House of Representatives
24 September 1953

20^th Parliament · 1^st Session

SUPERANNUATION
- Petition
QUESTION
- EMPLOYMENT OF WOMEN
QUESTION
- WHEAT
QUESTION
- NATIONAL SERVICE
QUESTION
- WATERFRONT EMPLOYMENT
QUESTION
- ARMED FORCES
QUESTION
- SOCIAL SERVICES
QUESTION
- IMMIGRATION
QUESTION
- GOVERNMENT LOANS AND FINANCE
QUESTION
- LAND SETTLEMENT OF EX-SERVICEMEN
QUESTION
- HEALTH AND MEDICAL SERVICES
QUESTION
- AUSTRALIAN WAR MEMORIAL
QUESTION
- ATOMIC WEAPONS
QUESTION
- POSTAL DEPARTMENT
QUESTION
- FILMS
DAYS AND HOURS OF MEETING
ENTERTAINMENTS TAX ABOLITION BILL 1053
- Second Reading
DISTINGUISHED VISITOR
ENTERTAINMENTS TAX ABOLITION BILL 1953
- Second Reading
PAY-ROLL TAX ASSESSMENT BILL 1953
- Second Reading
QUESTION
- ESTIMATES 1953-54
ADJOURNMENT
ANSWERS TO QUESTIONS
- Capital Issues
- Taxation

Mr. Speaker (Hon. Archie Cameron) took the chair at 10.80 a.m., and read prayers.

page 584

SUPERANNUATION

Petition

Mr LESLIE:
MOORE, WESTERN AUSTRALIA

– I present a petition from certain citizens of the Commonwealth praying that the Parliament will rectify an injustice which, they believe is being done under the ‘ Superannuation Act. As the subject-matter of the petition has already been presented to the House, I suggest that the petition he received.

Petition received.

page 584

QUESTION

EMPLOYMENT OF WOMEN

Dr EVATT:
BARTON, NEW SOUTH WALES

– Some time ago I asked the Minister for Labour and National Service a question relative to the adoption by the International Labour Convention of the principle of equal pay for work of equal value, irrespective of sex. The Minister undertook to ascertain’ from the State governments what they were doing and what they proposed to do jointly with the Commonwealth in connexion with the carrying out of the recommendation. I ask the Minister, particularly in view of the decision reached by the Australian Council of Trades Unions convention yesterday, whether he will consider calling into conference the

Ministers of Labour of all the States to see whether something oan at last be done in this matter.

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

– Since the right honorable gentleman mentioned the matter some time ago, I have had before me a draft report which I propose to lay on the table of the House. The report sets out the comments that have been made by the State governments on this matter following the circulation of the resolution of the International Labour Convention. I understand that the report is being processed at present. I hope to be in a position to table it next week. I shall examine the second suggestion made by the right honorable gentleman. He, of course, knows as well as does anybody in this chamber, the attitude that has been taken traditionally by our industrial tribunals in relation to wages paid to male and female employees in Australia.

page 585

QUESTION

WHEAT

Mr ADERMANN:
FISHER, QUEENSLAND

– I direct a question to the Minister for Commerce and Agriculture. The Queensland Minister for Agriculture, when speaking about the marketing of potatoes, said that for price fixing there must be a relationship in prices between States and that that applies to almost any commodity. He went on to say that the alternative was for goods to gravitate to a more profitable market, and that there was no legal power to stop it. Has that principle been applied by the Queensland Government to the wheat marketing scheme? What is the general attitude of that State to the present wheat requirements?

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

– I read with great interest the statement of the Queensland Minister for Agriculture that it had become quite clear that, in respect of potato marketing, there could be no Australiawide orderly marketing while price differentials existed in the States, and that in order to ensure orderly marketing uniform prices must be fixed by all the States. It is clear that if the Queensland Minister for Agriculture desires that principle to apply to wheat, his only formula for ‘bringing it about is for all the other States to jump into line with Victoria and Queensland. The situation speaks for itself. r.- r2n

page 585

QUESTION

NATIONAL SERVICE

Mr KEON:
YARRA, VICTORIA

– I have received a letter from the mother of an eighteen-year-old national service trainee who was recently fined £10 and sentenced to 77 days’ extra camp for having missed evening parades. The reason why the trainee missed the parades was that he lost his jo’b after his return from the three months’ training period, and had obtained another job on which he was working overtime and, therefore, could not attend the evening parades. The mother asks me whether I can explain to her why the Government can act so promptly and harshly against a lad who merely misses some evening parades while it allows a prominent Communist, who occupies official quarters in Peking, to return to Australia without penalty after he has actively assisted the enemies of this country and, indeed, the enemies of civilization generally?

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

– I point out to the honorable member for Yarra, in reply to the second part of his question, that the Prime Minister has already made the position of the gentleman who went to Peking perfectly clear. If the honorable member has not understood the Prime Minister’s explanation, I cannot assist him with a further clarification of the situation. I also inform him, in reply to the first part of his question, that if he will give me privately the name of the national service trainee concerned, I shall be prepared to obtain for him or the House the full circumstances surrounding the prosecution. However, I make it clear that the decision in this case is that of a court. It was not reached by the Government or myself. I have not known of one case that has not been dealt with fairly and squarely, and in which every consideration has been given to the trainee.

page 585

QUESTION

WATERFRONT EMPLOYMENT

Mr PEARCE:
CAPRICORNIA, QUEENSLAND

– Is the Minister for Labour and National Service aware that a report is circulating to the effect that he is quite satisfied with the labour position on the waterfront at Bowen? Will he inform me whether such a report is a correct statement of the position at that port? If it is not a correct statement of the situation, will he give the House his views on the matter?

Mr HOLT:
LP

– I regret that the report to which the honorable member for Capricornia has referred is not a correct statement either of my attitude or of the situation at Bowen. I did make some comment yesterday to the effect that, as we were a’ble to concentrate all gangs in the port on the loading of sugar last week, we were able to move, in that period, 5,000 tons more sugar than was actually produced in the same time. Since then, the position has deteriorated quite sharply again. Absenteeism has occurred on an abnormal scale during the last three days, and there has not been the encouraged transfer of labour from other ports which, we were assured, would be carried out by the Waterside Workers Federation in accordance with the undertaking given to the Australian Council of Trades Unions and myself. At the present time, three gangs are loading meat and four gangs are loading sugar. I believe that those gangs are quite insufficient to meet the- requirements. I am arranging as from to-morrow to improve the position slightly by transferring an extra gang to sugar loading and having one gang less on meat loading. I propose to communicate with the president of the Australian Council of Trades Unions and the general secretary of the Waterside Workers Federation and direct their attention to the deteriorating position that is developing at Bowen.

page 586

QUESTION

ARMED FORCES

Mr ANDREWS:
DAREBIN, VICTORIA

– Will the Minister for the Army inform me who authorized the use of military personnel and equipment by a private company in Melbourne recently? Was any payment made for use of the equipment? If payment was made, will the Minister inform me of the amount charged? Why was Albert Lake Park-road fenced ‘by the military authorities for the conduct of a motor road race by a private company? What right or authority had this company to expect the military to do this work, or use Army equipment for it?

Mr FRANCIS:
LP

– If the honorable gentleman will give me the name of the company, I shall make inquiries. Under the administrative system that applies in the various commands, a small matter of that kind is dealt with usually by the General Officer Commanding instead of by Army Head-quarters or the Minister. Such matters arise in the various States from time to time. I shall obtain an answer to the honorable member’s question if he will supply the name of the company.

page 586

QUESTION

SOCIAL SERVICES

Mr DAVIS:
DEAKIN, VICTORIA

– The question that I wish to ask the Minister for Social Services arises from an answer that he gave to a question yesterday, when he said, if I understood him correctly, that the total cost of the variations of pension rates proposed by the Leader of the Opposition would be approximately £70,000,000 a year. Did that amount include the cost of abolishing the means test? If not, what would he the cost of the proposals made by the Leader of the Opposition including the abolition of the means test, and what would be the total annual allocation for social services in such circumstances? How much additional taxation would this involve?

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

– The figures that I gave yesterday did not include the cost of removing the means test. The amount of £70,000,000 that I mentioned would merely cover the other proposals that the Leader of the Opposition made in his speech on the budget. If we added the cost of removing the means test, the total additional cost would be about £170,000,000. That would make the full social services bill about £350,000,000 annually and would involve a taxation increase, I should say, of about 20 per cent.

Mr HULME:
PETRIE, QUEENSLAND

– I direct to the Prime Minister a question supplementary to that directed to the Minister for Social Services by the honorable member for Deakin. I- ask him whether, as the proposals of the Leader of the Opposition in respect of budget provisions would cost another £170,000,000 a year, the increase of 20 per cent, in taxes mentioned by the Minister would apply, not only to individuals and companies, hut also to excise and customs duties. Would not the proposals in fact, involve an increase of approximately 50 per cent, in taxation on individuals? Will the Prime Minister indicate what he believes would be the reaction of the taxpayers to such a proposal?

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– Of course it is quite clear that if any such proposals as those advanced by the Leader of the Opposition were put in operation and were actually paid for, in the true financial sense, the result would be complete uproar in the country. However, I urge the honorable gentleman to keep calm on these matters, because I think there is not the slightest risk in the perceptible future of those proposals being put into operation.

Mr LAWRENCE:
WIMMERA, VICTORIA

– Will the Minister for Social Services inform the House whether any time limit is placed on the receipt of unemployment benefit by any person? Could undesirable people and persons whom nobody will employ - for instance, those with criminal records - draw unemployment relief even though their own behaviour or record is the mason for their unemployment? Will the Minister examine this matter with a view to placing some restriction on people who never have worked and never intend to work, in order to prevent them from receiving a regular income from the taxpayers of this country merely because they are unemployable through their own fault?

Mr TOWNLEY:

– No time limit is placed, on the payment of unemployment relief. It is possible for a person with a criminal record to draw the unemployment benefit for a long time. The procedure is that a person, who is out of work to go to the Department of Labour and National Service and, if that Department lias no work for him, to have his card stamped to signify that no work is available. He is then sent to my department. He is then paid the unemployment benefit by my department. I have no hesitation in expressing the opinion that there are undesirable, and possibly criminal, types who do get a regular income from the unemployment benefit. Many people receiving the benefit are unfortunate, because due to-infirmity or something of the sort, they cannot be employed. The community has a duty to ensure that they get some measure of assistance. However, it is rather disturbing to see the numbers of people who have been receiving unemployment benefit for a long time. The honorable member asked whether I would examine this position. I have already done that, and I was disturbed to find that in Sydney, for instance, 40 per cent, of the people drawing the unemployment benefit have been doing so for six months or more. It seemed to me that among that number, particularly in view of the fact that in the Sydney newspapers sometimes one may see up to 70 columns of positions a.nd situations vacant advertised on a

Saturday morning-

Mr Haylen:

– That is completely stupid.

Mr SPEAKER:

-Order ! The honorable member for Parkes (Mr. Haylen) is out of order.

Mr TOWNLEY:

– In view of the large number of advertised vacancies, there is no doubt that among the unemployed people who are receiving unemployment benefit are persons who are unemployable no-hopers.

page 587

QUESTION

IMMIGRATION

Mr CREMEAN:
HODDLE, VICTORIA

– I ask the Minister for Immigration whether any action has been taken by his department or the Department of Trade and Customs to improve the allegedly inadequate landing facilities for the reception of immigrants at the port of Melbourne. As a number of complaints have been received concerning the distress and fatigue caused by the lack of proper facilities, will the Minister arrange to have the matter investigated as soon as possible ?

Mr HOLT:
LP

– Some complaints of this nature were made about a year ago, and action was taken then to improve the facilities for friends and relatives to meet immigrants on their arrival at the port. I have not heard of such complaints recently, but I shall make inquiries in order to ascertain whether any further action by the department is needed.

page 587

QUESTION

GOVERNMENT LOANS AND FINANCE

Mr KEKWICK:
BASS, TASMANIA

– The question that I direct to the Prime Minister concerns the far-reaching effect upon the Tasmanian economy of a recent secret transaction in which the Victorian Labour Government outsmarted the Tasmanian Labour Government by persuading the trustees of the George Adams Estate to transfer Tattersalls to Victoria. The jobs of hundreds of workers, including not only the employees of Tattersalls but also large numbers in the Postal Department and in the printing trade, are threatened. Will the right honorable gentleman indicate whether there is any way in which the Commonwealth can assist the people who are to be thrown out of employment by this action of a Labour government? With reference to the vastly different financial positions which will obtain both in Victoria and in Tasmania, will the Prime Minister elaborate on the point raised by the honorable member for Franklin and bear in mind, when tax reimbursements to the States are next considered, that Tasmania’s income will be reduced by £1,500,000 a year whereas Victoria’s income will be increased by £2,000,000 a year?

Mr MENZIES:
LP

– I have noted, of course, reports in the press that have given some account of these decisions of policy and the actions taken in respect of Tattersall’s. I have noticed, among other things, that the Labour Government of Victoria, allegedly violently opposed to monopolies, is to grant a monopoly to a private group in respect of a lottery. I have not failed to notice also the suggestion that, as the removal of the lottery will adversely affect Tasmania, the Tasmanian Government should obtain some reimbursement from the Commonwealth in respect of the loss and that, as the lottery will be profitable for Victoria, that State will secure a relative advantage. All I want to say is that these matters are not quite as simple as that. We shall watch the position very carefully, bearing in mind the interests of the Commonwealth and of the taxpayers.

page 588

QUESTION

LAND SETTLEMENT OF EX-SERVICEMEN

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– Did the Minister for the Interior threaten or propose last November to take over war service land settlement from the governments of the three eastern States? Does he still pro pose to do so? Was a conference on the subject deferred until last March? Was a further conference proposed to be held before the meeting of the Loan Council last May? Why has the further conference not been held? At the March conference, did the Commonwealth representative refuse to give a guarantee that the Commonwealth would spend more on war service land settlement in the three eastern States than the governments of those States were then spending? Has the Commonwealth now informed the State governments concerned that, despite the cessation of hostilities in Korea, it will not give any further assistance in respect of war service land settlement this year?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– It is quite impossible to give a detailed answer to all the questions that the honorable member has shot at me. The answer to most of them is a large, “ No “. That remark applies to the questions about promises alleged to have been made at conferences and about the holding of further conferences. The cessation of hostilities in Korea, or the conclusion of an armistice there, is completely irrelevant to war service land settlement. It has nothing to> do with the subject.

Dr Evatt:

– As a result of the cessation of hostilities, more applications will be received under the scheme.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– More applications may he received, as the Leader of the Opposition has suggested, but we already have a large number of applications from men who served in the two world wars, and these have not yet been satisfied. The basis of the discussions with the principal States, instigated by this Government, has been to find ways and means to speed up war service land settlement, especially in New South Wales and Queensland for the scheme was slowing down rapidly in New South Wales, and seemed to be coming to a standstill in Queensland.

Mr Whitlam:

– The Minister said that he would take the scheme over.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– The honorable member has been in the Parliament for only a short time. Somebody has supplied him with a lot of untrue information, which he has suddenly shot at me in a long list of questions. I am endeavouring to answer those questions. If he does not want to listen to my reply, I shall be pleased to sit down.

Mr Curtin:

– We shall be pleased if the Minister does do so.

Mr SPEAKER:

– Order ! The House is again becoming disorderly at question time- I respectfully suggest to the Government that, if honorable members are not prepared to maintain order during question time, we should proceed with the business of the day.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– Most honorable members are aware that it was suggested that a conference be held to ascertain what was going to happen in respect of war service land settlement in New South Wales and Queensland, two of the principal States. Victoria also was asked to attend the conference, because it was necessary to deal with all three of the principal States. At the conference, various suggestions were made, but none of the suggestions made by New South Wales and Queensland was in line with the principles on which the scheme is worked in the agent States. Then a meeting of the Loan Council was held. At the meeting, both New South Wales and Queensland included in their requests for loan funds items in respect of war service land settlement. On that basis, an allocation of funds for the ensuing year was made with the approval of the Premiers of those States and the Premiers of the other States. After all that had happened, after correspondence had passed between this Government and the State governments, and when the Commonwealth budget was practically finalized, on the 27th July - I speak subject to correction about the actual date - Queensland decided not to carry on with war service land settlement this year. That information, which was conveyed to us in a letter from the Acting Premier of Queensland to the Prime Minister, did not arrive until about the middle of August. As I have previously told the House, that decision is not only a breach of Queensland’s moral obligations to the Commonwealth, but also of its obligations to the other Premiers who were parties to the agreement. I hope that Queensland will alter its decision and will carry on with the three projects that have been already developed with war service land settlement funds, and not hand them over for civilian settlement.

page 589

QUESTION

HEALTH AND MEDICAL SERVICES

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

– I ask the Minister acting for the Minister for Health whether it is a fact, as was stated to the world health conference in Holland by the Minister for Health, that the Government’s medical scheme will be binding, by legislation, on the Australian people for at least three years. If that is a fact will the Minister state by what method it is proposed to make this provision? Will he also state why the Australian people should be asked to put up with this halfbaked scheme for an indefinite period?

Mr TOWNLEY:
LP

– I am not sure where the honorable member obtained his information, or from what newspaper he is quoting. If I. heard his question, correctly, it includes about four or five separate questions and I suggest, therefore, that he put it on the notice-paper. When the Minister for Health returns to Australia next week I am sure that he will give the honorable gentleman an adequate reply.

page 589

QUESTION

AUSTRALIAN WAR MEMORIAL

Mr McLEAY:
Minister for Shipping and Transport · BOOTHBY, SOUTH AUSTRALIA · LP

– Will the Minister for the Interior inform the House who was responsible for the removal of the painting of General Leane from a gallery at the Australian War Memorial in Canberra ? Further, will he give instructions that this portrait of one of Australia’s most gallant soldiers be returned to its rightful place in the gallery? I am under some obligation to the general, because, when he was wounded at Passchendaele, my squad was detailed to carry him out of the line and the following morning his orderly came round to try to find out where the general’s boots were.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– I am glad that the honorable member has asked this question, because similar questions might be asked outside this House regarding other portraits. The portrait of General Leane was in a gallery of portraits in the memorial, gallery number sixteen. The portraits for

FILMS

Mr SPEAKER:

– Yesterday, the honorable member for Farrer asked me a question in regard to the overseas distribution of films of Australian production. The position is that the films to which he referred were originally made by the Department of Information, the activities of which are now conducted by the News and Information Bureau, under the control of the Department of the Interior. Their overseas distribution is not in the hands of the National Library over which, by virtue of my office, I preside’ for the time being; it is made by three Commonwealth departments, the Department of External Affairs, the Department of Commerce and Agriculture and the Department of the Interior. Therefore, the honorable member’s question might be directed to the Ministers in charge of those departments.

page 590

DAYS AND HOURS OF MEETING

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

That, until the end of the session, unless otherwise ordered, the hour at which the House shall meet for the despatch of business on each Thursday and Friday shall be 10 a.m.

page 590

ENTERTAINMENTS TAX ABOLITION BILL 1053

Second Reading

Debate resumed from the 10th September (vide page 110), on motion by Sir Arthur Fadden -

That the bill be now read a second time.

Mr CALWELL:
Melbourne

.- This simple-looking bill is not quite as simple as the Government would make it appear to be. The Treasurer (Sir Arthur Fadden), in his second-reading speech, the typescript of which ran into only three-quarters of a page of foolscap, told us that the bill is designed to remove the entertainments tax on payments for admission to entertainmens to be held on and after the 1st October, 1953. It is designed to do a number of other things as well. It is designed to throw the odium of collecting entertainments tax on to the State governments. It is designed to enable this Government to evade its responsibility in the matter of raising revenue. When the measure is passed by the Parliament responsibility will be thrown on to the States either to enact or not to enact similar legislation. If they do not impose a State tax they will be deprived of an argument that they do not get sufficient money from the Commonwealth to enable them to perform their functions. Last year, the Parliament was asked to pass a bill to terminate the land tax. By the abolition of that tax, £6,000,000 was ostensibly remitted to the taxpayers of Australia, but the States, being starved for money, had to enter the land tax field almost to the extent that the Commonwealth had vacated it. On this occasion, the States, needing money desperately, have already been compelled to re-enact entertainments tax legislation, or they are contemplating so doing. They will certainly be compelled to do so before the year is out if they are to balance their budgets.

