points that have been raised by the right honorable gentleman. If that statement is ready by to-morrow, I shall read it to the House.

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– In directing this question to the Minister for Commerce and Agriculture, I refer him to several statements that were made by him as long ago as last July to the effect that it wag proposed to pay almost immediately - I think that those were the exact words that were used by him - to those persons who bad left the wool industry their share of profits from the activities of the Joint Organization. I also remind him that, a few weeks later, the Prime Minister made a statement in which he confirmed that announcement. Will the honorable gentleman now inform me how much longer it will be before those payments will be made? If there is likely to be any delay in finally winding up the Joint Organization scheme with the other governments that have been parties to it,, will the Australian Government make a substantial interim payment to growers? Will the Minister consider that matter as urgent, because of the growing feeling in the wool industry and in other primary industries that once any government becomes a trustee for growers’ money, it is only with the greatest reluctance, and after long delays, that it finally disgorges such funds?

Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

– I think that the latter part of the honorable gentleman’s question must relate to the activities of other governments and not to of the present Government. The policy of this Government, of course, is to acknowledge that profits that have accrued to the Joint Organization are the property of Australian wool-growers, and will he distributed to them. Four or five months ago I announced with the authority of the Government, that it would make arrangements on the earliest occasion practicable to pay to those growers who had left the wool industry before the recent .boom in prices occurred, their full share of the ‘profits. As the Joint Organization has almost completed its activities, the Government will announce at an early date the conditions of, and the arrangements for, the payment of the profits to all growers who are entitled to participate in thom. One factor is causing some delay in that matter. A case is now before the High Court of Australia, one judgment in which could affect to some degree the entitlement of some people to those profits. I refer to the Poulton case. The Government is now inquiring from its legal advisers whether it could properly proceed to make arrangements for distribution before that case has been decided. There will be no avoidable delay.

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– Oan the Prime Minister say whether the knighthood recently received by tho Governor-General was conferred as the result of a recommendation by the Government? If so, was the recommendation made prior or subsequent to His Excellency’s approval of the Government’s request for a double dissolution of the Parliament?


– The awarding of honours by the Commonwealth is always the subject of communications between Hia Majesty the King and the Prime Minister. Such communications occurred in this instance. They occurred quite recently, and I should like to congratulate the Governor-General upon the honour that has been bestowed upon him.


– Does the Prime Minister consider that a breach of etiquette was committed in the Australian Capital Territory yesterday by a certain high authority in describing His

Excellency the Governor-General, Sir William McKell, G.C.M.G. as a “cow” and stating that he had been taken for a trip towards the moon ?


– I cannot profess to understand the question.

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– Has the Minister for Immigration completed a new immigration agreement with the British Government, to operate for the next three years? If so, will he give to the House an outline of the terms of the agreement? Will he also make every effort to persuade the newly elected Government of the United Kingdom to co-operate enthusiastically in promoting emigration to Australia both as a means of satisfying our demand for a higher proportion of British settlers, and as a part of a plan to disperse Britain’s surplus population amongst the Dominions ?

Minister for Immigration · HIGGINS, VICTORIA · LP

– Negotiations were proceeding for some time prior to the dissolution of the British Parliament and had reached the point at which it was believed possible to make some announcement. Such an announcement would have been made ere now had an election not intervened. The Government of the United Kingdom thought it proper that no public announcement should be made until the elections had been held. I shall now ascertain whether a formal statement may be made and whether the details which the honorable member seeks may be supplied to him. We, as a Government, desire to attract to Australia as many British settlers as we can get, and it is encouraging to know that the previous Government of the United Kingdom was prepared to renew arrangements designed to achieve that purpose. I have no doubt whatever that we -shall obtain the same co-operation from the present Government. Australia has been fortunate in recent years in having been able to attract a very much greater number of British immigrants than have other parts of the British Commonwealth, and we certainly hope that the flow will continue in the years ahead.


– In view of the statement by the Minister for Immigration that it is the policy of the Government to introduce many more British immigrants into Australia, will the Minister inform the House whether he has given consideration to the fact that the New England tableland was specially selected by the British Government in 1928 for the purpose of the settlement of British immigrants under the immigration agreement? In view of representations that have been made on behalf of the Armidale and District Chamber of Commerce and the civic authorities, that a hostel should be established in that centre for the purpose of receiving immigrants who could be employed on various works, including a hydro-electricity scheme that is at present under consideration, will the Minister ascertain whether it is possible to establish a centre at Armidale from which immigrants could be sent to employment in a climate and a territory that :i re especially suitable for immigrants from the Old Country?


– I was not aware of the examination said to have been made in the New England district some time ago, but it may be that details of it are in the possession of the Immigration Department. As the honorable member may know from earlier statements, the Government has found it necessary to restrict its construction programme, and this lias had the effect of reducing the number of hostels that may be established in country areas. I hope, however, that local authorities and public-spirited citizens will not wait for governments to act before they themselves encourage the settlement of immigrants in their districts. In other parts of Australia much is being done to attract British immigrants, in particular by making arrangements to place them with employers, and to find accommodation for them. I hope that it will be found practicable to do the same in the Armidale district. The Government wishes to have immigrants settled in rural areas, and will co-operate with local authorities and rural interests in order to bring this about.

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– I direct the attention of the Prime Minister to the disastrous bush fires in New South Wales, particularly in the north-western area, where large numbers of stock and many miles of fencing have been destroyed. Among the people now suffering those losses are many who also suffered considerable loss of stock and fencing during the heavy floods of last year. In view of the shortage of locally produced fencing material and the inordinate cost of imported fencing material, will the Government co-operate with the Government of New South Wales in rendering financial assistance to those persons, will it consider subsidizing the importation of fencing material so as to reduce the cost to the victims of bush fires, and will it appoint a representative to co-operate with the New South Wales Bush Fire Relief Committee as was done in relation to flood relief last year ?


– I shall have the proposals that the honorable member has made in respect of this very grievous matter investigated by the Cabinet.

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– Is the Treasurer aware that, as a result of loan cuts, Victoria will go short of power next winter while £10,000,000 worth of new imported power machinery lies idle at Yallourn, and that there will be no channels to carry water from the Eildon Dam to irrigation areas? In the light of these circumstances is he, as the chairman of the Loan Council, prepared to call an immediate meeting of that body with a view to having a more careful evaluation made of the plight of the States?


– All the factors that the honorable member has mentioned were carefully analysed and considered at the meeting of the Loan Council that decided upon a loan programme of £225,000,000. No good purpose would be served by giving effect to the suggestion that he has made.


– The honorable member for Melbourne Ports stated that Melbourne will suffer electricity restrictions during the coming winter because of the policy of the Australian Loan Council. As an ex-Minister in charge of Electrical Undertakings in Victoria, will the Minister for the Interior inform the House whether that statement is correct or not?


– As far as I know, the statement is not true. The original programme of electricity undertakings in Victoria for the winter of 1952 relied on the capacity of the big 50 megawatt power station of the Melbourne City Council at Spencer-street, and No 4 power station at Kiewa, to make good the extra demand that will be placed on the system during the winter of 1952. Therefore, as neither No. 4 power station at Kiewa nor the Melbourne City Council’s generating station at Spencer-street, has been affected in any way, as far as I know, up to the present, I cannot understand why the honorable member for Melbourne Ports should have framed his question in that way. As a matter of fact, work on the No. 4 power station at Kiewa is being proceeded with much faster than before. Work on neither of those two stations has been affected by the decisions of the Loan Council, not of the Government, as honorable members opposite allege. If additional restrictions on the use of electricity are imposed in Melbourne next winter because the 50- megawatt station that the Melbourne City Council is building at Spencer-street has not been finished, the fault will be attributable not to the Loan Council but to the present Victorian Government because of its inactivity over a period of four months, during which weeds, grass, and stagnant pools of water took control in the area concerned. That situation was due to a political strike which the Victorian Government could have settled. Therefore, responsibility for electricity cuts, so far as I know, will rest on the Victorian Government and not on the Loan. Council.

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– In view of the fact that pensions payments at the Christmas period this year will fall in the week between Christmas and New Year, during which there will be several holidays, will the Minister for Social Services consider having arrangements made for pensions that fall due in that week to be paid at an earlier date so that pensioners may receive their pensions before the Christmas holidays?

Minister for Social Services · DENISON, TASMANIA · LP

– I shall examine the honorable member’s proposal, but I point out that I alone cannot make the decision. The Postal Department, which pays most pensions, must be consulted.

I shall ascertain what can be done about the suggestion.

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– I ask the PostmasterGeneral whether it is a fact that, notwithstanding the large increases of postal and telegraph charges that came into effect in July, the revenue of the Postal Department for the first three months of the current financial year has been much below expectations. If it is a fact, has the Government any plans to give a stimulus to postal and telegraph business in order that the revenue target of £62,500,000 that has been set for the present year can be achieved?

Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– It is not a fact that the revenue of the Postal Department is much below expectations as the honorable member has suggested. It has increased almost as much as was anticipated when the increased charges were announced. Although there has been a reduction of revenue in certain branches of the department’s activities, there has been an increase in other branches. Telegraph revenue has fallen off, for example, because more persons than formerly are sending letters by air mail instead of using the telegraph service. Trunk line revenue has remained very much the same as it was previously although there may have been a slight reduction. The overall position is very much the same as was anticipated.


– Will the PostmasterGeneral consider initiating discussions with representatives of the United Kingdom Government regarding the ‘postal rates that are charged for individual and bulk food parcels sent to the United Kingdom? I realize that such parcels are subject to concessional charges at present, but many persons believe that greater concessions would encourage the sending of a larger volume of food parcels to help the people of Great Britain at this difficult period. If such discussions as I have proposed be held, will the Postmaster-General, when releasing information in relation to the outcome, also appeal to Australians to reestablish the activities of all the organizations that did so much good in the past by sending food to Britain?


– Although the matter raised by the honorable member has been discussed from time to time with the Postmaster-General’s Department of the United Kingdom, I cannot foreshadow any lessening of the charges. At present, food parcels that are despatched from Australia to Great Britain are carried at a loss by the Postal Departments of both countries. In view also of the fact that shipping charges are constantly rising, I do not hold out very much hope that the rates will be reduced.

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– Will the Minister for the Interior inform the House whether it is a fact that only £4,250,000 has been allocated by the Australian Government to meet its limited commitments for war service land settlement in the three principal States, as well as its total commitments in the three agent States of Western Australia, South Australia and Tasmania in connexion with which it assumes full responsibility? Will the Minister say whether it is a fact that during this financial year the Government of New South Wales intends to expend on the land settlement of ex-servicemen as much money as the Commonwealth intends to expend to discharge the whole of its responsibilities in this connexion, and that New South Wales had planned to expend more money for this purpose had sufficient loan funds been available? If the Australian Government is genuine in this matter, why does it intend to expend only a relatively small amount on it compared with what New South Wales is expending? Why is it thatNew South Wales and Victoria, pursuant to their own legislation, between them have had to provide from loan funds 75 per cent, of the farms that have been allotted to ex-servicemen?


– The honorable member’s question is very easy to answer. I know, and every other honorable member of this House knows, the purpose that lies behind it. It is perfectly clear that the population and the number of ex-servicemen applicants in the principal States of Queensland, New South Wales and Victoria are greater than in the agent States of Tasmania, Western Australia and South Australia. The Commonwealth has allotted £4,125,000- not £4,000,000- for the land settlement of ex-servicemen in the agent States, for which the Commonwealth is responsible. At a conference of Ministers and representatives from those three States that was held at Canberra on the 29th October it was pointed out that approximately one-half of the exservicemen applicants had been settled, and that many more farms would be opened up for settlement - not merely transferred from their present owners to exservicemen - in Western Australia, and particularly in Tasmania. They were perfectly satisfied with the progress that had been made. I cannot see the relevance of comparing the expected expenditure by the Commonwealth during this financial year with the expected expenditure by New South Wales. The Commonwealth has no control over the amounts that are allocated to New South Wales, Victoria and Queensland, but it does control allocations to the agent States. The amount allocated to them for this financial year might be about £250,000 short of what they consider to be their estimated requirements. If this proves to be correct, I hope that further assistance will be provided by the Commonwealth. There has been a. definite attempt to convey the impression that the agent States and the Commonwealth are not playing their part in the scheme for the land settlement of ex-servicemen. In point of fact, they are doing a very much better job than is New South Wales, but are not making so much fuss about it.

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– The question that ] address to the Minister for Commerce and Agriculture, refers to the bushfires in the north-western part of New South Wales. In those areas, particularly the Baradine district, of which I can speak from personal knowledge, wheat harvesting has commenced, and a considerable quantity of wheat that is standing in the paddocks is being menaced by bushfires. It cannot be moved from the paddocks because the silos have not yet. been opened. Will the Minister confer with the Australian Wheat Board with the object of having silos opened as early as possible in those parts of New South Wales in which, for the reasons that I have given, it is necessary for that to be done?


– Neither this Government nor the Australian Wheat Board can issue instructions for silos to be opened earlier than is usual. However, in view of what the honorable gentleman has said, I shall ask the Australian Wheat Board to make appropriate representations to the State instrumentality that controls silos in New South Wales.

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– Last Thursday, I placed upon the notice-paper a question directed to the Minister for Defence. I have studied the document that has been circulated to honorable members, in which are printed questions asked upon notice and answers given to such questions. The document is admirably suited for the purposes for which it is designed, but I cannot find in it any reference to the question to which I have referred or to a reply to it. Will the Minister for Defence explain why my question and a reply to it have been omitted from the document ?

Minister for Defence · WAKEFIELD, SOUTH AUSTRALIA · LP

– I shall cause the right honorable gentleman’s complaint to be investigated.

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– Does the Prime Minister agree that it is desirable to establish reserves of funds overseas when the prices of our exports are high, in order that such reserves shall bc available for us to draw upon when prices fall? In other words, does he agree that in prosperous days the nation should live within its income, and that if it fails to do so disaster will ensue? If the right honorable gentleman be of that opinion, will he say what action the Government intends to take to obtain for Australia a favorable balance of trade in place of the present ever-increasing adverse balance, which, for the last three months, was over £110,000,000?


– I beg to be excused from giving the simple answer “Yes “ or “ No “ to the rather complex economic question that the honorable gentleman has put to me. The balance of trade of this country is occupying the close attention of the Government, and especially of the Treasurer and myself.

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– Is the Prime Minister aware of moves by certain Australian newspaper interests towards the syndication of press reports, not only from the parliamentary press gallery, but also in general news channels throughout the Commonwealth? Does the right honorable gentleman believe that such syndication would be highly undesirable from the standpoint of the general public interest?


– I gather from a communication that I received recently that the matter of news syndication i« about to engage, or perhaps is now actually engaging, the attention of one of the industrial tribunals that deals with the salaries of certain journalists. Under those circumstances, I think it would be undesirable for me to offer any comment upon it.

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– Has the Minister for the Army made any further inquiries concerning allegations of neglect, disrepair and non-use of Mount Martha House, Mornington? If he has not, will he concede that only twelve persons now live in the SO rooms which formerly accommodated 125? Is it not correct that the fourteen bungalows at the rear of the main building are deserted and dust-filled, and that windows and doors are falling into a state of general decrepitude? It is also not a fact that grass, weeds and stagnant water still cover the tennis courts, bowling greens and certain areas adjacent to the main building? Has not the Department of the Army recently paid for the accommodation of between 40 and 50 officers at the Royal Hotel, Mornington, and are not 30 officers accommodated at that hotel at the present time? Could not Mount Martha House be cleaned up and repaired, so that accommodation for such officers could be provided at a considerable saving of unnecessary expense to the people? Will the Minister inform me whether negotiations are proceeding for the purchase of Dava Lodge, Mornington ? Can he also state the number of occupants of Summerleigh Lodge, Healesville, and the purchase price that was paid for the property ?

Minister for the Army · MORETON, QUEENSLAND · LP

– I shall first answer the last question asked by the honorable member. The purchase of Dava Lodge has never been considered by my department. I have made that statement on several occasions, but no one seems to have thought it worthy of publication. Naturally, I am not conversant with the state of repair of every building owned by the Department of the Army, but immediately I saw press statements concerning Mount Martha House, I discussed the matter with officers of my department. I then caused immediate inquiries to be made, as a result of which [ decided not to accept the advice of my officers only; I sought also the advice of health authorities in the Mornington Peninsula area, who have assured me without reservation that the statement that water is lying about and is dangerous to public health is untrue. I repeat that that advice was received from health authorities and not from officers of my department. The fact that the accommodation available at Mount Martha House is not as I or any one else would like it to be arises from the difficulties that are caused by our having a growing Army and limited supplies of materials and man-power with which to construct new buildings or to repair old ones. However, the requisite funds are available for the repair of Mount Martha House, and representations have been made to the appropriate department to have the work carried out. I hope that something further can be done at an early date. Everything has been done and will continue to be done within the limited construction resources of my department. Summerleigh Lodge, Healesville, is required immediately to meet a very urgent and important development in Army administration. I refer to tropical medicine and tropical hygiene, and the training of individual members of the Army in their own protection when, fighting in the tropics or in areas where extreme climatical conditions are experienced. The honorable member doubtless is’ aware that the Eighth Division in Korea is at the moment materially infected by a mysterious tropical fever. One hundred and twenty-five members of the division, including two members of the Australian forces, are in hospital, and unfortunately, many members of the division have died from the disease. The work that is being done at Summerleigh Lodge is designed to meet such problems and to protect the lives of members of our Services. I inform the honorable member that the Department of the Army intends to go ahead with such urgent and important work despite the nature of any comments that he may make.

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– Can the Minister for Civil Aviation say whether an order has been placed with a view to providing any of the government airlines, particularly Trans-Australia Airlines, with jet-propelled or turbo-jet aircraft, so that those airlines will not be allowed to fall behind modern standards? If an order has not been placed for aircraft of that type, which are available from nondollar sources, is the placing of an order in the near future contemplated? Is it a fact that jet-propelled or turbo-jet aircraft were available to the Government under option some time ago, but the option was allowed to lapse, the airlines thus being placed in the disadvantageous and unsatisfactory position of not knowing when they would be likely to obtain delivery of aircraft which they might order in the future.


– No order has been placed by Trans-Australia Airlines or any other airline for jet or turbo-jet commercial aircraft.


– As Trans-Australia Airlines is a progressive organization, will the Minister for Civil Aviation say why an order has not been placed for turbo-jet aircraft such as the Viscount, which is manufactured in Great Britain? Is it because privately owned airlines are not prepared to invest additional capital in the purchase of modern aircraft?


– The ordering of aeroplanes by Trans-Australia Airlines or by private companies is a matter for decision by the management concerned. Trans-Australia Airlines has been conducting certain negotiations with the manufacturers of turbo-jet aircraft in Great Britain, but, so far, finality has not been reached.

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– I direct to the Prime Minister a question that relates to a recent statement which implied that practically all the powerful trade unions which had been the backbone of the Labour party, were now led by Communists and no longer gave allegiance to Labour. I also refer to another statement which implied that the former national secretary of the Federated Ironworkers Association of Australia is Stalin’s No. 1 man in the Pacific area, and that the present national secretary of that trade union is his deputy in Australia. In view of the fact that the Leader of the Opposition, in conjunction with other interests, so confused the people that they failed to carry the recent referendum proposals, which would have armed this Parliament with the constitutional power to deal with such dangerous agents in Australia. Can the Prime Minister state whether the Leader of the Opposition has made any suggestion to the Government, or perhaps to the trade union movement, about how such known Communists can be removed from the offices they now hold in that movement, or whether the legal advisers to the Commonwealth


– Order ! The Prime Minister is not answerable for the trade union movement.


– My question is, whether the Government’s legal advisers have yet recommended any action that might be taken against such Communists, under existing Commonwealth law or within the Constitution as it is now written ?


– That matter is always under investigation. We are in constant touch with legal authorities, and propose to exercise to the fullest possible degree such powers as we have.

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– I desire to ask the Minister for Commerce and Agriculture a question which arises out of his recent statement that beef production could be increased by growers rather than by the Government. Will the Minister consider recommending to Cabinet the lifting of all controls on the marketing of hides and beef by-products so that a genuine incentive may be given to beef producers that would have the dual result of fostering the breeding of beef cattle and eventually of making beef cheaper to the community ?


– Any Commonwealth authority that is concerned with the control of hides that was established as the outcome of an arrangement with the States, which desired to enforce the national policy of price fixation in relation to hides. Hides are generally sold at auction and the price obtained for those that are exported is different from that obtained for those that remain in Australia. Therefore, a system of price equalization is inevitable if a most serious injustice is not to be inflicted on people who have to sell on the local market at the lower price while exporters receive the very much higher export value. The object of the Australian Government is to ensure the equalization of the prices obtained by all sellers of hides. While State price fixation applies to hides J have no doubt that the Commonwealth will play a part in bringing about that equalization.

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– In view of the Postmaster-General’s promise to investigate the sale of the Macquarie broadcasting network, will he say whether he was the guest of honour at a dinner at Romano’s restaurant in Sydney early in August last when the announcement was first made that the Denison interests had sold the network? Was he informed before the dinner of the identity of the interests that had made the purchase? Was he aware that a member of the Australian Broadcasting Control Board was involved in the transaction? Did he indicate in any way his disapproval of the transaction when he was invited to speak at the dinner?


– I was a guest at a dinner given by a gentleman, and I was informed during the course of the dinner of a transaction which involved the sale of the Denison interests, but I was very definitely informed that those interests were being sold complete to Australian buyers. That was the information given to me, but it was completely incorrect.

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– I desire to ask a question of the Prime Minister, and I preface it by mentioning that I was one of a party of members of the Parliament who visited central Australia during the week-end. I was very impressed by what T saw and I believe that every member of the Parliament should make a similar visit. I take this opportunity to express to the Minister for the Interior and his departmental officers my appreciation of the way in which the trip was organized. Seeing that those who made the trip are bound to secrecy, will the Prime Minister emulate the Prime Minister of Great Britain, and hold a secret sitting of the Parliament at which a full and frank discussion of Australia’s defences and of the international situation may take place? If such a sitting cannot be held during the present sessional period, will he arrange for one to be held after he returns from abroad?


– I shall consider the honorable member’s proposal. I point out, however, that I, in common with other honorable members who were here during the last Parliament, cannot forget the na’ive observation of one honorable member, “I think it is high time that we had a secret sitting; otherwise, I shall have nothing to talk about at the bowling club “.

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Prime Minister · Kooyong · LP

by leave - The matter of parliamentary and ministerial allowances was last before the Parliament in 1947. It is common knowledge that since then there have been sharp and progressive increases of living costs which have been reflected in the cost of living index and consequential adjustments to the basic wage. These cost increases have led the State parliaments, from time to time, in the intervening period, to make what they have regarded as appropriate adjustments of their parliamentary and ministerial allowances. Members of this Parliament have not concealed the fact that in recent years they have experienced very real difficulties in trying to meet the expenses of adequate representation of their constituents from their present remuneration.

The Constitution of the Commonwealth imposes on this Parliament the responsibility for determining the allowances that shall be payable to Ministers and members. In the past this decision has been taken without reference of the matter to any body of persons outside the Parliament for either advice or recommendation. The fact that members of the Parliament have been thus able to increase their remuneration by their own act and decision has caused much criticism among many members of the public. Some State Parliaments in Australia, and the Parliament of New Zealand, have in recent years adopted the course of placing the matter of their allowances before an independent and impartial body. This policy appears to have been widely approved by many who. while opposed to allowing members of Parliament to fix their own remuneration, have no desire to see them given anything less than an adequate and proper remuneration for the public service that they render and the expenses that they necessarily incur.

My Government has decided to follow a similar course. We have requested three representative and responsible men to conduct an independent, impartial inquiry into the problem and to make recommendations to us. The Chairman of this Committee of Inquiry is the Honorable Mr. Justice Nicholas, formerly Chief Judge in Equity in New South Wales. The other members are Mr. H. F. Richardson, who, in addition to having had an extensive commercial experience, gave valuable service in an honorary capacity (luring the war years as Deputy Chairman of the Board of Business Management, in the Defence Division, Department of the Treasury, and later as Deputy Chairman of the Commonwealth Disposals Commission, and Mr. H. W. Buckley, a leading accountant and a former member of the Commonwealth Taxation Advisory Committee. The Government expresses to these gentlemen its appreciation of their willingness to make themselves available for this purpose.

Their terms of reference are as follows : - -

  1. To inquire into and report upon -

    1. the salaries and allowances payable to the Ministers of State of the Commonwealth in pursuance of the Ministers of State Act 1935- 1951 ;
    2. the allowances payable under the Parliamentary Allowances Act 1920-1947.
  2. If it be reported that it is necessary or desirable to alter such salaries and allowances or any of them, then to recommend the nature and extent of the alterations that should be made.
  3. Generally, to inquire into and report upon any other matters arising out of or affecting the premises which may come to the notice of the Committee in the course of its inquiries and which it may consider should be reported upon.

These follow closely the terms of reference of the inquiry that was conducted in New Zealand. The first meeting of the committee is being held to-day, and it will be for the members of it themselves to determine their own procedures, methods of inquiry, places of meeting, &c. I am sure that all members of the Parliament will welcome the holding of such an inquiry.

There are many grave misapprehensions about ministerial and parliamentary salaries and privileges. The Government’s approach is direct and simple. Public office should not be a means of private profit; but it should not involve such loss or financial embarrassment as would make it difficult for people without private means to enter the Parliament or to sit in a Cabinet. Nothing but good can come from a full and objective examination of the facts.

Leader of the Opposition · Barton

by leave - It is only right that I, as Leader of the Opposition, should say a word about the course that the Government has taken in this matter. In my view it has taken the proper course. It is well known, as the Prime Minister (Mr. Menzies) has pointed out, that since the salaries of Ministers of State and of honorable members were fixed some years ago there has been a very substantial increase of living costs. However, in view of the matters that the Prime Minister has referred to, it is of public concern and interest that the relevant facts should as far as possible be placed beyond dispute. That is why the appointment of this independent committee will prove very valuable indeed and will help those who are responsible to come to a fair and just decision.