The Treasurer has told us that the entertainments tax was brought into force in 1942 as a means of raising revenue for war purposes. That is perfectly true. It was introduced by the Curtin Government and it has been amended down through the years. One amendment was made in 1946 and two amendments were made in 1949. I well remember the amendments that were made in 1949. They were made, to relieve the burden on sporting clubs throughout Australia in which only humans participate. The remission which the Chifley Government made was well received by sporting bodies throughout Australia. I remember that I presented to the Chifley Cabinet a petition that was signed by all sporting bodies which sought’ a remission of the tax. Clubs representing all codes of football joined together in an attempt to secure very desirable tax remissions in respect of lower admission charges. This Government has made no mention of the fact that there had been any relaxation of the entertainments tax since ifr was introduced in 1942.

The Government has said that the tax has been vexatious. If it has been vexatious, why did not the Government, remit the tax when it first took office. It could have done so in 1950. If it is vexatious now, it has been vexatious all the time this Government has been in office. As a matter of fact, it is not the only vexatious circumstance since this Government has been in office. Indeed, the very existence of the Government itself is vexatious. But we shall be able to remedy that. The tax is not as vexatious as the Government now pretends it to be. The Government is saying that it is vexatious now only in order, to use a colloquialism, to try to make its alley good with the people because it knows it has to face them in June of next year. An entertainments tax was in existence before the war began, but the Government has not mentioned that fact. The Commonwealth Parliament was not the first Parliament in Australia to enact an entertainments tax. The Commonwealth tax was brought, into force in 1942. It superseded the then existing State entertainments taxes which had been in existence for many years. No doubt, State entertainments taxes will be in existence for a long time to come.

In recent months the Treasurer has been at his wits’ end to try to make it appear that his Government is eager to retire from certain fields of taxation so that responsibility will be thrown on to the States for the collection of a share of their taxes. They will have to accept whatever opprobrium may be attached to the levying of such taxes.

Mr Thompson:

– The States are to be left with the unpopular taxes.

Mr CALWELL:

– As the honorable member for Port Adelaide (Mr. Thompson) has said, the Government is now throwing on to the States the responsibility for collecting the unpopular taxes - and no tax is more unpopular than a tax on entertainments.

When the Curtin Government levied the entertainments tax in 1942 it imposed relatively low rates on the lower admission charges. It was desired by the Curtin and Chifley Governments - I was a member df the second Curtin Government and of each of the Chifley Governments, and I should know something, about this matter - that the people should be released from the tensions of war and that they should be able to attend picture shows and the like at as little cost as the Government could conveniently arrange, so that the strains and anxieties that were experienced during the war period could be relieved as much as possible. The Government has been eager to prove to its own satisfaction, and has been trying to force the States to accept the same view, that il is genuine in its desire to vacate certain fields of taxation. A Current Affairs Bulletin, issued by the federal secretariat of the Liberal party, contains the following statement by the Treasurer : -

We are firm believers in the Federal system, and an effective Federal system means that the States, as partners, must accept their share of financial responsibility, even if this responsibility has to be thrust upon them.

In my opinion, that statement, as an argument in favour of the abolition of the tax, is completely dishonest. There has always been a difficulty .in prescribing the extent to which expenses should be allowed. In some instances, 50 per cent, of the receipts has seemed fair; in other instances 50 per cent, of the receipts has undoubtedly been too much. The use of that argument at this stage, after the Treasurer has levied the entertainments tax for so long, will not appeal to the people. The Government is trying to make a good case out of a bad situation for itself, and is remitting the entertainments tax, not for financial reasons, but for electoral reasons.

The Treasurer has also stated in his second-reading speech -

The amount of the tax, in some instances, has served to increase the cost of admission to such an extent as to have an adverse effect on attendances.

That statement may be true, because of the increase of inflation in the last two years. It was not true in 1949, when the

Labour party was in office. All the difficulties that have attended the cost of living in recent years have also been reflected in the entertainments field. So, if the cost of admission to theatres and motion picture shows has thrown such a burden upon those persons who want to attend them as to have an adverse effect on attendances, it is a good thing that the burden should be eased. The entertainments interests themselves did not expect this remission. They were hoping for a reduction of tax by. an amount of Id. in every ls. charged for admission.

Mr Haworth:

– How does the honorable member know that ?

Mr CALWELL:

I should like, with your indulgence, Mr. Speaker, to say something about the origin of the entertainments tax. As all honorable members know, at one time the States, with one exception, imposed amusements taxes of their own. In wartime, for the purposes of the war, the Australian Government decided to impose entertainments tax. The fact that this tax was imposed by the Commonwealth in September, 1942, for war-time purposes, was made quite clear in a statement made by the Treasurer of that day, the late Mr. Chifley, in his secondreading speech on the Entertainments Tax Assessment Bill, which is reported at page S5 of volume 172 of Parliamentary Delates. Mr. Chifley said -

The Government intends that some portion of the present spending of the people on amusements should bc diverted back to the Commonwealth Government in order to help to finance thu war.

That was the exceptional reason for which a federal entertainments tax was imposed. Later, after the war had ended, the question whether or not a war-time measure should be continued in peace-time came before this House. Mr. Chifley, as Treasurer, advanced reasons why the war-time measure should become a peace-time measure. Speaking in this House on the 20th March, 1946, in support of a bill to repeal section 29 of the Entertainments Tax Assessment Act, Mr. Chifley said -

The effect of the bill … is to remove the time limit which lias been placed on the operation of the act and to give indefinite operation to the act. When the act was passed in ]!)42 arrangements were made with the governments of those States which had been imposing an entertainments tax, for the field to be vacated by the States in order that the Commonwealth might impose and e01lect one uniform entertainments tax throughout .Australia. The States were compensated for the loss of entertainments tux revenue bv a grant from Commonwealth revenue. The arrangements were, in fact, based on those which hari been enacted for uniform income taxation. As the legislation for uniform income taxation was expressed to expire at the end of the first financial year after the war. the same expiry date was adopted in the Entertainments Tax Assessment Act. In view of its present financial responsibilities-

That is, its peace-time financial responsibilities^ - the Government proposes to continue in the entertainments tax field, and has made provision in the’ States Grants (Income Tax and Entertainments Tax Reimbursement) Bill for reimbursement payments in respect of both income tax and entertainments tax.

I have quoted from that speech at some length in. order to indicate the origin of this federal tax in peace-time and the reasons for which it was continued in pence-time, and in order to underline the fact that it was regarded as part of a system of uniform taxation to be levied by the Commonwealth with corresponding reimbursements of tax to the States.

If we proceed further and look at the States Grants (Income Tax and Entertainments Tax Reimbursement) Act 1946, we find reinforcement for the view that the levying of entertainments tax was an integral part of the system of uniform taxation and of the system under which tax reimbursements were made to the States. Again I quote the words of thelate Mr. Chifley, reported in volume 186,. Parliamentary Debates, at page 427. Hesaid -

In 15)42, the Commonwealth Governmentestablished uniform income taxation for theperiod of the war and one full financial year thereafter. Later, in 1942, the Commonwealth legislation was unsuccessfully chal lenged in the High Court of Australia by four of the State governments.

A little later, he said -

Following this litigation, the Commonwealth, in agreement with the States concerned, established uniform entertainments taxation on a similar basis.

At a slightly later stage of the same debate, Mr. Chifley said -

Under the present legislation, separate tax reimbursement grants are paid to each State concerned in respect of income tax and entertainments tax respectively. It is now ‘proposed to combine these payments so that, as from the 1st July, 194G, the reimbursement in respect of both income tax and entertainments tax will be covered by the one grant.

Therefore, looking at the origins of the peace-time federal entertainments tax, we find that the taxation reimbursement system, under which annual grants are made to the States, undoubtedly has a component in respect of entertainments tax. I suggest it was implicit in that arrangement that, in the absence of a future agreement to the contrary between the Commonwealth and the States, the Stateshad for the time being given up the right to levy entertainments tax on their own, just as surely as they had given up the right to levy income tax or company tax in return for a system of uniform tax collections and tax reimbursements by the Commonwealth. Therefore, I suggest, it is undoubtedly within the moral and legal power of the Commonwealth to make its own decisions on whether the entertainments tax should be abolished. In the absence of a favorable response to the offer by the Commonwealth to abolish the uniform taxation system, the States have not acquired any kind of moral right - their constitutional right is, Qf course, beyond challenge - to, re-impose entertainments tax on their own, if the Commonwealth, in its wisdom, chooses to abolish it. The Commonwealth has abolished the entertainments tax.

Mr Thompson:

– Will the abolition affect the States tax reimbursements?

Mr HASLUCK:

– That is not a matter on which I should comment at this stage. It is a subject for consultation between the Commonwealth and the States. I shall not venture to prophesy what will happen in regard to tax reimbursements. The point I am making is that the States, at least in a moral sense, abandoned their right to levy entertainments tax when they chose, as recently as this year, to remain under a system of uniform tax collections and tax reimbursements by the Commonwealth.

The Commonwealth has decided to abolish the entertainments tax. There are sound reasons for that decision. I believe, that the abolition of the ta.x will confer considerable and very acceptable benefits upon the mass of the population of” Australia. Yet, State Labour governments - the Government of my own State of Western Australia more readily than the government of any other State - are hoping to impose again upon the taxpayers a burden that has been lifted from their shoulders by the Commonwealth. I suggest that that kind of action by the State governments is a fraud on the taxpayers.

Mr SPEAKER:

-Order! The word “ fraud “ denotes something very undesirable.

Mr HASLUCK:

– I withdraw the word. I say that, in deciding to reimpose on the taxpayers a burden that has been lifted from them by the Commonwealth, the Government of Western Australia is in the course of taking away, and the governments of the other States are proposing to take away, a benefit that is already half way into the pockets of the taxpayers. They will withhold from the taxpayers a benefit that they may legitimately expect to receive.

Mr Freeth:

– Very improper.

Mr HASLUCK:

– I agree with the honorable member for Forrest (Mr. Freeth) that that action is quite improper. It is not only contrary to the spirit of a system of uniform tax collections and reimbursements, but also unfair to the taxpayers. This is a matter which could, perhaps, more properly be argued in a State parliament than in this Parliament, but it is also a matter to which the members of this Parliament must give some attention and about which they will properly express some concern.

There were, as I think the Opposition admits, very good reasons for abolishing the entertainments tax. It was a vexatious tax which, owing to the multiplicity of the functions to which it applied, was bearing heavily on a large number of worthwhile charitable entertainments and sports and pastimes that most honorable members wished to encourage. I am certain that at some time every honorable member received representations from philanthropic bodies, sporting bodies, charitable bodies and bodies engaged in cultural activities for relief to be given from this vexatious tax that hampered worthwhile activities. The decision of the Government was influenced, not only by a desire to’ remove a vexatious tax that was hampering those activities, but also by the fact, which I think every honorable member recognizes, that the tax hit chiefly the pocket of the family man. The £7,000,000 raised each year by the tax was, to a very large degree, contributed by the ordinary wage-earner, who found his recreation in taking his family to the pictures one night a week. Every week of his life, the ordinary working man, the ordinary wage-earner, paid away shillings in taxes because he took his family to the pictures one night. This is not, as some honorable members have alleged, relief for the rich man. It is relief for the ordinary wage-earner who, every week of his life, has been paying entertainments tax and has contributed the largest part of the £7,000,000 raised by. the tax each year.

Mr Curtin:

– The basic-wage earner cannot go to the pictures.

Mr HASLUCK:

– The honorable member for Watson (Mr. Curtin), by his

Interjection, has proved, as I have long suspected, that, although he is more vociferous than any one else in this House in pretending t0 speak for the working man, he is more out of touch with the ordinary working man than is any other honorable member. If he continues to make interjections to the effect that the working man does not go to the pictures, or that the basic-wage earner never goes to a football match, he will prove, as we have long suspected, that he knows his own particular version of the working man, but has no idea of the way in which the average working man really lives. When this’ tax was levied by the Commonwealth, it fell on the family man. Most of the £7,000,000 that it yielded “was paid by the wage-earner and by nobody else.

When, as seems likely, it is re-imposed by State Labour governments, it will once again be a burden placed by them on the working man and on nobody else. As I have tried to say during my excursion into the origins of this tax, the State Labour governments, in deciding to re-impose the tax, are acting contrary to the whole system of uniform taxation, collection and reimbursement under which they have chosen to continue to operate. The Labour party is itself in a curious position. We have been given to understand that the representatives of that party in this Parliament will not oppose the bill. Yet several other branches of the manyheaded Labour party, which seems to flourish throughout Australia, are considering re-imposition of the entertainments tax. Where is the consistency of that? Where is there even an idea of fairness to the taxpayer in a party that allows a tax to be removed by this Parliament and decides to re-impose it by means of legislation passed by other parliaments that it controls?

Mr Morgan:

– Is that the result that the Government intended to achieve?

Mr HASLUCK:

– The Government’s only thought in introducing this measure is to remove a vexatious tax which has proved onerous as well as unsatisfactory in its application to a number of worthwhile activities. We are trying to relieve the budget of the family man. We believe that the amount of £7,000,000 which the tax has yielded annually will henceforth, unless the State Labour governments succeed in their proposals to re-impose the tax, remain in the budget of the family man, where it will do more good than it would do if it were collected by the Commonwealth or ‘States in tax. We deplore and are genuinely grieved over the fact that the Labour party is proposing to re-impose this burden on the taxpayer by means of State legislation.

There is scarcely need to commend the bill to the House, because the Opposition has already indicated that, although it grudges the Government the popularity that may come to it as the result of the removal of the tax, it can find no reason why it should not be removed.

Mr MULLENS:
Gellibrand

Mr MULLENS:

– In those moments when I think of the hereafter I remember occasionally that a little tender concern should be extended to those whose needs are so obvious in this community. When I . make that statement I am not playingpolitics nor am I appealing to false sympathy. A deep feeling of humanity underlies all of us. However, my tendersympathy does not extend to those who are interested in tax reductions of 2s. in the £1. My hindsight, which enables me occasionally to see behind the veil, tells rae that the foreknowledge that was possessed by Mr. Irish, the representativeof a Sydney newspaper, was not obtained purely by accident. My hindsight alsotells me that the Minister’s attitude to thisbill is specious and spurious in the extreme. He has said, in effect, “We will lift the entertainments tax. LikeNero of old, we shall divert the population by giving them a circus in the

Colosseum. The most unpopular Treasurer that has ever been inflicted upon the community, after consultation with my chief, will try to show that Treasurers of the future will draw great inspiration from him. He will go down in history as the Treasurer of the Commonwealth who, in this year of grace, 1953, is the benefactor of the family man, the remover of the entertainments tax, a public man whose sole interest in life is the welfare of the family man, the hope of the afflicted, the comforter of the oppressed, the helper of the pensioner, the aider of widows, the giver of 2s. 6d. to all and sundry”. He hopes that the people will forget all the things that the Treasurer has done to them because the entertainments tax has been abolished.

Mr HOWSE:
Calare

.- We all enjoyed the amusing speech of the honorable member for Gellibrand (Mr. Mullens). I wish that I had the gift of his eloquence so that I could make one like it. The honorable member spoiled his speech only when he referred to the bill. But, after he had made some passing references to the bill, during which he became a bit serious and we became a little depressed, he soon moved on to a lighter vein. It would be a very great tragedy if a tax were levied on the entertainment provided by the honorable member.

The entertainments tax was initiated by a Labour government in 1942. It is accordingly to be expected that Opposition members should be resentful of the fact that this tax-reducing Liberal Government is now undoing the mischief which the Labour Government then did.

Mr TURNBULL:

– What about the Australian Country party?

Mr HOWSE:

– I include the Australian Country party as a part of the Government. The honorable member for Melbourne (Mr. Calwell), who is the Deputy Leader of the Opposition, had rather uphill going in attempting to formulate arguments against the bill. He could not convince himself, let alone any one else. The honorable, member

Argued that if we give the family man a. few pounds a year, and that is exactly what this bill will do, he will not thank ns for it, but he will say, “ Oh : I do not want the few extra pounds because if T take the money the States might grab it out of my hand “. This Government is continuing its policy of eliminating and reducing taxes wherever it can do so. The States protested that we should not vacate this field of taxation. I direct attention to the fact that the allocation of tax reimbursements had already been made to the States before the budget was introduced. We cannot compel the States either to enter or to remain out of the field of entertainments tax, because they have sovereign powers and they are entitled to make decisions of that kind for themselves. The great advantage possessed by this bill lies in its simplicity. It is a popular bill, and the Opposition has been hard put to it to establish reasons why it should not be passed. Opposition members having racked their brains to find grounds upon which to attack it, must, if they are to be consistent, vote against it.

Entertainments tax is levied on popular entertainments which play a great part in the family life. Popular entertainments in various forms mean a great deal to the people. The abolition of this tax will ‘give great relief, particularly to the family man. Whatever we may think about the cinema, the average man and his family attend cinema shows very frequently. That is demonstrated by the fact that nearly SO per cent, of the entertainments tax is derived from cinema shows. Thus, the tax has imposed a heavy drain on the average family man. The abolition of the tax will also confer a great benefit on people in country areas. Country people, being more resourceful and enterprising than are city dwellers, organize many forms of entertainment for one purpose or another. In every centre in my electorate entertainments are arranged for the pleasure of the people who are denied the amenities of city dwellers. Football, cricket and racing clubs and charitable organizations of all kinds will benefit from the abolition of the tax. The Government’s proposal will be welcomed particularly by people who, after having spent many hours in arranging an entertainment for charitable purposes, have the greatest difficulty in keeping costs below 50 per cent, of the proceeds and almost invariably have to pay entertainments tax, thereby depriving the charity concerned of the moneys which they have earned on its behalf. Many people who give up hundreds of hours to work for charities of various kinds will be particularly pleased by the decision of the Government to abolish this tax. The Commonwealth decided to vacate this field of taxation in order to confer a real benefit upon the people. The States should not now intrude on it. They should allow this genuine advantage to be conferred upon the family man. The collection of and accounting for the proceeds of the entertainments tax has involved a great deal of form-filling and has caused much hardship to worthy people. Its abolition will be warmly welcomed by every one in the community.

– The Minister may disagree with me as much as he likes, but I have stated an incontrovertible fact. However, in view of Mr. Speaker’s ruling, I do not think that any good purpose can be served by continuing the debate on this bill. It is clear that the Government has decided to abolish the entertainments tax in order to assist it to present a popular budget, so that it may improve its standing in the eyes of the people. The entertainments tax. admittedly, is vexatious, and falls heavily on the family man, but other measures which have ‘been retained by the Government are even more vexatious and fall even more heavily on the family man.

– Yes, hut if the relief had been offered by other means it would have been possible to provide the people who are most in need of help with a great deal more of the purchasing power which they badly need. This Government really believes that some, if not all, of the State governments will be forced by their desperate financial circumstances to enter the field of entertainments tax.

The bill does not strike at the root of our economic problems. Obviously it will not help in any way to hold back ordinary living costs, which are still rising sharply. It will not help the States in their fight against rising costs, which are endangering all phases of Australia’s national life. Furthermore, if we judge by our experience of this Government’s conduct, there is no guarantee that entertainments tax will not be re-imposed if the people foolishly return it to office at the next general election.

Mr Turnbull:

– Fantastic!

Mr TOM BURKE:

– So is the record of this Government! It says one thing and does exactly the reverse. It is likely to impose a tax to-day and reduce or abolish it to-morrow. A classic example of an almost ancillary measure was the land tax-

Mr SPEAKER:

– Order ! Land tax is not under discussion now.