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Reports on Items.


– I lay on the table reports of the Tariff Board on the following subjects: -

Balls of Ferrous andNon-Ferrous Metals for Ball-Bearings.

Fish and Fish Products

Fork Lift Trucks; Elevating Platform Trucks of types used in Factories, Warehouses and Wharfs.

Magnetos and Magneto Parts

Pipe Cutters and Bolt Cutters

Record Changing Devices

Woven Upholstery and Woven Furnishing Fabrics

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Sydney “ Sun “ Newspaper Article


.- I move -

That the following report be agreed to: -

Report of the Committee of Privileges relating to an article appearing in the Sydney newspaper the Sun of the 2nd October. 1951.

I believe that the report of the Committee of Privileges expresses the views of the majority of honorable members. We need not waste the time of the House by holding a post-mortem on this subject. It is a matter which, properly, can be disposed of briefly. The article was most unfortunate, and I believe that honorable members will agree that it did not conform to the standard of journalism for which the writer is generally known. He has contributed to the journal in question some fine, constructive articles. However, for some reason or other, perhaps in a facetious mood, he wrote this article. The Committee of Privileges considers that certain statements in it constitute a breach of privilege. I agree entirely with that view.

The article at least gives the impression that when the terms of the budget were made known there was a mass movement on the part of honorable members from this House to buy certain articles that were available in the Parliamentary refreshment room and bar. That allegation was quite groundless. It may have been true - I do not know - in respect of a number of honorable members, but it could not be truthfully said to be a mass movement. To that degree the report was quite incorrect, lt is unfortunate that the committee has been obliged to find that the article, whilst not wholly untrue, was an exaggeration; and exaggeration is very difficult to define. I do not think that the writer was in a position to say that the things he reported did, in fact, occur. An honorable member might have been seen coming from the bar with a bottle of beer, but he would have been entitled to purchase it at the Parliamentary bar. That is an amenity that is made available to honorable members. However, no mass movement of that kind on the part of honorable members took place and nothing occurred that should have suggested such an atmosphere as the writer implied in his article. There seems to be an unfortunate trend in this country to regard politicians as fair game for criticism of this kind, and as a result the people as a whole are given a wrong impression of them. Honorable members will, I am sure, agree with the Committee nf Privileges that no punitive action should be taken against

Mr. Reid, but that this incident may be regarded by journalists as a warning that they must think twice before they write for publication to the world at large articles of a critical kind that may well be misunderstood by people who may not realize the spirit in which they are written. Journalists will agree that the dignity of this Parliament should be upheld at all costs. Unless members of the Parliament themselves uphold the dignity of this institution they fall down on their jobs. Journalists and members should co-operate in maintaining the dignity of the Parliament. I believe that the article to which exception was taken was an unfortunate one and I fully endorse the report of the Committee of Privileges in regard to it.


– Is the motion seconded ?


– I second the motion.

East Sydney

.- There are some aspects of the report to which I wish to direct attention because I do not regard them as satisfactory. When the minutes of the evidence taken by the Committee of Privileges were placed in the Parliamentary Library for the perusal of honorable members, I went through them carefully and noticed a statement that had been made by Mr. Reid, the Sun reporter which caused me to wonder whether certain matters that had been dealt with in the evidence should not have been further investigated. If Mr. Reid is unable to substantiate the statement to which I refer it appears that he made it merely in an attempt to intimidate members of the Parliament in connexion with a. report by a committee of the Parliament. During the proceedings of the committee the honorable member for Cook (Mr. Sheehan) addressed the following question to Mr. Reid : -

As a journalist, you said that the article was written because it had news value. Do roll think you are justified in writing up anything which happens in the precincts of the Parliament that appears to have a news value ?

Mr. Reid’s reply was ;

No; I do not write everything in these precincts that has news value, because if T did so I would be writing a tremendous number of scandal stories, and to be quite frank, I do not like writing scandal stories.

The matter was not taken further by the committee and no elaboration of the statement was offered by Mr. Reid. The privileges of members of the Parliament in relation to their actions and statements in the Parliament should be completely protected. That is the function of the Committee of Privileges. I do not believe, however, that the Parliament should function behind an iron curtain or that members should be free from criticism in respect of actions taken or statements made by them outside the Parliament. Therefore, I am naturally interested to know whether the press presumes to have the right - we hear a great deal about freedom of the press these days - to decide what news shall be suppressed and what news shall be published. I do not know the nature of the scandals to which Mr. Reid referred, but I Bertainly believe that if, in fact, there are scandals in the precincts of this House the press has no right to suppress details of them. It should not be permitted to make what I might call a selective report of what takes place here. I strongly suspect that the press decides whether or not it shall report what it describes as scandal largely upon the basis of the persons said to be involved in them. The anti-Labour press of this country, which is strongly pro-Government, will not publish the details of any scandal if a member of the Government is within “ cooee “ of it.

I do not know the exact procedure to follow, but I think that the matter which is now under consideration should be pursued a little further. The report of the Committee of Privileges is a fifty-fifty decision. The committee has said, in effect, “ Some sections of the newspaper report’ are true and other sections are exaggerated “. Mr. Reid wrote in his article about a mass exodus of honorable members to the bar to purchase goods, but he said in evidence that only eighteen members were involved. I submit that a movement of eighteen members in a parliament of 183 does not constitute a mass exodus, but because the committee has declared that the report is partly correct, everybody begins to speculate about the identity of those eighteen gentlemen. Consequently, every member of the Parliament is under a cloud. The fair and proper procedure would have been to name the members to whom the reporter referred. I have nothing more to say about the matter at this stage. The statement by Mr. Reid about scandals should have been probed further. I am referring not to scandal in respect of the conduct of a member of this Parliament in a personal matter but to a scandal in a broader sense. However, we do not know the sense in which Mr. Reid has referred to it. The whole matter should have been probed further, so that Mr. Reid and any other member of the press, if they had knowledge of any scandals in which members of the Parliament were involved, could be compelled to publish the particulars in their columns as they undoubtedly would if any member of the Labour party were involved in them.

New England

– I desire to associate myself with the statement of the honorable member for Bennelong (Mr. Cramer), and like the honorable gentleman I do not think that, having regard to all the circumstances, it will be wise for us to prolong this debate unduly. However, the statement by the honorable member for East Sydney (Mr. Ward) raises a question that is pertinent to every one who is regularly associated with the Parliament, whether he be a member of the House of Representatives, a member of the Senate, an officer of the Parliament, a pressman, or a member of the staffs that are admitted to the House. The honorable member for East Sydney has posed a question whether the statement which was made by the Sydney Sun reporter 13 true in whole or in part. That matter arises, of course, from the report of the Committee of Privileges. In my opinion, it is not a matter of whether any part of that report is true or untrue. The real question is whether such a. statement should have been made by any man who is admitted to the privileges of this or any other parliament.

The greater part of my parliamentary life, which extends over 32 years, has been spent in the Parliament of New South Wales, and I can recall only one instance in which a pressman broke a confidence. The company that employed him expelled him. from its service without awaiting action by the Parliament. He had committed a gross breach of the courtesies which were extended to him by honorable members. I can recall, in that period of 32 years, only one instance in which an honorable member has been guilty of a breach of the conventions of Parliament. What are those conventions ? As I understand them, they have a peculiar application to this National Parliament because the situation in Canberra is not similar to that in the State parliaments in the other capital cities. The members of those parliaments can, and do, get away very quickly from them. Many facilities are available in the vicinity of the State House of Parliament for hospitality, accommodation and the like. But we in this National Capital are. confined to Parliament House while the session is in progress. The convention to which I referred, as I have always understood it and seen it observed, is that any statement which a member makes within the four walls of the chamber is fair game, and that he must stand up to it either from within or from outside the chamber. Anything that he says and does after he leaves the precincts of the chamber is subject to certain well.known limitations, apart from which he may be also held responsible for his words and his actions. But such limitations also apply to pressmen, and to everybody else who is admitted to the precincts of this House, and to its courtesies and privileges.

Honorable members are bound by conventions, such as off-the-record discussions between them. Those conventions are necessary to make this institution workable. We all recognize that the political party in Opposition to-day may become the Government to-morrow. There are certain things associated with the working of this great institution which make lt necessary for us to act truly in accordance with our principles, while recognizing the inter-play of forces in the community, and the responsibility that our election to the Parliament confers upon us, to act as civilized members of a civilized community. We, who observe the conventions in this House, where we are confined to a greater degree than are members of the State parliaments, are able to work, and, for that matter, able to play, without undue acrimony or bitterness. Just as that convention applies to honorable members, so it must also apply to the other great estate of the realm, the press, more than to any other section of the community which is admitted to this House.

The pressmen have their conventions Professional standards impose upon them the duty to deal with those who break the confidence and conventions of this Parliament. Similar limitations are imposed upon every officer of the House. If those limitations are not observed by the exercise of common sense and by a regard for the ordinary decencies of life, this place will become a bear-garden, and unworkable. I read the evidence of the principal witness before the Committee of Privileges, and I noted that he said, in order to substantiate his statement about the mass exodus of members to the bar, that he could not watch all the entrances to the House. I shudder for the future of this place if every person who is associated with it, when he relaxes, as he must relax sometimes, has the impression that a gestapo is watching him and noticing his every action. In such circumstances life in this place would become impossible.

No one has a higher regard for the press than I have, but I believe that if this place is to serve the purpose for which it has been established, such tactics should not be resorted to by pressmen or any one else. I do not suggest that a man should be shielded from criticism which may be directed at him as he carries out his public responsibilities; but when we are outside this chamber, we must mingle upon a free and easy basis, and unless we do so with due regard ourselves to the ordinary courtesies and to the conventions which bind all parliaments, the position must become impossible. A responsibility rests upon every person in each section of the community that is admitted to thi9 House to see that a discipline is imposed, not by this chamber, but by himself in regard to the professional standards that should be observed in the spirit as well as in the letter.


– I also associate myself with the remarks of the honorable member for Bennelong (Mr. Cramer) and the honorable member for New England (Mr. Drummond). I agree entirely with the honorable member for Bennelong that this matter need not be debated at length. It should be quickly buried in the hope that it will have no offspring. The article was typical of a number that have appeared in the daily and weekly press, criticizing the behaviour of members of Parliament, not individually, but collectively. The institution of the Parliament has thus been held up to public scorn and disapproval. The desire of journalists to level criticism at members generally rather than to face the unpleasant task of singling out individuals, is understandable, but I believe that justifiable criticism of individual members with due regard, of course, for the practices of the House and the privileges of members, is far preferable to continuous attacks on members generally, which, as I have said, hold the Parliament up to public ridicule. At no time has there been greater interest in this Parliament than there is to-day and at no time has the dignified operation of the Parliament been of greater importance to this nation; but, unfortunately, rarely in the past has the Parliament been held in such scant respect as it is to-day-

Mr Ward:

– What rot!


– Once again, and not without some surprise this time, I find myself in disagreement with the honorable member for East Sydney (Mr. Ward).

When I entered this Parliament two years ago, I hoped, as I am sure other young members did, to be able to make an earnest and useful contribution to the political life of this country, and it was disappointing indeed to find the institution which we serve held in such scant respect bv the community in general. The press must bear its share of the responsi bility for that state of affairs. Our newspapers have a real and important function to perform in connexion with the Parliament. The press also has some responsibility, as we members have, to uphold the dignity, and to serve the real interests, of the Parliament as a publicinstitution. For that reason, I hope that the practice of criticizing the behaviour of members of Parliament collectively will cease and that articles of the nature of the one now under discussion will not be written in the future.


– I enter this debate to express a positive view that I hold about the part that the press can play in relation to our parliamentary institution. The only conclusion that I can draw from the article that we are now discussing is that journalists in this building consider themselves obliged to seek news in happenings outside the chamber. I believe that the press could best serve the Parliament and the people of this country by publishing objective and analytical reports of debates. Possibly the broadcasting of debates has set the press a new problem. For once it finds itself obliged to be a little bit fair in reporting the speeches of honorable members with the result that pressmen endeavour in the passageways and in King’s Hall to gather reports of incidents which apparently the newspapers consider to have a news value. Articles of the kind now under consideration are, as the honorable member for Evans (Mr. Osborne) has said, are attacks not so much individual members as on the Parliament as a whole at a time when we are supposed to be fighting totalitarian methods and when the newspapers should be helping to improve the public understanding of the work of the Parliament. I am not convinced, of course, that the press is very much concerned about uplifting our parliamentary institutions. Rather am I inclined to believe that although the press may be “ on side “ with the Government at present, it considers attacks on members of the Parliament to be news. The result is that the press generally, and the writer of this article in particular, are encouraging a dangerous line of thought. Every member of this chamber, regardless of his party affiliations, will agree that today, throughout this country members of Parliament are not held in the respect that is due to their high office. I do not suggest that parliamentarians should be given a place in the community to which they are not entitled, but in a democracy it is necessary that the elected representative of the people should be regarded as being something above what the writer of this article would have the public believe them to be. There is a place for journalists in the press galleries of this building. The other place for them is in the street if they continue to belittle the parliamentary institution. Their job is to get news from the debates that take place on the floor of the House and not to hang around corridors. I do not know how long we can tolerate the situation in which, in every hallway, somebody is listening to conversations between members of all parties in the hope of picking up something that is considered to be of news value. That is a dangerous practice. As the honorable member for New England (Mr. Drummond) has said, journalists should properly understand their function in this building. The article that we are now considering is an instance of the press going beyond that function, and although we agree with the committee’s report in this instance, 1 believe that a repetition of the incident should be regarded most seriously by the House. If public faith in parliamentary control is destroyed, the way is paved for a system that is contrary to the ideals that we hold dear. The writer of the article complained of is being let down very lightly on this occasion. Let the representatives of the press be warned that, if they do not play the game and observe the democratic principles that are treasured in this country, only one course of action will be left open to this Parliament and that will be to put them in a position in which they will not be able to do such damage not only to thu parliamentary institution but also to the people generally, as has been done by the article that we are considering. This issue affects the very institution of free parliamentary government in Australia. We, as the individuals who, for the time being are responsible in the parliament for the maintenance of our democracy, must ensure that nobody shall do anything, in his eagerness to find something of news value, that will injure the prestige of this institution. Let there be no repetition of the offence. Newspaper reporters who exceed their rights are not entitled to continue to enjoy the freedom that they have hitherto enjoyed in this building.


– A member of Parliament is given a position of privilege and honour, especially in the electorate that he represents, which makes it necessary for him to observe a high standard of conduct. I . believe that no member of this House is afraid of any honest report of anything that he may do. We are prepared to stand by our actions and take responsibility for them. I also believe that newspaper men have a responsibility to be fair and accurate in any report that they make of our actions. I am sure that Mr. Alan Reid, the chief of the Canberra Bureau of the Sydney Sun, will admit that, in the article that we are discussing, he dealt only with some aspects of what he saw and failed to tell the full story. It is unfortunate in this day and age that the word “ news “ has been invested with an extraordinary meaning. If a dog bites a man, that is not news; but if a man bites a dog, that is news. Carrying that dictum further, it is held that, if a member of Parliament does a sound job, it is not news because that is what he is expected to do. However, if he makes what is alleged to be a mistake, that is regarded as news. The public pays for and receives what it deserves in the way of news, and that is the sort of news that it pays for. In the article of which complaint ha? been made, Mr. Reid did not refer to all the members of this Parliament who try very hard to do an honest and effective job for the people whom they have been elected . to represent. These members move about their electorates night and day, travelling at great personal discomfort, to perform all sorts of duties that were not mentioned in the article. Therefore, I say that the article was not a fair and accurate report of the doings of members of Parliament, and I believe that Mr. Reid, on reflection, will admit that, had he been fair, he would have mentioned in it actions that reflect great credit on members of the Parliament.


.- I have carefully read the report of the Committee of Privileges and the summary of the evidence that was submitted to it. In my view, Mr. Reid is extremely fortunate to have been dealt with by a tolerant committee because, under crossexamination, he clearly indicated that almost the whole of his argument in the article to which exception has been taken was sheer exaggeration. He called it “ journalese “. I call it plain, downright journalistic lying ! He gave to the public the impression that there was a mass movement of members of both Houses of the Parliament in the direction of the refreshment-rooms for the purpose of purchasing goods that they thought might become more expensive as a result of the newly announced budget proposals. The truth is that the prices charged to members of the Parliament, members of the journalistic profession who enjoy privileges very much like those that are enjoyed by honorable members, and the members of the Parliament House staffs were not increased until the entire stock of goods then held in the refreshment-rooms had been sold. It was generally known that there was no necessity for honorable members, journalists or parliamentary officers to rush en masse to the refreshment room3. which, according to this filthy, misleading article, was what happened, to buy articles that they could have bought a week later at precisely the same prices. Mr. Reid professes to know a great deal about what happened in the members’ refreshmentrooms. He ought to know more about the sales from the rooms where he is entitled to the same privileges as members of the Parliament enjoy in their refreshment rooms. But he did not bother to investigate and report the fact that, over a period of three months when this Parliament was not meeting and when there were no members in Canberra, 20,000 bottles of beer were sold in the non-members’ bar that is devoted entirely to the service of pressmen and members of the parliamentary staffs. Does Mr. Reid claim that it was an abuse of privilege to buy 20,000 bottles of beer over a period of three months - if it can be deemed to be a privilege to buy a bottle of beer?

Mr Wheeler:

– They are thirsty boys !


– I am not questioning whether they are thirsty or not, but I am beginning to wonder whether they have a black market in Canberra. Either they have a black market or they have prodigious thirsts.

The next complaint that Mr. Reid made in his article was that there was no point at which representatives of the press could meet parliamentarians and exchange views. The truth is that there are many such points. There are the members’ private rooms, where they can meet and exchange views with journalists. There is also King’s Hall. The chief cause of Mr. Reid’s concern was that Senator Gordon Brown and I discovered, during our regime as President of the Senate and Speaker of this House respectively, that a room immediately abutting the members’ bar was used as a listening post after party meetings and we immediately ordered that representatives of the press be excluded from it. That has been a bone of contention ever since. Twice Mr. Reid stated in his evidence that he wanted to get back to some place where he could have individual conversation and share views. The places that he mentioned particularly were the verandah and the visitors’ room immediately adjoining the members’ bar. I have read through the evidence very carefully. I do not believe that there was a scintilla of truth in what Mr. Reid stated in the article. He is supposed to be a leading journalist. His articles are features. Apparently because his article was not sufficiently exciting or designed to “ catch the eye “, according to his evidence a member of the editorial staff of the Sun used the caption “ Canberra Statesmen Beat the Budget “. That was not his idea, but the idea of a subeditor who knew nothing at all of the matter. Little as Mr. Reid knew of the circumstances, the gentleman who suggested the caption for the article knew less.

After having gone into this matter very thoroughly, I am convinced that this man ought not to be allowed to remain in the press gallery. I would exercise the right - as I exercised it in the past - to remove a man of his type. He is a menace to the parliamentary institutions, because he plays into the hands of those people in the community who would degrade parliament for their own political purposes. Furthermore, he threw a whole bucketful of mud over all members of the Parliament. Yet he admitted in crossexamination that only fourteen members or eighteen members were involved. Such a man should not escape punishment. What did he care about whether he had been found guilty of a breach of privilege? On the following Sunday an equally disreputable and lying type of article written by him was published in the Sunday Sun. He virtually snapped his fingers at the members of this House and the Committee of Privileges.

One of my colleagues has stated that Mr. Reid should be careful in the future. If I had my way a man who had been guilty of such disreputable lying would have no place here. Although he regards himself as a leading journalist, or a specialist, he has so callously disregarded the truth of things as to make things difficult for men of his own profession. For his lying articles, he ought to be booted out of the place. It is too good for him, bad and all as he tries to make it out to be.


– I agree with other honorable members that the particular journalist who was involved in this matter has been let off extraordinarily lightly. To say the least of it, his article was scandalous. It was not true. It was not aimed at any particular person. It was not aimed at any particular party. It was put forward for one purpose, and one purpose only, which was to bring the whole of the parliamentary institution into hatred, contempt, and ridicule.

The alternative to democracy is a dictatorship. Unless we uphold our democratic institutions, democratic government in this country will be at an end. The continued existence of democracy depends upon the respect of the people for their parliamentary institutions and a free press. If, under the cloak of privilege, members of the press are to be permitted to publish scurrilous lies, which bring the whole of the parliamentary institution into hatred, contempt and ridicule, democracy will not survive. ‘

I do not believe that any member of the Parliament should have a screen placed round him. When a man enters public life his actions, apart from being correct, should also appear correct. J would not have minded if this particular journalist had seen some individual member misbehaving and had published an article on the circumstances. I object to his attitude because he did not use what he saw against the alleged guilty party but brought the whole of the parliamentary institution into contempt. Every honorable member of this House was stigmatized by Mr. Reid’s article. It implied, not that one individual member, but that all of us, were prepared to rush to the members’ bar to seize goods before the duties were increased. If I had done that sort of thing and Mr. Reid had criticized me for it, I would say that the criticism was fully justified. But he has criticized every honorable member of this House for something that was untrue. Yet, in crossexamination, he admitted that he saw only eighteen honorable members go into the bar, whether for the purpose that he mentioned or any other purpose. Although I support the decision of the Committee of Privileges, I consider that, in the interests of democracy, we should see that parliamentary privileges are preserved, that this democratic Parliament should have the respect of the people, and that appropriate action is taken against persons who publish and state untruths in order to bring the Parliament into disrepute.

Question resolved in the affirmative.

page 1877


Motion (by Sir Earle Page) agreed to-

That leave be given to bring in a hill for an act relating to the provision of hospital benefits.

page 1878


Customs Tariff Amendment (No. 3); Customs Tariff Amendment (No. 4); Customs Tariff (Canadian Preference) Amendment (No. 1)

In Committee of Ways and Means:

Vice-President of the Executive Council aud Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I move - [Customs Tariff Amendment (No. 3).]

That the Schedule to the Customs Tariff 1933-1950, as proposed to be amended by Customs Tariff Proposals No. 1 and Customs Tariff Proposals No. 2 introduced into the House of Representatives on the twety-sixth day of September, One thousand nine hundred and fifty-one, be further amended as hereinafter set out, and that, on and after the fourteenth day of November, One thousand nine hundred and fifty-one, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1950 as so amended. {: type="1" start="2"} 0. That, without prejudice to the generality of paragraph (1.) of these Proposals, the GovernorGeneral may, from time to time by Proclamation declare that, from a time and date specified in the Proclamation, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of any British or foreign country specified in the Proclamation. 1. That on and after the time and date specified in a Proclamation issued in accordance with the last preceding paragraph, the Intermediate Tariff shall apply to such goods specified in the Proclamation m are the produce or manufacture of a British or foreign country specified in that Proclamation. 2. That any Proclamation issued in accordance with paragraph (2.) of these Proposals may, from time to time, bo revoked o- v i ie ' by a fu thor Proclamation, an I upon the revocation or variation of the Proclamation, the Intermediate Tariff shall cease to apply to the goods specified in the Proclamation so revoked, or, as the case may be. the application of the Intermediate Tariff to the goods specified in the Proclamation so varied, shall be varied accordingly. 3. That in these Proposals, unless the contrary intention appears - " Proclamation " means a Proclamation by the Governor-General, or the person for the time bein ' administering the government of the Commonwealth, acting with the advice of the Federal Executive Council, and published in the *Commonwealth <>f Australia Gazette ;* " the Intermediate Tariff" means the rates of duty set out in the Schedule to these Proposals, in the column headed " Intermediate Tariff ", in respect of goods in relation to which tha expression is used. [Customs Tariff Amendment (No. 4).] That the Schedule to the Customs T,wig 1.933-1950, as proposed to be amended by Customs Tariff Proposals No. 1 and Customs Tariff Proposals No. 2 introduced into the House of Representatives on the twenty-sixth day of September. One thousand nine hundred and fifty-one, be further amended as hereinafter set out, and that, on and after the fourteenth day of November, One thousand nine hundred and fifty-one, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1950 as so amended. {: type="1" start="2"} 0. That, without prejudice to the generality of paragraph (1.) of these Proposals, the GovernorGeneral may, from time to time by Proclamation declare that, from a time and date specified in the Proclamation, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of any British or foreign country specified in the Proclamation. 1. That on and after the time and date specified in a Proclamation issued in accordance with the last preceding paragraph, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of a British or foreign country specified in that Proclamation. 2. That any Proclamation issued in accordance with paragraph (2.) of these Proposals may, from time to time bo revoked or varied by a further Proclamation, and upon the revocation or variation of the Proclamation, the Intermediate Tariff shall cease to apply to the goods specified in the Proclamation so revoked, or, as the case may be, the application of the Intermediate Tariff to the goods specified in the Proclamation so varied shall be varied accordingly. 3. That in these Proposals, unless the contrary intention appears - " Proclamation " mean a Proclamation by the Governor-General, or the person for the time being administering the government of the Commonwealth, acting with the advice of the Federal Executive Council, and published in the *Commonwealth of Australia Gazette;* " the Intermediate Tariff" mean the rates of duty set out in the Schedule to these Proposals, in the column headed " Intermediate Tariff ", in respect of goods in relation to which the expression is used. [Customs Tariff (Canadian Preference) Amendment (No. 1).] That the Schedule to the Customs Tar fI (Canadian Pr<ference) 1934-1950 be amended as hereinafter set out, and that, on and after the fourteenth day of November, One thousand nine hundred and fifty-one at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory Duties of Customs be collected in pursuance of the Customs Tariff (Canadian Preference) 1934-1950 as so amended. The proposals I have just introduced fail into two groups. The first group, in which falls Customs Tariff Amendment (No. 3), will give effect, as from 9 a.m. to-morrow, to the tariff concessions negotiated at Torquay between September, 1950, and April, 1951, under the General Agreement on Tariffs and Trade. These amendments do not fully implement the tariff concessions granted by Australia as, in some cases, the reduction of primage duty, the operation of existing intermediate tariff rates, or the binding of present duties, is involved. Other notion is bring taken to give effect to these changes, which will begin to operate simultaneously with the amendments with which I am now dealing. The comparative memorandum circulated to honorable members shows the effect of the proposed tariff alterations. Also included in the memorandum are details of the other changes that are consequent upon the Torquay negotiations to which I have referred. At the Torquay negotiations, Australia exchanged tariff concessions with Germany, Austria, Turkey, the Philip pines, Sweden and Denmark. In return for reductions of the Australian tariff, duties were reduced or bound at low rates on the major Australian exports to Germany, Austria, Turkey and the Philippines, which were negotiating under the General Agreement on Tariffs and Trade for the first time. As Australia had previously negotiated with Sweden and Denmark, the concessions exchanged with these countries were of a relatively minor nature. Apart from the direct concessions received from these six countries, Australia's exports generally will also benefit from negotiations concluded by other countries at Torquay. The Government has examined the results of the Torquay negotiations and is satisfied that, whilst they are not of major significance to Australian trade, they represent a reasonable balance from Australia's point of view. Accordingly the Government authorized signature of the Torquay Protocol to the Genera] Agreement on Tariffs and Trade on the 18th October, 1951, and is now asking the Parliament to give its approval of this action by implementing the concessions granted. The second group, in which fall Customs Tariff Amendment (No. 4) and Customs Tariff (Canadian Preference) Amendment (No. 1), also operates from 9 a.m. to-morrow and, apart from the amendments proposed in respect of gift parcels of apparel, item 110 (d), and dyestuffs, item 231(a)(2), cover goods which have formed the subject of recent Tariff Board inquiries. Variations of the present rates of duty imposed on potted and concentrated fish, furnishing fabrics, magnetos, bolt-cutters, pipe-cutters, record-changing devices, fork-lift trucks and elevating platform trucks, have been recommended by the Tariff Board, and the proposed amendments are based on these recommendations. A separate memorandum circulated to honorable members indicates the nature and the extent of the variations made. The provision in item 110 (d) for gift parcels of apparel is in the nature of a concession. The value limitation has been raised from the £5 14s. fixed in 1920, to £10, so as to bring it more into line with present-day conditions. The amendment to item 231 (a) (2), dyestuffs, does not alter the total duty payable on dyestuffs, but for administrative reasons it has been found desirable to express the existing import and primage duties as a single duty. Opportunity for debate of the proposed alterations will be given to honorable members at a later stage in this seasonal period. Progress reported. {: .page-start } page 1886 {:#debate-24} ### STATES GRANTS BILL 1951 {:#subdebate-24-0} #### Second Reading Debate resumed from the 26th September *(vide* page 114), on motion by Si? Arthur Fadden - >That the bill be now read a second time. {: #subdebate-24-0-s0 .speaker-JTF} ##### Mr TOM BURKE:
Perth .- The Treasurer **(Sir Arthur Fadden),** in his second-reading speech on this measure, pointed out that the Commonwealth Grants Commission has recommended that, during the current financial year, grants totalling £10,522,000 be made to Western Australia, South Australia, and Tasmania. Those States have come to be known as the claimant States, and New South Wales, Queensland and Victoria as the standard States. Year by year, the Commonwealth Grants Commission has conducted an exhaustive inquiry into the financial position of the States, and, having satisfied itself of the standards that have been achieved by the more populous States, has fixed what it has called an Australian standard. Then it has recommended that certain sums should be paid to Western Australia, South Australia and Tasmania for the purpose of enabling those States to function at a standard not appreciably below the Australian standard. This year, the commission has done exactly what it has done in previous years. Once again, it has presented a very valuable report. I agree with the basic facts that were stated in the Treasurer's second-reading speech, but I have been struck by r rather quaint expression that was used in the concluding stages of the speech. The right honorable gentleman said - >The special grants recommended by the Commonwealth Grants Commission each year have always been adopted by successive governments, and the present Government can see no reason why the recommendations contained in the eighteenth report should not be adopted this year. It appears that the Treasurer and th;; Government on behalf of which he speaks have some doubt whether the grants that it is proposed should be made to the claimant States will enable those States to function at a standard not lower than the average Australian standard. Over the years, the Commonwealth Grants Commission has gone very fully into the problems that confront the governments of claimant and non-claimant States. It has established its own principles and devised its own methods. It examines the claims made by the claimant States, considers the budgets upon which the governments of those States have operated during the year in respect of which the claims are made, and, having made the adjustments that it considers should reasonably be made, recommends that certain sums should be paid to those States by the Commonwealth. The commission, in its eighteenth report, has pointed out that it is now extremely difficult to estimate what sums will be sufficient to enable claimant States to meet their needs. *We* all realize that, owing to increases of the cost of living in this country, it is difficult, if not impossible, for the States to assess their future expenditure with any degree of accuracy. The report deals with another matter that has arisen in recent times. Formerly, the financial position of the States was calculated on the basis of a balanced budget, but during the war years the three standard States budgeted for accumulated surpluses. They were able to do so because the revenue that they derived from their railways increased considerably. When that situation arose, the three claimant States requested that the grants made to them by the Commonwealth should be sufficient to enable them not only to balance their budgets, but also to enjoy the advantages of a budget surplus of the same size *per capita* as had been accumulated by New South Wale3, Queensland and Victoria. At the time the Commonwealth Grants Commission rejected the application of the States but pointed out that whereas New South Wales, Victoria, and Queensland were able to put aside reserves against times when revenue was not so buoyant, the other States were not able to do so, and that that fact would be taken into account when the situation became more normal. The present report of the commission gives effect to that intimation. The commission has not accepted as the standard the deficits that have been indicated by certain States, but has had regard to the fact that when revenue was buoyant, surpluses were budgeted for and achieved by the Governments of New South Wales, Victoria, and Queensland. The commission has made greater provision for the needs of the three claimant States than would have been made had such surpluses been disregarded. In its report the commission points out that the increase of special grants is due to cumulative increases of salaries, wages and costs, offset to some degree by larger revenue. That, of course, is the way in which the commission works. The report indicated that the States are required to make a reasonable effort to maintain the standard of living to which the commission believes the people are entitled. The third report of the commission, issued in 1936, set out the principles on which it operates. The principle of financial need, which is reiterated at page 65 of the latest report, is as follows: - >Special grants are justified when a State through financial stress from any cause is unable efficiently to discharge its functions as a member of the federation and should be detenu i nod by the amount of help found necessary to make it possible for that State by reasonable effort to function at a standard not appreciably below that of the other States. That principle has been qualified to a degree by the terms of the present report. The commission points out that a reasonable effort is always a relative thing. The commission goes on to indicate that the claimant States have made some striking advances during recent years. At page 36 of the report, the following statement appears: - >There are several striking features of the economic progress made in the claimant States during the past two years. There has been a considerable growth in population; secondary industry has expanded steadily; and there has been a marked rise in the rate of house building. Within the next two or three years electricity and water supply and railway rolling-stock will be considerably improved. The report draws attention to the undesirability of wastage of national resources. It proceeds - >But overall, the most significant development is probably the attention which is being given to the control of wastage of resources Wastage of national resources occurs by obvious methods of destruction or uneconomic exploitation: it also takes the less obvious, but equally important, form o( gradual and unrecognized depletion. The commission indicates the need for reafforestation schemes, soil conservation, and retention of water for power and other supplies. It seems to me that the wealth of experience which the commission has gained during the years might well make it a valuable instrument with which to examine present State public works programmes. We have heard unseemly arguments in the last week or so to the effect that some States have been grievously affected by decisions of the Australian Government and of the Australian Loan Council, in the operations of which this Government plays a dominant part. It seems to me that the Commonwealth Grants Commission is perhaps the appropriate body to examine the programmes that are placed before meetings of the Australian Loan Council. I do not suggest that the commission should act as the final arbiter to determine whether works should be permitted to proceed or whether they should be discontinued or retarded, but I suggest that it could determine the value of public works, and also assess the man-power and material resources that could be spared from an overstrained economy. I consider that the interest that has been shown by the commission indicates its ability to perform that function. Various public "works, which are primarily the concern of State governments, should be completed without delay, but because of shortages of man-power and resources priorities have been determined. Many people think that the heavy hand of the Australian Government has fallen on such works. I consider that it would be worth while if proposed public works could be reviewed by the commission before determinations are made by the Australian Loan Council or conferences of Commonwealth and State Ministers. Ultimate determinations could then be made with greater knowledge and deeper appreciation of the needs of such State schemes. The report of the commission states that various States submitted claims for assistance during 1951-52. South Australia made no definite amount of claim, but the State representatives intimated that the indispensable requirements of the .State for 1951-52 would probably amount to £7,S00,000. The recommended grant, naturally, is below that figure. The procedure followed by the commission in arriving at the ultimate grant is set out. South Australia, in common with the other States which made claims on this occasion, presented a claim which seemed reasonable, in the circumstances, to the State government. The amount of that claim, however, would no doubt be incapable of meeting the requirements of the State owing to increasing wages and costs. The State of Western Australia also submitted no detailed statement of claim. The State's representatives intimated that if the then prevailing trends in revenue and expenditure continued a special grant of £8,500,000 would be required to enable the State to balance its budget in 1951-52. I . do not suggest for a moment that the amount of money that was sought by the various State governments was the minimum amount on which it was possible for them to manage during the current financial year. Honorable members are no doubt aware of the practice which has been followed for many years by State Premiers when approaching the Australian Loan Council. A bargaining ensues for the maximum amount that may be wrested from a reluctant Federal Treasurer. It is a practice which, I believe, has not given very great satisfaction, either to the Commonwealth or to the States, and which does not make for a proper, workable relationship between the Commonwealth and State Parliaments. Tasmania submitted a claim for £1,600,000. The total grant recommended, and the payment of which this legislation is designed to authorize, is £S76,000. It is also necessary to give some consideration to the way in which the Commonwealth Grants Commission has now decided to handle this particular problem. Honorable members know that the State budget on which the commission makes its assessment is the audited budget, and that there is a lapse of two years between the year on which the assessment has been based and the year in which the grants are paid. So the commission recently decided to divide the payments into two sections. One is an adjusting payment which relates to the States' budget results in the year on which the grants were assessed. That payment amounts this year to £522,000. The second payment relates to the States' prospective needs for the year in which the grants are paid. This year that payment amounts to approximately £10,000,000, which is to be made available to enable the States to balance their budgets in this year. The commission itself is apparently feeling its way because of the new situations that have arisen. It points out that not only must it have some consideration for the actual grants payable as part of the claims of the three States to which I have referred, but that it must also have some regard for the amount of money that is made available by way of ordinary tax reimbursements under a measure that was recently passed by this Parliament. In addition it invites comment on particular attitudes of State Treasuries and of the Commonwealth Treasury, a fact which indicates that the commission is now trying to adopt new formulas and to achieve a more satisfactory relationship between the States and the Commonwealth insofar as that lies within its power. Paragraph 83 of the commission's report for 1951 reads - lt also invites discussion of the question whether the concept of financial need extends so far that it covers the possibility of a surplus-budget standard, even though such a standard may result in recommendation of grants which are greater than arc required to enable claimant States to function as members of the Federation at standards not appreciably below those of the other States. The commission also points out that in recent times the three States to which I have referred have made substantial increases of charges for services and of taxes. It is clear, particularly to honorable members whose electorates are in any of those three States, that the severity of taxes in those States is taken into account by the commission in making its assessments. But because of rising costs the States are finding it more and more necessary to increase charges for services. I suggest that some new method of approach must be found. It is true that State-owned services, such as railways and tramways, should pay their way in normal circumstances and, in addition to meeting their working expenses, should pay off capital indebtedness. But we find that every increase of charges by a State instrumentality pushes the cost of living higher and so helps to increase inflation. We must have some regard for the possibility that that situation is one of the major factors that will finally end in the present boom becoming a tragic slump. Railway and tramway charges, and licensing fees for motor cars, are increasing, and such increases are pushing the cost of living higher and making the inflationary position more grievous than ever. The Government should examine the situation. Yet, although the charges made by State instrumentalities have been frequently increased, the States are not able to meet the costs of the services that they provide. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- Do not be morbid. {: .speaker-JTF} ##### Mr TOM BURKE: -- As a matter of fact it is a morbid situation - a hopeless government facing a desperate position. In normal circumstances the increased charges levied by the States for services should show some return, but at present the process is only that of a dog chasing its tail. Prices for services rise, and wages rise as a result. Then prices again rise as a result of the wage increase, and wages rise again. The end is nowhere in sight, unless it be in a final collapse. So I believe that the Government, in addition to making such grants as are provided for in this measure, should get down seriously to the problem that confronts the country to-day, and for which record grants to the States from time to time provide no solution. There is only one overall solution of the problem, which is for the Government to get really to grips with that problem. It is of no earthly use to call together representatives of the various classes of the people or of various organizations, admirable though such a move may be. It is of no use to ask representatives of church organizations, women's movements and trade unions to confer with a view to hammering out some plan for a solution of the States grants problem and other problems. The Government should call the States together in conference, and should be prepared, as the senior and wealthy partner in the federation, to accept the major responsibility. It should get the States working together so that the present grievous situation can be altered. I turn now to the Western Australian gold-mining industry. As the Treasurer **(Sir Arthur Fadden)** knows, Western Australia relies greatly on the prosperity of that industry. Rising costs have almost crippled the industry, which is of such great advantage to Western Australia and which is also of no insignificant benefit to the whole of Australia. I refer particularly to its dollar-earning capacity. All reports indicate that only the best mines can continue to operate under the burden of sharply rising costs. If something is not done either to halt the inflationary situation or to give some special benefit to the gold-mining industry, Western Australia's economy could approach grave danger of collapse. I have in my hand a report of a submission that **Mr. C.** H. Simpson, the Western Australian Minister for Mines, made to the Treasurer on the 24th August. **Mr. Simpson** asked me, and, I presume, other honorable members, to give some attention to this matter when the subject was being debated. Part of the report reads - > **Mr. Simpson** said lie knew that **Sir Arthur** Fadden fully realized this- that is, the importance of the industry to Western Australia. The report proceeded - and that the Federal Government was sympathetic. This was proved by its definite and clear-cut statement at the recent Federal elections and the Mining Industry pinned its faith on this declaration. What was wanted, however, at the present time was a clear reaffirmation of Commonwealth policy in relation to mining. If it was Commonwealth policy to fix the price of gold at the present figure to conform to International agreement, then it was only fair that the Gold Mining Industry itself should have offsetting compensation, in view of the fact that the dollar price of gold was restricted to its pre-war price. According to the report **Mr. Simpson** also said - >A firm declaration of policy would restore *ii* feeling of confidence, would attract investors and enable settlement to be established. I believe that a first-class problem exists. It seems that our federation cannot be greatly modified by means of referendum. In consequence it is more than ever necessary that the relationships of the States and the Commonwealth should be put on a far better working basis than has so far existed. Prior to its assumption of office the Government claimed that it believed in the federal principle. Its actions have not always given support to that claim. In recent times it has appeared that the Government is determined to " stand over " the States, and not to give effect to its previously expressed belief in proper participation by the State Governments in the working of Australia's governmental machinery. The Opposition accepts the Commonwealth Grants Commission's report which has resulted from a most exhaustive examination of the matter. That examination was carried out on a fair, practical and impartial basis, but it has left untouched the continuing problem of the relationship of the States and the Commonwealth of Australia, the solution of which is a Commonwealth responsibility, and it has left unsolved, though it has referred to it in nearly every line, the problems created by the inflationary spiral. Those problems are a Commonwealth responsibility also. While the Opposition supports this bill it desires to point out that the Government has sought and assumed a very grave responsibility. It has been given these responsibilities by the people of Australia, but there is no evidence that it has appreciated their magnitude or that it is willing to accept them and assist the States to reduce the present inflationary spiral. {: #subdebate-24-0-s1 .speaker-JQ7} ##### Mr BLAND:
Warringah -- I do not wish to traverse the ground that the honorable member for Perth **(Mr. Tom Burke)** covered. The honorable member drew a clear picture of the difficulties that the Commonwealth Grants Commission encountered in deciding the adequacy of the grants to be made to the States under section 96 of the Constitution. However, I want to challenge some of the suggestions that the honorable member made. His first suggestion was that there was an obligation on the part of the Government to straighten out the financial relationships between the Commonwealth and the States. 1 do not believe that the honorable member is anxious to have that straightening out process put into effect. I believe that he and his colleagues would much prefer that the existing relationships should continue until the States disappear altogether as independent agencies. When the honorable member suggested that the commission might decide the validity of the applications made by the States in respect of various matters which, by reason of its experience, it might be able to investigate, I thought that he would advance some ideas of how the commission could reach a conclusion in regard to those matters. It is no solution to substitute the decision of a body like the Commonwealth Grants Commission for that of the Parliament. The three bills relating to grants to the States seem to provide an excellent illustration of the necessity to decide,' here and now, whether we wish to retain the federal system which implies the existence of independent States sovereign in their own field or whether we wish to continue the other trend which has developed. Two completely opposing trends seem to have been operating during the past few years. There has been a constant desire on the part of the Government in Canberra to obtain greater power. This tendency has been resisted by the States, which have wished to preserve their own existence. I believe that referendum proposals have emphasized, more than anything else, the wish of the people to retain the integrity of the States. If the existing financial trends continue the States will not retain their integrity. The bill makes apparent to honorable members that although Western Australia, South Australia, and Tasmania will not receive the total amount for which they have asked, they will receive twice as much as they received four years ago. Reimbursements of income tax have increased from £84,000,000 in 1947-48 to £190,000,000 in 1951-52. These grants indicate quite clearly that the Commonwealth dominates the whole financial field. The work of the Commonwealth Grants Commission, the reimbursement under the uniform taxation scheme and other matters make it perfectly clear that the situation has changed completely during recent years. The first change in Common.wealthState financial relationships was brought about by the amendment to section 128a. of the Financial Agreement. Then the Commonwealth Grants Commission was set up, and in 1942 the uniform taxation legislation was introduced. The next important development was the passing of the banking legislation of 1945 under which the Commonwealth was placed in complete control of the central bank, which it could use for political purposes. These developments have completely altered the financial relationships between the Commonwealth and the States and have created a difficulty which it is necessary to resolve. I do not believe that a solution can be found in the way that the honorable member for Perth suggested. I do not believe, for example, that a solution can be found in the creation of bodies such as the Australian Loan Council or the Commonwealth Grants Commission to decide what the States should receive. The operation of parliamentary committees which prepared *ad hoc* reports about the amounts of assistance to be afforded claimant States was not satisfactory. It became desirable that some such body as the Commonwealth Grants Commission should be established. But I suggest that in the process of seeking expert assistance we have created institutions that are strangling us. Like Frankenstein, we have created a number of monsters in the form of institutions such as the Commonwealth Arbitration Court, the Public Service Board, and the Commonwealth Grants Commission, which have taken possession of our live3. When attacked upon financial policy, the Treasurer can shelter constantly behind the Loan Council. That is a negation of parliamentary government. If an institution is to decide the Government's financial policy parliamentary government will disappear. We must eliminate institutional controls and revert to control by parliament or we shall see the end of parliamentary government and of our federal system. I think that any convention for the purpose of reviewing CommonwealthState financial relationships should be warned against attempting to find an easy way for an authoritative body such as the Commonwealth Grants Commission or a taxation council to make decisions which should be made by Parliament. I do not think that it is possible to revert to the conditions which existed prior to 1942 when the uniform taxation legislation was introduced. There may be some merit in the suggestion of the honorable member for Perth that the Commonwealth and the States should form some kind of co-operating body. But it is necessary to go further than that and find a completely new means of allocating the taxation resources of the Commonwealth and the States in order that we may preserve the substance of parliamentary government. If the Commonwealth is to dominate the whole field of government, then the parliamentary system of the States will disappear. We must go back to the period prior to 1910, before the Surplus Revenue Act was in operation, and find a new method of allocating the financial resources of the Commonwealth and the States. As a preliminary, a committee of this House might be appointed to consider the matter, and to submit recommendations to a convention that would get to grips with the problem of the functions and resources of State and Federal Governments, so that the federal system, which I think is essential for Australia, may be put upon a new basis. **Mr. THOMPSON** (Port Adelaide) [4.51 1 . - I was interested to hear the remarks of the honorable member for Warringah **(Mr. Bland)** about federation. This bill is evidence of the fact that if we are ever to get away from the idea that we are Australians, rather than Victorians or Tasmanians or South Australians, we must recognize that the welfare of the people of each part of Australia is the responsibility of the people of all Australia. We must ensure that no one is placed at a disadvantage just because he happens to live in a particular part of the continent. The introduction of uniform income taxation has made it more than ever necessary that the Commonwealth should come to the help of some of the States. I was a member of the South Australian Parliament in 1930-31, during the depth of the depression, and was appointed to a committee consisting of three members from each side of the House of Assembly. We were charged with the responsibility of preparing a budget that would be acceptable to the Opposition, and which could be put through the Parliament without undue recrimination. The Legislative Council, or Upper House of the Parliament, was a .highly privileged body, and because of its constitution it was not prepared to accept a budget that would meet the needs of the people, and give them all a fair deal. The Leader of the Opposition in the Parliament at that time was the leader of the State Liberal party. He said that school-teachers were receiving too much, and that their salaries would have to be reduced as a means of avoiding increased taxation. I take my hat off to the Director of Education of that day for the way