Mr TOM BURKE:

– At one stage this Government increased the rate of land tax enormously by introducing a new system of valuation, and shortly afterwards it abolished the tax altogether. That was characteristic of its methods. Its actions to-day give no indication of the policy it will pursue should it be returned to power next year. It is extremely convenient on occasions, the Government has found, to reverse a policy overnight. The Government can easily do so because it commands the support of the great organs of public opinion, the daily newspapers, which have been willing to provide excuses for it whenever it has betrayed the electors under pressure from big interests. The Opposition will not vote against the bill, but it maintains that the Government has not shown a proper regard for priorities in reducing and eliminating tax imposts. It has shown scant regard, if any, for the problems of State governments in their struggle to develop and service the States, end none for the people who need and deserve the greatest measure of support, those who are dependent upon social services and who, therefore, are the most vulnerable of our citizens. As the Commonwealth Government, it has a duty to share with the State governments the problems that they encounter on every hand and it should do its utmost to make easier their task of developing the nation.

Mr SPEAKER:

– I have listened to six speeches in the course of this debate, and in each case there has been no opposition to the bill. I suggest that the pressure of parliamentary business dictates the need for the Government to take note of this fact. Furthermore, I should like to hear new material introduced in subsequent speeches.

Mr TURNBULL:
Mallee

.- I agree most heartily with you, Mr. Speaker. In the circumstances, it is advisable for us to refresh our minds at this stage on the purpose of the bill. It is a measure to abolish the entertain- ments tax. We have listened to a series of remarkable speeches by the honorable member for Melbourne (Mr. Calwell), the honorable member for Gellibrand (Mr. Mullens) and the honorable member for Perth (Mr. Tom Burke), each of whom followed a different line of debate. The honorable member for Gellibrand took advantage of the occasion to demonstrate his book-learned skill. Most honorable members must have realized that he was concerned less with the fate of the entertainments tax than with his ability to spin words. The honorable member for Melbourne, who is a different kind of debater, betrayed the fact that some deepseated motive underlay his criticism of the bill. Notwithstanding the confusion of their speeches, we must keep in mind the fact that all three of the Opposition speakers have said that they will support the bill. I believe that the real objection of the honorable member for Melbourne to the abolition of the entertainments tax springs from his desire for the centralization of power in Canberra. In the abolition of federal entertainments tax, he sees a drift of power away from the Australian capital. As everybody in Australia should know, Labour’s aim is to centralize power here so that, when the opportunity arises, it can implement socialism throughout the country.

Mr George Lawson:

– Surely the honorable member does not believe that?

Mr TURNBULL:

– There is not the slightest doubt about it. I believe it with all my heart.

Mr Fuller:

– An auctioneer would say anything.

Mr TURNBULL:

– So might a ragseller. The best debating force in support of the Government’s proposal is the Opposition. I should like every member of the Opposition to speak on this measure, because those who have spoken so far have condemned themselves and their party. The honorable member for Melbourne said that, when he addressed a meeting of motion picture magnates at Coolangatta in Queensland, they had not expected entertainments tax to be abolished. According to him, they expected only a reduction of Id. in ls. The honorable gentleman showed clearly that he was more concerned with the welfare of the motion picture industry than with the interests of the Australian people.

Does it matter whether anybody expected the abolition of the entertainments tax or not? The simple fact is that the bill provides for tax relief of £7,000,000 in a full year. The saving for the remainder of this year will be approximately £5,300,000.’ Members of tho

Opposition have complained that this will make the Government popular. If that be so, it must be a good measure. The people obviously approve of it. Honorable members opposite have spoken against the measure, but they are forced to support it. I should not like to be placed in their position. “We have heard some of them, almost in tears, speaking of the small sales tax levy on children’s ice-cream. The truth, of course, is that most ice-cream is consumed by adults. This bill will provide children with a chance to spend their small sums of pocket money to the best possible advantage in obtaining entertainment. The Opposition, however, would prefer the Government to take from them by way of entertainments tax all the spare pennies that they have. Honorable members opposite kicked up a terrible row when sales tax was imposed on musical instruments and gramophone records. But the abolition of entertainments tax will enable people to attend concerts, plays and ballets. It appears to me that all three members of the Opposition who have spoken in this debate really regard the bill in a favorable light. Their only criticism appears to be that the tax was not abolished by a Labour government. Had they sincerely wished to abolish this tax, they could have done so long ago. After all, it was a war-time measure, and the Labour party remained in office for some years after the end of the war. The honorable member for Melbourne asked why, if it was to be abolished, it was not abolished last year or the year before that. The Leader of the Opposition said recently that the Labour party, if returned to power, would abolish the means test. Why did it not do so four years ago when it was in power? There is no logic in the arguments of the honorable member for Melbourne.

The honorable member for Gellibrand made one or two statements that gave me the impression that the former Labour Government had made no attempt to abolish the entertainments tax, and now it appears that the Labour party is wholly in favour of the State governments reimposing the tax after this bill becomes law. Therefore, members of the Labour party clearly are in favour of the tax.

There can be no doubt about that. The honorable member for Perth said that the States would not be able to carry on unless they levied entertainments tax after this bill became effective. Why should that be so? The abolition of the tax was quite unexpected. It came as a great surprise to the Labour party. Therefore, I ask honorable members opposite how the State governments would have managed if this Government had not decided to abolish the entertainments tax ? That is a fair question. It appears to me that the States are doing very well under the present system. Western Australia, where the honorable member for Perth lives, receives a large sum as its share of the revenue from the petrol tax, for example. All of the States appear to be in a sound position. The truth is that some of the State governments are so rapacious that they are never satisfied. The abolition of the federal entertainments tax will provide them with another means of extracting money from the taxpayers, and a few of them at any rate will take advantage of it. The honorable member for Perth said that the tax relief afforded by this measure would not amount to a large sum annually. I think that, even to-day, £7,000,000 is considered to be a large sum. People all over Australia will approve of this bill. It will make the Government more popular, and for a legitimate reason. We want more of these tax remissions. The attitude of the Opposition on this occasion is extraordinary. Apparently all honorable members opposite are prepared to condemn the measure but will support it. I am eager to hear more speakers on the Opposition side of the chamber. The three who have spoken so far have condemned both themselves and their party. In the circumstances, I doubt that any of their colleagues will rise to speak but I gladly give them the opportunity to do so.

Mr DEPUTY SPEAKER (Mr Adermann:
FISHER, QUEENSLAND

– I remind the House that, as Mr. Speaker has notified all parties, Senator Ellender, a distinguished visitor from the United. States of America, will address members during the luncheon period.

Sitting suspended from 12.45 to 2.30 p.m.

page 608

DISTINGUISHED VISITOR

Mr SPEAKER:

– I have to announce that Senator A. J. Ellender, a member of the United States Senate, is within the precincts of the Hou3e. With the concurrence of honorable members; I shall invite him to take a seat on the floor of the House beside the Speaker’s chair.

Honorable Members. - Hear, hear!

Senator Ellender thereupon entered the chamber, and was seated accordingly.

page 608

ENTERTAINMENTS TAX ABOLITION BILL 1953

Second Reading

Debate resumed.

Mr CREMEAN:
Hoddle

.- Prior to the suspension of the sitting, the honorable member for Melbourne (Mr. Calwell) made a statement that could not be contraverted. He said that the abandonment of the field of entertainments tax by the Commonwealth undoubtedly was designed to push the States into the unenviable position of re-imposing the tax. It does not take much exercise of the imagination to see why the States may have to impose it. They are starved of revenue, and the exploitation of new fields of taxation by them is unavoidable.

I propose to trace the’ history of the entertainments tax since it was first levied by the Commonwealth. It is not true, as has been suggested by some Government members, that the tax was. levied first by the Commonwealth in 1942. The Commonwealth imposed it as far back as 1916, and continued it in operation until 1925. In that year, the Commonwealth vacated the field of entertainments tax. In 1930, the States entered it. The Commonwealth began to levy the tax in 1942, and continued to do so until quite recently. The States, in their administration of the tax, exercised a great deal more common sense than did the Commonwealth from 1942 onwards. Since 1942, the revenue raised by the tax has increased constantly. Between 1942 and the end of the last financial year, the Commonwealth received nearly £60,000,000 from the operation of the tax. In 1949-50, revenue from the tax amounted to £4,648,076. In 1952-53, it exceeded £7,000,000. That increase of nearly 54 per cent, is an illustration of what honorable members opposite doubtless regard as the benevolent financial policy of the Australian Government, which, with its revenue from all sources continuing to rise, does not give due consideration to the effect .of the taxes it imposes.

My main purpose in rising is to direct attention to one of the many far from benevolent acts of this Government during its administration of the entertainments tax. In a number of States, race meetings and sporting meetings of various kinds are conducted for the benefit of deserving charities. When the States were administering the tax, they exempted certain meetings of that kind if the promoters could show that they were held for certain worthy purposes. But this Government’s administration of the tax was the despair of many charitable institutions, not only in Victoria but also in other States where sporting fixtures were held for the benefit of charities. If the expenses of a sporting meeting conducted for the benefit of charity do not exceed 50 per cent, of the receipts, the promoters are entitled to a rebate of the entertainments tax paid in respect of the meeting. When the Labour party was in office, it did not regard stake money as a part of the expenses of a race meeting. Consequently, most of the sporting organizations that promoted race meetings for charity were able to give to the charitable organizations concerned the whole of the receipts. But this Government, when it came into office, said that stake money had to be regarded as a part of the expenses. Many sporting organizations that conducted meetings on behalf of charitable institutions discovered that, in those circumstances, the expenses of the meetings exceeded 50 per cent, of the receipts and, therefore, they had to pay entertainments tax.

Let me read to the House some extracts from letters I received from organizations that were loud in their protestations about the unfair effect of the entertainments tax as administered by this Govern ment. The Trotting Control Board, in r. letter addressed to me on the 21st February of this year, said that since 1947 it had conducted 24 meetings for charitable purposes and that the proceeds of the meetings, which amounted to £99,713, had been distributed among a lengthy and varied list of organizations.

The board went on to say -

In recent years, with expenses constantly rising and with attendances not so buoyant, it has become increasingly difficult to keep the expenses down to the required minimum and several instances have arisen in which the receipts have been insufficient to enable the meetings to qualify for exemption. Entertainments tax having, therefore, to be paid, the effect has been to deprive the recipient charities of a large sum of money.

This tax, totalling in all £S,375, has been paid in respect of six of the meetings butit is significant that five of those meetings were held between the 1950-51 season and the present one and those five accounted for £7,000 of the total of £8,375.

I understand that representations were made that, when organizations conducted a sporting meeting for the benefit of charities, stake money in respect of the meeting should be exempted from consideration in calculating the expenses of the meetings. But this Government refused to accede to those representations. Consequently, many charities in Victoria were deprived of a great deal of money. They include the Essendon and District Memorial Hospital, the Essendon branch of the Bed Cross Society of Victoria, the Footscray and District Hospital, the Women’s Hospital, St. Vincent’s Hospital, Queen Victoria Memorial Hospital, the Blind Babies Association and the Legacy Club. I have taken those institutions at random from a list contained in a letter sent to me by the Trotting Control Board.

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

– Does the honorable member oppose the bill ?

Mr CREMEAN:

– I do not oppose it.

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

That the question be now put.

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

AYES: 59

NOES: 42

Majority . . . . 17

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 609

PAY-ROLL TAX ASSESSMENT BILL 1953

Second Reading

Debate resumed from the 10th September (vide page 110), on motion by Sir Arthur Fadden -

That the hill be now read a second time.

Mr CLAREY:
Bendigo

.- This bill is designed to amend the Pay-roll Tax Assessment Act in two ways. The first amendment will have the effect of increasing the statutory exemption from £1,040 to £4,160. The second amendment will exempt from pay-roll tax certain international organizations. The organizations concerned are the Imperial War Graves Commission, special agencies of the United Nations, the South Pacific Commission and the United States Educational Foundation in Australia. It is proposed that the bill shall take effect from the 1st October this year, and that the existing rates shall remain in force until the 30th September. In his secondreading speech the Treasurer (Sir Arthur Fadden) stated that approximately 90,000 employers were at present liable to pay pay-roll tax, of whom about 50,000 would be freed of that liability as a result of this measure.

As a foundation for my arguments on the measure I shall give the House some of the history of pay-roll tax and its close association with the financing of child endowment payments. The act has been in operation since the 1st July, 1941. During the period of its operation it has not been substantially amended. It is well to point out that taxation of wages, which is essentially taxation of employment, has to be examined critically by this or any other house of legislature, because the taxation of wages and of employment in. effect places a liability on those forces and institutions that are actively engaged in the nation’s productive effort. It is strange, in view of all the methods by which taxes can be raised, that a tax on wages and employment should be operating in Australia. In detailing to honorable members the history behind this matter I may, on occasions, go slightly outside the ambit of this bill. I’n 1919 Mr. William Morris Hughes, the then Prime Minister, appointed a commission to inquire into what was a reasonable wage for the support of a husband, wife and three dependent children. After having made extensive inquiries the commission reported that the sum necessary to support such a family was £5 16s. a week. That rate never came into operation, and, following the rejection of the report, the chairman of the commission, Mr. A. B. Piddington, published a book entitled The Next Step. Mr. Piddington suggested in that book that one way of overcoming the difficulty in respect of the support of dependent children of workers engaged in industry was the payment of child endowment. He pointed out that there was only one avenue whereby the necessary money could be raised. His theory was that a tax on wages would provide the money necessary to make child endowment possible. Child endowment was not at that time put into operation to apply to workers in industry, but the Australian Government of the time introduced legislation that made child endowment applicable to all Commonwealth public servants who had children under a certain age. From that time onwards child endowment and the financing of child endowment ceased to be matters of active public interest. In 1940, the Australian Council of Trades Unions applied to the Commonwealth Court of Conciliation and Arbitration for a substantial increase of wages. The court rejected the application, but, in doing so, the late Chief Judge Beeby indicated to the government of the day that he was far from satisfied with the rates of wages that were being paid, and said that unless the Government introduced a system of child endowment into Australia he intended to increase the basic wage for employees throughout the Commonwealth by 6s. a week. The Government was consequently faced with the task of deciding the action that it would take in the light of the suggestion of the Chief Judge. It decided that from the standpoint of the country’s economy, and from the employers’ standpoint, it would be better to introduce child endowment at 5s. a week for all children except the first child in each family than to submit to an increase of 6s. a week for all workers throughout Australia. Therefore, on the 1st July, 1941, child endowment was introduced, and, in order to provide finance for the endowment, a measure, which is now known as the Pay-roll Tax Assessment Act was brought into operation. That act provided that there should be a % per cent, levy on all wages paid throughout the Commonwealth by employers whose wages bills were more than £1,040 a year.

I suggest to honorable members that the incidence of this tax, from the passing of the act, could be clearly understood. When the legislation came into operation, the basic wage for the six capital cities wa* £4 6s. a week for adult males. At that time the Commonwealth Arbitration Court assessed the female basic wage at 55 per cent, of the male rate, and, consequently, the female basic wage was about £2 5s. Consequently, an employer of five persons, who paid each of them the adult male basic wage, was required to pay pay-roll tax. If he employed eight or nine females at the female basic wage he was also subject to the tax. Immediately his wages bill reached £20 a week he became liable to pay this tax.

According to figures that have been secured from the Commonwealth Statistician, and which may, therefore, be considered to be accurate and reliable, the nominal average earnings of the average male worker in 1941 was £5 ls. 8d. a week, and the wage of the average female worker was £2 16s. Sd. a week. Therefore, if an employer had four average adult males working for him, his wages bill would have been £20 6s. 4d. a week, and he would have been subject to pay-roll tax. If he employed eight average female workers he would also be subject to the tax. Now let us consider how the act affects employer? und employees at present. It is true that under this measure the exemption will bc raised fourfold, from £1,040 to £4,160 a year, and that increase is greater than the increase of wages in the period between 1941 and the present clay. Nevertheless, if prices continue to rise, and I suggest with a good deal of conviction that the present tendency of prices to rise will further increase wages, the benefit given by the increased exemption limit will disappear and we shall return to the same condition as those which operated in 1941.

Mr Falkinder:

– That will take a long time.

Mr CLAREY:

– I do not think so. because the figures that I intend to place before the House will indicate that the receipts from the pay-roll tax have increased substantially in the last two years, although these receipts remained fairly static for the first eight or nine years of the operation of the act. In the first year of the operation of the pay-roll tax, the revenue benefited to the extent of £8.962,000. By 1945 the receipts from the tax had increased to £11,499,000) by the end of 1951 the receipts wen £28,721,000, and last year the Government received £40,171,000 from the tax. In spite of the fact that this amending legislation is not intended to operate until the 1st October, the amount to be received from the tax for the present financial year is expected to be £39,000,000. That is a fair indication that the Government does not anticipate that there will be any substantial fall in revenue because of the operation of this measure. The present basic wage in the six capital cities is about £12 a week for males and £9 a week for females. The latest figures available with respect to nominal wages indicate that the nominal wage of the average male employed in Australian industry is £14 2s. 6d., and of the average female £9 16s. a week. Therefore, it is obvious that only very small employers will be exempt from the operation of this measure, even though the exemption limit has been substantially increased. It can be said that an employer who has six males working for him, will come within the ambit of the legislation because six employees each receiving £14 2s. 6d. a week would produce a wages bill of over £80 a week, and that is above the exemption limit proposed in the bill.

From the stand-point of a tax on employment, this measure will have a most inequitable application. The heavy industries are most important to Australia. They employ adult males and pay the highest pay-roll taxes. The light industries that mainly employ women and youths, employ very many more persons and make much more profit but pay considerably less in pay-roll tax than do the heavy industries. I also point out that the operation of this tax throughout the whole field of our economic life is far from saitsfactory and far from fair. For instance, the employers in the iron and steel industries, who employ thousands of adult men, will pay the greatest proportion of the payroll tax. Moreover, these heavy industries are producing goods that will develop our country and expand our economy. Persons such as doctors, barristers, consulting engineers and so on earn relatively large incomes, but because they employ no labour, or very little, they are not required to contribute to the pay-roll tax. Therefore, I suggest that it is unfair that the burden of this tax should be thrown on the industries that are developing the country. Persons engaged in activities of lesser value, although I admit that they are valuable activities, pay only relatively small amounts of pay-roll tax. Importers are also persons who pay less than a fair proportion of pay-roll tax. As a rule an importer does not employ muchlabour, and while he may make a greater profit out of bringing goods to this counrty than is made by those who make goods in the country, he pays relatively less pay-roll tax. I point out those matters because I believe that taxation should be distributed as equitably as possible over all the people. A tax on persons who are large employers, and pay huge wage bills, is not the type of tax that a country struggling to increase production should impose. The definition of “employer” in the Pay-roll Tax Assessment Act 1941is - “ employer “ means any person who pays or is liable to pay any wages and includes -

the Crown in the right of a State;
a municipal corporation or other local governing body or a public authority constituted under any State Act;
any public authority constituted under any Act or under any law in force in a Territory of the Commonwealth the wages paid by which are not paid out of the Consolidated Revenue Fund;

The wages of Commonwealth employees are paid from the Consolidated Revenue Fund, and consequently the Australian Government dos not pay pay-roll tax in respect of them. I suggest that that is a most extraordinary feature. However, the States, municipalities, universities and public and private educational institutions, are all subject to the Pay-roll Tax Assessment Act and have to pay the tax. It would be difficult to justify the placing of a burden of this kind upon organizations and institutions such as universities, or on private and public educational establishments. It would be much more difficult to justify the imposition of the tax upon State govern ments and municipalities. Public authorities act on behalf of the people as a whole and should not be subject to tax. Because the States have to pay the tax they in turn make demands on the Commonwealth for tax reimbursements to enable them to finance their activities. The Commonwealth takes money from the States with one hand and gives it back to them with the other. It is compelled to make special grants to three of the States in addition to tax reimbursements. The principles that underlie this tax might very well be reconsidered by the Government with a view to its complete abolition or the drastic reduction of its incidence. No economic purpose is served by levying pay-roll tax on States and government instrumentalities. The tax was instituted for the purpose of financing child endowment, but it has never completely fulfilled that purpose. It would be better from all aspects of government finance if the money necessary to finance child endowment were obtained by some other tax which operated more equitably on all sections of the community.

I come now to what I consider to be the greatest danger of this legislation; I refer to its unfortunate effect upon the cost structure of the community. This is one of the few taxes which is not directly paid by the taxpayer. The pay-roll tax really becomes a part of the wage cost of every industry and it adds to the cost of production and services of all kinds. It is reflected in the prices charged to consumers and, in the ultimate, in the prices of exported goods. The rate of 2½ per cent, imposed does not seem very high. In the early days following the introduction of the tax it amounted to only 2s. 3d. a week in respect of each adult worker, but on the basis of to-day’s wages it amounts to a considerable sum. The latest figures available from the Commonwealth Statistician show the average earnings of a male adult in Australia to be £15 a week. Thus, the tax represents a surcharge on the wages of the average workers of 7 s. 6d. a week. When we multiply that amount by the number of persons engaged in industry, and take into consideration the fact that the tax is adversely affecting industries of all kinds, we can estimate the enormous additional burden imposed upon the cost structure by this tax alone. Every one agrees that costs are too high and that there is a tendency for them to go still higher. If the Government is eager to take progressive action with the object of bringing about a reduction of high costs, it might well concentrate as a first step upon the abolition or scaling down of the pay-roll tax. Unless we are able to lower costs quickly production will suffer very severely. We have already suffered very severely from the impact of world prices in respect of a number of commodities which we are compelled to export because Australian production exceeds demand. Australian butter is sold to-day on the world’s markets at below the cost of production. A very lucrative and thriving industry engaged in the manufacture of processed, dried and condensed milk, is endangered because it cannot hold its own in the markets of the world. The same remarks apply to our great fruit and vegetable canning industries which are highly mechanized and extremely well managed, and the production of which per man-hour is greater than it has ever been. The products of these industries cannot be sold overseas because of the impact of the lower-priced goods from Spain, Portugal and South Africa. If the best results are to be obtained from industry, the burden of the pay-roll tax which is superimposed upon the inescapable costs of industry must be modified..

The Opposition intends to vote for the measure because it grants some relief from a tax which we regard as obnoxious, and because we believe that some relief is better than none at all. However, I cannot agree to allow the bill to be passed without making some general observations on it. The first is that the pay-roll tax never has and never will meet the cost of child endowment.

Mr Falkinder:

– The proceeds of the tax are paid into Consolidated Revenue, which bears the cost of the child endowment scheme.

Mr CLAREY:

– I agree that the payroll tax contributes towards the cost of child endowment. In the first year of the operation of the tax the yield was £8,000,000, but child endowment payments amounted to £11,300,000. Whilst the yield is now a little more than £40,000,000, the cost of child endowment last year was no less than £53,700,000. The cost of child endowment has been greatly increased because the Government two years ago decided to endow the first child and to double the endowment of the second and other endowable children. Thus, child endowment payments have increased much more rapidly than has the yield from this tax.

Industry is entitled to a greater measure of relief than the Government proposes to grant it in the bill. The Government should seriously consider either the repeal or the substantial amendment of the legislation to remove the exceedingly harsh features that are associated with its application and administration. State governments, municipalities, universities and public and private educational establishments should not be required to pay tax on the services which they render to the community. In a country like Australia the greatest encouragement should be given to the expansion of educational facilities. Technical colleges, high schools and similar institutions should be exempt from the pay-roll tax. If the Government is not d re pared to repeal the legislation, at least it should consider exempting from the tax export commodities which have to compete against the goods of other countries on the world’s markets. If producers were relieved of this oppressive burden they would be better able to compete with the producers of other countries in the export markets. Consideration should be given to the amendment of the legislation with a view to granting material assistance to industries to enable them to increase the number of their employees. Employment should not be taxed because it represents the means whereby we are able to produce the things that we need. For the reasons I have indicated, I support the bill.

Mr CRAMER:
Bennelong

.- One would wonder why it should be necessary to take the time of the House to discuss a measure with which every one obviously agrees. I should not have participated in the debate but for certain remarks made by the honorable member for Bendigo (Mr. Clarey). I do not propose to speak at great length because I do not think that the bill warrants lengthy discussion. The honorable member in his opening remarks gave me the impression that he believed that the payroll tax is imposed on wages. That, of course, is not so. The tax is in no way imposed upon wages in the hands of the workers ; it is calculated upon the amount of wages paid, but it is imposed upon industry. The honorable member also endeavoured to demonstrate that the tax had had an effect upon certain industrial matters. It certainly had no effect on the wages paid to the workers who were con.cerned in them.

The pay-roll tax was introduced in 1941, when Australia was at war, and many of our people, who ordinarily comprise the working force, were in the defence services. The wages paid to servicemen were not at that time, and ure not now, subject to this tax. The pay-roll tax was imposed in . war-time for the specific purpose of meeting the cost of child endowment. The fact is often lost sight of by the Labour party that the previous Menzies Government introduced the pay-roll tax, and child endowment, which became payable at the rate of os. for each child, other than the first of a family, under the age of sixteen yen rs. The tax yielded, in the first year it was in operation, an amount of approximately £S,Q00,000, which was about £3,000,000 less than the cost of child endowment. I remind the House that expenditure on child endowment in 1952-53 amounted to £53,243,000, and that the receipts from the pay-roll tax in that financial year fell short of that figure by from £11,000,000 to £12,000,000. Honorable members will see, from those figures, that a substantial part of the cost of child endowment has always been met from the Consolidated Revenue Fund.

The pay-roll tax cannot be regarded, by any stretch of the imagination, as a tax 011 the wages of the worker. This tax is levied on the employer, and is calculated on the wages that he pays to his employees. One matter raised by the honorable member for Bendigo is deserv- ing of comment, because it is diametrically opposed to all that Opposition members have been saying in this chamber during the last two weeks. The Leader of the Opposition (Dr. Evatt) and his colleagues, in their speeches on the budget, have constantly expressed the opinion that this is a rich man’s budget.

Mr SPEAKER:

– Order ! The honorable member will not be in order in discussing the budget at this stage.

Mr CRAMER:

– Opposition members have complained during the last two weeks that the Government’s financial proposals favour the rich man. The Leader of the Opposition and his colleagues have said that the policy of the Government is to help the rich. This bill will not help the rich. Indeed, the honorable member for Bendigo has complained that the pay-roll tax hurts the rich, and the big businessmen. The abolition of the tax will assist the small businessman, and the person who attempts to establish a small business in the future. The bill proposes to increase the amount of the statutory exemption from pay-roll tax from £.1,040 per annum to £4,160 per annum. In other words the exemption will apply to a pay-roll not of £20 a week but of £80 a week. Therefore, a small businessman who employs from four to eight persons will be relieved of the obligation to pay this tax. The Treasurer (Sir Arthur Fadden) has explained that the effect of the proposed increase in the statutory exemption will be to relieve approximately 50,000 of the 90,000 employers in Australia who are at present liable to pay the pay-roll tax, from the liability to do so.

This legislation is evidence of the Government’s desire to encourage the small businessman. Making out forms, keeping records, and so forth, do not give a big business organization a headache, but such activities are a constant worry to a small businessman, who cannot afford to employ accountants and office staff in order to comply with the requirements of the law. A big organization is able to take this work in its stride, but the amount of red tape which modern legislation has wound about the small businessman to frustrate him in every way has always been a source of great anxiety to him. When this bill becomes law on the 1st October, next, the butcher, the grocer and other small businessmen will be relieved of the obligation to pay pay-roll tax. Tens of thousands of persons who are conducting small businesses will welcome this legislation as a most progressive step.

I know positively that the legislation will be of great value to the small builder, who is one of the most important persons in the community. Big building contractors are able to engage in bulk buying, and obtain advantages in other ways that make it difficult sometimes for the small builder to compete with them. The bigger’ construction firms have contracts for large works, such as industrial premises, and the small builder, who keeps his overhead costs on the cuff of his sleeve, works efficiently and effectively to provide houses for the people. This bill will also grant relief to the small manufacturer who at times is up against it to produce goods in competition with big manufacturers. The legislation will also encourage the decentralization of organizations which might otherwise become monopolies. Members of the Labour party are most inconsistent when they complain about the abolition of this tax, because it definitely favours small businessmen. I emphasize that fact, because it is important that the people should know the objective of the Government in this matter. The Government is offering encouragement to the small businessmen, because it regards him as the lifeblood of the community. People who are considering the advisability of entering into business at this time will be encouraged to know that they will not be frustrated by the operation of the pay-roll tax and all the bookkeeping that would be entailed if the tax were to apply to them.

Unlike the honorable member for Bendigo, I believe that the abolition of the pay-roll tax will reduce the production costs of the small man, and will foster a better spirit of competition in production. I agree with some of the honorable member’s remarks about the danger of increasing costs of production, but I remind him that the influence of the pay-roll tax on production costs is almost negligible compared with that of the major factors that have lifted our cost structure to its present high level. The major factor in the pro duction of goods is the enormous cost of labour, and that is due to the extension of ‘ amenities in recent years, and to the arbitrary introduction by the New South Wales Parliament of the 40-hour week, which, perhaps, has had a greater effect on the cost structure than any other single factor. When I make that statement, I do not suggest for one moment that, in the ultimate, a 40-hour week is not a reasonable working period; but I do say that the introduction of the 40-hour week, arbitrarily by legislation and not as the result of a decision of an industrial tribunal, dealt, at that time, one of the greatest blows to the cost structure that Australia has ever known. Indeed, this country has not yet recovered from it.

The statement that the pay-roll tax constitutes a great danger to the cost structure is merely beating the air, although I agree that the tax has some effect on the cost structure. I make it perfectly clear that I am violently opposed to the application of a pay-roll tax, but I appreciate the Government’s difficulties’ at the present time. A tax that was introduced in 1941-42 in war-time cannot be abolished at one fell swoop. However, this bill is a clear indication to the people of the Government’s policy, and I believe .that the payroll tax will be abolished at a not distant date. I emphasize that I regard the pay-roll tax as an obnoxious levy, and I do not like its imposition on industry. The modification of the tax will be in the interests of many small businessmen, and of our national development.

The honorable member for Bendigo in advocating the complete repeal of the Pay-roll Tax Assessment Act, is somewhat inconsistent, and, I think, out of step with his colleagues. I remind him that it is not the policy of the Labour party to repeal any tax. Indeed, the Labour party is usually scrounging round for new means of taxing the people, and is notorious for the way in which it retain.’ a tax. However, I agree with him that the pay-roll tax should be abolished. The greatest comfort that I draw from this bill is that it proves to everyone that this Government is determined to reduce taxation, and the number of taxes, in order to relieve the public of the obligation to fill in a multiplicity of tax forms. The cost borne by industry in complying with the requirements of red tape, which has increased so materially in recent years, is incalculable. All of that is indicated in the bill, and I am certain that the people will welcome the Government’s decision to take a bite at this obnoxious tax. The cost to Consolidated Revenue of this relief will be £5,000,000 a year. I thoroughly endorse the hill because it represents a step in the right direction. I am sure that the people will recognize it as an indication of the Government’s intention to continue to reduce taxation.

Mr THOMPSON:
Port Adelaide

– Honorable members of all political parties represented in this House look upon this measure from different points of view. My own opinion is that the Government has decided to increase the exemption from pay-roll tax in order to counter the effects of inflation. As the Treasurer (Sir Arthur Fadden) pointed out in his second-reading speech, the present rate of exemption is £20 a week. When this Government came into office, before costs and prices entered the steepest part of the inflationary spiral, a payroll of £20 a week provided for about four employees. The Government lias decided to raise the rate of exemption to £80 a week. To-day a wage of £15 a week is a fair average, and, therefore, employers will be able to employ up to five men without becoming liable to pay-roll tax. The concession proposed in this bill will be greater in proportion to the magnitude of cost increases than will be most of the other concessions that the Government intends to make. Nevertheless, it conforms to the general pattern of the budget provisions. Candidly, I am not in agreement with my colleague, the honorable member for Bendigo (Mr. Clarey), who has advocated the complete abolition of the pay-roll tax. The honorable member for Bennelong (Mr. Cramer) wants to abolish the tax because he is eager to reduce the variety of forms of taxation. As soon as he announced his opinion, the word “ uniformity “ sprang to my mind. The Government and its supporters are afraid of uniformity as a rule. That is why the honorable member’s argument on this occasion was worthy of note. If he carried it to its logical conclusion, he would be in favour of having only one form of tax. That is a fate which I fear. If we had only one form of taxation the burden would fall too heavily upon a few sections of the community.

This debate has reminded me of the old controversy about the basic wage. I remember discussing the question long before I became a member of this Parliament. On one occasion, I said to a group of men with whom I was having lunch, “ The principle of establishing a basic wage upon the needs of a man, wife and three children is not fair”. They asked me why I held that view, and I said to one of them, “ You have no children, but your wage to-day provides for yourself and a wife and three children. I have six children, and my wage provides for only three. You are getting your wage at my expense “. My belief at that time, which remains unchanged to-day, was that, in order to establish uniform conditions amongst men working in industry, regardless of the number of dependants’ in their families, there should be some basis upon which parents could receive special payments according to the number of their children. I realized, of course, that the burden could not be placed upon employers in industry. Obviously, if a boss had to pay a higher wage to a man with a family than he had to pay to an unmarried man, he would not employ a family man if he could help it. My idea was that the basic wage should be calculated according to the needs of a man and wife, and that an endowment scheme for all children should he instituted. That would have relieved industry of the amount provided in the basic wage to cover the needs of three children. Therefore, provision would have had to be made for industry to pay that sum in another way. I said to my friend at the time, “When I want to take my children to the beach, I have to number them off into a tram car. You have a horse and trap, but you have been able to buy that outfit only because you, who have no children, are paid a wage that includes provision for three children, and I, who have six children, receive the same wage”. As honorable members will realize, this problem is not new to me. I have thought about it for many years, and I decided that child endowment was necessary long before the present system was introduced.

The Treasurer stated that pay-roll tax amounting to £40,000,000 was collected during 1952-53 and he estimated that, unless the exemption was increased, the amount collected during the current year would be £42,300,000. That calculation, of course, reflects the effect of the continuing spiral of costs. The increase of the exemption from £20 to £80 will result in a total collection of only £38,400,000 of pay-roll tax this year. Not only will the employers who operate small businesses and industrial plants benefit from this concession, but so also will employers with large staffs, though the percentage of their saving will not be high. I do not wish to debate the bill at length. The Opposition supports it, and 1 support it on the basis that the tax should not apply to employers who have only three or four men working for them. That was the basis upon which the tax was levied in the first instance. All the form-filling and rigmarole attached to the making of returns is not justified in the case of employers with small staffs. At the inception of pay-roll tax, the rate of tax was 6d. in the £1 of wages, which represented 10s. a week on a wages bill of £20. It would have been ridiculous to expect a man whose wages bill amounted to only £10 a week to make out all the necessary forms and go through all the procedure of lodging returns merely to provide a contribution of 5s. a week to revenue. Under the present conditions of inflation, it is not worth-while to require employers with pay-rolls of less than £80 a week to pay this tax. The tax was introduced in order to finance child endowment, and I am sure that, if child endowment had not been introduced, the basic wage to-day would include a. loading greater than the amount of 7s. 6d. a week, the tax now paid on a wage of £15 a week.

The lifting of the burden of pay-roll tax from the cost structure, as the honorable member for Bendigo has suggested, would not ease the lot of the average taxpayer. The burden would have to be transferred elsewhere. The honorable member for Bendigo and the honorable member for Bennelong have expressed the two opposing points of view that prevail in relation to this bill. The honorable member for Bennelong has said that pay-roll tax is not a tax on wages.

The honorable member for Bendigo has said that it increases costs. If it increases costs, the increase must ultimately have the effect of a tax on wages, because consumers must pay more for the goods that they need.

Mr Clarey:

– It is a tax on wages paid and a tax on employment.

Mr THOMPSON:

– I still do not agree with the honorable member. I say that the pay-roll tax merely represents an adjustment of what has to be paid to workers by way of wages. It has been imposed in order that we may increase the payments made to the parents of children in the form of child endowment. Child endowment is not so high as it should be, in my opinion. The inflationary spiral has increased costs, but the rate of endowment has not kept pace with that increase. That is why the Opposition contends that child endowment payments should be adjusted. Any increase of endowment, of course, would require the collection of additional taxes from some source. The pay-roll tax is a method of extracting from national production the money that is required to meet the needs of the nation, which include such items as child endowment and the maternity allowance. I fear very much that the abolition of the pay-roll tax would bring us back to the position that I mentioned at the outset of my speech. The man with a big family would again be called upon to bear the heaviest burden. I admit that the family man to-day already carries a heavy load, but it is. not so heavy under the present system as it was prior to the introduction of such methods of adjusting economic injustice as child endowment.

The Opposition has decided to support the bill. Nevertheless, I declare emphatically my belief that, if the pay-roll tax were to be abolished, taxation would have to be increased in other ways and that any such increase would increase the burden on the ordinary man and woman. Let us consider the effect of ‘ this tax on the cost structure. For the sake of illustration, I refer to one item that is prominently under notice at the present time, the Holden motor car. General Motors-Holden’s Limited has a pay-roll of millions of pounds a year. Pay-roll tax adds to the cost of producing the Holden motor car. The ordinary man in industry with half a dozen children cannot afford a Holden. I had served for many years in Parliament before I could afford to buy a motor car. In my opinion, the people who do not own motor cars do not share the hurden of the pay-roll tax that is paid by General Motors-Holden’s Limited and the manufacturers of other cars that are made, or partly made, in Australia. In fact, the charge is paid by the purchasers of the motor cars instead of by the general community, including the many workers with families who cannot afford motor cars. This is an issue on which members of the same political party may differ. I am of the opinion that we should continue to levy the pay-roll tax rather than tax the great multitude of taxpayers more heavily than they are taxed to-day.

Mr FALKINDER:
Franklin

.- I have not the aptitude for prolonged and somewhat tortuous argument possessed by the honorable member for Port Adelaide (Mr. Thompson). The example that was set by the honorable member for Bendigo (Mr. Clarey) is one that might be followed more often in this House. I did not agree with some of his arguments, but I thought he approached the bill in a very reasonable manner. I am sure that the honorable member for Barker (Mr. Archie Cameron) will agree that such an approach to legislation, if adopted more often, would make the job of Mr. Speaker very much easier. I agree with the honorable member for Bendigo that the pay-roll tax should be abolished. In that connexion, it is fair to say that the Government has shown clearly that it intends to do that eventually. I do not intend to trace the history of this tax, because that has been done very ably by the honorable member for Bendigo. It was introduced in 1941. It was levied then, as it still is, at the rate of 2-J per cent. I join issue with the honorable member for Bendigo on one point. He has said that this is not a tax to pay for child endowment.

Mr CLAREY:
BENDIGO, VICTORIA · ALP

– Only partly.

Mr FALKINDER:

– The proceeds of the tax are paid into Consolidated

Revenue, from which child endowment is paid. Therefore, it is fair to say tha: it is a means of paying for child endowment. I disagree with the honorable member for Bendigo when he implies that the Menzies Government of 1941 had to introduce the pay-roll tax because of a finding of the Commonwealth Arbitration Court. If the honorable member wishes to argue in that way, it is fair to say that his party at first opposed the extension of child endowment to a first child, although ultimately it agreed to the extension.