in which he stood up for the school-teachers, and put their case before us. We decided not to reduce their salaries, but the Labour Government was compelled to introduce a budget the effect of which was to give the people of South Australia a lower standard of living than that enjoyed by the people in other parts of Australia. The honorable *member* for Perth **(Mr. Tom Burke)** suggested that we should try to get away from the present system of the Commonwealth making grants to some of the States, but I cannot see how we can ever avoid the need for the Commonwealth to help those States which suffer certain natural disadvantages. When I was a member of the South Australian Parliament, I found that one of the greatest handicaps from which the State was suffering was that railways had to be built for long distances through comparatively poor country, with the result that in South Australia the revenue per mile was only one-third of that in Victoria. The deficit in the State's finances each year was almost exactly the deficit on the operation of the State railway system. Neither Liberal or Labour governments were to blame for the situation. It was necessary to open up the country, and railways had to be built. It is just unfortunate that they had to be built through country that is, and always will be, sparsely settled. I have no doubt that the same is true of the railways in Western Australia. The fact that there is this difference in the natural resources of the States has developed a tendency among some of the people to stick out their chests, and take pride in the fact that they are citizens of wealthy States. I give credit to the honorable member for Warringah for pointing out that the Commonwealth arbitration system has had the effect of making wages costs uniform over a wide field in all the States. For instance, federal trade unions take care that railway workers receive the same wages in Western Australia as they do in New South Wales, and this has the effect of increasing railway running costs in Western Australia and in the other less fortunately situated States. **Lt** is necessary, therefore, that some provision should be made to help those States to meet the rising costs. I think the honorable member for Warringah also said that, but for uniform taxation, the States would have been able to raise taxes sufficiently to meet increased charges, but [ do not believe that the poorer States would have been able to compete in that way with the States possessing greater natural resources. In years gone by people used to talk of unification, and my reply always was that f did not believe that the people were ready for unification. The same might be said of socialization although, as time goes on, people have come to accept more and more readily the benefits arising out of unified or social action. For instance, the farmers, in poor seasons, have been prepared to accept the benefits of a wheat stabilization scheme. For a great many years, the dairy-farmers readily accepted the benefits of the Paterson butter stabilization scheme, and they pressed for and obtained legislation preventing the unlimited manufacture of margarine because it was competing with butler. Thus, whether or not we like the idea of unification, the trend seems to be more and more in that direction, even though we continue to call ourselves a federation. It appears to me that the honorable member for Warringah has considered the matter from that stand-point. He believes, and indeed he so indicated, that if the Australian Government's relationship with the States develops along its present line our federal system, will gradually be altered and will become some other sort of system. He said that to-day our system is not one of parliamentary control, but rather of control by outside organizations', such as the Loan Council, the Commonwealth Court of Conciliation and Arbitration and the Commonwealth Grants Commission. I suggest that our governmental system is what must be expected because of the unification of the States. I might almost suggest that we are controlled by unification. Australia as a nation cannot depend upon different State instrumentalities, which quite often pull one against the other. Consequently we have been forced to depend on boards and other authorities which have been set up by the central government. It must be remembered that those outside authorities merely make recommendations. It is left to this Parliament to approve or dis- approve of their proposals. I suggest to the honorable member for Warringah that whether he likes it or not this system is necessary, and must remain. So long as any one State needs assistance - and it need not be my own State of South Australia - then it is for the other States, through the Australian Parliament, to give it that assistance. It has been argued of course that provision sometimes has to be made by the Australian Government out of its general revenues for the needs of States which have spent unwisely. I suggest that there has been very little unwise spending on the part of the States. A comparison of a pre-war South Australian budget with one of the present time indicates that to-day South Australia is far better off than it ever was before. {: .speaker-JQ7} ##### Mr Bland: -- That is fundamental to the Constitution. {: #subdebate-24-0-s2 .speaker-KVT} ##### Mr THOMPSON:
PORT ADELAIDE, SOUTH AUSTRALIA -- I contend that the grants which we are discussing are fundamental to our federal system. It is desirable that all the citizens of Australia, no matter what State they live in, should enjoy the same standard of living. When comparing the present financial position of South Australia with that of twenty years ago, I feel very grateful that the system of making grants to the different States has been introduced. Whatever government was responsible for introducing the present system deserves great credit because it took a great step forward in the unification of the States of Australia. The honorable member for Sturt **(Mr. Wilson)** dealt with this matter very fully, and I endorse his remarks. The sum of £4,55S,000 has been allocated to South Australia so that that State will be able to balance its budget this year. At present nobody knows whether that amount will be sufficient. It will be two years before the official report of the Commonwealth Grants Commission covering the financial year 1951-52 will be made available to us. That report will show whether that amount has been sufficient. To-day the Government of Western Australia would be in a very bad financial position if the proposed grant of £5,880,000 were not made. That government would not be able to carry on, or if it attempted to carry on it would do so at the expense of the living standards of the people. There is no need for a prolonged debate about this matter, but it is a good thing that at such a time honorable members have an opportunity to state some of the beliefs that they hold about what is essential for the welfare of the people and for the welfare of future generations. The honorable member for Perth referred to the report of the Commonwealth Grants Commission. He mentioned that it indicated an improvement in the financial position of certain States. He also spoke of industrialization. In Western Australia and South Australia industry has grown tremendously in the last few years. If those two States, as well as Tasmania, had been left to their own resources, they would never have been able to build up their industries to their present state. Last Thursday this House dealt with a bill which involved general grants to all the States of the Commonwealth. I desired to speak on that bill, but unfortunately time was limited and I was unable to do so. That bill is linked to this one. Before federation almost all our Australian industries were in the great industrial States of New South Wales and Victoria. There were a few small industries in the other States, such as clothing and boot and shoe industries, but they hardly counted in the Australian industrial scheme. The position has gradually altered, the rate of alteration having accelerated during the last few years, until now quite a fair number of industries may be found in the three smaller States. That has raised the standard of living of the people of those States. I support this bill because I believe it is a measure which gives evidence of this Parliament being a really national parliament which is trying to cater for the needs of all sections of the people. {: #subdebate-24-0-s3 .speaker-L19} ##### Mr LESLIE:
Moore .- This is a bill to give effect to the recommendation of the Commonwealth Grants Commission for the allocation of £10,522,000. That sum is to be distributed to South Australia, Western Australia and Tasmania, which are usually called the claimant States. Western Australia's allocation is £5,088,000. That is much less than the amount requested by Western Australia. It is quite true, as the honorable member for Perth **(Mr. Tom Burke)** said, that the report of the commission referred to the fact that that State did not submit details of its proposed expenditure, but stated that this money was required to balance its budget. I agree that in these times it would be presumptuous on the part of any State to submit detailed plans of its proposed expenditure because it would have no idea of what it might actually do when it came to carrying out its necessary works. I refer, for instance, to the pro-; vision of a comprehensive water scheme in Western Australia in respect of which the Commonwealth is pledged to finance half of the total cost which, originally, was estimated at £10,000,000. Of course, that estimate will be totally inadequate in view of present costs, let alone those of the future. For that reason, it would be impracticable for the States to submit detailed estimates of the cost of projects when they are applying for grants. The proposed grant to Western Australia is totally inadequate having regard to the special circumstances in which that State is placed. I again protest against the practice of the commission under which its estimate of the needs of each of the claimant States is based on the average cost for all States of such items associal services and public utilities. For instance, the commission has only partly taken into account the inescapable additional costs that are peculiar to a State like Western Australia. Special costs arc involved in the provision of up-to-date rail and other transport services because of the tremendous distances that have to be covered in Western Australia in areas which are sparsely populated. The commission overlooks those factors. It simply bases its estimates on the average cost *per capita* of similar services in all the States as a whole, and ignores the fact that that average cost is far below the expenditure that Western Australia must actually incur. {: .speaker-JTF} ##### Mr Tom Burke: -- The commission in its latest report has invited further discussion on that aspect. {: .speaker-L19} ##### Mr LESLIE: -- -I am aware of that fact. However, I shall continue to stress this point in the hope that the injustice that is being done to Western Australia will be remedied. For the reasons that L" have mentioned, the cost of making provision for education must he considerably higher in Western Australia than it is in the more populous States. [n recent years the Western Australian Government has been obliged to increase its expenditure on education to a phenomenal degree. I refer particularly to its system of correspondence schools which is conducted by highly efficient officers whose qualifications have evoked favorable comment from overseas education authorities. On the average, tha attainments of students who are educated under the correspondence school system are higher than those of children who attend school. However, in recent years, parents of correspondence students have not been able to supervise the studies of their children to the degree that they would like. Consequently, the State Government has been obliged to provide a subsidy in order to enable such parents to obtain assistance in that respect or to free themselves of some of their domestic and farm responsibilities for that purpose. Anybody who is acquainted with the facts would not criticize the State for providing assistance in that way in order to enable children who are being educated under the correspondence school system to gain the greatest benefit from it. Widespread misunderstanding exists among local government authorities and public bodies of all classes with respect to the allocation of funds that the Commonwealth makes available to the States. I have no doubt that all honorable members have received from roads boards, shire councils, parents and citizens associations, scholastic institutions or other organizations that are concerned with public welfare in various districts, requests that Commonwealth funds be allocated to them for specific purposes. Such requests may relate to defence or educational matters, the construction of a road or the provision of electric power. It should be made clear that the distribution of funds that the Commonwealth makes available to the States is entirely a matter for the respective State governments and that the Commonwealth has no power to earmark such funds for specific purposes except funds that it makes available to the States under particular legislation. The present system under which finance is made available to the States either in the form of special grants or as reimbursements in respect of uniform income tax collections is not only weak but, indeed, dangerous. Under such a system it is possible that within a short period we shall establish unification. {: .speaker-JYV} ##### Mr Fuller: -- That would be to the good. {: .speaker-L19} ##### Mr LESLIE: -- I am aware that the honorable member for Hume **(Mr. Fuller),** as a member of the Labour party, advocates unification. The most desirable system of government is one under which the people are enabled to play a direct part in their local affairs. The State governments condone the present system under which the Commonwealth makes available special grants and reimbursement payments to them, because they are glad to be able to avoid the responsibility of imposing taxes in order to raise the revenue that they require. {: .speaker-JRJ} ##### Mr Bowden: -- Some of them may be glad. {: .speaker-L19} ##### Mr LESLIE: -- I am prepared to say that all the States come within that category because taxation is the most unpopular task that confronts any government. It is much easier for a State government merely to accept funds from the Commonwealth which imposes and collects income tax and, therefore, bears the odium that attaches to the tax gatherer. {: .speaker-KWP} ##### Mr Turnbull: -- Victoria would like to raise its own revenue completely. {: .speaker-L19} ##### Mr LESLIE: -- I am not so sure that it would. The commission in its latest report refers to the operation of uniform income tax and the system of making reimbursements to the States in respect of collections of such tax. Under the existing reimbursement formula Victoria is being treated very generously. When the uniform income tax system was introduced, Victoria had a very high income and a very low tax rate. {: .speaker-JRJ} ##### Mr Bowden: -- That was the result of good government. {: .speaker-L19} ##### Mr LESLIE: -- That is so. Since then, some of the other States, including Western Australia, have had increased taxable incomes, but those incomes have not been taken into consideration by the Commonwealth when it has determined tax reimbursement allocations. When the uniform income tax system was introduced, Western Australia, unlike Victoria, had a low income and a high tax rate. If the rates imposed in those States when the uniform income tax system was adopted were applied to their present increased incomes, it would be seen that Western Australia is very much worse off than is Victoria under this system. When the system was adopted, Western Australia, unfortunately, was the second highest taxed State in the Commonwealth. The popularity of a government depends to a great degree upon its taxing laws. A courageous government that does its job and meets the needs of the people and of the nation must inevitably be unpopular at times. Some State governments want to retain their popularity with the people, and no matter how vociferously they claim the right to reenter the taxing field, they are content to allow the collection of taxes to remain in the hands of the Commonwealth knowing that the Commonwealth must bear the opprobrium that results from increased rates. They do not have to raise the money and they worry very little about the manner in which it is expended. Every State Premier and Treasurer knows that the Commonwealth Parliament would not stand idly by and allow a State to default. {: .speaker-K8B} ##### Mr Curtin: -- Why? {: .speaker-L19} ##### Mr LESLIE: -- Because Australia is an honorable nation and its honesty is in the hands of the Commonwealth Parliament. The present system of uniform income tax tends to bring about an attitude of irresponsibility on the part of the State governments and it places in the hands of the Commonwealth the fate of those State Governments that have a sense of responsibility and are eager to carry out their tasks. The framers of the Constitution did not envisage the circumstances that have resulted from this system. They did not intend that we should establish a unified system of government with the Commonwealth exercising a virtual dictatorship over finance. A weakness of the system lies in the fact that the Australian Government, which is responsible for raising revenue from income tax, has no control over a great part of its expenditure. The Commonwealth and the States must make a concerted effort to straighten out what has steadily become an impossible position in their financial relations. It would not be right that the Commonwealth should virtually be in a position to decide whether or not a small school should be established or continued at Woop Woop or some other place. Decisions of that kind can best be made by authorities on the spot who are well aware of the needs of the community in which they live. {: .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP -- Does the honorable member know to which political party he belongs? {: .speaker-L19} ##### Mr LESLIE: -- Yes; I know much better than the honorable member for Hindmarsh **(Mr. Clyde Cameron)** knows to which party he belongs. The financial relations of the Commonwealth and the States should be completely overhauled. The present system under which the Commonwealth raises the money and the States throw it away must be amended- {: .speaker-KDA} ##### Mr Duthie: -- That is not true. {: .speaker-L19} ##### Mr LESLIE: -- I am not speaking of the State which the honorable member for Wilmot **(Mr. Duthie)** represents. I do not agree with the honorable member for Warringah **(Mr. Bland)** that this is a matter for consideration by a convention. It should be considered by an investigating authority representative of all political parties in the Commonwealth and State sphere. A preliminary effort should be made to reach common ground for agreement. Those matters upon which agreement cannot be reached should be set out clearly and submitted to the people for their decision. Improvements of the financial relations between the Commonwealth and the States cannot be made piecemeal by legislative enactments. We must remember that the Constitution was framed in the horse and buggy age but that we have now reached the atomic age, and what was adequate for the horse and buggy age is not necessarily adequate for the atomic age, and vice versa. Provision must be made for a more ready means of adjusting financial differences between the Commonwealth and the States, which are likely to result in chaos. {: .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP -- What does the honorable member suggest should be done? {: .speaker-L19} ##### Mr LESLIE: -- I have already told the House what I think should be done. I support this bill- {: .speaker-K8B} ##### Mr Curtin: -- What a twister the honorable member is. {: .speaker-L19} ##### Mr LESLIE: -- I support the bill very reluctantly because, although it does not provide for Western Australia anything like the grant that that State needs to meet its commitments, the grant ot' £5,0SS,000 will at least go some way towards meeting its requirements. When the Commonwealth Grants Commission and the Treasury estimate the full extent of the contribution made by Western Australia to the national economy, I am sure that they will be prepared to treat that State more generously. In conclusion, I offer a word of advice to the honorable member for Perth. I inform him that he has no reason to feel so pessimistic, and to worry as he does, about the welfare of the country. He pays a wonderful tribute to this Government if he believes that it has the ability to correct in five minutes all the ills that were caused during eight years of Labour administration. Honorable gentlemen on this side of the chamber appreciate such a tribute, but I warn him that a little time must elapse before the Government is able to take in hand the reins of management that were recklessly thrown aside by the Labour Government, and lead the country along the road to stability and prosperity. That will be done, but the honorable gentleman should possess his soul in patience for a little time and, while still retaining his obvious belief in the capacity of this Government, realize that, after all, Ministers are only human. {: #subdebate-24-0-s4 .speaker-KDA} ##### Mr DUTHIE:
Wilmot .- T expect that the gag will be applied to this debate at any moment, but I intend to proceed with my speech until I am interrupted by the closure. At the outset, I desire to pay a tribute to the Commonwealth Grants Commission. Its report is one of the finest that is presented to this Parliament each year, because it describes in detail the reasons why the commission recommends the payment of certain grants in aid to the three claimant States - South Australia, Western Australia and Tasmania. I congratulate the commission upon its report which, though concise, covers a wide range of subjects, and fully justifies its own opinions and decisions. Whether or not honorable members agree with those conclusions does not detract from the merit of the report. The principle that the strong should assist the weak is the basis of the annual grant to the three less populous States, and I consider that such a principle must always be observed in these matters. Having paid a tribute to the comprehensive report of the commission, I should now like to direct attention to a serious matter. I do not know how the commission assesses the grants which, it considers, should be paid to South Australia and Western Australia, but I know that its report on Tasmania is based on the budget of 1949-50. If a similar basis of calculation has been adopted in respect of South Australia and Western Australia, the matter is serious. The commission has tried to overcome tin anomaly, though without much success. The fact that its recommendation for Tasmania is based upon the budgetary position in 1949-50 means that it cannot reasonably assess the present needs of the three claimant States. Inflation is forcing up the costs that are incurred by the States at an alarming rate, yet the commission has based its report upon the budgetary position that existed two years ago. South Australia, Western Australia and Tasmania received grants in aid from the Commonwealth as long ago as 1912. The Lyons Government established the Commonwealth Grants Commission in 1934, and the three less populous States have received financial assistance from the Commonwealth since .that year. The report of the commission gives a sound *resume* of the financial and economic position of Tasmania eighteen months or two years ago. The commission point3 out, in the rural chapter of the Tasmanian story, that the sheep population has increased but the number of lamb slaughterings, although the third highest, has not been sufficient to obviate the need to import meat during the last twelve months. The high price of wool, and the big increase of shipping freights, have caused the reduction of the number of ewes for fat lamb breeding. More sheep are now grown for wool, and that factor will have a detrimental effect upon the supply of meat for domestic and export purposes. The output of the dairying industry has increased during the last two years. A stimulus has been given to dairying in Tasmania by the scheme for the settlement of ex-servicemen on the land, and production will increase as additional exservicemen take up holdings. The potato position has been grim. The potato acreage has been reduced as a result of uncertainty about marketing and prices. Growers in Tasmania are desperately anxious about the position, and some of them have changed to dairying and sheepraising. New areas are being developed for primary production, principally on the north-east coast and in the Marrawah swamp area on the north-west coast. The State Government proposes to expend a considerable sum of money on a twentyyear developmental plan to convert that vast swamp into land suitable for primary production. Bulldozers are being imported from the United States of America for that purpose. About twenty of those machines have already arrived, and some of them will be hired to primary producers, but most of them will be utilized on that developmental project. One of the most serious aspects of rural production to-day is that the sons of farmers do not appear to be interested in working the land when their fathers have retired from primary production as a result of age or illness. That reluctance, on the part of young people to settle on the land is almost general throughout the Commonwealth, and I do not know whence the future generation of farmers will come. That position should be of concern to every honorable member because the need for an increase of primary production is urgent. Production from the land may be described as the life-blood of our economy. If the sons do not follow in the footsteps of their fathers, who is to take their place? One solution of the problem in Tasmania is for the State Government to sponsor the establishment of machinery pools, from which machinery of all types would be hired to farmers who have not sufficient labour for their requirements. During World War IT., thousands of pounds' worth of equipment in machinery pools was hired to fanners to enable them to maintain production when labour was diverted from the rural areas into the Royal Australian Navy, the Army and the Royal Australian Air Force. A similar position has arisen to-day, because labour has been attracted from the primary industries to the secondary industries in the large cities. Farmers must be encouraged to carry on the struggle and maintain production. Tn my opinion, machinery pools would be of immense assistance to them. {: .speaker-JOE} ##### Mr Jeff Bate: -- Why do farmers in Tasmania have to struggle? {: .speaker-KDA} ##### Mr DUTHIE: -- They are struggling because of uncertainty regarding prices, labour, and lack of machinery. The establishment of better dairy herds, fodder conservation, and the growing of supplementary fodder crops are notable achievements in Tasmania during the last five years. Fodder conservation was almost unheard of before that time. Primary producers and others believed that the island had such rich soil, and an assured rainfall, that it was not necessary to conserve fodder. The last four years, in one of which a serious drought was experienced, have taught those people a bitter lesson, and a great impetus has been given to fodder conservation. "We have even held fodder conservation competitions throughout the island. The Commonwealth Grants Commission has criticized the Tasmanian Government for making a grant of £300,000 to fruit-growers in the Huon Valley who lost practically all their crops through a bad frost, but I consider that the Tasmanian Government took the right course. Had the grant not been made, some of the fruit-growers, particularly those who were in their first year of operations, would have been forced out of business altogether. The money will come out of this year's grant, of course, but I believe that the Tasmanian Government's action was necessary to keep the fruit-growers in production. Motion (by Mr.eric J. Harrison) put - That the question be now put. The House divided. (Mr. Speaker - Hon. Archie Cameron.) AYES: 56 NOES: 44 Majority . . . . 12 AYES NOES Question so resolved in the affirmative. Original 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-start } page 1899 {:#debate-25} ### STATES GRANTS (ADMINISTRATION OP CONTROLS REIMBURSEMENT) BILL 1951 {:#subdebate-25-0} #### Second Reading Debate resumed from the 27th September *(vide* page 157), on motion by **Sir Arthur** Fadden - >That the bill be now read asecond time. {: #subdebate-25-0-s0 .speaker-JTF} ##### Mr TOM BURKE:
Perth .- The Opposition would like to say a great deal about this bill, but I understand that the Government is determined to use its numbers in order to curtail the debate. The Opposition believes that the Government ought to do its utmost to make the restricted form of prices control that is at present operating as effective as possible. "We know that control by the States is not fully effective, and we believe that it will not become fully effective unless this Government assumes full responsibility for it. Unfortunately, it is not possible for the Opposition to deal with all the manifold ramifications of this subject in the limited period of time that will be available for consideration of the bill. Therefore, sneaking on behalf of the Opposition, I shall be obliged to restrict my comments to general principles. The Government should accept the consequences that flow from legislation of this character. The bill provides for a grant of £S19,000 to reimburse the States for the cost of administering prices control. This is in accordance with the procedure that was laid down by the Chifley Labour Government. When the present system of prices control was instituted, the late **Mr. Chifley,** as Prime Minister of the day, undertook to reimburse the States the cost of administration of the system, and, in addition, to give them any other assistance that they required. This Government has continued the policy of granting funds, but it refuses resolutely to accent other responsibilities that rightly should rest upon it. Month after month, State Prices Ministers and their governments have sought assistance from this Government without avail. Failing sole control by the Australian Government, they have asked for the appointment of a Prices Minister representing the Commonwealth to co-operate with them. The Opposition considers that that is the very least measure of assistance that this Government should be prepared to concede. It should be obvious to the Treasurer and his colleagues that, without the full participation of this Government, the present system of prices control is merely a waste of money. If the Government will not even take an interest in the problems that beset the State governments, prices will continue to rise, the economy of the country will become even more unstable, and the money that is expended on prices control will not be productive of good results. After constant needling by the States, this Government did agree to make available the services of **Mr. McCarthy,** the former Prices Commissioner, to act in conjunction with the State governments in a sort of co-ordinating capacity. But that action was a tardy and futile gesture. The Government should go still further. It is useless to try to operate a system of prices control unless that system is made as effective as it can be made and, therefore, it is useless to ask **Mr. McCarthy** to accept any responsibility as a co-ordinator unless this Government allows one of its Ministers to sit at conferences with the State Ministers. Why have the requests of the States been refused? They have asked for assistance time after time, but this Government has flatly refused to help them and will not give any reasons to justify its decision. It merely says " No " to every request from a State government. In fact, it treats the States with contempt. The State governments, both Liberal and Labour, are doing their best to make prices control effective, but they claim that they can succeed only in recording prices under the present system. This Government has wide powers in relation to customs and excise duties and export trade, and its co-operation would be invaluable. Therefore, the Opposition asks it to give reasons for the stand thai it has adopted. No explanation has been vouchsafed to the State governments. Surely, when we are asked to grant a sum of £S19,000 to the States for purposes of prices control, we are entitled to have some statement from the Government in support of its continued policy of inaction. The Government is acting as though it were giving away its own money without any regard for the method of expenditure or the possible benefits accruing from that expenditure. It has told the States that it will give them almost £1,000,000 but that they must bear the sole responsibility for its expenditure. Ii refuses even to consider the appointment of a Minister to co-operate with State Prices Ministers and it has flatly refused to support the prices control system by means of subsidies. All its old arguments have been thrown overboard. That is why we ask the Government to tell us and the country, even at this late stage, what it proposes to do. Naturally, the Opposition will support a bill that makes prices control by the States possible. Although the system is almost entirely ineffective it is better than no system of control at all. No responsible government in any country would hand over nearly £1,000,000 and refuse to take action in order to ensure that the expenditure of that money should achieve good results. This is the first Government in history to behave in that way. It proposes merely to hand over the money to the States and then to wipe its hands of the problem. It is the senior partner in the Australian governmental system, and it ought to take a share in the conduct of prices control. But the Prime Minister has said " No " and the Treasurer has said " No ". They expect the Opposition to agree, within a period of about ten minutes, to hand over this vast sum without qualification of any sort. Their conduct represents political irresponsibility in the extreme. It reveals a complete disregard of any of the principles of sound governmental finance. The Government appears to hold the view that all wisdom reposes in the Cabinet, as it may be constituted from time to time by the accident of selection. The back benchers on the Government side of the House have disclosed a grave lack of responsibility by allowing themselves to be dragooned into approving of the proposed grant. They have not made any effort to ascertain the probable effect of the expenditure of the money or to elicit any explanation of the Government's refusal to assist in the administration of prices control. The Government placed this bill on the stocks over a month ago, and now it expects us to pass it within a few minutes. It does not even admit that any problem exists in relation to prices control. It merely says that it will not do anything to help the States apart from handing over nearly £1,000,000 to them. Motion (by **Mr. Eric** J. Harrison) proposed - >That the question be now put. {: .speaker-KNM} ##### Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP -- Shame! {: #subdebate-25-0-s1 .speaker-10000} ##### Mr SPEAKER: -- Order! That word must not be used in relation to any proceedings in the House. Question put. The House divided. (Mr. Speaker - Hon. Archie Cameron.) AYES: 56 NOES: 40 Majority . . . . 16 AYES NOES Question so resolved in the affirmative. Original 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 * Sitting suspended from 6.5 to8 p.m.* {: .page-start } page 1901 {:#debate-26} ### SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1951, {:#subdebate-26-0} #### Second Reading Debate resumed from the 26th September *(vide* page88), on motion by **Sir Arthur** Fadden - >That the bill be now read a second time. {: #subdebate-26-0-s0 .speaker-BV8} ##### Mr CALWELL:
Melbourne .- The case against this Government in the matter of its sales tax legislation, and, indeed, in respect of every other proposal embodied in the budget for 1 951-52, is a particularly deadly one. The amount sought to be raised by indirect taxation during this financial year is the highest in our history. Sales taxation was once described by the Vice-President of the Executive Council and the Leader of the House **(Mr. Eric J. Harrison)** as a vicious form of taxation. During this financial year it is expected to yield £117,000,000 of the total amount of the budget- £1,014,000,000- just a mere thousand million of money. This vast total of appropriation represents at least 30 per cent, of the estimated national income during this financial year, compared with at least 34 per cent, of last year's national income. Sales tax, represented by £114,000,000, will therefore equal 3 per cent, of the national income. No country can survive under that weight of taxation. ' Never before has so much money been raised by an Australian government by a tax on the sale of goods. In the midst of the war period the highest rate to which the former Labour Government took the sales tax schedules was 25 per cent. We needed the money at that time in order that the men in the fighting forces could be kept in the field. There is no war on now to justify increasing the rate to 66jj per cent. There is no war, unless it be a war in the party room against yourself, **Mr.** Speaker, or some other people- {: #subdebate-26-0-s1 .speaker-10000} ##### Mr SPEAKER: -- Order! I am not subject to sales tax. {: .speaker-BV8} ##### Mr CALWELL: -- But you are subject to "attacks" in another connexion! There may be a war in the Cabinet room about revaluation of the currency, but there is no war to justify a heavy impost of this nature. Sales tax was first levied in 1931, in the midst of the depression, and from that time until the end of World War II., successive governments took £21S,500,000 out of the pockets of the people by this means. From the end of the war until the advent of the present Government, £186,000,000 was collected in sales tax. In the two years during which this Government has been in office more than £170,000,000 has been raised, or is in the process of being raised. In his budget speech the Treasurer **(Sir Arthur Fadden)** gave the House certain figures, but the Secretary to the Treasury has supplied to me other figures. He has told me that sales tax during the last financial year yielded £57,000,000, compared with £42,000,000 in the last year of office of the Chifley Government. It is estimated that during this financial year it will yield £60,000,000 more than during 1950-5.1. The M'enzies-Fadden Government has the unenviable distinction of being able to boast that it has collected twothirds as much in sales tax in the two years during which it has been in office as was collected in the first fifteen years of the operation of the tax, including the war years. It represents nearly as much as was collected by the Chifley Government in the five post-war years - the dangerous transition period when we were passing from war to peace. It is amusing to read the policy speeches of the leaders of this Government when they were contesting the general election in 1949. The present Prime Minister **(Mr. Menzies),** when speaking at Canterbury, Victoria, in November, 1949, as Leader of the Opposition, made this promise to the nation - >We will review the incidence of indirect taxes (which are a huge though sometimes unrecognized item in Australia) upon basic wage and cost of living items and housing costs. How has the right honorable gentleman reviewed them? He has increased the tax to limits that were beyond the contemplation of even the most enthusiastic sales tax-minded economists. Not to be outdone by the senior partner of the firm, the Treasurer, who was then merely the Leader of the Australian Country party, when speaking at Boonah, in Queensland, stated - >We promise that a competent review will also be made of the incidence of indirect taxation because we recognize the necessity for sensible reductions in the many cases where such reductions will arrest the upward trend of living costs. What did the Government do last year in the way of a review of the sales tax? It gave a remission in respect of neon signs and other items, but the total remissions amounted to only £1,000,000. But then the Government " planked " on, for good measure, increased rates estimated to yield another £10,000,000. This year, the Government intends to grant remissions totalling only £16,000, but, according to the Treasurer's budget speech, the higher rates will yield an additional £35,000,000. According to the Secretary to the Treasury, the additional yield will amount to £60,000,000. In all, the Government remitted only £1,000,000 of sales tax last year. The Chifley Government, from 1942 onwards, gradually remitted sales tax and reduced the rates on various items in the schedules. During its period of office it granted remissions that totalled £36,000,000 annually. In the light of present-day values, those reductions are certainly worth much more to the people of Australia to-day. I shall entertain you presently, **Mr. Speaker,** with some " play-backs " of speeches that once fell from the toughened lips of certain Ministers in this Government when they were in Opposition. When he was out of office, the Treasurer contended that a reduction of sales tax and of other forms of taxation would help to cure inflation. But now he says that the way to kill inflation is to tax the people to killing point. He says he wishes to skim off all their surplus money. To do that we must tax the babies, their mothers, and their fathers. We must deprive their older brothers and sisters of a tennis racquet or a cricket bat - anything that savours of a luxury - because only when the mass of the people have no luxuries left will the Treasurer solve the problem of inflation. That is his argument. He was recently created a Knight Commander of the Order of St. Michael and St. George. This latest Commander of St. George now tells us that if he can increase taxes, he will be able to slay the dragon of inflation. Instead of the modern St. George being on top of the dragon, the dragon is on top of him. The dragon, in reality, is sprawling all over the country. Let me quote some extracts from a speech that the Treasurer made on this subject in this chamber on the 20th October, 1948. The right honorable gentleman said - >Tooth paste, washing soap, soap powders, dusters and dish cloths are essential aids to cleanliness and to the maintenance of healthy living standards yet they are all subject to sales tax at the rate of 2s. in the £1. Surely prevention is better than cure in this case as in others. Is it not ridiculous that the Government should spend tens of millions of pounds on social services, and at the same time place a heavy tax on essential aids to a healthy existence ? Those items are now subject to sales tax at a much higher rate than was imposed when the right honorable gentleman was leading the Australian Country party in Opposition. The Treasurer, who has sponsored the increases of sales tax that we are now discussing, is the man who, three years ago, used the words that I have just quoted. On the same day he said - >Is there any parent who would allow his child to grow up through a toyless and partyless childhood, or without some indulgence in sweets or ice cream ? It is only those of us who have experienced the intense happiness that children get from the simple pleasures, who can appreciate the official niggardliness that taxes them so severely. In those days, sales tax was relatively light and was not imposed on many toys. Under this bill, it will be imposed on ice cream at the rate of 20 per cent., on toys at the rate of 33-^ per cent, and on party decorations and novelties at the rate of 66f per cent. Contrasted with the Government's proposals that I have mentioned, how banal do those words of the Treasurer sound now? What bathos! Branches of returned servicemens' organizations, legacy clubs and committees of orphanages throughout Australia are appealing to the Treasurer and also to honorable members on this side of the House for a remission of these taxes so that they may be able to give to the children under their care the Christmas treat that every child expects to enjoy. If there is one man who will go clown in the history of this country as the man who tried to kill Santa Claus, it is the present right honorable member for McPherson. The Treasurer was really wound up when he made the speech from which I have quoted. The eloquence flowed from his lips as fast as did the promises that he made from election platforms approximately twelve months later. Referring to the late **Mr. Chifley,** he said - >The Treasurer would surely not regard smoking as a luxury. If ever he subscribed to the view that it should he dispensed with, he would have more strikes on his hands than he could manage. Not content with imposing heavy excise duties on cigarette papers and matches, the right honorable gentleman also imposes sales tax on these two items, which most men regard as necessities. 1 am still quoting the present Treasurer, who will have to make to the electors of Australia his defence in respect of this and other aspects of the budget when next we can drag the Government parties unwillingly before their masters. The right honorable gentleman also said - > >As the revenue can certainly afford a reduction of these taxes, it would be sounder economically if the price increases were absorbed by reducing or eliminating the indirect taxes on these items. There would then be no need for sharp increases in the basic wage to cover these high costs. The whole administration of sales tax in this country is a farce. The anomalies that exist are too glaring to escape the notice of a responsible Treasurer, and the time has arrived when they should be rectified. The place at which to start is the base, and the base of social justice is the home-life of a community. Having compared the statements that the right honorable gentleman made when he was a member of the Opposition with those that he has made while he has been the Treasurer of this country, we are entitled to ask whether he is a responsible or an irresponsible Treasurer. Can any Treasurer be regarded as responsible who imposes a sales tax of 66$ per cent, upon knives, forks and spoons and yet talks about the base of social justice being the home life of the community? Can the right honorable gentleman be an honest Treasurer when he has been found to have been guilty of such a reversal of his beliefs? He finished his speech by saying - >The bill should be withdrawn and redrafted on a sensible basis having regard to our economic requirements and the indispensable need for an improvement of the home life and health of the community. We say that this bill should be withdrawn and re-drafted. We shall vote against every part of it, because there is nothing good in it. {: .speaker-F4T} ##### Sir Arthur Fadden: -- Did the Chifley Government withdraw its bill ? {: .speaker-BV8} ##### Mr CALWELL: -- No. It was not withdrawn, because it was a good bill. The maximum rate of sales tax at that time was 25 per cent., a.nd in the next year it was reduced to 20 per cent. The Chifley Government reduced the general rate of sales tax from 12^ per cent, to 84 per cent. This Treasurer has increased the general rate from 8^ per cent, to 12^ per cent. Last year, he was responsible for the insertion in the principal act of a schedule of articles upon which sales tax was imposed at the rate of 33-£ per cent., and this year he is seeking the insertion of schedules of articles upon which the tax will be imposed at the rate of 50 per cent, and 66f per cent, respectively. This country cannot stand that. The increases are savage, unnecessary and burdensome to all sections of the community, especially family people. When we become the Government of Australia in approximately two years time, we shall get back as quickly as possible to the Chifley rates. The people of Australia wish that **Mr. Chifley** was Treasurer now and that there were in operation the rates of sales tax that prevailed when the Labour party was defeated. On the 19th October, 1949, the present Minister for Labour and National Service **(Mr. Holt),** referring to the Chifley Government's sales tax. proposals, said - >In the average household budget, the sales tax represents a considerable expenditure, despite proposed reductions. 1 he sales tax is expected to yield £35,000,000- Contrast that with £117,000,000 to-day- or more in the current year, or £5 a head per annum, or at least £20 per annum for the average Australian family. Under this bill, of which the Minister for Labour and National Service is part author, it is proposed to raise by means of the sales tax not £5 but £14 a head per annum, and not £20 but £56 per annum for the average Australian family. In insincerity or calculated contempt for public opinion could anybody go further than the Minister arid his colleagues have gone in the" preparation of this measure? Yet even worse could happen to the country if this Government lasted for another year and brought down another budget. That would be the last budget that it would present for a long time, because the country would then be finished and so would the Liberal party and the Australian Country party, at least for the life-time of every person who now has a vote. The Vice-President of the Executive Council **(Mr. Eric J. Harrison)** had his say upon this matter. I could regale honorable gentleman opposite with quotations from speeches until I had raised a blush upon their cheeks, although that would be very difficult to do because by now they are hardened political sinners. The Vice-President of the Executive Council said that worthwhile reductions of sales *tax* would have a material effect in keeping living costs down. I give him back his opinions. Worthwhile reductions would do so, but worthwhile reductions are not the order of the day as far as this Government is concerned. The increased costs with which it has burdened the people will not keep living costs down because sales tax percolates into the basic wage. Every increase of tax of this kind will mean higher quarterly adjustments of the basic wage. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- Sales tax on luxuries has been increased. There is no tax on housing materials. {: .speaker-BV8} ##### Mr CALWELL: -- The Vice-President of the Executive Council has said something about housing. Let me read what the honorable gentleman said previously - >The Government could have removed sales tax on furniture or other articles that go to make a home, but unfortunately, the sales tax remains on these items. Not only does it remain, but it will be increased to 50 per cent. ! This Government even proposes to tax a baby's cot. Surely the cot is a piece of furniture ! Paradoxically enough, it does not propose to tax perambulators. Apparently it believes that a perambulator is a piece of furniture while a cot or a bassinet is not. Tho Vice-President of the Executive Council also said-:- >Young couples, who are embarking on married life, in addition to having to pay exorbitant prices to get their homes built, must pay sales tax on their bedroom suites, the mattresses on which they will sleep, the tables and chairs that they will use, and the knives and forks that they will use when having their meals. They will also have to pay sales tax on the ice chests or refrigerators in which they will keep their food, and the pots and pans in which they will cook their meals. They must also pay sales tax on the linoleum for their floors, the Venetian blinds for their windows, and' even the soap containers and rubber mats that they require. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- An excellent speech ! {: .speaker-BV8} ##### Mr CALWELL: -- If the honorable gentleman carried out while in government the dictum that he uttered when in Opposition it could bo regarded as an excellent speech. However, not only has he become an ardent sinner himself but he also supports the imposition of tax of up to 50 per cent, on items that he said should never he taxed. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- The circumstances are different to-day. {: .speaker-BV8} ##### Mr CALWELL: -- Yes, they are. The country has lost a good government and has acquired a bad one. That is the only way in which the circumstances are different. I hope that the honorable member continues to interject. On that occasion he also stated that - >The happiness, harmony, and satisfaction of young couples means far more to this country in the long run than the obtaining by the Government of even hundreds of thousands of poinds by way of sales tax on these commodities. Yet he is privy to the sales tax legislation under which Australia is groaning to-day. I use the word " groaning " in the literal sense. I have already referred to the fact that the honorable member spoke of sales tax that had been imposed by the Chifley Government as " this vicious indirect tax ". Yet he is prepared to be a party to the perpetuation and aggravation of it, to an accentuation of its burdensomeness and all the evils that are in it. The honorable member concluded his speech by moving the adoption of an amendment in the following terms: - >That all words after "That" be left out, with a view to insert in lieu thereof the following words: - "the bill be withdrawn and redrafted for the purpose of correcting grave anomalies in the present and proposed incidence of sales tax in order to provide adequate relief to persons with family responsibilities and to protect the healthy and economic conditions of family groups. It is because the Opposition is concerned about the family groups and the people who have family responsibilities, that it is protesting to-day. This Government is taxing from the cradle to the grave. It has not yet taxed coffins, but I have no doubt that it will do so next, year if it remains in office. I ask honorable members to listen to the succession of sales tax impositions which this Government will place on every newly born baby. The soap that washes it, the powder that soothes it, the dummy that satisfies it and the cot that holds it will all be taxed. All those items are now super-luxuries, according to the Treasurer. Unless babies are prepared to do without their soap, powder, dummies and cots, apparently he cannot grapple properly with the evil of inflation. Either the babies must do without those things or their parents must pay a punitive tax which ranges from 12½ per cent to 50 per cent under this legislation. Several hundred thousand babies have been born in this country since the Government took office, but it seems to me that all of them will grow up roundshouldered because they will be obliged to carry the Prime Minister **(Mr. Menzies)** and the Treasurer on their poor little backs. Not only must they do that, but they must carry every other ministerial " no-hoper " as well. Amongst those babies is the grandson of the Prime Minister. He is a very nice little boy, but his sad fate is that he has to help to carry his grandfather on his back, because the people of Australia were foolish enough to make his grandfather Prime Minister. About the only item that this Government does not yet propose to tax is man's last refuge - his coffin. I now wish to say a few words concerning the burden of sales tax which this Government will impose upon the women of the nation. When the Treasurer introduced the budget, he paraphrased Nelson's famous signal and sent out one of his own to the nation. It read, "The Menzies-Fadden Government expects this day that every woman will do her beauty ". The honorable gentleman who sent out that message went to an Australian Country party conference in Ballarat last year. I have no doubt that he has vivid memories of the gathering, because he was given a very rough time. One elderly lady, a member of his party, questioned him concerning the Government's punitive sales tax legislation. He turned to her and said, " I would sooner paint an old house than paint an old face". {: .speaker-KX7} ##### Mr Ward: -- Did he say that? {: .speaker-BV8} ##### Mr CALWELL: -- He said that. The honorable member for East Sydney **(Mr. Ward)** will agree that it was exquisite diction and classical prose. No wonder the lady spoke of the charming man we have as Treasurer. It is certain that the right honorable gentleman and Dale Carnegie are not pen friends. The women of Australia are " mad " because of these heavy sales tax proposals. I have the authority of the press of Sydney and Melbourne for my statement. One Sydney newspaper report stated - >Sydney women are " hopping mad " over the steep tax increases on cosmetic and hairdressing items. They regard the added 50 per cent sales tax as a " deliberate hit in the face " and an " unwarrantable addition " to ever-growing money worries. A Sydney woman is reported to have said - >I'm not a young woman, but I always wear make-up because it makes me feel better.I don't see why they want to take this little bit of brightness out of women's lives. Honorable members on both sides of the House are aware that the women of the nation have objected most strenuously to what has been done. Apparently, in order to even things up, the Government has introduced a 50 per cent tax on razor blades and shaving soaps and creams. I do not know whether the Government wishes to encourage men of this generation to grow whiskers, but according to it, unless men and women who use face lotions, hair lotions, shaving cream and razor blades are prepared to pay a 50 per cent tax, the battle of inflation cannot be won. This means, in effect, that every time a woman buys a piece of lipstick she must cut it in half, post onehalf to the Treasurer and use the other half herself. Whenever she buys a box of " Angel Face " she must scoop out one-half of it and send it to the Treasurer. In other words, each time she takes out her powder puff to powder her nose she will suffer the indignity of having the Treasurer dart his hand over her shoulder in order to get his cut first. Who are the people who have attacked the women of Australia with this shocking increase of tax on face powder, hair lotion, lipsticks and cosmetics generally? Are they handsome young men who have never been in love and therefore know no better ? Nothing of the sort ! They are the Ministers in the present Cabinet - twenty aged and ageing misogynists; just twenty withered emblems of the old order. This is a wonderful government. It calls itself a Liberal government, and itincludes an Australian Country party element which shelters under the wing of the Liberal party. The members of the Government describe themselves as being liberal-minded. We must give them credit for one piece of liberalism - they have certainly given to Australia a liberal dose of intiation, lt has been so liberal, in fact, that Australia's economy is now in danger of collapse. There is a great deal of concern throughout the country about the incidence of sales tax. Women, particularly women whose husbands voted for the Liberal party at the last general election, arc upbraiding their husbands. One man told me recently that he intended to vote for a Labour party candidate at the next general election, even if only to keep his wife quiet. There may, of course, be some people in this country who, in spite of the Government's severe taxation of all sorts, and particularly sales tax, are still prepared to vote for Liberal and Australian Country party candidates at general elections. But surely the number is not great. If it is, then all I can say is that such people must be gluttons for punishment. I shall give to the House further examples to show how unfairly the proposed rates of sales tax will operate. The Government would find it impossible to justify some of the rates which it has imposed in respect of certain articles. The rate of tax on fountain pens, for instance, is to be 33-^ per cent. Every father likes his school child to have a fountain pen. Everybody who works in an office wants to own a fountain pen. Most people would rather have a fountain pen than any other kind of pen. A fountain pen is not a luxury. It is a necessity. But everybody who buys one is to pay a tax of 33j per cent. The rate of tax on lunch cases that exceed 12 inches in length is to be 33^ per cent. A man who has a good appetite will pay 33^ per cent, tax when he purchases his lunch case, but another man who can keep hi9 appetite within the bounds of the con tents of a 12-in. lunch case will not have to pay any sales tax. Sewing bags, shopping bags and knitting bags are all to be subject . to tax of 33-£ per cent. Honorable members know what a simple article a shopping bag is. It is just a collection of holes bound together with string. Unless purchasers of such bags pay sales tax, the country will go broke 1 The items that I have named are placed in the same category as yachts, - skiffs, dinghies, launches, speed-boats and canoes. I do not know how the Government works out .its equations, or what its sense of value is, when it places on toys and parts for toys, on Christmas stockings and Christmas crackers, on games and puzzles, on " Snakes and Ladders " and " Ludo ", the same rate of sales tax as it imposes on yachts and ocean-going vessels. That unrepentant sinner, the Vice-President of the Executive Council, had the hardihood, in other days, to demand the abolition of all forms of sales tax. As a matter of fact, right throughout the war period, when we had to impose sales tax, as well as company tax of up to 6s. in the £1 and income tax on individuals of up to 18s. 6d. in the £1, members of the Government, who were then in Opposition, were always crying out for the abolition of sales tax. In every year the Labour Government introduced proposals for reductions of sales tax. Never a year went past in which we did not reduce sales tax to some degree. Yet the honorable gentlemen now in office demanded more and more reductions every time. Now they have the odious temerity to try to justify in this House high rates of taxation which have never been known in this country, or in Canada or in any other country in which sales tax is levied. Other items on which a rate of 33; per cent, is to be paid include fireworks, rockets, coloured lights, electric sparklers and catherine wheels. The rate of sales tax on wireless receiving sets is to be increased from 25 per cent, to 33^ per cent. That is a very heavy impost on the purchaser of a radio set, which is an everyday necessity. People need radio sets so that they may listen in to the races on Saturdays, to church services on Sundays and to the Parliament when it is in session. But the Government does not want people to listen in to what goes on in this Parliament. It wants to make it as hard as possible for the people to own radio sets, or to be able to pay the listeners' licence-fee, which is now to be increased to £2. I think it was the Minister for Labour and National Service who said once that there were 600 pages of items that were subject to sales tax. The Government is doing its best to add greatly to the number of pages. The' fifth schedule, to which I have already referred, names the items on which a rate of sales tax of 50 per cent, is to be paid. The list includes toilet- and beauty preparations and materials, including powder puffs, powder compacts, safety razors, safety razor blades and shaving brushes. Articles in the sixth schedule on which a rate of 6G$ per cent, is to be imposed, include knives and forks, spoons or other cutlery, and even ordinary scissors. Also in this category are toothpicks, cigar or cigarette cases, nut-crackers and incense burners. . I do not know why the Government wants to tax incense burners, unless it believes that no honorable member on its side of the House is prepared to burn incense before it any longer, and so considers that it does not matter now whether they buy incense burners or not. A rate of 66$ per cent, is also to be imposed on cigarette lighters. Sections of the community which have a very real grievance against the Government for its past and proposed severe increases of sales tax and its last heavy increase of general taxation, include retailers and wholesalers. I have here a letter from a Sydney jeweller who writes that he has to pay 66$ per cent, sales tax the moment he buys his goods, although he may never sell them, or at least may take a long time to sell them. He has to pay the tax; and the wholesaler before him- {: .speaker-JXI} ##### Mr Freeth: -- - Maxie Falstein. {: .speaker-BV8} ##### Mr CALWELL: -- I said "a Sydney jeweller ". This particular gentleman operates in Martin-place, in Sydney. He is a reputable jeweller and a very good citizen. As he once mistakenly voted for a Liberal party candidate, he is obviously not the former honorable mem1 ber for Watson. This gentleman makes a very strong protest about the result of the sales tax at the point at which it is imposed. He states in his letter - >The point I wish to stress is that while the retailer *pays* this sales ta.v, the actual manufacturer, the wholesaler, the agent, or the distributor does not pay any sales tax at all. None of these people pay litis tax themselves, other than actually adding the tax to their accounts, collecting it from the retailer, and remitting it to the Taxation Commissioner. That position should be altered soon. Unless it is altered, quite a number of retailers, not only in the big cities but also in the country towns, will have to close down. The Government's sales tax legislation is punitive and embarrassing and can have the effect only of depriving many people of their businesses and occupations. Last year the Government said that its sales tas legislation was designed to divert manpower and material from non-essential into essential industries. To that degree it was a form of industrial conscription which was completely obnoxious to the people generally. The Government has no right to continue to deprive men of the opportunity to work where they want to work. It should mete out even-handed justice to all sections of the community. It should show no favours to any section, and it should administer its laws justly. All that this legislation will accomplish will be an increase of inflation which will make it more difficult for ordinary families to live and will make it very difficult for people to maintain their standards of living. It will also make it most difficult for a number of big business people to hold their present staffs. If the Government considers that by this means it will assist the economy of Australia it is mistaken. Instead of collecting £117,000,000 from taxation the Government should refrain from budgeting for a surplus of £114,500,000. Instead of expending huge sums on defence the Government should take less by means of indirect taxation. What Government supporters said when they were in opposition applies with even more force at present. There was no basis for the criticism that those honorable members levelled at the Chifley Government, which progressively reduced all forms of taxation, including sales tax. This Government is increasing taxation in all its forms. It is pushing Australia to the edge of a precipice, and unless it is destroyed soon the *country* that we all love will be destroyed. For the safety of Australia, the Menzies-Fadden axis must go. {: #subdebate-26-0-s2 .speaker-KGC} ##### Mr HAMILTON:
Canning .- Most honorable members hold the honorable member for Melbourne **(Mr. Calwell)** in fairly high regard, realizing his capabilities. But to-night we have listened to 40 minutes of clowning by the honorable member, who is the deputy leader of a party which his colleagues refer to as " the great Australian Labour party ". The honorable member has not proved himself to be capable of leading such a party. He commenced by saying that this is a deadly piece of legislation and later hinted that the fate of the nation depends on lipstick. He revealed himself as inclined to oppose defence expenditure when he said that the Government should not expend so much money as it proposed to expend on defence. Apparently he made that statement as a result of the representations of the deputations that have visited this building during the last fortnight. The honorable member quoted other honorable members of long experience in this House in an endeavour to bolster his case, but said very little concerning the sales tax legislation and in what he did say was far from the truth. He did not say one word on the Labour party's determination, when in office, not to remove the sales tax on requisites for the blind people, even after repeated representations by institutions on behalf of these people. He did not say a word about the exemptions that are included in the bill before the House, but he did say, incorrectly, that a tax of 66 per cent, is proposed on knives, forks and spoons. The bill proposes that there shall be a tax of 66 per cent on the following items that are set out in the Sixth Schedule : - >Plate and plated wear, being articles made wholly or principally of or plated with, platinum, gold, silver or other precious metal, and including articles of rolled gold or gold filled articles,but not including - > >Knives, forks, spoons or other cutlery; > >Scissors; > >Cutlery sharpeners: or > >Goods covered by any item in any other Schedule to this Act. It ill becomes an honorable member such as the honorable member for Melbourne, who holds a responsible position in this House, to make and repeat on several occasions the misstatement that there is a tax on items that are specifically excluded, when he knows full well that there is no such tax. The honorable member said that people were taxed from the cradle to the grave and that linoleum and other household requirements will be subject to a high rate of tax under the Government's proposal. He knows that it is only proposed that there shall be a tax of 12½ per cent, on such items as will come under the general rate. All that we have heard from the honorable member has been a repetition of speeches that were made years ago and deliberate misstatements of fact. The honorable member took great pleasure in quoting from the policy speech which the present Prime Minister made in 1949. I remind him that since the 10th December, 1949, there has been a complete change in the outlook of *the* nations of the world. There was then no such thing as a war in Korea. There was no such thing as the mad armaments race that is going on throughout the world now. There was not the severity of inflation that there is to-day and the Government did not face the internal problems with which it is faced to-day. The honorable member admitted that the Labour Government had to impose a sales tax during the war. Let us look things fairly in the face as the Minister for the Interior **(Mr. Kent Hughes)** recently suggested that we should do. Our men are fighting in Korea and we are at war and must take the necessary precautions to ensure that those men shall be all right. The Government must strengthen our defences in order to protect Australia against any aggressor who may seek to attack us. Revenue must not be frittered away. Even if the Government has a surplus at the end of the financial year it will need it to redeem outstanding treasury-bills or to underwrite loans for the States. The principles of good housekeeping require that one shall save for a. rainy day and that is what the Government is endeavouring to do. These taxes would not be imposed if it were not for the position in which the Government finds itself. Repeated reference has been made in this House to the fact that the Australian Loan Council found it necessary to reduce loan programmes totalling £300,000,000 to £225,000,000, and that the Commonwealth undertook to provide from revenue whatever amount could not be raised by loans. It is important to remember that there are most essential goods which are exempt and will always be exempt from sales tax. The honorable member said a few minutes ago in the concluding part of his speech that the Government should not expend so much on defence. Are we to throw in the sponge, and make no effort in our own defence? Is that what members of the Opposition would like us to do? As the Prime Minister and the Treasurer have told us, these taxes have been imposed for a specific purpose. Much has been said about the sales tax on ice-cream, and the Government has been charged with taxing the " kids ". Mr.Ward. - So it is. {: .speaker-KGC} ##### Mr HAMILTON: -- Honorable members should know that adults eat more icecream than do children. On every hotel and restaurant menu, and on the bill of fare in the refreshment-rooms in this building, ice-cream regularly appears. Millions of gallons of milk are used in the manufactureof ice-cream and chocolate, when it should be used for the manufacture of butter and cheese. Not long ago, the people of New South "Wales were trying desperately to get butter from other States. It was even being sent by aeroplane from Western Australia to New South Wales. Our own kith and kin in Great Britain, who have been enduring severe trials for the last ten or eleven years, could use more butter and cheese if we sent it to them. Honorable members opposite talk of taxing the children, when they know that the tax has been imposed to stop adults from eating so much chocolate and ice-cream. {: .speaker-K8B} ##### Mr Curtin: -- What about toys? {: .speaker-KGC} ##### Mr HAMILTON: -- I support the tax on toys but not because I am against the children having toys. I know that some ex-servicemen are making toys, but their output is less than 50 per cent of the total quantity sold in Australia. Other firms are making a handsome income out of the manufacture of toys, and the labour and materials they use could well be devoted to the manufacture of more essential items. We are importing from Japan steel, fencing wire, wire netting, cement and galvanized iron, at the rate of £30,000,000 worth a year, when there is no real reason why we should not be manufacturing in Australia all that we need of those commodities. Are we to go on contributing to the development of heavy industries in Japan even though those industries might be used in the future to do us injury?I hope that such a situation may never arise, but we should not disregard the possibility. We can produce in Australia the best steel, wire and galvanized iron in the world, as cheaply as it can be produced anywhere else, but we are not doing so. We are allowing labour and materials to be used in non-essential industries, while buying essential commodities from other countries. The honorable member for Melbourne quoted from speeches delivered by the Vice-President of the Executive Council **(Mr. Eric J. Harrison)** and the Leader of the Australian Country party **(Sir Arthur Fadden)** years ago, but the situation has changed since then. Ministers now realize that increased taxation is necessary, and they are not afraid to propose it. Members of the Labour party, on the other hand, pander to the electorate, and prefer to live by expedients. I wish now to refer to three matters which come within the scope of this bill. I suggest that ammunition for the destruction of vermin should be free of sales tax as are poisons that are used for that purpose. I do not know what the practice is in the eastern States, but in Western Australia poisons for the destruction of vermin are handled and distributed by the local governing authorities, and I see no reason why ammunition for the destruction of vermin should not be distributed in the same way. {: .speaker-K8B} ##### Mr Curtin: -- What about cricket bats? {: .speaker-KGC} ##### Mr HAMILTON: -- It is provided in the bill that sporting material bought by parents and citizens associations for use in competitive sport shall be exempt from sales tax. We all like our bit of sport, and I am not against it, but I do not believe that it will hurt us to pay a little more for our sporting equipment. Goods purchased for use by hospitals are exempt from tax, and it has been suggested that the exemption should be extended to goods used in infant health centres. It has been represented to the Treasurer that donations to infant health centres should be an allowable deduction for income tax purposes. The proposal was not supported by the expert committee on taxation. As that concession cannot be granted, perhaps the Treasurer can see his way to exempt from sales tax goods purchased for use in infant health centres. If it is good enough to make thousands of pounds available for amenities to miners in order to encourage the production of coal, surely some consideration should be given to other members of the community who are just as important as the miners. Day after day in this House appeals have been made to country people to produce more food. One worthwhile way of encouraging the country people to produce food is by encouraging the introduction of certain amenities. Infant health centres are urgently necessary in the back country where people are usually many miles from hospitals. The Government should foster, through its taxation proposals, the development of such health centres. They should be placed on the same footing as hospitals and all the goods that they use should be exempt from sales tax. Now I come to the evergreen matter of refrigerators. When this legislation was introduced the Treasurer said that the basic needs of the people in food, clothing and medicine were free of sales tax. I suggest that if food is exempt from sales tax, surely there is a case for the reduction of sales tax on refrigerators. In homes without refrigerators the general cost ' of living is increased because of the wastage of food, particularly during our summer months, through spoilage. Refrigerators are necessary in country districts where shops are not as handy as they are in urban areas, and housewives have to carry comparatively large stocks of food. I support this measure and I have mentioned the three matters which I believe should be reconsidered. The rest of the legislation deals with the imposition of fair taxes on goods that are not absolutely essential. I admit that it is sometimes difficult to differentiate between essentials and non-essentials. Honorable members opposite have complained about the increased sales tax on razor blades. Surely that will have very little effect on individual men of the community? During the last war, when it was impossible to get razor blades, men both in and out of the services used to sharpen their razor blades on ordinary tumblers or on small glass hones. In thai way their blades lasted many times as long as they ordinarily do. Surely it is not too much to ask those who consider this sales tax is too great to buy a hone and thus cut down their consumption of razor blades. Much has been made of the tax on lipstick and other cosmetics. I have spoken to many women about this, and I have found that the average woman does not complain very much about it. Most women go on buying the same old lipstick and cosmetics that they are used to buying and, after all, they do not use very much of them. {: type="A" start="T"} 0. support the legislation and I do not believe that the Opposition has any real ground for complaint. I suggest that honorable members opposite have merely been trying to catch a few votes by attacking this legislation. The honorable member for Melbourne was one such example when he fulminated to-day against the sales tax on ice-cream and toys. {: #subdebate-26-0-s3 .speaker-6V4} ##### Mr DALY:
Grayndler .- In the few uneasy moments that the honorable member for Canning **(Mr. Hamilton)** touched on the subject under discussion it was quite apparent that he, like other honorable members on the Government side, was very uneasy at the introduction of a measure which is nothing less than a complete repudiation of an important part of the policy upon which the Government was elected to office. For the second time in a few weeks, the honorable member for Canning has advocated the importation of Japanese toys in order that Australian workers could be released and forced to enter the Army or some industry which he termed " essential ". Apparently the honorable member seeks to replace the Australian workers with those who a few years ago were our bitter enemies - the Japanese. All Australian workers will be very interested to know that in this Parliament there is an honorable member who, under the guise of supporting a sales tax proposal, advocates the replacement of Australian workmen by Japanese. The honorable member also said that in 1949 before this Government was elected to office, and when it made its election promises to the people, there was no threat of war and no inflation. Surely it is apparent to everybody that the Government parties made promises to the people during the 1949 general election campaign fully realizing that they would be unable to fulfil them. In 1949 any responsible body of men, in view of the warnings constantly being given by the then Government, should have realized that an inflationary tendency existed and that there was a danger of war. This measure has been made necessary because the Government saw fit, in the interests of political expediency and in an endeavour to gain office, to disregard the decencies of political life and make promises the fulfilling of which they knew would be to the detriment of the Australian people. The honorable member mentioned the 12-J per cent, sales tax ou various household items. That in itself is a tragedy because practically every wage-earner on every day of the week finds .it necessary to purchase, from the meagre earnings allowed him by this Government's policy, some of the necessaries that carry *12&* per cent, sales tax. The Labour party opposes this tax for reasons already enunciated by the honorable member for Melbourne **(Mr. Calwell).** Among other reasons why we oppose it is because it is a complete repudiation of the Government's promises to reduce indirect taxation. We also oppose it because it is inflationary. It will increase the cost of living, decrease the purchasing value of the £1 and cause hardship and suffering in the community. We oppose it because it is an attack on Australian industry which was developed in the past by the policy of Labour governments. It is a back door method of closing down industries and directing man-power. In the guise of sales tax proposals the Government has introduced a measure to put into effect the method of controlling industry that has been adopted in countries behind the Iron Curtain. This Government, by the viciousness of its taxation proposals will completely destroy many Australian industries which have been encouraged by past governments. In the light of the budget surplus of nearly £115,000,000, there is no justification for any government making these savage imposts on all sections of the people, particularly the pensioners and others who are quite outside the scope of ordinary taxation. This is the Government that was going to put value back into the £1. This 13 the Government whose Treasurer stated in his 1949 policy speech - >If the Socialists are defeated, therefore, rates of taxation, both direct and indirect, can and will be steadily reduced. In short, our policy is a progressive reduction of taxation on individuals and the community in general . . . The Prime Minister **(Mr. Menzies),** in his policy speech during the 1949 general election campaign said - >We will review the incidence of indirect taxes (which are a huge though sometimes unrecognized item in Australia) upon basic wage and cost of living items and housing costs. I hold in my hand further evidence of the fact that the Government parties have repudiated the promises that they made during the last two general election campaigns. I refer to a letter, copies of which I have every reason to believe were distributed in every electorate throughout the Commonwealth by the wives of candidates of the Liberal party and the Australian Country party. Each letter carried a photograph of the respective candidate and his family. It reads - >Dear Women of (name of electorate). > >Long before my husband thought of entering Parliament, I used to tell him about the difficulties we women put up with. Men so often forget our problems, that is why. when Bill gets into Parliament, I am going to see that he really does watch the interests- of the women in his electorate. As I see it, we women are expected to keep house on pro-war standards - yet the cost of living has skyrocketed - matches, for instance, once (id. a dozen, are now ls. 6d. Of course more than iki. of that goes to the Government in tax. Do you know we pay 2s. in the £1 tax on ice? Also on baby powder, tooth paste and soap - even the children's ice-creams and lollies. Half the price of petrol goes to the Government so that prevents us getting things delivered regularly- I wonder what the Australian housewife says to-day when she ponders over the Government's budget proposals. The letter continues - >Perhaps this wouldn't be so bad if the money were us'ed to help us. For instance, use some of it to subsidize washing and sewing machines to place them in the reach of every wage-earner - but most important of all, to build baby-minding centres- I guarantee that the Government has classed such amenities as luxury items under these sales tax proposals. In fact it is taxing washing machines and sewing machines out of production. The letter continues - >So you can rely on me to keep the needs of us women before my husband when he is in Parliament. Although my two children keep me busy, 1 do hope to meet you personally in the near future. Please write any particular suggestions to me at this address. To-day, many housewives will be forwarding suggestions in response to that invitation. The Government's record, in the light of those promises, should be sufficient indication to the people that it would be better for them to rely upon the Australian Labour party than to elect as their representatives in Parliament the collection of hen-pecked husbands on whom the Government now relies to keep it in office. I have quoted from that letter in order to indicate how the Government parties have repudiated the promises in regard to taxation that they made during the last general election campaign. *Conversation being audible,* {: .speaker-10000} ##### Mr SPEAKER: -- Order ! The House must come to order. If it does not do so, I shall have to take appropriate action. {: .speaker-6V4} ##### Mr DALY: -- Whereas in 1949-50, which was the last year that Labour wa3 in office, indirect taxes averaged £23 per head of the population, to-day, in spite of the Government's promise to reduce taxation, indirect taxes averages £37 per head of the population. Whereas in 1949-50 an Australian family, which consisted of a man, his wife and two children, paid on the average £92 per annum in indirect taxes, to-day such a family unit is paying £148 per annum in indirect taxes. Tha Government has certainly adopted very strange methods to honour its promises to reduce both direct and indirect taxes. In fact, it has increased all classes of taxes to such a degree that the additional imposts cancel out any benefit that the people may have gained from any concessions that it has made since it assumed office. After these proposals have been implemented, each Australian will be obliged to pay an average in direct and indirect taxes of £123 a year. That is an all-time high in taxation ; and it has been achieved by a Government that was reelected on its promise to reduce taxes! The Government has callously ignored those promises for the sake of party political expediency. These proposals are inflationary in character. Under them Australians will be called upon to pay an additional impost this year of £35,000,000 on goods that are included in the sales tax schedules. Inflation will run riot. Persons who, to-day, have difficulty in making ends meet on an income of £11, or £12, a week will not be able to pay the additional annual impost on . goods that are basic commodities. Heavy additional imposts are to be levied on many everyday household items. Thus, these proposals will reduce our standard of living still further. The Treasurer admitted that he could not differentiate between luxury and essential goods. He said that the line of demarkation was practically indiscernible and that, in effect, he had decided to impose additional taxes upon all sections of the community. That is the only reason that has been given for the imposition of these exhorbitant rates of taxes. As the honorable member for Melbourne **(Mr. Calwell)** has mentioned, many of the articles upon which additional tax will be imposed, I shall not refer to the list in detail. In spite of the remarks of the honorable member for Canning **(Mr. Hamilton),** the majority of Australian children will still expect to receive popcorn, ice cream, lollies and ice blocks. It is useless for the Government to provide milk free of charge to school children at a cost of hundreds of thousands of pounds annually and, at the same time, make it practically impossible for the parents to provide their children with ice cream which is an essential commodity in every home where there are children. Sales tax on such items will be at the rate of 4s., in the £1. Since when has it been considered to be a sin to be able to obtain musical instruments at reasonable prices? Under these proposals, the rate of sales tax on such items will be increased to 5s. in the £1. The rate of tax on watches and clocks will be increased to 6s. 8d. in the £1. Since when have such items been considered to be non-essential? The Government claims that it was elected to care for women's interests, yet it now proposes to increase the rate of sales tax on ladies' handbags, baskets and hampers, which are essential goods, to 6s. 8d. in the £1. Is it not surprising that the Government of a nation which is noted for its attainments in the sphere of sport should increase the rate of sales tax on all classes of sporting goods, including fishing equipment and tennis racquets to 6s. 8d. in the £1? And it proposes to take such action simply in order to force manufacturers of sporting goods to change over to the manufacture of articles considered to be more essential. Wireless receivers are necessary in every home. Their manufacture is a great industry that is of value to the country in time of peace or war. Yet, the Government regards wireless receiving sets as luxuries on which it now proposes to increase the rate of sales tax to 6s. 8d. in the £1. The rate of tax on such articles as mouth organs, warblers, kazoos and whistlers are also to be increased to 6s. 8d. in the £1. Sales tax is to be increased on every article that is regarded as necessary in the average home. The more closely we examine the list of items upon which sales tax has been increased the more we are convinced that the tragic Treasurer of the past, the right honorable member for Cowper **(Sir Earle Page),** has lost his title by a knock-out to the present Treasurer. Sales tax at the rate of 10s. in the £1 has been imposed on many items that are regarded as essentials by the womenfolk of the community. Hair rinses, face powders, rouge, face creams, face lotions, face masks, lipstick and eye-brow pencils are all subject to tax at the rate of 10s. in the £1. In order that the womenfolk may not feel that they have been subjected to special punitive treatment by the Government the Treasurer has included in the list of goods subject to the 50 per cent, rate men's toilet requirements, including safety razors and blades, shaving brushes, shaving sticks and other preparations for use before or after shaving. To-day, pensioners who are trying to exist on a meagre £3 a week under the administration of this inflationary Government, despite the fact that they are outside the scope of income tax, are expected to pay an additional 50 per cent, for their toilet requisites. It is small comfort to those in receipt of social services benefits to know that although they are outside the clutches of the income tax gatherer, they have to pay tax of 10s. in the £1 on many of their essential requirements. Even the older men in the community do not escape, for the Treasurer extracts from them no less than 13s. 4d. in sales tax every time they buy a pipe for smoking. Every member of the community, from the toddler to the old man, is caught up in the Treasurer's net and subjected to heavy sales tax impositions solely because of the Government's inability to grapple with the problem of inflation and its refusal to place the burden of taxation on those best able to bear it. Before I conclude I desire to refer to the attack that these proposals will make on essential industries. The Treasurer has said that the purpose of increased sales tax is to divert materials and labour from non-essential production to the production of goods essential to defence and national development. The Government was not courageous enough to bring about the desired diversion by direct methods. It adopted the back-door method exemplified in this bill. As the result of this legislation, industries that until recently were permitted by the Government to issue unlimited new capital and to expand their production, will be forced out of business. The real purpose behind the Government's policy was disclosed by the honorable member for Canning, who said that he favoured the importation of cheap goods from Japan. Recently, we read in the press of the arrival of the first two Japanese businessmen to visit this country since the war. In an article headed " Made in Japan " we were told of Japan's determined drive to regain its pre-war markets in this country. We realize the threat to Australian workmen of a resumption of trade with Japan. This unpatriotic Government is prepared to send Australian industries to the wall and to allow Japanese manufacturers to reap the benefit of the Australian market at the expense of good Australians who have developed sound Australian industries. The security of every worker and of every person who has invested money in industry is threatened by the decision of the Government to permit the importation of cheap Japanese goods. There is every justification for our opposition to this measure, which constitutes a real threat to the economy and general stability of Australia. The Australian Labour party believes that it is necessary adequately to arm and equip our defence forces and to formulate a sound defence policy, but it does not believe that those who cannot afford to pay - pensioners, superannuated persons and low wageearners who have only their labour to sell - should bear the full brunt of the cost of the expanded defence programme, while large and influential companies such as McPherson's Limited which made a profit of £429,235 last year, and North Broken Hill Limited which made a profit of £1,000,000 last year, are permitted to avoid making their just contributions to the national revenues. The Labour movement and the workers generally ask that those companies be called upon to pay excess profits tax 30 that the Australian people will not have to be bled white by legislation such as this which has no parallel in this or any other democratic country. {: .speaker-KGC} ##### Mr Hamilton: -- I desire to make a personal explanation. The honorable member for Grayndler **(Mr. Daly)** has stated that I advocated the replacement of Australian workers by Japanese workers. That statement is completely untrue. What I suggested was the development of our heavy industries as distinct from those of Japan and other countries the pro ducts of which may at some future time be used against us. The honorable member for Grayndler has completely misrepresented what I said. {: #subdebate-26-0-s4 .speaker-KBH} ##### Mr WILSON:
Sturt .- No private member can derive pleasure from supporting any measure which increases taxes. Every thinking Australian, however, must feel proud that this Government has had the courage to follow that course, which is the right course, even though it may be unpopular with many people. Increased taxes are necessary for two purposes - first, to enable Australia properly to prepare its defences; and, secondly, to combat inflation. To-night, the honorable member for Melbourne **(Mr. Calwell),** in criticizing the Government's policy, contended that it would be better for the Government to expend less money on defence than it would be for it to increase taxes. On that proposition every member and supporter of the Government joins issue with honorable gentlemen opposite. We contend that the defence of Australia is and should be the paramount consideration of the Government. Whatever measures are necessary properly to put our defences in order should be taken by the Government. In the pre-war year 193S-39 we expended £12,000,000 on defence; this year we are forced to provide no less than £122,000,000, or more than ten times as much, for that purpose. Does any honorable member desire to see Australia practically defenceless, as it was at the outbreak of World War II. ? We all expect the Government to place our defences in proper order. 1 assure honorable members opposite that our womenfolk will not have lipstick and cosmetics, and that our menfolk will not have razor blades and other shaving materials, if this country is placed under Russian domination from behind the Iron Curtain. The Government has had the courage to do the right and proper thing, which is to make such provision as is necessary to defend this country adequately even though ii involves the unpopular step of raising additional revenue by means of higher taxes. The money which is to be raised under this bill is also required for the advanced social services policy of Australia, and for that, the Liberal party and the Australian Country party make no apology. Let us examine the expenditure on repatriation. *In* the year prior to the outbreak of World War lt., it totalled £10,000,000. For this financial year, it will be £53,000,000. Does any honorable member contend that we should not expend so much on the dependants of servicemen who have given their lives, or on those who have lost their limbs, in protecting this country? {: #subdebate-26-0-s5 .speaker-K8B} ##### Mr CURTIN: -- We should expend a lot more money on those persons. {: .speaker-KBH} ##### Mr WILSON: -- But the honorable member for Watson **(Mr. Curtin)** criticizes this bill, the purpose of which is to raise revenue to meet the cost of repatriation and social services. He complains that the Government is putting a tax on lipstick and other cosmetics. {: .speaker-K8B} ##### Mr Curtin: -- Let that money be taken from the proposed grant to South-East Asia under the Colombo plan. {: .speaker-KBH} ##### Mr WILSON: -- The Government is proud of the fact that it has increased repatriation benefits. I shall now examine social services generally. In the year before the outbreak of World War II. the expenditure on age and invalid pensions and other social services amounted to £16.000,000. The expenditure upon those social services during the current financial year will be approximately £140,000,000. The Government is proud of the fact that on two occasions it has increased the ago pension by the largest amount that has been granted in the history of Australia, yet the Labour party criticizes the manner in which the Government proposes to raise the revenue from which social services are to be paid. This Government makes no apology for the fact that it has increased age and invalid pensions, and other social services, and taken its courage in its hands to raise the revenue which is necessary for that purpose. The second ground on which the Opposition attacks this bill is that the Government should not attempt to raise so much money while budgeting for a surplus. I have never heard such utter nonsense in all my life. For fifteen months one member of the Labour party after another has asked, " When will the Government put value back into the £1? When will the Government take action to halt inflation?" This bill is one of the measures by which the Government intends to curb inflation, and the Labour party immediately opposes it. There is not an economist in Australia, or an honest member of the Parliament, whether he belongs to the Liberal party, the Australian Country party or the Labour party, who does not agree to the economic proposition that the Government, if it is to prevent a depression and restore stability to our economy, must save in times of prosperity, and expand purchasing power in times of depression. That economic theory was propounded by a former Labour Treasurer, the late **Mr. E.** G. Theodore, and has been advanced by all leading economists throughout the world. Australia is now passing through a period of great prosperity. To budget for a deficit at the present time would be to take the most inflationary step that could be conceived. The Government has taken the necessary steps to restore stability to the economy, but it will take time to achieve that result, because there is no short-term remedy. Showing the most commendable courage, the Government has taken most drastic steps to restore stability to the economy eventually. The first step in that direction is not only to balance the budget, but also to provide for a surplus in this period of prosperity, so that purchasing power may be expanded if times become bad. Therefore, the Government has budgeted for a substantial surplus. But the honorable member for Melbourne attacked this bill on the ground that the Government should not budget for a surplus. In other words, he has said that it should not take the measures which are necessary to restore stability to the economy. The honorable gentleman said, in effect, " The Government must put value back into the £1, but must not take any steps to do so ". The soundness of the Government's policy would not be disputed by any of the leading economists, regardless of their political views. This bill is a part of the Government's financial policy under which definite and drastic deflationary measures have been taken. The effect of some of those measures may already be perceived. The floor covering, feltex, has been reduced by £1 a yard, bargain sales are being held by retail stores, and the prices of secondhand motor cars and other things are rapidly falling. In other words, deflationary measures are now in operation {: .speaker-KDX} ##### Mr Joshua: -- I describe them as " depressionary " measures. {: .speaker-KBH} ##### Mr WILSON: -- I inform the honorable member for Ballarat **(Mr. Joshua)** that, during an inflationary period, the brake must be applied if stability is to be restored to the economy. The important consideration is to ensure that such a brake shall be taken off at the appropriate time. This Government is now applying the brake, but it is also providing sufficient reserves to enable it to release that brake when the price levels have been stabilized. The measures being taken under the Government's proposals are extremely drastic, but I suggest that they will be most effective. The actual surplus, according to ordinary methods of accounting, will probably be in the vicinity of £300,000,000 in one year. If honorable members will examine the budget, they will find, in respect of the National Debt Sinking Fund- {: .speaker-10000} ##### Mr SPEAKER: -Order ! The honorable member's remarks are hardly relevant to the sales tax. {: .speaker-KBH} ##### Mr WILSON: -- I desire to point out that the sales tax has been imposed for the specific purpose of raising revenue. {: .speaker-10000} ##### Mr SPEAKER: -- Order ! The Committee of Supply considered the budget and the Estimates for several weeks. The honorable member's remarks would have been more appropriate to those debates. {: .speaker-KBH} ##### Mr WILSON: -- I bow to your ruling, **Mr. Speaker,** but I point out that the purpose of this bill is to provide a part of the revenue for which the Treasurer **(Sir Arthur Fadden)** has budgeted. The Government's financial proposals provide for the raising of money, not only to meet the cost of administration, but also to establish a surplus of £114,500,000 as a deflationary measure. As this bill is a part of the budget proposals, I respectfully submit that I am entitled to deal with the deflationary effects of that policy. However, if you rule otherwise, **Mr. Speaker,** I shall not pursue that theme. Portion of the revenue that will be collected under this measure will be included in the budget surplus, and it will have a deflationary effect and help to restore stability to the Australian economy. The total actual surplus will be approximately £300,000,000. Portion of it will remain in liquid funds, portion will remain in defence reserves, and portion will remain in war service homes and other civil works of that kind. I suggest, therefore, that the Government, which has introduced this bill, has clearly proved itself to be a government of outstanding courage and one that is prepared to tackle a most difficult problem by means which, obviously. must be unpopular at the outset. However, I am sure that in twelve months or fifteen months, when the people have a chance to appreciate the stability that has been achieved in the Australian economy, and when they find that the Government is able to reduce taxes, they will say, " Thank heavens we had a government at a critical time which had the courage to do the right thing ". {: #subdebate-26-0-s6 .speaker-JVA} ##### Mr MORGAN:
Reid .- This bill is another example of the Government's policy of placing the burden of taxes on the shoulders of those least able to bear it. I refer, of course, to families in the lower and middle income groups. Those people are always severely hit by hidden imposts such as the sales tax. This pernicious tax has a demoralizing effect upon the community. It undermines the confidence of the people in the Government and in democratic institutions. Such taxes also incite the worst elements in the community - the racketeers, blackmarketeers, and other anti-social individuals. Those people are influenced by the Government's bad example in adopting subtle means to obtain revenue instead of making a direct approach to the problem. Leading citizens in the community have condemned this measure and described the Government's approach to its financial problems as improper and immoral. I shall quote the remarks of **Mr. S.** E. Wilson, managing director of Farmer and Company Limited, Sydney, who, no doubt, in the past, has been a supporter of the Government. Apparently he has changed his views. When the Government's taxation proposals were first announced by the Treasurer **(Sir Arthur Fadden), Mr. Wilson** said that it was immoral to increase taxation without exhausting a constructive attack on other aspects of inflation. The " taxthepeopleintotheground " attitude was a negative approach to our problem. He added - >A policy of penal taxation, destruction of incentives, and utter gloom in a nation rich in human material resources, will plough us into the ground. We deserve to go there if we take it lying down. That is not the opinion of a member of the Opposition. It is the opinion of a leading citizen in the commercial life of this country. It is little wonder that governments have always been apologetic when introducing or re-enacting legislation of this kind. We are always assured that a new tax i3 a temporary measure to meet an emergency, and that it will be abolished or reduced as soon as the emergency ends ; but the emergency never seems to end and the new tax becomes a permanent feature of our financial structure. Some day there may be a government - I have no doubt that it will be a Labour government - with sufficient statesmanship to give effect to those assurances and so restore the confidence of the people in our democratic institutions. This measure to impose steep increases of the sales tax is in line with the Government's beer and tobacco economy. When a government of a similar pot tical complexion was in office in the early days of World War II., serious thought was given to a proposal that Australians should be encouraged to drink more beer and smoke more tobacco to help win the war. Some honorable members opposite, including the Prime Minister **(Mr. Menzies)** and the Treasurer **(Sir Arthur Fadden),** claim that they have not heard of real protests from any responsible section )f the community, including the trade union movement, against the sales tax increases. I assure them that, like many other honorable members on this side of the chamber, I have received protests from many trade unions. Last week and the week before we had the spectacle of trade unions- {: .speaker-10000} ##### Mr SPEAKER: -- Order ! The honorable gentleman is getting right away from the bill. The House is discussing the sales tax and nothing else. {: .speaker-JVA} ##### Mr MORGAN: -- Surely the attitude of the public to the proposals can be debated. {: .speaker-10000} ##### Mr SPEAKER: -- We are concerned only with the honorable gentleman's attitude at the moment. {: .speaker-JVA} ##### Mr MORGAN: -- I think that I am entitled to reflect the attitude of my constituents. That is what I am here for. {: .speaker-10000} ##### Mr SPEAKER: -- The honorable member speaks for his constituents at all times, and for nobody else. {: .speaker-JVA} ##### Mr MORGAN: -- As 1 have said, representative people in the community have expressed their views on the Government's taxation proposals. Just after those proposals were announced they were attacked by several leaders of the commercial and industrial life of Sydney. {: .speaker-10000} ##### Mr SPEAKER: -Order ! The honorable member may not act as the spokesman for certain individuals in Sydney. {: .speaker-JVA} ##### Mr MORGAN: -- Surely I am entitled to quote the views of prominent citizens and to state the public reaction to this taxation measure. {: .speaker-10000} ##### Mr SPEAKER: -- The honorable member must deal specifically with the sales tax and not with taxation generally. {: .speaker-JVA} ##### Mr MORGAN: -- I am dealing only with the sales tax. After all, the Government is budgeting for a surplus and that surplus will be made up largely- {: .speaker-10000} ##### Mr SPEAKER: -- Order ! I have already prevented the honorable member for Sturt **(Mr. Wilson)** from proceeding on that line. The budget is not before the House now. Honorable members dealt with the budget in committee for several weeks. {: .speaker-JVA} ##### Mr MORGAN: -- I am dealing solely with the sales tax. I submit that the imposition of taxes of this kind will have an important adverse effect on the morale of the community and will greatly reduce production. Last week-end an appeal was made by prominent church dignitaries and jurists for a better spirit in the community. By introducing taxation measures such as this, the Government is contributing nothing towards that spirit. Certainly the workers will not be given any incentive to produce. As the honorable member for Melbourne **(Mr. Calwell)** pointed out when the sales tax proposals were announced, the women of Sydney were " hopping mad ", and many of them expressed themselves in strong terms. I shall quote the comments made by one or two of them who were interviewed. A mannequin said - >Teenagers always use more make-up than older women - I can't think how they're going to make ends meet. I regard myself as an average girl - make-up is already costing me more than £15 a year now. A mother of two young children, **Mrs. C.** S. Dwyer, of Enfield, said - >Women are going to look awful sights if they have to go without make-up. I'll have to talk my husband into giving me some of his beer money to keep up with this. A woman, who lives at Punchbowl, said - >This 50 per cent, increase is terribly unfair, particularly to business girls who have to look smart on a small salary. {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable gentleman has quoted three such comments. He is a member of the legal profession, and he ought to know that his remarks are far removed from the subject of this debate. {: .speaker-JVA} ##### Mr MORGAN: -- I could quote many more comments in the same strain. E object particularly to the new rate of sales tax on sporting goods. It, too, will have a bad effect on the morale of the community. The Government is exacting considerable sums from sportloving Australians, particularly young men and women who are fond of healthy recreation, but apparently it does not propose to use any of the extra revenue for the purpose of promoting national fitness. The amount of £72,500 that has been set aside for the national fitness campaign this year is the same as the appropriation for that purpose last year. Not one penny of the 33$ per cent, tax on sporting equipment is to be returned to the sporting community in the interests of health and fitness. Those who engage in amateur sports will be most severely affected. Professional sporting men and women are in the happy position of being able to pass on any extra charges. The people who attend football matches, race meetings and other professional sporting events will pay the1 extra costs and will continue to contribute substantially to government revenue at the same time through the medium of the amusement tax. Many amateurs, unfortunately, will be forced to restrict or abandon their sporting activities. This will have serious results. Medical examinations of young men who have been called up for national service have disclosed many physical defects. The trainees who are enrolled, of course, will benefit from the physical training and the recreational facilities that are provided by the Government. They are called up for service at the age of eighteen years, but the most important period in the lives of growing boys occurs before that age. The Government is doing nothing to promote their physical well-being during that period and, in fact, is discouraging it by imposing this vicious levy on sporting equipment. This increase of sales tax has called forth protests from many citizens who are interested in sport. **Mr. E.** S. Stephens, who is the secretary of the New South Wales Hardcourt Tennis Association, has commented - >Sport is essential for the training and health of the nation's young men and women. Now, however, it is obvious that most will be forced to become spectators. . . . The sport in which our 3'oung manhood and womanhood now takes part will be drastically reduced. **Mr. Stephens,** who managed the victorious Australian team during the last Davis Cup tour, said that no other country taxed the sport of its youth. He added - >The Federal Government is not helping sport and sporting organizations to build healthy young Australians. We have a great reputation overseas as sportsmen, but how we hope to maintain it when the tools of sport, such as tennis racquets and balls, cricket bats and balls, golf clubs and scores of other items of sporting equipment are taxed as luxuries ih beyond me. > >I have already received strong protests from many organizations in Sydney. It is obvious that many strong protests will be made against the Government's anti-sport budget. > >Sport in Australia is doing far more to bring our youth to a state of military fitness than any military training scheme. This has always been the ease. Now, however, this free training and body-building will be taxed out of existence. **Mr. Stephens** pointed out that, under the new tax rate, tennis racquets would cost £7 15s. instead of £6 10s., cricket hats would cost £6 2s. instead of £5, and golf balls would cost 6s. 6d. instead of 5s. 6d. Many other items, such as rifles, surfboards and polo equipment have been similarly affected. One result of these impositions will probably be that many young Australians, instead of engaging in healthful forms of recreation, will be driven into the ranks of the widgies and the bodgies who, apparently, will have their fun taxfree. Thus, the higher rate of tax gives rise not only to an economic problem but also to a social problem. The social problem has been the subject of strong comments by such reputable citizens as the Dean of Sydney, **Dr. S.** Barton Babbage. Only recently **Dr. Babbage** said that the rise of the bodgie and widgie cult was a judgment on contemporary society for its failure to provide a creative outlet for adolescents. He said that adolescents who called themselves bodgies and widgies were merely reacting violently against the drab uniformity of urban life. Their desire for variety and colour expressed itself in the cult of the primitive and barbaric. He added- >It would >be unjust to condemn adolescents as less moral and honest than their elders. It is not surprising, in view of blackmarketing and racketeering, that adolescents should show scant respect for law and social conventions. As a solution of the delinquency problem, **Dr. Babbage** urged- {: .speaker-10000} ##### Mr SPEAKER: -- Order ! The honorable member's remarks are far beyond the scope of the sales tax. {: .speaker-JVA} ##### Mr MORGAN: -- I am referring to the sales tax on sporting equipment. {: .speaker-10000} ##### Mr SPEAKER: -- The honorable member has been dealing with delinquency for some time. {: .speaker-JVA} ##### Mr MORGAN: -- I am connecting my remarks with the restriction on the sale of sporting equipment that will result from the imposition of sales tax at the rate of 33^ per cent., which will place it beyond the means of many young Australians and will thereby drive them into the ranks of the bodgies and widgies and similar cults. **Dr. Babbage** pointed out that the delinquency problem could be solved by the improvement of environment and the provision of better facilities for leisure and recreation. The Government has made a very grave mistake in deciding to impose such a severe tax on sporting goods. Furthermore, it has aggravated its offence by its failure to provide for the use of at least a part of the extra revenue derived from the tax for the encouragement of national fitness. Supporters of the Government have said that they have not received any protests against the sales tax increases. Obviously they have not moved freely amongst factory workers and the community in general. Perhaps in the seclusion of their clubs they do not hear what the people are saying. No doubt they will learn the views of the people in due course. The Sydney *Sun* recently published an interesting article on the subject of the attitude of Government supporters to the sales tax increases. It stated - >While protests against the budget have been received from all over Australia, Government members appear indifferent. Their view is that they do not have to face the electors for nearly three years and by that time the resentment against the budget and its harsh provisions will be lessened. One member summarised the general attitude by saying, " There will be another three budgets before the electors can get at us, and all we need to eradicate the memory of this one is to have a good pre-election budget on which to go to the people." What sort of chicanery is that? It shows utter irresponsibility and disregard of political honesty and integrity on the part of Government members who, apparently, have been telling some of the pressmen quietly how they really feel about this bill. There is an old saying that a government can fool some of the people for some of the time, but that it cannot fool all of the people all of the time. {: #subdebate-26-0-s7 .speaker-JLR} ##### Mr DEPUTY SPEAKER (Mr, Adermann:
FISHER, QUEENSLAND -- Order! The honorable member should direct his remarks to the measure before the House. {: .speaker-JVA} ##### Mr MORGAN: -- Reference to the sales tax proposals do not ring too well in the ears of Government members. {: .speaker-KZP} ##### Mr Wheeler: -- Now tell us what the *Herald* said about it. {: .speaker-JVA} ##### Mr MORGAN: -- No doubt the honorable member for Mitchell **(Mr. Wheeler)** would like to hear the comments that have been made about the sales tax proposals by other newspapers, although some of them have been significantly silent about the Government's financial legislation. Because certain journals have not been able to say anything in favour of it, they have refrained discreetly silent. The only people who are pleased with the legislation are the money-lenders and Professor Copland. While disclaiming any responsibility for the paternity of this brain child, Professor Copland has at least stated that he is proud of it. On the other hand, the m on eylenders {: #subdebate-26-0-s8 .speaker-10000} ##### Mr DEPUTY SPEAKER: -Order! If the honorable member is going to ignore my ruling I shall ask him to sit down. {: .speaker-JVA} ##### Mr MORGAN: -- What is your ruling, **Mr. Deputy Speaker** ? {: .speaker-10000} ##### Mr DEPUTY SPEAKER: -- The honorable member should direct his remarks to the bill before the House. {: .speaker-JVA} ##### Mr MORGAN: -- But increases of sales tax were proposed in the budget. {: .speaker-10000} ##### Mr DEPUTY SPEAKER: -- Order ! The honorable member must deal with the sales tax measure. {: .speaker-JVA} ##### Mr MORGAN: -- I am dealing with the sales tax proposals that were contained in the budget. I point out that these exactions will render many people in the community short of ready cash and drive them into the hands of the money-lenders, who are quite gleeful. The following is an extract from an article by Larry Boys that a reared in the *Sunday Telegraph* of the 30th September: - The Pawnbroker - He's A Budget-Happy Man. Apart from **Sir Arthur** Fadden and pensioners, the only people who got a gleeful kick out of this week's budget shocks were the pawnbrokers. They expect business to pick up almost immediately. {: #subdebate-26-0-s9 .speaker-10000} ##### Mr DEPUTY SPEAKER: -- That has nothing to do with sales tax. {: #subdebate-26-0-s10 .speaker-JVA} ##### Mr MORGAN: -- It refers to the budgetary proposals, **Mr. Deputy Speaker.** {: .speaker-10000} ##### Mr DEPUTY SPEAKER: -Order! The honorable member will obey my ruling to confine his remarks to the bill, or resume his seat. {: .speaker-JWT} ##### Mr Francis: -- Hear, hear! {: .speaker-JVA} ##### Mr MORGAN: -- The Minister for the Army **(Mr. Francis)** apparently does not realize that the increased sales taxes will severely hit people in the community with large families. I have before me an extract from a circular letter that was forwarded by the Associated Chambers of Manufactures of Australia to its members on the 4th October. It reads - Sales Tax Hits Families. All over Australia the sales tax is becoming an even more oppressive burden as costs of commodities rise. The tax hits rich and poor, but its incidence is felt keenly and harshly by those on the lower incomes. The removal of subsidies on many essential items has made this tax a still greater burden. The Treasurer is as obstinate as usual in refusing any effective relief. So declared a leaflet (No. 8) issued by the Liberal party of Australia from its Federal Secretariat on 25th October, 1948. The Government is adopting an ostrichlike attitude towards the protests that have been made about increased rates of sales tax by various sections of the community. Doubtless, the Government is working on the principle that public memory is short. Perhaps, just prior to the next general election, the Treasurer will attempt to win back popularity for the Government by making certain remissions. Honorable members opposite will find that the public's memory will not beso short. Nemesis will overtake this Government. It will be brought to book for breaking its promises to the people. {: #subdebate-26-0-s11 .speaker-L19} ##### Mr LESLIE:
Moore .- The honorable member for Reid **(Mr. Morgan)** has stated that it will be left to a Labour government to repeal this form of taxation in the future, and that the people will obtain relief in due course. I believe that they will be guided by what has happened in the past. Although the former Labour Government had ample opportunity to repeal the sales tax legislation, it did not do so. Furthermore, I remind honorable members that sales taxation was introduced by Labour. {: .speaker-L08} ##### Mr Rosevear: -- That is no reason why the Government should increase it. {: .speaker-L19} ##### Mr LESLIE: -- If, as the honorable member for Melbourne **(Mr. Calwell)** has suggested, this is a pernicious form of taxation, the Labour party stands selfcondemned for having introduced it. If honorable members opposite are honest they will admit readily that this Government has merely imposed certain fractional increases of sales tax. It has even abolished sales tax on some articles. Honorable members opposite are finding it extremely difficult to offer substantial criticism against sales taxation. This evening the honorable member for Melbourne dealt with the subject in a jocular manner. He would have adopted a more serious and sober approach to the subject if he was honestly critical of the Government's intentions. Honorable members opposite have exaggerated the position in an effort to justify their criticism. The honorable member for Reid stated that, by increasing sales tax on sporting gear, the Government will tax out of existence sport and the opportunities for our youths to maintain physical fitness. It is not necessary for youths to obtain expensive sporting gear for this purpose. Furthermore, many articles that young people require in order to maintain physical fitness are exempt from sales tax. Honorable members opposite have attempted to deceive the people about the articles on which increased rates of sales tax will be imposed. They have exaggerated the position to an unusual degree. I remind honorable members that sales tax is a tax on spending rather than on income. Honorable members opposite should make up their minds whether they prefer a tax on income which takes away from the taxpayer any opportunity to obtain direct pecuniary benefit for the money that he hands over to the Government, or another form of taxation. The principle that has been adopted by the Government is that taxes shall be paid by those people in the community who are best able to pay them. {: .speaker-JTF} ##### Mr Tom Burke: -- Does the honorable member advocate that the man with the biggest family should pay most in taxes? {: .speaker-L19} ##### Mr LESLIE: -- The honorable member for Perth **(Mr. Tom Burke)** is attempting to mislead the people on this issue, because essential needs in the home are not taxed. In many instances, people with big families have big incomes. Articles that contribute in any way to sustaining life in the home are not taxed. It is equitable that a man with a large income should disgorge a portion of it to assist our national economy. The taxpayer who is using his money wisely and is doing what this Government has asked him to do, and what any government with a real sense of responsibility would be required to ask him to do, will not be hit in any way by the operation of this tax. He is either lending money to the Government or. is saving against a rainy day. {: .speaker-L08} ##### Mr Rosevear: -- How many people can do that? {: .speaker-L19} ##### Mr LESLIE: -- The deposits in the savings banks are evidence of what many people can do and are doing. A great number of people in this country have a sense of responsibility, which is something that, unfortunately, members of the Opposition appear to lack. It is true that some of the increases of sales tax have been subjected to criticism. There has been criticism, for example, of the small increases of the tax upon ice cream and other commodities, although the effect of the increases has not been to raise the prices paid by consumers. Uninformed or wrongly informed criticism has arisen owing to the attitude that has been adopted by members of the Opposition who, instead of assisting the Government in these dangerous days, to awaken in the people a sense of responsibility and a realization of the fact that everybody in this country must be called upon to make sacrifices, have indulged in this chamber, and doubtless also outside it, in tactics of the kind that they have used in this debate. Honorable gentlemen opposite have said that sales tax has been increased upon many articles which they claim are necessaries and which the Government regards as being luxuries. Would they care to define what a luxury is? The honorable member for Melbourne referred to knives, forks and spoons 'being subjected to sales tax at the rate of 66$ per cent. That is not so, but I assume that the honorable gentleman intended the people to infer from his remarks that this Government regards knives, forks and spoons as luxuries. In the Parliamentary diningrooms and in many private homes tables are covered with lovely napery and are set with fine silver cutlery. Comfortable chairs are arranged round the tables. To some people, those things are necessaries, but I ask honorable gentlemen opposite to say how cutlery, crockery, napery and furniture can provide food for a hungry belly? {: .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP -- Does the honorable gentleman want chopsticks? {: .speaker-L19} ##### Mr LESLIE: -- Apparently, the honorable member for Hindmarsh **(Mr. Clyde Cameron),** who has been elected to a position of responsibility in which he is called upon to assist in guiding the destinies of this young nation, is more concerned about ensuring that there shall be a fork upon the table than a chop. {: .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP -- I said chopsticks. {: .speaker-L19} ##### Mr LESLIE: -- The Government does not deny the usefulness of those articles in their proper places, but it says that in these dangerous and serious times it can divert the money of the nation into the most useful channels only by fiscal measures. It can deal with the present position only by measures such as this. It would be the responsibility of Labour, if the people were prepared to trust it to govern this country, to do not less than this Government has done, but I have no doubt that honorable gentlemen opposite, if they were in power, would try to cast the burden of increased taxes upon certain sections of the community rather than attempt to spread it evenly over the whole of the community. Even if the burden imposed by sales tax is as serious and as heavy as the Opposition has suggested, the tax will still be paid by those who can best afford to pay it, because it is a tax, not upon income, but upon spending. If honorable gentlemen opposite object to the sales tax and if they want another form of tax substituted for it, let them say what substitute they suggest. They know why the national revenue must be increased. They should not indulge only in condemnation. Let them advance constructive suggestions. If they have any ideas in their minds about better courses of action than this, let those ideas be born. This is the place in which to give birth to them. But I doubt whether any ideas have yet been conceived in their minds. There is something wrong with the sales tax. It was introduced by a Labour government. I say that it was an iniquitous tax, and that it still is. A3 it is operating now, it is an unjust tax. {: .speaker-L08} ##### Mr Rosevear: -- Nevertheless, the honorable gentleman will vote for this bill. {: .speaker-L19} ##### Mr LESLIE: -- The sales tax, which 1 have described as unjust, is a tax for which the honorable member for Dalley **(Mr. Rosevear)** voted. He made sure that the bill under which it was instituted went through the Parliament. {: .speaker-L08} ##### Mr Rosevear: -- I did not have a vote on it. {: .speaker-L19} ##### Mr LESLIE: -- But the honorable gentleman made sure that every other member of his party voted for it. It is a fundamental principle of taxation that, all things being equal, everybody shall pay the same sum in taxes. That does not happen in connexion with the sales tax. The sales tax is imposed upon the wholesale price of an article. Included in that price are costs and charges incurred by and imposed by the wholesalers. Therefore, people who live in States that are distant from manufacturing centres and residents in country districts pay more sales tax upon an article than do people who live in the manufacturing or city areas. {: .speaker-KGX} ##### Mr Haylen: -- That is not correct. {: .speaker-L19} ##### Mr LESLIE: -- It is useless for the honorable member for Parkes **(Mr. Haylen)** to say that what I have said is not correct, because I have taken some trouble to ascertain the position. Sales tax is payable upon wholesale selling prices, and those prices include certain costs and charge;. Recently I received a complaint from a Western Australian firm which drew my attention to the manner in which sales tax operates against the people of Western Australia. I made representations in that connexion to the Commissioner for Taxation. In the instance to which I refer, certain goods which are manufactured in the eastern States were urgently required in Western Australia. Normally they would have been sent by sea, when the freight would have been appreciably lower, but because they were urgently needed they were sent to Western Australia by air, at considerably increased freight costs. The cost of the freight was added to the wholesale price of the goods. Consequently, sales tax was charged on the wholesale selling price, which included additional air freight. The Commissioner for Taxation informed me that the law does not provide for the imposition of sales tax on freight as such. It provides, however, that tax shall be charged on the wholesale selling price of taxable goods. The wholesale selling price necessarily includes all the costs that are incurred by the wholesaler in the transport of the goods from the factory to the warehouse, and it also includes any other costs that he cares to include. The result is that in Western Australia - and the same state of affairs would apply to South Australia and Queensland, which are nonmanufacturing States - the purchaser of taxable goods is compelled to pay a far higher rate of tax than are purchasers of goods in Victoria and New South Wales. I draw the attention of the Treasurer **(Sir Arthur Fadden)** to that matter because it is time for the Government to correct this serious anomaly. I remind honorable members that sales tax was introduced by a Labour government, and is a typical example of the disregard of the Australian Labour party for the less populous States and for people living in country areas. Country people are compelled to pay sales tax on wholesale prices which include freight and other incidental costs that are incurred by the wholesaler in transporting goods to rural areas. I look to this Government to ensure that every section of the community receives a fair deal and that no unjust burden is placed upon certain people. I hope that Western Australia will be relieved of yet another injustice which has been imposed upon it because of its position on the western coast of Australia. I suggest that the unjust application of sales tax to which I have referred could be removed if goods were taxed at their source. If that were done, the collection of tax would be facilitated and far less work for the officials of the Taxation Branch would result. In addition, the Government would save costs of administration, and wholesalers and distributers of goods would be saved a considerable amount of work. The present form of taxation could probably be challenged under section 92 of the Constitution, because it imposes an unfair rate of tax on certain people and treats the States of the Commonwealth dissimilarly. Another matter which I consider requires adjustment in connexion with the imposition of sales tax is the amount of money that is collected illegally by retailers and by pseudo-wholesale retailers who charge sales tax without any right to do so. Much of the discontent concerning the incidence of sales tax is due to the fact that retailers add sales tax without justification. The legislation provides that persons who do so are liable to a fine of £100, but I do not know of an instance in which a person has been brought before a court and charged with such an offence. It is true that the provision is difficult to police, because prosecutions can be launched only when evidence is given by the purchaser. It is well known that the collection of such evidence involves certain problems. 1 appeal to the Treasurer to instruct his departmental officers to police more effectively the addition of sales tax charges by retailers. The practice is regularly followed in many areas. I am satisfied that if an investigation were made many offenders would be brought to light. The retailer robs the customer because he levies sales tax on his profit. That offence is being repeatedly committed and is one of the things which I believe is creating a great deal of the misinformed criticism that is directed against sales tax. I point out that criticism of sales tax legislation is not of recent origin. That form of taxation has been condemned ever since it was first imposed. I consider that it is the job of the Government to ensure that when it imposes a tax a certain section of the community shall not be permitted to make a profit from it, thereby .bringing the Government into disrepute and creating misunderstanding. If the Opposition really has a sense of responsibility it will desist from attempts to foster i. feeling among the people that there is no real need for the burden of sacrifices that they are being asked to bear and that they should reject it. If honorable members opposite have any feelings of loyalty to the nation they should give evidence of them by making only justifiable criticisms of the measure. Let them by all means offer such criticism, but let them also suggest any alternatives to the Government's proposals that they can think of. So far, in the time that I Lave been a member of this Parliament, I have not heard honorable members opposite offer any worthwhile alternative to any Government proposal. {: #subdebate-26-0-s12 .speaker-JPE} ##### Mr BIRD:
Batman .- The House has just been treated to an extraordinary dissertation by the honorable member for Moore **(Mr. Leslie).** In the first half of his speech he waxed eloquent and enthusiastic in support of tho measure, but in the remainder of his speech he was most critical about the incidence of the sales tax. So if ever there was a classic example of having £1 each way, we have just had it. He was very critical of the methods by which the tax is assessed, apparently by retailers in Western Australia, and he blamed a Labour government for imposing sales tax originally. Sales tax was first imposed in 1930 by the Scullin Labour Government, which went out of office in the following year. Anti-Labour governments were in office for the next ten years, but they did not remove the disabilities to which the honorable member for Moore referred. We have now had an anti-Labour government in office for almost two years, and it is quite apparent that the influence exerted on it by the honorable member for Moore is extremely small, or else he has not made any representations to it to remove the anomalies of which he has spoken. With other honorable members on this side of the House I had hoped that after the Government's previous impositions of heavy sales tax, and other taxes, some major relief would be afforded to the longsuffering taxpayers in this year's budget. I am amazed by the Government's proposals to tax the people more heavily because, I well remember that members of the present Government when they were in opposition between 1941-1949, clamoured often and vociferously for tax reductions. The honorable member for Melbourne **(Mr. Calwell)** has already cited the utterances of Government members when in Opposition, in relation to sales tax and we could spend from now until the same time to-morrow quoting extracts from *Hansard* to prove in the last two years that there has been a distinct somersault by members of the Government in respect of their attitude to sales tax. Despite the statement of the honorable member for Moore that sales tax is paid by those who can best afford to pay it, it is recognized that sales taxation is the most insidious form of taxation. It contradicts every sound principle of taxation, and can be justified only in special circumstances. In the present circumstances an increase of the rates of sales tax, or the inclusion of other articles in the schedules of goods to be taxed, is simply unpardonable. The Scullin Government's action in introducing sales taxation in 1930 was dictated by the distressing circumstances of the economic depression, and was in line with the actions of almost every government in the world at that time. That fact has been carefully overlooked by honorable members opposite who have been attempting to justify the Government's present proposals. Sales tax was originally intended as a temporary revenue producer in an emergency. Unfortunately it has tended to become a permanent source of revenue. The reason that actuated the Scullin Government was that falling price levels during the depression reduced the return from income tax to a small figure. Many people were out of work, and those who were in work were receiving low wages. Many workers were paying no income tax at all. But the government of the day, despite its shrunken revenue, had to continue to provide services', and so it imposed sales tax to obtain the finance necessary for the provision of those services. It required a source of revenue with a reasonable degree of stability. The only such source was sales tax. Other governments that were faced with similar problems took the same actions. But such a method of taxation can be justified only by such considerations. When we were engaged in World War II. the governments of the day had to find large sums in order to keep our fighting forces in the field. That fact justified the imposition of sales tax in war-time. To-day the position is the reverse. Income tax returns, particularly from taxpayers in the high income groups, have never been greater. Their magnitude is a reason why the Government should now discontinue the imposition of sales tax, which, as I have said, was introduced at a time when returns from income tax were low. Sales tax means an inequitable apportionment of the tax burden. The Chifley Labour Government recognized that fact and made progressive reductions of sales tax rates after the end of the war. Sales tax imposed now fails to meet the needs of equitable taxation, because a large proportion of the workers' incomes is spent, and not saved, as a result of it. By reason of its very nature sales tax cannot take into account the personal economic condition of each person who purchases goods on which sales tax is levied. A boy of sixteen years of age who buys a packet of razor blades to have his first shave will pay as much sales tax on them as a millionaire will pay when he buys a similar packet. The same argument applies to every article on which sales tax is levied, and so the burden is inequitable. In the past the value to a government of the imposition of sales tax has been its indirect nature. As it is included in the purchase prices of the goods on which it is levied it is unseen and is paid in ignorance. The constant collection of minute amounts of taxes from consumers in respect of each of millions of transactions lends an appearance of painlessness to the process of paying. Nevertheless to-day we find that savage rates of sales tax amount to a heavy reduction of the consumer's purchasing power. When the Labour Government first imposed sales tax the rate was 5 per cent. This Government seeks to impose rates ranging from 12-^ per cent, to 66$ per cent. A much better case against sales tax can be made out to-day than could have been made out before. The proposed increases will mean that the purchasing power of consumers will be further curtailed. That is where the Labour party joins issue with the Government. I think it has been estimated that at least 80 per cent, of the total amount received from the sales tax is paid by wage and salary earners. These are the people who need relief from taxation and inflation, and yet the Government proposes by the imposition of these additional rates to make the lot of these unfortunate people worse. These people stand to benefit far more from a reduction of indirect taxation than from an increase in wages. The worker needs, not higher wages, but lower indirect taxation. Substantial reductions of sales tax affecting a very wide range of consumer goods would result in a very real addition to purchasing power. Such action would not he inflationary beacuse the bulk of expenditure would naturally be on essential consumer goods. It appears reasonable to appraise any form of taxation from three points of view. First, it should be asked how it apportions the burden among persons with different incomes. As has been pointed out by honorable members of the Opposition the burden of sales taxation is the same, irrespective of the income of the purchaser. This cuts across the accepted principle of taxation in accordance with the ability to pay and therefore must be roundly condemned. Secondly, one should ascertain the cost of administration in relation to the revenue produced. Sales tax is a source of irritation to the retailers who pass it on to the consumers and a large army of public servants is required for the purpose of charging and collecting the tax the rate of which has increased from year to year. Thirdly, it is necessary to appraise the effect of the tax on the productiveness of the economic system. The obvious result of this tax must be a decrease in production, not only of so-called luxury goods, but of goods that are recognized as essential to the existence of the average person. From these three points of view, this 'bill must stand roundly condemned. I understand honorable members opposite to have stated that the bill has a dual purpose. Its first purpose, according to them, is to raise money. For the remainder of this financial year the Government expects an additional £35,000,000 to be extracted from the pockets of the consumers under the bill. Last year £57,000,000 was raised in this way. It is estimtaed that £S2,000,000 would have been collected this year on the basis of last year's rates and that the additional £35,000,000 which will be collected under this bill will result in £117,000,000 having to be found by the consumers of the goods included in the schedule. Government supporters have stated that the second purpose of the bill is to fight inflation. This legislation will definitely fail in its declared objective of causing a diversion of labour. People in the main will have to find the money to purchase the goods affected because a large quantity of such goods will have to be purchased. Many luxury goods will bear the rate of 66f per cent, but if people wish to live an ordinary, decent existence they will have to purchase most of the other articles included in the schedules. Consequently manufacturing firms will have to continue to make them. So the diversion of labour will not be achieved. If taxation is to be increased, why cannot it be increased equitably? There are .many other ways of increasing taxation. About twelve months ago the Treasurer and other members of the Government expressed their intention to introduce an excess profits bill which they said would be made retrospective to the 1st July, 1950. That legislation was never introduced. There are a large number of people in the higher income groups from whom the Government could obtain money by the imposition of additional income tax rates. In introducing the bill before the House the Government has overplayed its hand. The anomalies contained in it are as numerous as the leaves in autumn. Let us examine the unscientific approach that has been made to the sales tax on suitcases. It has been proposed that musical instrument cases shall be taxed at the rate of 25 per cent, but that music cases shall be taxed at the rate of 33iV per cent. These two types of cases are both made from the same materials - leather. Why different rates of tax has been imposed I cannot imagine. The proposed increase to 33^? per cent, on snorting gear is extremely unfair in these days when it is often said that it is a pity that many of the crowd who attend sporting events do not participate in sport themselves. It is the responsibility of every government body to encourge the development of sporting activities. Municipal bodies which suffer from a paucity of income have made available large areas of land and halls for use by sporting bodies often at the risk of financial embarrassment. Yet this Government which expects a huge surplushas proposed a tax of 33 ;V per cent.. on sporting equipment of all kinds. TheGovernment does not propose to encourage the sporting tendencies of youth although small authorities such as municipal bodies have strained their resources to do so. That is a strange commentary on two systems of Government. When I participated in junior cricket the cost of leg pads, mats and bats was infinitesmal. compared with their present cost and the excessive price of these articles must result in a dimunition in sporting activities. Every encouragement should be given to the development of a sporting spirit. A healthy youth is one of the country's greatest assets and the money obtained by the increased tax on sporting equipment will be insignificant compared to the dimunition of sporting activities which serve to make young people healthy. The proposed 33-J per cent, impost on toys is an ill-conceived plan. Toys play an essential part in the life of children. Apparently the Government is unaware that toys are a necessary means of educational advancement for children. At a time when every assistance should be given to the family man the Government is penalizing him. People will be forced to buy cheaper toys, because the well-constructed toys, which are the cheapest in the long run, will be beyond their reach. The Government is adding insults to injury by increasing the tax on radio receiving sets to 33-J per cent. Last year, it was increased from 8 per cent, to 25 per cent. Surely no one will claim that a radio set is a luxury. Obviously, it is a necessity, because radio plays an important part in the daily life of the people. The policy of the Government in this matter passes all understanding, and seems to be the result of loose thinking. The Government would be well advised to withdraw the bill in order to correct a multitude of injustices and anomalies. Debate (on motion by **Mr. Hulme)** adjourned. {: .page-start } page 1928 {:#debate-27} ### ADJOURNMENT {:#subdebate-27-0} #### Civil Aviation - The Parliament - Commodity Containers Motion (by **Mr. Eric** J. Harrison) proposed - >That the House do now adjourn. {: #subdebate-27-0-s0 .speaker-JVA} ##### Mr MORGAN:
Reid .- I wish to remind members of the Government of an incident that occurred to-day when an aeroplane in which 40 people were travelling to Canberra nearly came to grief. One of the landing wheels would not come down, and the aircraft had to circle for nearly an hour until the pilot, acting on advice received from the ground, was able to rectify the trouble. Members of Parliament made up about half the number of passengers, and had the aircraft been compelled to land when the wheel was not in position there might have been a repetition of the tragedy which occurred some years ago when several members of Parliament, including some Ministers, were killed in an aeroplane that crashed when coming in to land at Canberra. The incident that occurred to-day brings home the ever-present risk that honorable members run every week when travelling by air to and from Canberra in the discharge of their parliamentary duties. When I mentioned this to a member of the Government during a trip which some honorable members made during the weekend to the guided weapons testing range, he informed me that members of Parliament were covered up to £2,000 if they were killed while travelling on parliamentary or electoral duties. I do not know whether that corresponds to the cover given to passengers on ordinary commercial flights, or whether it is a special provision. I now ask for an elucidation of the position so that honorable members may know where they stand. In any case, the provision applies only to travel by aircraft, but honorable members also incur risks when travelling by train or motor car. Some time ago, the honorable member for Hunter **(Mr., James)** was severely injured while travelling by motor car, and the Government was called upon to compensate him. In the ordinary way, a member of Parliament injured while travelling would be entitled to damages only if he could prove negligence on the part of some other person. In New South Wales, workers travelling to and from their employment are entitled to compensation, amounting in some instances to thousands of pounds, if they are injured, and I can see no reason why members of Parliament should not be covered by a similar scheme. I know that honorable members are reluctant to speak up on such matters, in spite of what is said outside about their being eager to grasp as many privileges as they can. I urge the Government to consider my suggestion with a view to giving it effect. Last week, I mentioned that an American businessman, who had come to Australia with the intention to spend 1,000,000 dollars on the establishment of a business here, had returned to his own country without spending the money because no official encouragement was given to him here to do so. In the Sydney *Telegraph* a photograph was published showing the man holding sight drafts for 1,000,000 dollars, or £A.446,528, which he took back with him when he left on the liner *Aorangi.* In a press interview, he said that he was leaving without investing the money because government controls made it impossible for him to do so. I understand that last week the Minister for Trade and Customs **(Senator O'Sullivan)** said in the Senate that the man did not apply for import licences, but that is beside the point. If government policy here is such that he was discouraged from investing his money, it is not likely that he would go so far as to apply for import licences. When I mentioned this matter last week, the Treasurer **(Sir Arthur Fadden)** seemed to be in the dark about it, and he asked me to give him particulars. This American is not likely to come back to Australia, but there are probably other American businessmen who would be prepared to invest dollars in Australia, and if they did so we would have the benefit of the dollars without having to borrow them. The money they brought would help to develop the country and the profits would remain here. I should like to know who is responsible for the policy which this American businessman found so discouraging. Is it the Secondary Industries Commission? Business people who come to Australia with the idea of investing money here should be encouraged, instead of being kicked around from pillar to post. There may be some simple explanation of the whole matter, but it seems to be very baffling. Another matter that I wish to bring to the attention of the House concerns the prices being charged by the Royal Australian Air Force to its members for clothing and other equipment. I have here a pair of black cashmere socks which were sent to me by one of my constituents who is also a member of the Royal Australian Air Force. They are marked, " Air Force equipment 1944 ". Apparently they are part of the old stock from the last war which was not handled by the Commonwealth Disposals Commission or which could not be sold by that organization. These socks were sold to my constituent for 6s. lid., and I have been given a receipt for that amount. During the war similar articles were probably sold by the Air Force for two or three shillings. I suggest that the same type of socks could be bought at a Coles or Woolworth store for much less than 6s. lid. {: #subdebate-27-0-s1 .speaker-10000} ##### Mr SPEAKER: -- Order ! The honorable member's time has expired. {: #subdebate-27-0-s2 .speaker-KCM} ##### Mr DRAKEFORD:
Maribyrnong -- I rise only because of something that was said by the honorable member for Reid **(Mr. Morgan)** about air travel. It was rumoured to-day that a certain aircraft developed some trouble because of faulty landing gear. I agree that if £2,000 was the insurance cover for honorable members five years ago it should be more to-day. I would be sorry if anything that my colleague has said gives people the impression that air travel is unsafe. Modern air travel can be more than satisfactorily compared, as far as safety is concerned, with motor car travel. The men who are flying our civil aeroplanes are trained to the highest degree and they are most capable. The fact that in a period of five years only ten people have been killed while travelling by Trans-Australia Airlines, and that 119 have been killed while travelling by private airlines indicates that at least the Government airline has a very high standard of efficiency. Moreover, it must be remembered that in that period of time millions of passengers have been transported by air. People who travel in private cars to-day face far greater risks than those who travel by air. From time to time I have studied the accident figures of air travel, and I am satisfied that air travel is not unsafe. Honorable members are splendidly served by the air transport system and there are many who would not be able to return home for week-ends if it were not for the excellent air service provided. The trouble mentioned to-day occurs very rarely. The men who operate our trains, public car transport systems and aircraft are all highly qualified and very efficient. It is not these men but the inexperienced and irresponsible holders of motor car licences that we have to fear. The public can rest assured that it is getting the best possible service in all three travel services. I believe that air travel is as comfortable and as safe as anybody could expect. {: #subdebate-27-0-s3 .speaker-JTF} ##### Mr TOM BURKE:
Perth .- I was a passenger in the aircraft which to-day had a little trouble with its landing gear. The machine was very well handled by its captain and first officer. The passengers were told that the landing gear had caused a little trouble, but that even if it did not finally operate the aircraft could still land. We were told that there was no danger to the passengers, but that if we landed without the undercarriage down it might involve some damage to the aircraft. I pay a very warm tribute indeed to the pilot and first officer of the aeroplane, and to the two air hostesses. There is always a danger in any sort of travel, whether it be by motor car, train or aircraft. However, perhaps the most danger is involved in walking because very many pedestrians are knocked down and killed or injured by motor traffic. The pilot of this aircraft took all the necessary action to ensure that the landing gear would operate when landing, but we were assured that even if it did not operate there was no danger to any of the passengers. {: #subdebate-27-0-s4 .speaker-KGC} ##### Mr HAMILTON:
Canning .- I endorse the remarks of the honorable member for Perth **(Mr. Tom Burke)** about the way the aircraft was handled. The two air hostesses first informed the passengers of a slight mechanical fault. I have been informed that a section of the press has dealt with this matter in a way that was intended to be facetious at the expense of members of the Parliament. I wish to speak mainly about that. I endorse the remarks of the honorable member for Perth and pay a tribute to all of the crew for the fine job that they did. Captain Gray took the necessary action to shake the nose wheel into position before landing, and for that purpose lie was obliged to perform certain aerobatics. Subsequently, we were informed by operators on the ground that the aircraft had done everything but loop the loop. However, those who travelled in the plane did not get that impression. The captain side-slipped the aircraft and climbed and dived in order to shake down the nose wheel. Those of the passengers who were not accustomed to Hying became ill. I refer particularly to some of the women and children. When the aircraft eventually landed and they noticed that a fire cart and an ambulance were in attendance they felt very concerned. However, precautions of that kind are taken normally in respect of all landings. Some afternoon newspapers reported that members of Parliament who were travelling on the aircraft were white in the face when they disembarked. I did not notice that any of the male passengers showed any symptoms of that kind. Probably, if some members of the staffs of those newspapers had had a similar experience they might have disembarked with pallid faces. The newspapers that wrote up the incident in that strain- I refer particularly 10 ti'6 Perth *Daily News* - showed poor taste, because the consequences may have been much more serious, particularly if the captain of the aircraft had been obliged to make a belly landing. One does not like to contemplate what might have happened in such circumstances. I am sure that every passenger on the aircraft felt grateful to the captain and crew for the job that they did in landing it safely. {: #subdebate-27-0-s5 .speaker-KNX} ##### Mr ERIC J HARRISON:
Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- *in reply* - The matters that honorable members have raised will be referred to the appropriate Ministers, who, I have no doubt, will consider the representations that honorable members have made. The honorable member for Reid **(Mr. Morgan)** referred to several matters, but I propose to deal with only one of them. He directed attention toa report that was published in theSunday *Telegraph* of the 4th November in which prominence was given to an interview with a **Mr. Edward** Ball, a visiting American businessman. That report, which was headed, " He tried to spend a million dollars here and failed "t was followed up with a report on the same subject that was published in the *Daily Telegraph* four days later. If the honorable member kept abreast of political happenings he would know that the Minister for Trade and Customs **(Senator O'Sullivan)** replied to those reports in the Senate on the 8th November, when he made it clear that in every respect they were completely without foundation. {: .speaker-10000} ##### Mr SPEAKER: -- Order ! The Minister will not be in order in dealing with proceedings that have occurred in the Senate during the current session. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- I am giving information to the honorable member in the terms in which it was conveyed to me by the Minister for Trade and Customs, whom I represent in this chamber. My colleague informed me that an officer of his department interviewed **Mr. Ball** in Sydney and that **Mr. Ball** stated that he had at no stage requested a licence to import machinery, that he had made no inquiries to that end and that he did not intend to do so. The *Daily Telegraph* referred also to the refusal of the Department of Trade and Customs to allow the local sale of a new American car which **Mr. Ball** imported on a temporary basis. My colleague added - >This criticism reveals a complete misunderstanding of the issues involved. Obviously, if **Mr. Ball** sold his car in Australia and returned to the United States of America with the money from that sale, which would be much more than the duty deposited by him on his arrival, Australia, on **Mr. Ball's** own figures, would lose £3,000 worth of dollars. Australia will not use scarce dollar currency to purchase luxury cars as there are many commodities far more essential. > >The fact that **Mr. Ball** could not sell his car in Australia could have no hearing on his reported intention to invest as, had he proposed residing in Australia for some time to organize and supervise his so-called investments, he would have been permitted to keep hiscar here. In the light of that information there appears to be no foundation whatever for the reports that were published in the newspapers that the honorable member has mentioned. **Mr. Ball,** himself, made it perfectly clear that he had made no effort whatever to obtain an import licence. I shall direct the attention of the Minister for Civil Aviation **(Mr. Anthony)** to the matter to which reference has been made by the honorable member for Reid, the honorable member for Maribyrnong **(Mr. Drakeford),** the honorable member for Perth **(Mr. Tom Burke)** and the honorable member for Canning **(Mr. Hamilton).** I am sure that the Minister will take appropriate action. Question resolved in the affirmative. {: .page-start } page 1931 {:#debate-28} ### PAPERS The following papers were presented : - Commonwealth Bank Act - Appointment Certificate - R. J. Watson. Defence (Transitional Provisions) Act - National Security (Industrial Property) Regulations - Orders - Inventions and designs (2). Lands Acquisition Act - Land acquired for Defence purposes - Breddan, Queensland. Norfolk Island Act - Ordinance - 1951 - No. 5 - Lunacy. Overseas Telecommunications Act - Fifth Annual Report of the Overseas Telecommunications Commission (Australia) for the year ended 31st March, 1951, together with financial accounts. Public Service Act - Appointments - Department - National Development - J. A. Brooks. S. P. Willmott. Shipping and Transport - H. M. Head. Treasury - J. C. Lloyd. House adjourned at 11.16 p.m. {: .page-start } page 1931 {:#debate-29} ### ANSWERS TO QUESTIONS *The following answers to questions were circulated: -* {:#subdebate-29-0} #### National Security Resources Board {: #subdebate-29-0-s0 .speaker-KX7} ##### Mr Ward: d asked the Prime Minister, *upon notice -* {: type="1" start="1"} 0. . How many meetings of the National Resources Board have been held? 1. Are records kept of the discussions and decisions of the board? 2. Is it proposed to submit to Parliament from time to time reports covering the activities of the board ? {: #subdebate-29-0-s1 .speaker-N76} ##### Mr Menzies:
LP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. There have been fifteen meetings of the National Security Resources Board. 1. No official record is kept of discussions at meetings of the board, but the hoard's decisions are recorded. 2. The functions of the board being purely advisory to the Prime Minister and Cabinet, it is not proposed to submit reports thereon to Parliament. However, at an appropriate time Parliament will be informed of the progress made in defence preparations, in which connexion the board has greatly assisted the Government. Shipping. {: #subdebate-29-0-s2 .speaker-N76} ##### Mr Menzies:
LP s. - On the 9th October, the honorable member for Shortland **(Mr. Griffiths)** asked a number of questions relating to conditions in Newcastle harbour. I understand that the report referred to by the honorable member has already been made available to the press by the Minister for Shipping and Transport and I am arranging for a copy to be sent to the honorable member. The Commonwealth Government has for some time been aware of the conditions on the Australian waterfront and in particular the conditions at Newcastle. As a preliminary step a United Kingdom expert has been brought to Australia and he is at present examining port facilities generally. His survey will also include the port of Newcastle. . When the Government receives his report, urgent consideration will be given to it. {:#subdebate-29-1} #### Postal Department {: #subdebate-29-1-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP n asked the Post master-General, *upon notice -* {: type="1" start="1"} 0. What were the duties carried out by the five " investigation officers " employed by his department last year? 1. Are they still employed; if not, why not? {: #subdebate-29-1-s1 .speaker-JLZ} ##### Mr Anthony:
CP -- 'The answers to the honorable member's questions are as follows : - >The five positions in question are still in operation and they are now included with other positions listed under the heading " Clerks " in the 1951-52 Printed Estimates. Two of the positions are attached to the central administration of the department and the remaining three positions are located in the Accounts Branch, General Post Office, Sydney. All of the positions are filled by permanent officers and the following givesbrief particulars of the duties together with the salary classification of each position concerned: - Central Staff Positions. One position - Investigation of financial and costing records of contractors and in respect of variation of contract prices. Regulation salary rate, £1,214-£1,304. One position - Investigations and preparation of reports and correspondence relating to administrative and policy matters associated with the conduct, in Australia, of the international telecommunications and postal services. Regulation salary rate. £908-£1,004, Sydney Office Positions. One position - Investigation of financial and costing records of contractors in respect of variation of contract prices. Regulation salary rate, £1,004-£1,124. One position - Assists with investigation of financial and costing records of contractors in respect of variation of contract prices. Regulation salary rate, £860-£956. One position - Investigations in connexion with accounting methods and procedures and directly related activities. Regulation salary rate, £1,004-£1,124. {:#subdebate-29-2} #### Government Loans andfinance {: #subdebate-29-2-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP n asked the Treasurer, *upon notice -* {: type="1" start="1"} 0. What is the cause of the falling price of Commonwealth 3½ per cent, loans? 1. What is the Government doing to arrest the decline? 2. Is it a fact that investment companies are urging clients to refrain from investing in public loans because of the likelihood that the Government will increase the interest rate on Commonwealth loans to 4 per cent.? 3. Will he state whether 4 per cent, interest will be offered for the next Commonwealth loan? {: #subdebate-29-2-s1 .speaker-F4T} ##### Sir ARTHUR FADDEN:
MCPHERSON, QUEENSLAND · CP -- The answers to the honorable member's questions are as follows : - 1 and 2. The attention of the honorable member is invited to my remarks on this subject during my closing speech on the budget on the 30th October. {: type="1" start="3"} 0. I have no reliable information on this point. 1. The terms of the fourteenth security loan included interest at the rate of 3¾ per cent. {:#subdebate-29-3} #### Dollar Deficits {: #subdebate-29-3-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP n asked the Treasurer, *upon notice -* {: type="1" start="1"} 0. What was the value in dollars of *(a)* imports into Australia from the United States of America and (6) exports from Australia to the United States of America in each of the years 1946, 1947, 1948, 1949 and 1950? 1. From what source did Australia pay whatever debits there might have been at the end of any year's trading? 2. What was the value in dollars obtained for Australian wool sold in the United States of America by (a) Great Britain and (b) other European countries? 3. What would have been the value received in dollars if Australian meat, ores and other exports, excluding wool, had been sold to America instead of to Great Britain in each of the years 1946, 1947, 1948, 1949 and 1950? 4. Can Australia supply to the United States of America sufficient goods annually to pay for the goods it requires from that country to meet the needs of this nation's economy? {: #subdebate-29-3-s1 .speaker-F4T} ##### Sir Arthur Fadden:
CP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. The statistics requested are as follows: - {: type="1" start="2"} 0. Settlements for trading transactions are made continuously and there is no question of lump-sum settlements being made at the end of a trading year. The sources from which Australia's dollar commitments for imports and other items were met during the years 1946 to 1950, inclusive, were_ {: type="a" start="a"} 0. Earnings from Australian exports to the dollar area; 1. Other dollar receipts, including net capital inflow and the 20,000,000 dollars drawn from the International Monetary Fund in October, 1949; 2. Purchases of dollars against sterling from the Bank of England. 1. No information is available. 4 and 5. These are hypothetical questions involving matters of opinions. Persia. {: #subdebate-29-3-s2 .speaker-N76} ##### Mr Menzies:
LP s. - On the 9th October, the honorable member for Wilmot **(Mr. Duthie)** asked the following question : - >Will the Prime Minister consider making a statement to the Parliament with respect to the Abadan oil dispute in Persia in order to indicate how that dispute may affect the supply of petroleum products to this country? *Gun* the right honorable gentleman say whether the Government has taken any step to re-introduce petrol rationing as the result of the curtailment of the supplies of petrol from Persia? I now advise the honorable member as follows : - >In 1950, approximately 30 per cent, of Australia's total imports of petroleum products were imported directly from Persia. Of the principal products 40 per cent, of aviation spirit, 22 per cent, of motor spirit and 65 per cent, of fuel oil imported into this country were obtained from this source. The Abadan refinery during 1950 waa the largest individual source of our supplies, but other sources included Singapore, Indonesia, Bahrein Island and New Guinea. From the latter source crude oil was obtained for refining. Since the dispute between the Anglo-Iranian Oil Company and the Persian Government resulted in supplies from Abadan being discontinued, the oil companies marketing petroleum products in Australia have made other arrangements to meet the demand in this country. They are now drawing additional supplies from the United States and crude oil is also being obtained from - Kuwait. This re-organization of supplies has involved close co-operation between the major oil companies with worldwide interests in the production, transport and marketing of petroleum products and they have been successful in achieving an output from the refineries under their control sufficient to meet the demand which would otherwise have been met by tho Abadan refinery. There has been a marked increase in the output oi crude oil from Kuwait and it seems clear that the refinery developments of the oil industry in countries other than Persia will be adequate for our future needs! As I have stated previously, the Government has no intention of re-introdusing petrol rationing in Australia.

Cite as: Australia, House of Representatives, Debates, 13 November 1951, viewed 22 October 2017, <>.