Mr Clarey:

– We asked for 10s. a week instead of 5s. We opposed 5s. a week.

Mr FALKINDER:

– I think the honorable member will agree that, at first, his party opposed the extension of child endowment to a first child. The late Mr. Chifley, when he was in office, said that he would not introduce child endowment for a first child because he believed that it would have an effect on the basic wage. As we have discovered since then, it has no effect on the basic wage.

I believe that the pay-roll tax should be abolished at the earliest possible moment. I believe the tax to be inflationary, because it adds to costs. Any employer who has to pay the tax will pass his increased costs on to the people who buy his products. That is elementary. In that sense, the pay-roll tax is an inflationary tax. Our costs of production ire very important to-day, because we are being costed out of our normal export markets. Our small fruits, to take an example in my own electorate, have been costed out of the overseas markets. This measure represents a very sensible approach to the problem of reducing costs, because, if the berry fruit producers in my electorate, whom I have taken as an example, are no longer obliged to pay this tax, their costs of production will be reduced to a small but important degree. As this is a tax which is paid month by month, the effect of the reductions will be felt quickly. I will support any person or “ any party in the Parliament which tries to abolish this tax completely. I believe it is the intention of the Government to do so.

Another feature of the tax which is obnoxious to me is that, in a sense, it is a discriminatory tax, because it affects only certain employers of labour in the community, whereas most of the other taxes affect the whole of the community. I believe it ignores the efficiency of businesses, because, whilst an inefficient business may employ a large number of people and have a high pay-roll tax, a small and highly efficient business may pay no payroll tax at all. Another bad feature of thi’ tux is that it necessitates substantial time-wasting procedures especially in small businesses. The people who fill in the returns are doing time-wasting and non-productive work. They are, up to a point, in that sense doing civil service work without pay.

If the Government were to abolish the tax, there would be certain compensatory effects. The tax is a component of the contract price for all works done for Federal and State governments. That is not an insignificant feature of it. The abolition of the tax would reduce costs, but if prices were not reduced correspondingly, the increased income of the companies concerned would be distributed in the form of profits which, in the hands of companies and shareholders, are taxable. To the degree that the abolition of the tax reduced prices, the additional money so put into the hands of the community would be used to purchase many articles subject to excise duty and sales tax. It is clear, therefore, that if the tax were abolished, there would be certain compensating features of the abolition.

I agree completely with the remarks of the honorable member for Bendigo about the payment of pay-roll tax by municipalities, universities and similar organizations. I hope that steps will be taken to exclude from the operation of the tax bodies such as those, which are performing public services. On a number of occasions, I have made representations to that effect to the Treasurer (Sir Arthur Fadden). He has assured me that they will be considered. I hope they will be considered effectively, because, with the honorable member for Bendigo, I believe that, in respect of bodies of that kind, the tax should be abolished.

I believe this to be a sensible measure, designed to relieve business people of unproductive work and industry of unnecessary cost loadings. I say that T shall work for the eventual abolition of this tax, but, having said that, I want to say also that I believe the Government has done a very wise thing in taking this step towards that objective.

Mr EWERT:
Flinders

.- As a comparatively new member of the Parliament, it is pleasing to me to see honorable members on both sides of the chamber in agreement on principle. The principle is that it is necessary to make an attack upon costs in Australia. The bill relates to a small, but quite important, element of our cost structure. As a nation, we have a responsibility to devise a constructive policy for the reduction of our cost level. If the attitude adopted by honorable members to this measure can be extended, and if we can devise, before it is too late - it is almost too late now - a means to attack constructively, not by dangerous deflationary methods, the problem of costs in Australia, we shall have performed a very useful function. The effect of this measure upon the cost structure will be rather insignificant. Although some small employers will not be required to pay pay-roll tax in future, the revenue from the tax this year will be only £1,700,000 less than last year. It is true to say that the Treasurer has assumed that further increases of prices and wages will occur and that, but for this reduction of the pay-roll tax, small though it be, revenue from the tax would have been increased still further. However, to the degree that relief is being given, it will be welcome, especially by small employers who have to prepare the returns themselves. Although the returns are simple, their preparation still takes time.

I hope that in the future a more purposeful attack will be made on this problem. During the last twelve years, pay-roll tax collections have increased progressively, partly owing to a general increase of industrial activity, but mainly owing to wage increases due to increases of the cost of living. Inflation is the principal reason for the increase of these tax collections. As wage increases occurred, many small employers, who previously were exempt from the operation of the tax, found that they were required to pay it. This bill proposes to relieve those people of a burden that. was thrust upon them by inflation. It goes further than that, but only a little further. The pay-roll tax is a bad tax, because it increases the costs of industry. Anything that tends to do that must be examined very closely, because our cost level has risen to such a degree that we can no longer compete successfully in the markets of the world with the products of other nations. Indeed, to a point where we “can no longer compete effectively in our own home market against imported products. That will be one of our main problems of the future. The bill must be welcomed insofar as it proposes to make a slight contribution to the correction of that position.

One important feature of the incidence of this tax to which careful consideration must be given is that it has an effect on costs and prices because it is passed on to the consumer by firms which make profits. In a time of difficult competition a firm which cannot readily pass on its tax liability will be able to do very little about it. It will just have to bear the tax burden itself. Pay-roll tax is reflected in the cost of production of our export goods which have to compete in the markets of the world against the goods of other nations. However, during this Government’s term of office Australian prices and costs have increased so much more than those of other countries that we are now in difficulties. I cited recently in this chamber the plain fact that our prices and costs have increased by 57 per cent, in the three and a half years that this Government has been in office. It is relevant to say that in the three and a half years before the Government took office, a period which covered the era of post-war readjustment, Australian prices increased by only 28 per cent., or less than half as much as they have increased under the present regime. In 1949 we were in a comparatively happy position. Our costs had increased during the war period and the post-war readjustment period less than the costs of other nations had increased. All that has changed. During the Government’s term of office our prices have increased twice as much as have the prices of the United Kingdom and New Zealand. United Kingdom prices increased by 33 per cent, and New Zealand prices by 30 per cent, in that period.

The Government came to power on a pledge to reduce costs, but since it has been in office prices have increased four times as much as in Canada and the United States of America in the same period. Our efforts to reduce costs of production in Australia must be conditioned by costs overseas, because we have to compete in the markets of the world with other nations. The attack represented by this measure is small, but it is at least pointed in the right direction. We must take thebroad viewpoint. The Labour party has pledged itself to a policy of full employment in Australia. Having pledged ourselves to a policy of full employment we must he realistic regarding the capacity of certain of our industries to compete with similar industries and to offer employment. We must also take account of the fact that many of our secondary industries must, in the immediate future and even more so in the distant future, produce more goods for export. Those industries can no longer bear the existing burden of pay-roll tax costs.

The expansion of our primary industries, with a consequent increase of primary production and the placing of more people on the land, will cost a lot of money and take a lot of time. In addition, the increase of our population as the result of immigration makes necessary the widening of our avenues of employment. The future of immigration depends on an active, efficient secondary industry large enough to employ our increased population.

Neither pay-roll tax nor any other tax can be properly considered by this chamber without reference to other taxes. The Government had several choices when it decided to reduce taxes. It would have been much better for the future of Australia, the soundness of our industry and its capacity to compete at home and overseas, if the Government had decided tohelp to reduce production costs by removing pay-roll tax entirely rather than by increasing the profits of companies by giving them, in the budget, tax reductions that will amount to £33,000,000.” The Government might have chosen toattack the problem of costs to the extent of reducing wage cost by 2£ per cent., by removing the pay-roll tax altogether..

Instead, it chose to relieve companies of taxes worth £33,000,000. I suggest that in future when it is necessary, as it will be, to raise more money for social services, it should not be raised by means of a tax on industry, which, after all, will be either passed on to the consumers or will result in reducing the capacity of our industries to compete overseas. We must look at the matter purely and simply from the social viewpoint of how taxes should be collected. Taxes should be taken from the people who are most able to bear increased taxes. I declare in favour of a progressively graduated tax scale, wherever it can be applied, so that we shall take from people with high incomes and surplus spending power more than we take from people with no surplus spending power. Accordingly, a Hat rate of pay-roll tax, such as is provided in this measure, is an iniquitous tax.

In view of the difficulties of State governments, municipalities, and, above all, educational institutions, certain vital changes could and should have been made by this measure to remove the burden of pay-roll tax from those bodies. The honorable member for Bendigo (Mr. Clarey) referred to the position of the State governments. The Victorian Government pays a large sum in wages directly or indirectly. As a result of its payments to employees of its large and effective railway system, and indirectly to employees of the State Rivers and Water Supply Commission, which, operating with restricted finances, endeavours to take water to country districts especially, the State Electricity Commission, the Country Roads Board, and the Melbourne Metropolitan Board of Works, Victoria has to meet a heavy bill for pay-roll tax. Victoria’s mental institutions are required to pay pay-roll tax. The Government could very well have relieved the States of the obligation to pay this tax. Municipal employees have often requested, and rightly, increases of wages in order to enable them to meet the increased cost of living. Such requests are more significant now that the -basic wage is pegged. Municipalities are still required to pay payroll tax at the rate of 2£ per cent. The money that councils could have saved if the pay-roll tax had been removed could have been passed on in full, or in part, to municipal employees in the form of increased wages. As iniquitous as any aspect of this tax is the fact that our public and private educational institutions, which are now having to battle against an increasing demand for education and a shortage of teachers, are also required, irrespective of their capacity, to pay pay-roll tax. I ask the Government to give particular attention to that aspect of the incidence of the tax. If the Government does not wish at present to abolish the tax entirely it could at least consider relieving instrumentalities that cannot afford to pay it, of their present liability to pay the tax.

Pay-roll tax is bearing heavily on industry at this most significant stage in the trade cycle of Australia. Production costs must be reduced by a constructive plan, and not by any dangerous deflationary method. The Government could make a small contribution to the attack on costs by revising its approach to this matter.

Mr BOWDEN:
Gippsland

.- The tone of this debate is- moderate, which is surprising. The tenor of the debate is no doubt disconcerting, to those who wish to maintain an atmosphere of stark realism. I do not know whether the speeches of honorable members are intended as the soft answer that will turn away wrath, but as my natural kindness of heart inclines me to benevolence I shall attempt to emulate them and nol disturb the mood of the House. I believe that the people of Australia are intensely proud in the knowledge that their judgment has been vindicated. In 1949 the electors said to the parties now in office, “ We cannot afford any longer to experiment with socialism or any other ism. The nation’s economy is on a toboggin heading inexorably to economic disaster, and we want you to place it once again on solid ground “. We undertook that task, without regard to political popularity or unpopularity, and we carried out the mandate that was given to us. To-day, although we are not able to tell the people that the task they set us has been completed, we can say rightly that this bill is an extensive first instalment, and that the job will be completed if the people give us the time te do it. The public’ to-day is proud of its judgment in spite of the fulminations of the frustrated Opposition about the budget I can hardly find an excuse for speaking to this measure, because it 13 so obviously a good bill. I believe that Government supporters could well afford to be magnanimous to what I may rightly term a- very battered and frustrated Opposition which is desperate be- cause it can see its election prospects receding from the realm of probability into the realm of remote possibility. Today the Opposition is the battered, shattered remnant of a once great fighting force; it is the tail end of a great organization that is out of step with every one of its branches. Every voice that is raised in any part of this country, other than this chamber, acclaims the Government’s budget as a splendid effort and a magnificent first step to complete economic recovery. This measure explains so clearly how benefits will accrue to some 50,000 taxpayers that there is really no necessity to say anything about it. Honorable members opposite who have shown a tendency to oppose the granting of every . concession proposed by the Government, find it very difficult to criticize anything in the bill. In the last few days they have repeated the same sentiments time after time, but have been very careful to make no reference to taxation concessions. However, one honorable member opposite, when steering the Opposition’s ship through difficult waters, almost beached it on the sandbanks. No doubt he had to explain to his caucus his action in even mentioning that the Government had made certain taxation concessions to the people. Of course, it was necessary that honorable members opposite should avoid any reference to such taxation reductions, because their attack on the Government has been based on the ludicrous argument that taxation reductions are really taxation increases. They have been trying to tell us that the Government’s budget has increased taxation. I am sure that honorable members on this side of the House have never listened to a greater absurdity, but it is quite apparent that the Opposition is in a very difficult position and that the Leader of the Opposition (Dr. Evatt) is making every attempt to extricate himself and his party from the consequences of his own folly. The grandiloquent promises that he has made, and the fear that he tried to engender during his campaign in the last two by-elections, are looked upon with contempt in wellinformed circles, and in the leastinformed circles they are treated as a joke. He now knows that he must change his ground, and apparently he thinks that the debates on the Government’s financial proposals offer a good opportunity to do so.

Mr DEPUTY SPEAKER (Mr Adermann:

– Order! The honorable member must not continue to speak about the budget proposals.

Mr BOWDEN:

– I shall relate what I have been saying to the measure now under discussion. The pay-roll tax has always been regarded by the people as extremely irritating, and extremely sectional in its incidence, because it has to be paid whether or not a profit is made. Pay-roll tax has to he paid according to the wages that an employer pays, and it does not matter whether he is heading for bankruptcy, he still has to pay the tax. Whatever government imposed this tax must have been in extremis because although it had’ already taxed the products of the pay-roll, it decided to tax the pay-roll itself. The tax has militated against the buoyant employment situation, because a person whose pay-roll is on the borderline of the exemption limit will hesitate to employ more men, and a person who is not exempted will also hesitate to employ more because of the increased taxes that he will have to pay. Consequently, the tax has operated to discourage those persons who have tried to progress and employ more and more skilled workers.

– Order ! The honorable member must discuss the bill.

Mr DALY:

– I am making a passing reference to matters that are outside the scope of the bill merely in order to answer the charge made by the honorable member for Gippsland that the pay-roll tax is retarding employment in Australia. It is of no use for the Government to try to pull the wool over the eyes of the Opposition members by claiming that this measure will result in increased employment. Not one honorable member opposite has demonstrated that it will give employment to one additional unemployed man. The legislation does not exempt from payment of the tax municipalities, shires and State governments. Which municipalities will benefit from this legislation? Even the municipal council of Snake Gully would pay a wages bill of more than £80 a week and accordingly will not be exempted from the tax. Honorable members opposite in rejoicing at this belated move to honour a promise to reduce taxation attempted to cover up the real fact that this legislation will confer no benefit on the people because of the effects of inflation caused by the economic policies applied by the Government.

I did not intend to speak on this bill. I decided to do so only after I had listened to the speeches made by the tory honorable member for Gippsland and other honorable members opposite. The honorable member for Franklin (Mr. Falkinder) congratulated the honorable member for Bendigo for his impartial approach to the subject-matter of the bill, but every other honorable member opposite who participated in the debate criticized the Opposition for what they claim to be its half-hearted support of the measure. The broad, national approach of the honorable member for Bendigo was not appreciated by honorable members opposite. I suport the measure. I am delighted that after four long years of inertia, the Government has at last taken action to reduce taxes. I trust that in the future it will give much more speedy effect to the promises upon which it was elected to office in 1949. I hope that we shall not have to wait for years for its other promises to be honoured. Honorable members opposite should accept the advice tendered to them by the Opposition in relation to this tax, particularly that of the honorable member for Bendigo and other Opposition members, including, if T. may say so with due modesty, myself.

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES · ALP; LANG LAB from 1932; ALP from 1936

– “Will the measure result in increased employment?

Mr DALY:

– While the honorable member for East Sydney (Mr. Ward) was temporarily absent from the chamber I made it clear that this measure will do nothing to improve the unemployment position. No supporter of the Government has shown how it will improve the capacity of industry to employ even one of the many thousands of persons, who are now in receipt of the unemployment benefit - let alone the persons whom the Minister for Social Services (Mr. Townley) to-day characterized as criminals and “ no-hopers “. Those who are out of work as the result of the policies applied by this Government-

Mr DEPUTY SPEAKER:

-Order! The honorable member must discuss the bill.

Mr DALY:

– I invite the Government to take note of the knowledgeable advice tendered to it by honorable members on this side of the chamber in relation to this most important legislation.

Mr WILSON:
Sturt

. - I congratulate the Government for having introduced this bill. From now on 50,000 of the 90,000 pay-roll taxpayers of the Comonwealth will be exempted from the tax. One of the principal drawbacks of this tax is what I might describe as its nuisance value. Every employer of two or more workers formerly had to register for pay-roll tax purposes. The proprietors of many small firms who, because they had no experience in accountancy and the preparation of forms, were caused great worry and expense, will be relieved of the payment of the tax. The Government is to be congratulated upon having made one of the finest taxation reductions that has ever been made in this country.

It is the policy of the Government to simplify taxation and tax procedures. Ithas done a tremendous amount of work in that direction since it has been in office. Not only has it considerably simplified returns for income tax purposes but it has also abolished land tax and the entertainments tax. In this bill it proposes to exempt from the payment of pay-roll tax 50,000 of the 90,000 pay-roll taxpayers in the Commonwealth. It has completely exempted from income tax married per sons of pensionable age whose incomes do not exceed £750 per annum. It has deleted thousands of items from the sales tax schedules and substantially reduced the tax on others. It has granted increased concessional deductions for income tax purposes for the wife or housekeeper of a taxpayer and it has increased the concessional allowance for medical and dental expenses for the taxpayer and the members of his family.

Mr SPEAKER:

– Order ! The honorable member is getting well away from the bill.

Mr WILSON:

– I am pointing out that this measure is in accordance with the Government’s policy of simplifying taxation and taxation procedures. I have merely made passing reference to other directions in which the Government has simplified and reduced the taxes. Finally, the Government has .granted exemption from estate duty of estates of a value of up to £5,000 which are passed to the widow, children or grandchildren of a taxpayer.

The pay-roll tax not only has a great nuisance value but its collection, particularly from small taxpayers, has been very costly. Many employers are liable to pay tax because they employ two persons. Their tax bill amounts to only £1 or £2 a year. Yet they have to go to the /expense of compiling monthly returns which, in turn, have to be checked by the officers of the Taxation Branch who also have to ensure that appropriate payments are made by the taxpayer. In future the pay-roll tax will be levied only on big firms and companies which employ the requisite administrative staffs to prepare the necessary forms. As a member of the Government Members’ Taxation Committee I particularly welcome this reform. I am sure that every member of that committee congratulates the Treasurer not only for having taken into account the point of view which the committee has expressed but also for having been even more generous than they had hoped he would be.

The honorable member for Grayndler (Mr. Daly) made the extraordinary statement that municipalities will not benefit from the provisions of this bill. That is utter nonsense. Every pay-roll taxpayer will benefit from the measure because of the increase of the flat rate exemption to pay-rolls of £80 a week. Whereas tax was formerly paid on amounts in excess of £20 a week, in future it will be levied only on pay-rolls in excess of £80 a week. Municipalities and shire councils will thus have to pay a considerably reduced amount of tax. I agree in principle with honorable members who have suggested that the pay-roll tax should be ultimately abolished. Every one agrees that the tax is unfair. It is not related to ability to pay nor is it a tax on luxury. It is a tax on employment, and the more employment that persons or companies provide, the more tax they have to pay. For that reason, the pay-roll tax is unfair.

I hope that this wonderful reform will be followed by the abolition of the pay-roll tax when the general financial position makes that possible. However, the House should not overlook the fact that this tax has yielded approximately £40,000,000 per annum, and that if it were abolished now the Government would not be able to grant the people substantial reductions of income tax and sales tax, abolish the entertainments tax, and increase social services benefits. The Government ha3 kept a sensible balance in this matter, and has decided to remove difficulties and administrative costs which taxpayers have borne in the past. This legislation will also reduce, indirectly but substantially, the amount of tax that everybody has to pay. The Government has wisely decided to relieve small employers of the obligation to pay the pay-roll tax, because they have been affected to a greater degree than big employers by the bookkeeping entailed by compliance with the provisions of the act. ‘ In order to enable a reduction of income tax and sales tax, and the abolition of the entertainments tax, the Government has not exempted big employers from the liability to pay the pay-roll tax. They have adequate accountancy staffs to complete the necessary forms, and attend to the administrative details. By this policy, the Government has been able to give other necessary and valuable concessions.

It should always be understood that pay-roll tax is passed on to the community, and reflected in the cost of commodities. Nobody imagines for one moment that a retail store which pays thousands of pounds a year in pay-roll tax does not pass on that amount to the purchasers of its goods. Therefore, people cannot derive very much satisfaction from the fact that when this hill becomes law, pay-roll tax will be paid only by large employers. In point of fact, the pay-roll tax will continue to be paid by the community. Another matter that should not be forgotten is that the pay-roll tax is an allowable deduction for income tax purposes. If the Government were to abolish the pay-roll tax, the only result would be that big employers would have larger incomes, and, therefore, would pay increased income tax. So, when we speak of abolishing the payroll tax, we do not mean that Consolidated

Revenue will incur a loss indefinitely. A loss of revenue might be suffered only in the year in which the pay-roll tax was abolished. The explanation is that payroll tax is collected immediately the wages are paid, but income tax on the increased incomes which would result from the abolition of the pay-roll tax would probably not be paid for nearly twelve months. Consequently, I suggest that, in future, consideration should be given to the ultimate effect on Consolidated Revenue of the abolition of the pay-roll tax.

This bill is one of the finest that a government has ever introduced into this Parliament. It has everything to commend it, and no honorable member can raise any valid objection to it. The Treasurer has explained that the bill is designed primarily to increase the amount of the statutory exemption from pay-roll tax from £1,040 per annum, or £20 a week, to £4,160 per annum, or £80 a week. That exemption of £80 a week is fair and proper. Administrative charges borne by the taxpayer and the taxation authorities will be reduced, and substantial relief will be given to small employers who urgently need it.

believe that this proposal will improve the employment situation in the future. A. person who was considering whether he would engage an extra hand would possibly have rejected the idea if his increased wages bill would make him liable to pay pay-roll tax. Now he knows that he can employ another person without becoming liable for pay-roll tax, he will probably engage the extra hand. In this way, additional employment will be provided for many people who, for health or other reasons, are not always able to give full value for the wages that they are paid. Some people, through no fault of their own, are difficult to employ, and they find only casual employment. The discrimination against the small business man, who provides employment is removed by this bill, and the employment situation should thereby be improved. Even the ordinary householder who has employed a gardener or a domestic servant has not dared to engage another employee because, if he were to do so, he would become liable to pay the pay-ro tax. He now knows that he may engage two or three additional employees without being brought into this taxation field. For all the reasons I have given, the bill should receive the wholehearted support of every honorable member, and its passage should be expedited.

Mr BIRD:
Batman

.- The honorable member for Sturt (Mr. Wilson) has stated that municipalities should welcome the introduction of this bill, which increases the amount of the statutory exemption from pay-roll tax from £20 to £S0 a week. For many yearsthe Municipal Association of Victoria! has been urging the exemption qf municipal authorities from the pay-roll tax.. The municipal council of which I am at present a member, has a pay-roll of a little more than £2,000 a week. Obviously, the raising of the exemption from £20* a week to £80 a week will be of infinitesimal benefit to that council and to other similar authorities of which there are 2S in the city of Melbourne alone. When one considers the disabilities under which municipal authorities are labouring at the moment, one can only come to the conclusion that the Government Baa been very hard indeed in not including in this measure a provision exempting them entirely from the pay-roll tax. After all, municipal councils are different from private employers. They are engaged largely upon community work and one would have thought that this Government, which claims to be a generous administration, would have been prepared to recognize the value of that work throughout the Commonwealth. To-day almost every municipality, including those in the capital cities, and even the Melbourne City Council itself is in the throes of serious financial difficulties. If the Government were genuinely sympathetic towards the problems of local government, it would have had no hesitation in exempting municipal authoritiesfrom the operation of the pay-roll tax. During the last three or four years, overtures have been made consistently to this Government on behalf of municipal councils. Attention has been drawn repeatedly to the added responsibilities that have been thrust upon those bodies over the last decade. Many municipal councils are doing work which is rightly the responsibility of the community as a whole. For example, some councils are compelled to provide services for people who do not even pay rates. Indeed, municipal councils, generally, are providing services for everybody from the cradle to the grave. Why should the burden of providing these community services be placed only upon municipal ratepayers instead of upon the community as a whole? Repeatedly, representations have been made on behalf of various municipalities to federal members and to the Commonwealth Government itself pointing out that State governments have not the funds necessary to give relief to local government authorities. Complaints are being made continually by municipalities against the refusal of this Government and past Commonwealth governments to pay rates on Commonwealth owned properties. Some municipalities are expected to provide services for government instrumentalities, both Federal and State. In framing this legislation, the Government had a wonderful opportunity to show in a practical fashion the sympathy it professes to have for municipal councils throughout the Commonwealth, and its appreciation of the work they are doing on behalf of the taxpayers. The raising of the exemption from £20 a week to £80 is only a miserable sop. It is not worth the paper on which it is drafted, and I protest emphatically against it. I protest also on behalf of the Municipal Association of Victoria which consists of about 198 municipal and shire councils, against this Government’s niggardly attitude. For the last four years, the Government has been claiming to be sympathetic towards the needs of local government authorities yet, when it has an opportunity to do something practical for bodies that are doing so much for the community, we find that honorable members opposite are not prepared to face up to their responsibilities. Therefore, whilst I welcome the bill in other respects, I must express my extreme disappointment that this very tangible and worthwhile exemption has not been inserted.

Mr HULME:
Petrie

.- In this debate we have heard more of the wailing of the babes in the wood than we have ever heard since I became a. member of this chamber in 1949. It is surprising to me that members of the Opposition claim to support the bill whilst at the same time they offer severe criticism of it. Such a speech has just been made by the honorable member for Batman (Mr. Bird). Because he is a member of some municipal council or other, he has taken upon himself to come into this chamber and plead the case of municipal authorities generally. I remind him that the exemption of £20 a week applied throughout the eight years of Labour rule and that nothing was done during that time to ease the burden that the pay-roll tax imposes upon, not only municipalities, but also small businesses and industry generally. I am confident that few people will be’ impressed by anything that has , been said by the Opposition in this debate. The exemption of 50,000 employers out of a total of 90,000 from the provisions of the pay-roll tax will be tremendously appreciated, particularly by the proprietors of small businesses. They are the ones who will really benefit under this measure. As most honorable members are aware, I was a practising accountant before I was elected to the Parliament. I realize, of course, that the income-earning capacity of accountants is reduced by measures such as this; nevertheless we know something about the responsibilities that have rested upon small businessmen in relation to the preparation of pay-roll tax returns. Take, for instance, members of the medical profession. Many doctors find it impossible because of their extended working hours to give personal attention to their accounts. They are compelled, therefore, to employ other people to do that work. In addition, some medical men have to employ a nurse in their surgeries. In the past such employers have come within the provisions of the pay-roll tax legislation. It was never intended, I believe, that small businesses should be subjected to this tax, and I believe that the raising of the exemption from £1,040 to £4,160 a year will be of great assistance to them.

The yield of tax from employers whose weekly pay-roll is between the old exemption of w20 and the new exemption of £80 proposed in this legislation has been relatively insignificant, but the preparation of pay-roll tax returns has caused considerable irritation. Those people will be gratified, indeed, at this lightening of their burden, not by a Labour government which held office for a period of eight years, but by the present Administration. The inconvenience caused by the pay-roll tax has been felt particularly by small storekeepers. Such people usually work flat out during the day, attending to their customers, and then have to look after their accounts at night. Liability to pay-roll tax has meant filling in just one more government form, and in many instances the tax has amounted to less than £1 a month. It is most undesirable that those people should have that responsibility resting upon them. I believe that over the years we as a Parliament have thrown too much responsibility on small business people in the preparation of returns for this purpose and that purpose. In most instances, the revenue derived has been verysmall indeed.

I believe that the cost of collection is a very important feature of taxes such as this and I am sure that the cost of collecting the pay-roll tax must be substantial. The total loss of revenue involved in this amending legislation is estimated at £5,000,000 a year or £3,900,000 for the remainder’ of the current financial year. I am confident that a substantial percentage of that loss of revenue will be offset by the economies which will result in the Taxation Branch because of the greatly reduced number of employers liable to pay-roll tax. What has been the position for the last ten years or more? At the end of each month taxpayers have had to prepare their forms in triplicate. They have had to detail the wages they have paid. They have had to deduct, and will continue to deduct until the end of this month, the exemption of £86 13s. 4d. That means that every person whose wages bill exceeds £86 13s. 4d. a month, which covers only two senior male employees’, deducts that figure from the total amount of wages paid, calculates the tax due at the rate of 6d. in the £1, and sends his cheque to the Taxation Branch. From the 1st October, the amount that will be deducted will be :£346 13s. 4d. a month. I am sure that small businessmen throughout Australia will greatly appreciate this additional concession.

Members of the Opposition have spoken of big businesses. Under the provisions of this bill, approximately 40,000 taxpayers will continue to pay the tax. Pay-roll tax, in my opinion, is an unfortunate tax. It has no relation to income that is earned, and any such tax is suspect. Nevertheless, I am sure that we should find, if we analysed the situation, that the pay-roll tax paid by the larger companies does not represent more than 1 per cent, of their production costs. Most business organizations in Australia can easily carry an impost of 1 per cent, on their costs of manufacture. In some businesses, perhaps, the wages bill, as an element of cost, is greater than it is in other businesses. In no case would I believe that the cost element of pay-roll tax could exceed 2 per cent. Even accepting that as the figure, I still believe that few industries in Australia cannot carry the tax with ease. Like the honorable member for Sturt (Mr. Wilson), I hope that, with the passage of time, it will be possible to abolish the pay-roll tax. I am certain that, if the present Government remains in office, it will be abolished before many years have passed. When that happy day arrives, the people of Australia will be even more grateful to the Treasurer than they are to-day. The honorable member for East Sydney has suggested that the friends of the Treasurer could fit into two telephone boxes, but I believe that the right honorable gentleman has many friends throughout the country. They have found that in him, whom they criticized in 1951, they have a real friend, because he is mainly responsible for having established economic’ stability. I congratulate the Government on this bill and I repeat emphatically that 50,000 small business people will be tremendously grateful to it for having removed this impost, which has carried with it the obligation to prepare each month irritating returns that have contributed very little to revenue.

Mr LUCHETTI:
Macquarie

– Any small tax remission which thi* Government in its last few years of office may care to bestow on the tax-weary community of Australia will be welcomed by the recipients. In this instance, those who will ‘be blessed by the discontinuance of the obligation to pay payroll tax will be glad that this Government, facing an election in the near future, has at last heeded public clamour and the warning that its attitude towards taxation must be changed. The people are tired of the policy of the Menzies.Fadden Government, which has indulged in the greatest taxation orgy in the history of this land. Many taxpayers will regard this bill with suspicion, and. certainly they will think that this, like many other Government proposals, smacks of a vote-winning campaign and bears no relation to the solution of the economic problems that confront the nation. It appears to me to be a deathbed repentance, another example of providing too little too late. Members of the Opposition consider that a more positive and practical approach should have been made to this subject, that payroll tax should have been abolished, that industry should have been saved this expense, and that this portion of the cost structure should have been removed. In the days when the National “Welfare Fund existed, revenue from the pay-roll tax was paid to that fund in order to perform a useful service for the community. Then, and then only, could it be fairly said that there was need for such a form of taxation. Since the fund was destroyed by this Government, and it no longer exists as a source from which social services payments can be made, a different approach must be made to this subject and to kindred matters.

The honorable member for Batman (Mr. Bird), in a well-reasoned speech, made a plea on behalf of local government bodies. I should like to add to what he has sa.id and to press in particular the claims of our country shire3 and municipalities. These bodies perform a considerable service for all sections of the community, not excluding Commonwealth and State government departments. If proper consideration had been given to the pay-roll tax when it was being revised, the position of local government bodies would not have been overlooked, because, in most municipali-

Mr. Luchetti. ties and shires, the Commonwealth and the State concerned are the holders of tracts of land and the owners of buildings upon which no rates are paid. For that reason, if for no other, the pay-roll tax should have been remitted in the case of local government bodies. Here was an exceptional opportunity for the Government to relieve those instrumentalities of the tax. These bodies, harried as they are by the effects of the inflation to which this Government’s administration has given rise, should have ‘been freed of the obligation to collect and pay this tax to the Government. The saving thus effected would have enabled them to build new roads and bridges and provide improved services to the community.

The proposed rate of exemption of £80 a week is sufficient only to pay the wages of six employees on the base rate. How can that help the majority of struggling industries where skilled technicians are employed? How can it assist those industries that were mentioned by the honorable member for Bendigo (Mr. Clarey), who spoke of the canneries shutting their gates to their employees, thus threatening the very basis of our economic life - the rural industries that produce essential foodstuffs? From time to time we have heard the Government exhort the people to produce more food. Despite the fact that the people have produced food in abundance, cannery after cannery has been obliged to close down. Had the Government taken effective action to cure our economic ills, many of the industrial undertakings which were forced to close their doors might have been able to remain open, employ Australian men and women and play an effective part in the task of feeding the peoples of the world.

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

That thu question he now put.

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

AYES: 59

NOES: 45

Majority . . 14

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 3 agreed to.

Clause 4 - (1.) Section 15 of the Principal Act is amended -

by omitting . . .
by adding at the end thereof the following paragraphs : -

Section proposed to be amended -

1. The provisions of this Part shall not apply to wages paid -
1. by religions or public benevolent institution, or a public hospital;

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I move -

That, before paragraph (a) of sub-clause (1.), the following paragraph be inserted: - ” (aa) by adding at the end of paragraph

) the words ‘ or a community hospital’;”

I cannot understand why this Government refuses to exempt community hospitals from pay-roll tax, although it has now decided to give such exemption to its wealthy friends. For many months the honorable member for Kingston (Mr. Galvin) has been making representations to the Government in an endeavour to obtain exemption for the Ashford and Glenelg community hospitals. The honorable member has also written letters to the Treasurer (Sir Arthur Fadden) to direct attention to this anomalous position. The Treasurer, in his reply, passed the buck by saying that the matter would be referred to the Committee on Taxation. It is futile for him to say that he did not know about this case. He cannot possibly defend his action in rejecting the appeal of the honorable member for Kingston. It would perhaps be interesting for the committee to hear from the right honorable gentleman the excuse that the Government proposes to make for its refusal. It has been said that one of the inequities of the pay-roll tax is that companies that are losing money are compelled to pay the tax. That view is widely held by the supporters of the Government, who seem to be concerned solely with the profit motive. A community hospital is not a profit-making organization. Instead, it assists those who are most in need of assistance. I believe that this Government will stand condemned in the eyes of the community if it refuses to extend this benefit to community hospitals which, as everybody knows, are rendering yeoman service to the sick people of this country. As the Government has handed out millions of pounds to its wealthy friends, I cannot see how it can justify its persistent refusal to accede to the requests of men like the honorable member for Kingston (Mr. Galvin) and others, who have continually asked that some relief be given to community hospitals.

Mr TOM BURKE:
Perth

.- Surely we are going to hear from the Treasurer on this matter. A reasonable amendment has been proposed.

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

That the question be now put.

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

AYES: 56

NOES: 47

Majority . . 9

AYES

NOES

Question so resolved in the affirmative.

Question put -

That the words proposed to be inserted (Mr. Clyde Cameron’s amendment), be so inserted.

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

AYES: 46

NOES: 55

Majority . . 9

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Mr CLAREY:
Bendigo

.- I move -

That, at the end of paragraph (c) of subclause (1.), the following sub-paragraphs be added : - “ (i) the Crown in the right of a State;

a municipal corporation or other local governing body or a public authority constituted in any State;

any university or other educational authority recognized by a State Government; or

a trade union.”.

The effect of the amendment would be to extend the exemptions that are provided in the bill to cover the States, municipalities, educational authorities and trade unions.

Question put -

That the words proposed to be inserted (Mr. Clarey’s amendment) be so inserted.

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

AYES: 46

NOES: 56

Majority . . 10

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Remainder of bill - by leave - taken as a whole and agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 633

QUESTION

ESTIMATES 1953-54

Declaration of Urgency

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

– I declare - (a) that the estimates of expenditure are of an urgent nature; (6) that the resolutions preliminary to the introduction of the Appropriation Bill are urgent resolutions; and (c) that the Appropriation Bill is an urgent bill.

Question put -

That the Estimates of Expenditure be considered of an urgent nature; that the resolutions be considered urgent resolutions; and that the Appropriation Bill be considered an urgent bill.

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

AYES: 46

NOES: 44

Majority . . . . 2

In division:

AYES

NOES

Mr SPEAKER:

– Order ! No questions may be asked during divisions.

Question so resolved in the affirmative.

Allotment of Time

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

.- 1 move-

That the time allotted for the consideration of the remainder of the Estimates, the Resolutions, and the stages of the Appropriation Bill, be as follows: -

One could be rightly annoyed at the action taken by the Opposition in an endeavour to delay the provision to the people of the

benefits that flow from the budget. 1 speak more in sorrow than in anger. Honorable members opposite have acted in this way because they are devoid of feeling for the pensioners, the taxpayers and the community at large. Their action indicates that the Opposition is likely to attempt to delay still further the passage of the Estimates and the Appropriation Bill. I am not a prophet, but I have no doubt that the next twenty minutes will show clearly that the Opposition is not prepared to allow the budget benefits to go to the people. I warn honorable gentlemen opposite that the people will not take these tactics lightly, but will object strenuously to them. It is customary to apply the “ guillotine “ in relation to consideration of the Estimates. In the three years from 1946 to 1949 the Labour Government applied the “guillotine “ on no fewer than twelve occasions, or about four times in each of these years. From 1950 to date, this Government has used the “ guillotine “ twelve times, or three times a year. In its last year of office the Labour Government used the “guillotine” so harshly that we had only 30 hours in which to debate the whole of the Estimates. On- this occasion I have been very liberal in the proposed allotment of time. The time allotted for the debate on the Estimates amounts to 36£ hours, compared with the 30 hours allowed by the Chifley Government in its last year of office. I admit that members of that Government had reason to hurry matters. They were about to face their masters. I have no doubt that’ in view of the attempt which members of the same party are now making to prevent the concessions proposed in the budget from being made available to the people, the electors will have something to say when the election for the House of Representatives takes place early next year.

Mr CALWELL:
Melbourne

.- The Opposition strongly opposes the attempt that is being made by this Government, once again, to gag the Estimates through the Parliament within a few hours. Under the motion before the Chair, honorable members will be obliged, in committee, in a period of 36j hours, to debate the expenditure of the sum of £986,542,000. Last year, the Government allowed 36£ hours for the corresponding debate, but on .this occasion it does not want us to have even the extra quarter of an hour to expose it to the people for its miserly half-a-crown treatment of age and invalid pensioners.

Mr SPEAKER:

– Order ! The honorable member is getting outside the scope of the motion.

Mr CALWELL:

– The Vice-President of the Executive Council (Mr. Eric J. Harrison) said that the Opposition was trying to delay the implementation of the proposals contained in the budget. If honorable members, sitting in committee, approve of the proposed expenditure of £986,542,000 in a period of 36-J hours they will vote millions of pounds of public money each hour and, in some instances, more than £500,000 in a matter of minutes. Government supporters who are to face their masters next year do not desire that a worthwhile debate should take place on the Estimates. They desire to close the Parliament as quickly as possible, because they want to arrange for the opening of a new session with unnecessary pomp and ceremony, which will involve the expenditure of thousands of pounds of .public money. The figures cited by the Vice-President of the Executive Council in the calculations that he made a few minutes ago were wrong, because this i3 not the twelfth but the thirteenth occasion on which this Government has applied the “guillotine” in the twentieth Parliament. The figure given, to him by the Clerk was the number of times that the “guillotine” had been applied before this occasion. During the nineteenth Parliament, this Government applied the gag on 40 occasions and the “guillotine “ on four occasions and, since it assumed office, it has applied the gag on 164 occasions and

Hip “guillotine” on eight occasions.What a record for a government that has an overwhelming majority .in this House! If has applied the “guillotine” and the gag on 216 occasions! That is not evidence of good government. This Government has made a farce of government. It has not done electoral justice to the people’s representatives who sit on your left, Mr. Speaker; the representatives of .the wealthy sit on your right. The Parliament was closed from March last to the beginning of this month, and during that period Ministers and their friends were tripping around the world.

Mr SPEAKER:

– Order ! The honorable gentleman is not in order in referring to what has happened during the Inst six months.

Mr CALWELL:

– The Parliament was closed down for six months before it reassembled a fortnight ago. Now, the Government asks the Parliament to vote in a few hours expenditure amounting to hundreds of millions of pounds. In that time, of course, the committee will not be able to discuss such matters adequately. Members of the Australian Labour party will change all that next year; and we shall do so in a way that will be beneficial to the parliamentary institution, because, whilst Government supporters pretend that they are opposed to communism and totalitarianism-

Mr SPEAKER:

-Order! The subject of communism is not under discussion.

Mr CALWELL:

– If you will bear with me, Mr. Speaker, it is under discussion to this degree-

Mr SPEAKER:

– I will not bear with the honorable gentleman. The question before the Chair is the allotment of time for the consideration of the Estimates.

Mr CALWELL:

– I am saying that the Parliament must be given adequate time in which to discuss these matters. The proposal which the Government now makes is typical of the communistic and totalitarian systems and I do not care what anybody else may think about it.

Mr HOLT:
Minister for Labour and National Service and Minister for Immigration · Higgins · LP

– The honorable member for Melbourne (Mr. Calwell), who is the Deputy Leader of the Opposition, is to be congratulated on putting on his best turn so far in the current sessional period.

Opposition members interjecting,

Mr SPEAKER:

Debate interrupted under Standing Order 92.

Question put -

That the motion(vide page 034)be agreed to.

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

AYES: 55

NOES: 45

Majority . . 10

AYES

NOES

Question so resolved in the affirmative.

In Committee of Supply: Consideration resumed from the 23rd September (vide page 580).

Parliament

Remainder of proposed vote. £745,000.

Prime Minister’s Department

Proposed vote, £2,059,000.

Department of External Affairs

Proposed vote, £1,915,000.

Department of the Treasury.

Proposed vote, £8,071,000.

Attorney-General’s Department

Proposed vote, £1,320,000. (Ordered to be considered together.)

The honorable member for Sturt (Mr. Wilson) was the first Government supporter to discuss the proposed new rate of pension of £3 10s. a week.

The CHAIRMAN:

– Order ! The honorable member for Sturt is in order.

Mr Ward:

– I rise to order. The House having decided on an allotment of time for consideration of the Estimates, is it now in order for an honorable member to intrude any matter not mentioned in the Estimates?

The CHAIRMAN:

– An honorable member may always make a personal explanation if he claims to have been m isrepresented.

Mr Wilson:

– The honorable member for Port Adelaide continued -

He referred to the C series cost-of -living figure and said that, under the Leader of the Opposition’s proposal, the pension at the present time would be £38s. 3d. a week. . . . Such misrepresentation of the statement of the Leader of the Opposition indicates that Government supporters are hard-put to justify this budget. . . . An examination of the statement of the Leader of the Opposition reveals that he did not refer to cost-of-living figures or the C series index.

I shall now repeat what I said last night, and what the Leader of the Opposition said. I am not in the habit of misrepresenting statements by honorable members, and what I said the Leader of the Opposition had said was exactly what the right honorable gentleman did say.

Honorable members interjecting,

The CHAIRMAN:

– Order ! I do not require the help of honorable members.

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

– I rise to order. The honorable member for Sturt has not stated how he was misrepresented. He has only proposed to read to the committee what he said and what the Leader of the Opposition said. You have already ruled, Mr. Chairman, and it has been ruled in the House on many occasions, that a personal explanation cannot be made, and a ground of misrepresentation taken merely by an honorable member repeating what he has said before. I submit that an honorable member must state in what respect he has been misrepresented, and exactly where hehas been misrepresented.

The CHAIRMAN:

– I have not yet had an opportunity to hear what the honorable member for Sturt wants to say. He has a right to read what he said formerly in order to correct a misrepresentation if he claims to have been misrepresented.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I rise to order. The honorable member for Sturt has merely referred to the same matter-

Mr Gullett:

– “What importance?

Mr KEON:

– Irrespective of the views of the honorable member for Henty (Mr. Gullett) in relation to Ireland, I should have thought that he would have an idea of the importance of the appointment of one of Her Majesty’s ambassadors to another country. This is a typical instance of the maladroitness of this Government’s administration.

The Government is now obviously engaged in trying to soften Australian opinion to accept the fact that, sooner or later, the Government will succumb to pressure from other quarters and, in return for a promise that they will be good boys in future, provide for the recognition of the Peking red government.

Mr KEON:

– I am glad that honorable members opposite are displaying the degree of importance which they attach to these matters. I should have thought that a matter of this nature would be of considerable concern to honorable members opposite but apparently it is not. It seems quite obvious that the Government will succumb to the world-wide campaign through the multifarious avenues by which the Communist party infiltrates public opinion. The Government is going to succumb to the pressure which was put on the Prime Minister (Mr. Menzies) in London to follow the United Kingdom Government in recognizing the red regime in Peking.

Mr Drummond:

– It was recognized by the Attlee Government.

Mr KEON:

– That recognition has been confirmed by the Conservative Government. In recognizing that regime an Australian government would be doing the worst thing possible to the Australian people and would have to bear the responsibility for its action. If, as a. result of a political decision to recognize red China, this Government is faced with international legal consequences, what will be the fate of Formosa? This Government, if it recognizes red China, cannot continue to support what will be just a small group of disgruntled exiles who confer with one another in a back, room somewhere in Formosa. If Formosa falls to the Communists, the whole Pacific defence line from Japan to Korea and down to the Philippines will go. That defence line, which is manned mainly by United States forces, will be compelled to fall back thousands of miles across the Pacific. But what is even more important, Australian recognition of red China will be an insult to every member of the United States Senate and House of Representatives, whether he be a Republican, Democrat or Dixiecrat, because both Houses of Congress in the United States of America carried unanimously a resolution opposing recognition of red China. This Government proposed to adopt an entirely different policy from that pursued by the United States of America, and, in doing so, will slap our American friends in the face. This policy can do nothing but severely strain the friendship which exists between Australians and Americans at the present time. The honorable member for Petrie (Mr. Hulme) appears to doubt my belief that the Australian Government will recognize red China. I am glad to have an assurance that he is opposed to such action.

Mr Hulme:

– The Government will not take that action.

Mr KEON:

– The honorable member should wait and see. It is significant that this matter has not been referred to the Foreign Affairs Committee, which consists entirely of Government supporters. Why has not Australian recognition of red China been referred to that committee? The answer is that the Government does not want the committee to consider that matter, because Ministers know that at least some honorable members opposite would take a definite stand against such a policy.

The first point that I have raised is relative to Formosa, and the second is the insult that would, be given to the United States of America if Australia recognizes red China. Australia will be placed in a precarious position to obtain further assistance from the United States of America. The third point is the declaration to the people of Asia that they need no longer hope that, if they continue to fight battles- against the forces of communism, they can depend upon the Western democracies, or at least upon the Australian people to take any part in the struggle. What will be the reaction among the 20,000,000 Chinese who live outside China in other parts of Asia and are loyal to the Nationalist regime on Formosa? If ambassadors, consulates, the education system and the newspapers which are at present controlled by the Nationalists through South Asia and South-East Asia are to be turned over to the control of the Peking Government, there will be established, without any shadow of a doubt, a force which will, within, a few years, greatly increase the strength of the Communists throughout that area, and declare to people who have been prepared to fight against the Communist tryranny in that part of the world that all they can expect from us is to be let down at the critical stage. That will be our declaration to those loyalists if this Government is allowed to continue the policy that it is following at the present time.

I know that some Government supporters will point out to me that Great Britain has recognized red China, and that we should follow suit. I remind those honorable gentlemen that Great Britain recognized red China before the outbreak of hostilities in Korea. What has Great Britain got from its recognition of red China? The British ambassador cooled his heels in Peking for two yearsor more before the Chinese Government even deigned to notice that he was there, and even then it was not prepared to allow the secretary of the Chinese Department of External Affairs to receive him. ‘ He has returned home, and his place has been filled by a charge d’affaires-

Mr McLEAY:
Boothby · LP

.- I inform the honorable member for Yarra (Mr. Keon) that any person who reflects on Mr. Paul McGuire’3 character, family background and record of service to his country should know that three brothers in the McGuire family were killed in action in the defence of their country, two died as a result of their war service, and one was wounded in action in company with the Premier of South Australia in the 27 th Battalion. Mr. McGuire, senior, was Commissioner of Railways in South Australia. The lives of the father and mother were shortened by the enormous volume of patriotic work that they undertook in the Cheer-up Hut, which provided comforts for troops who were passing through, or staying in, Adelaide. I have complete confidence in the character and family background of our chosen representative to Ireland, and the Government, if it has any obligation at all in this matter, should ensure that other representatives of Australia are men of similar calibre and ability.

My . statement about Australia House will be in the nature of a personal explanation. When this matter was raised some time ago, I directed attention to what I considered to be unsatisfactory conditions there. I formed that opinion from my own observations, and from certain criticisms that were voiced to me by people whom I met in Great Britain and en route to Australia. The credit for the great improvement that has since taken place at Australia House belongs to our present High Commissioner, Sir Thomas White. He has done a magnificent job since he has been in London. The whole set-up at Australia House hasbeen improved as the result of a plan formulated by the Vice-President of the Executive Council (Mr. Eric J. Harrison) ‘when he was the Australian Minister resident in London, and substantial economies have been effected. The proposed vote this year is a reduction of £60,000 on last year’s expenditure. What is even more important is that the staff of Australia House, which numbered 866 in 1950, shortly after this Government assumed office, has been reduced to 643. The many improvements which have been made are due to the energy, courage and tenacity of the High Commissioner. According to reports, a marked improvement has occurred in efficiency, courtesy and general conduct at Australia House. I feel it my duty to say that the people of Australia have cause to be proud of the achievements of Sir Thomas. I also applaud the wisdom that has been shown in bringing the staffs of Australian departments in London under the one roof, which will make possible the disposal of Australian property for an amount of £26,880.

On a previous occasion, I made a passing reference to a matter which I did not consider to be serious, but the results went further than I had expected. A certain journalist in London had cast a reflection on advice that she had allegedly received from Australia House about making billy tea. Sir Thomas White never let up on this matter. A considerable amount of correspondence occurred, some of which, I am afraid, would need to be censored. Sir Thomas followed the matter through to the end, and pinned the lie. We may not consider the episode to be serious, but finally the journalist apologized to the High Commissioner, and frankly admitted that she did not obtain the advice from Australia House. She used that as an excuse to satisfy the thousands of people who had been writing to her about the so-called evidence which she had printed in the newspaper.

This Government, by permitting its representatives and staffs in London to be placed for the first time under the complete .control of the High Commissioner, has made a progressive move. I hope Ministers will do everything in their power to co-operate with the High Commissioner and ensure that members of their staffs in London obey his instructions.

The only other criticism that I desire to make does not apply to Australia House alone, but is equally relevant to our representation in many countries. I have received a complaint relative to the designation of the official car of the Australian ambassador, high commissioner or official representative, whatever his title may be. In my opinion, a representative of Australia should not be placed in an inferior position. The standard of his transport, and his chauffeur, should be worthy of this country, and his official emblem should always be prominently displayed. However, these distinctions should be used only by the ambassador, high commissioner or senior Australian official in a country. The loose manner in which some junior officials have been using the Australian flag in order to enable them to pass the police has created a very bad impression among Australians who have seen them in action. I hope that all matters relative to official motor cars and expenditure incurred on them, and above all, the use of the flag, will be thoroughly examined. I feel sure if that is done we shall see some further economy in this type of administration. Sir Thomas White has my fullest confidence and I am sure that of all supporters of the Government which was responsible for appointing him to his present position. I congratulate him upon the magnificent job he has done. I have no doubt that, with full co-operation and support, he will continue to set a good example to other departments represented outside the Commonwealth of Australia.

Mr WARD:
East Sydney

.- I propose to direct attention to a matter concerning the administration of the Treasury. I refer to the scandalous and irregular capital issues transaction recently carried out. Yesterday the Treasurer (Sir Arthur Fadden) read to this

House a statement by Mr. Balmford. I do not know how the statement was prepared, but its wording was rather peculiar. It was headed “Pacts concerning newspaper case as reported by Mr. W. C. Balmford “. It would appear, judging by the dates, that the statement was prepared from some kind of diary, but I suggest that we in this chamber have not been told the total contents of the diary. We have only been given extracts from it to try to bolster up the opinion expressed by the Government that there was nothing irregular or improper about this transaction. The Opposition is not interested in the newspaper war. We do not care which side wins. In fact, in our view, a suitable end to the fight would be a double knock-out. But we are concerned about the improper use of a government department and a government officer in the intrigue and manoeuvring of various newspaper groups to gain advantage one over the other. It is scandalous that a public officer should be used in this way. It may be that if Mr. Balmford were permitted to speak the truth and did so, he would say that he had not acted on his own initiative at all, but that he had acted under direction. There are only two members of the Government who could give him directions. They are the Treasurer, to whom he is directly responsible, and the Prime Minister (Mr. Menzies). Let us look at Mr. Balmford’s statements in his report to the Treasurer. The first entry, dated Thursday, the 6th August, states that Mr. Schapel, of the Daily Telegraph, rang Mr. Balmford to say Mr. Packer wanted to see him urgently. On Thursday night or Friday morning, according to this document, Mr. Schapel again rang Mr. Balmford to say that Mr. Packer could not keep the appointment but that a Mr. MacDonnell would come. Mr. MacDonnell arrived at about 5 p.m. lie reminded Mr. Balmford that he had met him once before on an occasion when Mr. Balmford had been asked by Mr. Chifley, then Prime Minister, to see representatives of Courtaulds (Australia) Limited, on a Sunday. When the Treasurer read that portion of Mr. Balmford’s report, Government supporters appeared to be delighted. But what had that to do with the matter? The repre- sentatives of Courtaulds (Australia) Limited were not asking for immediate consent as was sought on this occasion. They merely asked for an appointment so that they could place their case before the Government. It is quite possible that they had limited time in this country. They may have intended to leave Australia almost immediately, and merely made the request so that they could place their case before somebody in authority. I repeat that they were not seeking immediate consent to a capital issues application. This damnable attempt to blacken the character of Australia’s greatest Prime Minister now that he is not able to defend himself has no parallel in Australian public life. Mr. Chifley could not possibly have been guilty of any improper act. He was too honorable a man and had too high a reputation for honesty and straight dealing. I shall leave that matter because it was merely an attempt to draw a red herring across the trail.

According to Mr. Balmford’s report, Mr. MacDonnell informed him that Consolidated Press Limited wanted to buy a business. I ask honorable members to take particular note of this matter. Up to this point no application had been submitted to the Capital Issues Board on behalf of Consolidated Press Limited. According to Mr. Balmford’s report, Mr. MacDonnell said he did not wish to tell Mr. Balmford the name of the business that was to be acquired unless he was asked to. do so. How could an application for the approval of the Capital Issues Board be made unless the board knew all the particulars of the transaction? I have with me tonight one of the official application forms and it contains many questions about the details of the transaction for which approval is sought. On this occasion, however, the matter was dealt with by Mr. MacDonnell and Mr. Balmford before any application had been made, and on the basis that Mr. MacDonnell did not want to disclose to Mr. Balmford the name of the business that Consolidated Press Limited wanted to acquire! Surely that was rather irregular and improper conduct. At the end of the discussion Mr. Balmford. said -

The newspaper was obviously a Sydney evening paper-

He does not say he knew at that time which newspaper it was -

I saw no reason why consent should be refused.

How could he possibly have formed the opinion that consent should not be refused when he did not even know the name of the business that was to be acquired? Although no written application had been made on the official form, Mr. MacDonnell said, according to the report, that he wanted consent immediately. In reply, Mr. Balmford, who had already intimated that he could see no reason why consent should be refused, said to Mr. MacDonnell that he needed time to think the matter over or at any rate to have an opportunity to discuss it with some one else. Whom did he get in touch with to discuss the proposition? He got in touch not with a member of the Capital Issues Board, but with Dr. Wilson, the Secretary to the Treasury. What had Dr. Wilson to do with it? There is a special board to deal with such applications. Why did ‘ Mr. Balmford not ring other members of the board ? Why did he not convene a meeting of the board so that when the application was made it could be considered? And here is the part that amazes ordinary members of the public who know how difficult it is to get any business transacted even a few minutes before closing time in a government department. Obviously, if one knows the right people and has the right influence, a department can be opened at any time and a private typist can be brought in to type consent if no official typist is available. Let us examine what happened. Mr. Balmford went to see Dr. Wilson after 6 p.m. His report of that interview states that they decided that the application should be approved without reference to the Treasurer. Why without reference to the Treasurer? Why was any mention made of the Treasurer in this particular discussion? Again I point out that even at this stage no application had been made. I should like to know what applications are usually referred to the Treasurer for his consideration. According to the report, Mr. Balmford then went back to Parliament House to tell Mr. MacDonnell the result of the interview and that they had decided to give approval before the application had actually been received. I should like to know at what hour of the night Mr. Balmford returned to Parliament House to convey that decision to Mr. MacDonnell. Mr. Balmford has admitted that it was after 6 p.m. when he saw Dr. Wilson. This is what happened when he discovered that Mr. MacDonnell wanted to obtain consent at once. It was arranged, after Mr. Balmford and Dr. Wilson had decided to approve of the application, that the application would be lodged by the Monday and that consent would be air-mailed to Sydney.

Quite a lot of consideration was shown in respect of this application. According to Mr. Balmford’s statement, no reasons were advanced for this extraordinary haste. Mr. MacDonnell returned to Sydney that night. I want honorable members to remember the times. It was after 6 p.m. when Mr. Balmford saw Dr. Wilson and, when they had discussed the matter and reached a decision, he came back to Parliament House at some unstated hour, after which Mr. MacDonnell returned to Sydney. Later that night - and it must have been very late on the Friday night if Mr. MacDonnell had returned to Sydney - Mr. Schapel again telephoned Mr. Balmford and informed him that Mr. MacDonnell wanted to speak to him on the telephone.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– From Sydney?

Mr WARD:

– Yes, in the very dead of night, because it must have been about midnight then, or even early on the following morning. Mr. MacDonnell told Mr. Balmford that things were moving very rapidly in Sydney. He had not yet told Mr. Balmford what the business was all about, of course. That information was to be supplied later, in the application. Mr. Balmford agreed to attend to the matter if the letter was delivered to him on the Saturday. He pointed out that there might be difficulty about having the consent to the application typed over the week-end,, and Mr. MacDonnell conveniently supplied his own typist. On Friday, the 21st August, the matter was reported to the Capital Issues Board. Not until two weeks later was the board appointed by this Parliament to deal with such applications first advised of the matter! Why was the board’s consent needed if Mr. Balmford and Dr. Wilson, who was not a member of the hoard, could give consent without consulting it? Is it not a farce? Mr. Balmford’s report states that the board approved of the application. There is nothing surprising in that. Apparently it merely acted as a sort of figurehead in these activities. On Thursday, the 27th August, according to Mr. Balmford’s: statement, the first record of an announcement in the Daily Telegraph of the pro:posal by Consolidated Press Limited to buy shares in Associated Newspapers Limited appeared on his files. That was the first he knew about it, according to his statement. He had already approved of the application, which he had not seen and the contents of which were unknown to him.

– I did not want a fixed commission- as the right honorable gentleman did.

Mr MENZIES:

What is the next element of the charge ? If I understand it correctly, I suppose it is that Mr. Balmford, this highly respected public official, known to and respected by almost everybody on the Opposition side of the- committee as well as by us on the Government side, is corrupt. If that charge is made by the Leader of the Opposition I shall instantly appoint a royal commission to investigate it, but I shall not do so if it is made only by the honorable member for East Sydney. Is the charge that, although Mr. Balmford was not corrupt, he was given orders by some Minister? If so, I should like to know by whom.

Mr Ward:

– There are only two who could do it.

Mr MENZIES:

– I should like to know by whom.

Mr Ward:

– The right honorable gentleman may take his pick.

Mr MENZIES:

– Very well, I shall take my pick, because it has been made clear that either I or some other Minister gave Mr. Balmford directions on a matter of which I had never heard until I read about it in .the newspapers the other day.

Mr COSTA:
Banks

.- I wish to direct the attention of the committee to several matters that come within the jurisdiction of the Prime Minister’s Department. One is the Public Service Act and the other is connected with the Superannuation Act. I am referring to this matter because there is some conflict between the provisions of the two acts and as a result of them some persons are suffering injustice. I direct the attention of honorable members to the case of an officer who has been compulsorily retired from the Commonwealth Public Service after 34 years of faithful and zealous service because he became ill. At the time that he was retired under the provisions of the Superanuation Act, he was aged 48 years. He underwent ibo treatment that was prescribed for him and eventually was fit enough to resume work, but, because he was then 50 years of age his re-admission to the Public Service was refused. The .Superannuation Act contains provisions under which this man could have returned to the Public Service, but section 46 of the Public Service Act contains a qualification. It states -

Any person having at any time either before or after the commencement of this Act retired from any salaried office, not being of a temporary or casual character, in the Commonwealth or Territorial Service or in the Public, Railway or other Service of any State, may. if not more than 50 years of age, be appointed by the Board to the Commonwealth Service without examination, and, if the Board think lit. without probation.

Although the officer to whom I have referred had completely recovered good health, he was not taken back into the Public Service because he was 50 years old. That is in conflict with the provi sions of the Superannuation Act, as section 50 provides -

If, in the opinion of the Board, the health of any pensioner to whom a pension under section thirty or section thirty-seven of this Act is being paid, has become so restored as to enable him to perform duties which, in the opinion of the Board, are suitable to be performed by the pensioner, having regard to the duties performed by him immediately prior to his retirement, the Board shall so inform a prescribed authority with a view to suitable employment being found for the pensioner.

If suitable employment is offered to him, at a salary not less than two-thirds of his salary at the time of his retirement, or at such salary as is agreed upon between him and a prescribed authority, the Board may cancel the pension and thereupon it shall cease to be payable.

The point is that although the Superannuation Act prescribes that an officer who has recovered his health can be taken back into the service, section 46 of the Public Service Act rules that he cannot re-enter the service in certain circumstances if he is 50 years of age. The officer to whom I have referred is receiving superannuation at the rate of £7 15s. a week. Just before he became ill, he entered into a commitment to buy a house. Because of inflation, his pension is worth less than it was when he became ill. At that time he was receiving a salary of £12 a week and it was then well above the basic wage. If he takes a job outside the Public Service at that salary or even at two-thirds of his retiring salary, he will lose his superannuation pension of £7 15s. The officer wants to return to the Public Service, and I believe that it is unjust that he should, be debarred from doing so simply because he is now 50 years of age. If this man had been employed in private enterprise for 34 years and had recovered his health after an illness, a place would have been found for him.

I direct the attention of the committee now to section 47a of the Public Service Act which refers to Commonwealth public servants who wish to contest elections. Until 1947, Commonwealth public servants had no civil rights in that connexion. If a public servant desired to contest an election, either Federal or State, he had to resign from the Public Service and that terminated his service. The act was amended and section 47a now provides -

Notwithstanding anything contained in this Act, if the Governor-General is satisfied that any officer who was employed in the Common- wealth Service -

resigned from the Service in order to become a candidate for election as a member of any House of the Parliament of the Commonwealth or of a State;

was a candidate at the election; and

failed to be elected, and that the resignation was effective not earlier than one month prior to the date on which nominations for the election closed, the Governor-General may, upon application by that resigned officer within two months after the declaration of the result of the election and upon the recommendation of the Board, appoint him to the Commonwealth Service without examination, and, if the GovernorGeneral thinks fit, without probation, at the same classification as he had immediately prior to his resignation.

A person so appointed shall be deemed to have continued in the Commonwealth Service as if he had not resigned and as if during the period from the day of his resignation to the day immediately preceding his appointment he had been on leave of absence without pay, and that period shall be included as part of the officer’s period of service.

Clearly that section of the act was framed to provide that if an officer had retired from the Service to contest an election and was defeated, all his prior rights would be reserved to him, but I have discovered that officers who are employed in the Repatriation Department are affected differently. Because the officers whom I have in mind were contributing to a provident account which is related to the Commonwealth Superannuation Fund, but is not specifically mentioned in the Superannuation Act, they have been asked to withdraw all the contributions they have made to the provident account up to the time that they resigned to contest an election. They must then start their contributions afresh upon rejoining the department. Section 60y of the Superannuation Act states -

Subject to this Act, where a contributor to the Provident Account retires or is retired on or after having attained the age of sixty years or where his services are terminated -

on the ground of invalidity; or

owing to retrenchment, there shall be paid to him a sum equal to two and two-thirds times the following amount, namely, the aggregate of his contributions to the Provident Account, together with compound interest on those contributions at the rate of three pounds per centum per annum.

The CHAIRMAN:

– Order! The honorable member for Parkes will come to order.

Mr Gullett:

The CHAIRMAN:

– I ask the honorable member for Lyne whether his statement applied to the honorable member for Yarra?

Mr LUCOCK:

Mr W M BOURKE:
Fawkner

– I desire to draw the attention of the chamber to an item in the estimates of the Prime Minister’s Department. That is the proposed vote to the Australian National University. This remarkable institution, set up in the splendour and isolation of Canberra, contains dozens of professors but no students. It is like an army composed of all generals and no soldiers. Now, according to the Estimates, £975,000 is proposed ;to be expended on capital works for the Australian National University this year, and £650,000 for the running expenses of the institution. That large total sum of £1,625,000 will be just another of a long series of parliamentary grants of substantial amounts of money to this institution which, as I have said, is remarkable for the fact that it contains no students at all. The university was established by the National University Act 1946. According to that act £325,000 is to be voted each year to defray the expenses of the university. Now, at a time when our national expenditure is increasing year by year, more than double the amount authorized by the act is to be granted for the running, expenses of the university, but no explanation for the increase has been put before the Parliament. Moreover, only three brief references can be found in the Estimates to the large sum of £1,625,000 that is to be voted for the purposes of the National University. In the section of the Estimates that deals with capital expenditure, we find this brief item -

Australian National University - Permanent buildings, acquisition and erection of dwellings, equipment and works £975,000.

In the section that deals with miscellaneous services the relevant reference is -

Australian National University - Running expenses - Supplementary grant £325,000.

On the same page there is a brief footnote -

In addition, £325,000 provided under Special Appropriations.

Those three paragraphs contain all the information before the Committee about this large vote of £1,625,000 for the Australian National University. There is no information available to indicate to honorable members how the money is to be expended, whether it is to be expended wisely and whether it is to be expended in the interests of academic research and culture. There are many matters that honorable members of this House, members of the public, members of the staffs and student bodies of State universities, and people who contribute to their support, would like to know about the expenditure of this money. All those persons would like to know how this large sum of money is to be expended,” and how the Australian National University has expended the money granted to it in the past. At present the matter of housing is of great interest to the residents of Canberra. It is, therefore, pertinent to ask how much of the money devoted to the university will be expended on providing houses for the staff. Ordinary public servants, and I use that term in no derogatory sense, who want to obtain government houses, have to put their names on the priority list of the Department of the Interior. Even if they have children, they all have to live in hostels until their names reach the top of the priority list, when they are allotted appropriate houses. In view of the statements that have recently been made in the press that the Government is interested in instituting a scheme of tenant ownership of government-built houses, it is interesting to note that most of the houses in Canberra are owned by the Government. Apparently the tenants are not given much of an opportunity to purchase the houses. However, the average public servant has to put his name on a priority housing list. That arrangement was not good enough for the dons of the Australian National University. They did not want to be treated like the ordinary run of public servants, and take their turns when waiting for houses. Sir Douglas Copland, who now represents Australia in Canada, apparently had the ear of the Prime Minister (Mr. Menzies) and the Government, and was able to obtain unlimited sums of money to enable him to go into the real estate business of buying and building houses on behalf of the Australian National University. It is common knowledge in Canberra that the university bought up most of the big and expensive houses that came on the market and, as it was using public funds, it was able to outbid all competitors and send the price of property sky-high.

The Australian National University has bought, and is building, houses, blocks of flats, and boarding houses, and in the process of doing so it has aquired some magnificent dwellings. It is commonly stated in Canberra, that the total cost of the residences of Sir Douglas Copeland and Sir Marcus Oliphant was about £50,000. It is a deplorable waste of public money to provide such extravagant houses for high-ranking persons out of the money that has been voted by the Parliament to the university year after year. Therefore, it is essential that we should have details of how the money now to be voted is to be expended. It is also necessary that details of past expenditure should be furnished to this chamber. Honorable members have been furnished with a full statement of how other departments intend to expend their votes, but no information has been supplied about expenditure by the Australian National University. We have been given no information about the number of houses that they have bought or built, or about how many blocks of flats they have bought or built. We do not know the terms upon which the houses are let, or who fixes the rent. We do not know whether the houses are let already furnished, and whether the furniture has been purchased out of the liberal grants to the university. Nobody in this Parliament has told us about those matters, and I do not know how we can obtain the information.

I shall direct the attention of the committee to a section of the National University Act that is not being complied with. Evidently, the people who are responsible for administering the Australian National University hold the institution which grants to them a large amount of money each year, in1 titter contempt. They refuse to furnish details of expenditure by the university. There is a provision in the National University Act with relation to the furnishing of an . annual report to the Parliament. Subsection (1.) of section 33 reads -

The Council shall, within six months after the close of each University year, transmit to the Governor-General a report of the proceedings of the University during that year, containing a true and detailed account of the income and expenditure of the University during the year, audited in such manner as the Treasurer of the Commonwealth directs.

The “ Council “ means the council of ibm university. A very explicit and detailed obligation is imposed on the council of the university by that provision of the act. Sub-section (2.) of section 33- reads -

A copy of every such report shall lie laid” before both Houses of the Parliament.

As I am very interested in the Australian National University, particularly the very liberal way that it is treated in* the matter of funds compared, with- die niggardly way in which the universities in the capital cities of the various States - which do the real work of training students - are treated, I set about finding out how the Australian National University has expended about £6,000,000 that has been granted to it. I inquired from the Clerk of Papers to-day whether reports that the act states shall be placed before the Parliament were available for perusal. The Clerk of Papers told me that the latest report that had been tabled was the report of the Interim Council of the Australian National University for the period 1st January, 1950 to the 30th June, 1951. No reports have been furnished for two years. Despite the express and” explicit statutory obligation to which I have referred, no report has been submitted to the Parliament during the last two years by the Australian National University furnishing details of how it has expended the millions of pounds that have been granted to it, and which it has expended,, during that time. In 1951-52 no less than £450,000 was granted to the university to meet current expenses and working costs, and an additional £930,000 for capital expenditure. Is the following year, 1952-53, £600,000 was provided for current expenses, and £977,000 for capital expenditure. There has been no accounting to this Parliament of the way in which that money has been expended. We have not received a word from the university about what it has done with all that money, despite the very explicit obligation that is imposed upon it by the act. This is a disgraceful state of affairs, which reflects upon the administration of this Government. It indicates a very serious laxity in administration. Apparently the Government, in budgeting for the expenditure of thousands of millions of pounds, is not worried about these matters. Apparently it has not reminded these people of their obligations to the Parliament.

The CHAIRMAN:

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

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– It is, of course, quite natural for honorable members to be concerned if they think that government -funds are being expended and not properly accounted for, and the honorable member for Fawkner (Mr. W. M. Bourke) has become, a little excited about the expenditure of the Australian National University. The facts are not quite as he would have the committee believe. The Australian National University has been directed by law to furnish a report to the Governor-General, and to the Parliament, every twelve months, and it is quite true that the last report that was tabled in the House was the report of the interim council for the period to June, 1951, as the honorable member has told the committee. However, the interim council was succeeded by the permanent council, on which, I remind the committee, there are four members of the Parliament - two from the Government side of the House and two from the Opposition side. Another factor that should be borne in mind is that the academic year does not end in June but at the end of December. The permanent council decided that it would present its first report, not for the first six months, but for the period to the end of the academic year after it took office, that is, in respect of a period of eighteen months. That report has been completed in every detail and has been forwarded by the council of the university. The only reason why it has not been tabled in the House is that the Auditor-General has so far not furnished his report on it. There has been no attempt to conceal what has been going on at the university! It is very unfortunate that honorable members should try to create the impression that this great institution - and it is a great and valuable institution in this country - is engaged in some nefarious way in trying to cover up its activities and expend money without accounting for it. Of course, nothing of the sort is going on. What is really happening is that an academic body with eminently high qualifications, which is not in any sense a party organization - it was set up not by the present Government, but by the previous Labour Government, and has been carried on by this Government - is discharging its functions to the great benefit of the academic life of Australia. It is absurd to suggest that a veil of secrecy has been thrown over these eminent men who are engaged in intellectual work for Australia. Nothing of that sort is going on. I shall give to the committee a few facts about the Australian National University. The honorable member for Fawkner spoke as though actually nothing was going on there. In fact, a great deal of work has gone on there, and I need refer only briefly to the work that has been done in some of the schools of the university. At the School of Physical Sciences at least two of the most eminent physicists in the world are now working. I refer to Professor Marcus Oliphant and Professor Titterton. Honorable members will recollect that the British Government thought so highly of Profesor Titterton that it asked the Australian Government to make him. available as an observer at the time of the atomic explosion on the Monte Bello Islands. In the School of Physical Sciences there have been set up departments of Particle Physics, Nuclear Physics, Radiochemistry, Geophysics, and of Astronomy. The Institute of Astronomy at Mount Stromlo is ‘integrated with the Australian National University. Some of the most eminent men in the world, in the field of medical science, are working there. Professor Eccles, whose name is well known to the committee, is regarded as one of the most eminent men in his field in the world. The quantity of apparatus and technical equipment installed at the university fully justifies the amounts of money expended for that purpose. In regard to the Schools of Social Sciences and of Pacific Studies, it is appropriate that I should mention that excellent work has been done in them bv such prominent men as Mr. Fitzgerald, whose book on China, if it is not well known to honorable members should be well known to them, and Dr. Stanner. As the extent of building operations being undertaken at the university has been questioned, I should like to give the committee some information in regard to that matter. It is impossible to carry on great schools of science and medical research unless suitable buildings are provided for that purpose. If we ai-e to attract men of very high intellectual calibre from other parts of the world and retain in Australia the most highly qualified men who previously sought to employ their talents abroad because they were unable to obtain fitting employment in this country, we must build the requisite buildings and laboratories and provide them with all the apparatus and equipment that they need to carry on their work. That cannot be done without the expenditure of considerable amounts of money. Apart from building technical schools, such as the School of Pacific Sciences, and laboratories such as the medical laboratory, and so on, over a period of four years the university has built 62 houses and six flats and it has bought 21 houses. Let me assure the committee that existing houses are not bought unless the purchase price is below the current cost of construction. That principle has been rigidly adhered to. It is paltry for honorable members to try to cast aspersions on eminent men like Sir Douglas Copland who reflect a great deal of credit on this country in many fields and to try to belittle the fact that they hold great and important positions of leadership. They are entitled to be provided with houses fitting to the office which they hold. It is paltry to burke at the expenditure of adequate amounts of money to provide for not only the vice-chancellor of that great national institution, but also for the senior members of the staff, fitting homes in which they can live. We want these people to live here and make their contribution to the intellectual life of this country. If we are to attract men of the highest intellect from Australia and abroad we must provide these amenities for them. The standards that we adopt in Australia compare very unfavorably with the standards that these people expect in other countries. If we are to make this great institution a success, we must match the standards that leaders of intellectual thought are able to demand in other countries.

I return to the question whether the Parliament can supervise the estimates of the Australian National University. The council of the university has prepared a full and detailed account of its expenditure. The latest report is not available only because the AuditorGeneral’s report on the accounts is not yet available. A report of the activities of the council to the end of last year has been prepared and only the absence of the Auditor-General’s report prevents it from being tabled in the House.

Mr HAYLEN:
Parkes

– I propose to refer the proposed vote for the Department of the Treasury and in particular to the activities of the Capital Issues Board. Before I deal strictly with administrative aspects of the board I should like to comment on statements that were made on this subject on earlier occasions. I should not like the committee to think that the honorable member for East Sydney (Mr. Ward) is completely in isolation in having raised this matter, as has been suggested by the Prime Minister (Mr. Menzies). We have our views in regard to it and they are not personal views. The view that 1 wish to express and expound by illustration and analysis is that something seems to be wrong with an instrumentality which, out of business hours, can issue a permit for one of the biggest issues of capital without a meeting of the board. Surely, the need for tidy housekeeping in the economic sense should prevent such a practice from being allowed to go on any longer. The challenge to us to accept a royal commission, to denounce somebody or to remain silent is merely play acting on the part of the Prime Minister. We have every right as the custodians of th-3 rights of the people to demand an explanation from the Government. Because we do so, is there any reason why the Labour party and the honorable member for East Sydney should be made the victims of an attack? I admit that there is provocation on both sides as there always is. I hope to get back to realism by asking a few questions that are particularly relevant. The Capital Issues Board includes in its membership as chairman, Mr. Balmford, who was a friend of the late Mr. Chifley, which makes him a friend of ours. There is nothing in the suggestion - and I say this with the authority of my position as a senior member of the party on this side of the committee - that a charge of any kind has been made against Mr. Balmford. If anything of that sort has been injected into this question it was done by the Prime Minister who, waving his arms, said, “ Well ; you charge them !”. It is the old technique of trying to isolate any honorable member who dares to raise his voice. We think that there is justification for :i n inquiry into the facts relating to this matter.

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

– Why did the honorable mem’ber wait until the Prime Minister had left the chamber ?

Mr HAYLEN:

– I had to wait until .1 got the call from the Chair. The VicePresident of the Executive Council (Mr. Eric j. Harrison) knows very well that honorable members have no choice in the matter. The Capital Issues Board was established to deal with the very vexed question of new capital for industry. Its task is a difficult one. If that is so why was the decision in this case left to one man ? I can imagine that the decision in relation to the issue of a permit for the raising of capital of a. small amount - say, E10,000- would be left to the delegate of the Treasurer, or Mr. Balmford could issue such a permit in Sydney; but very different circumstances surround the granting of a permit for a capital issue of £500,000. If the people of Australia are astonished that a permit for such a huge amount should have been issued to a newspaper, having regard to the purpose for which it was obtained, while other applications were turned down, can one wonder at their astonishment? We must remember that the permit was issued to a company which could barely make a profit of 5 per cent, on its capital and that its capital was actually doubled by the issuance of new shares which would make it entirely unprofitable. We expect the issuance of new capital to create employment. In this instance its ultimate result will be the discontinuance of a newspaper and the disemployment of 100 pressmen and newspaper employees. We say that a decision on this matter was made by one man and the Secretary to the Treasury to whom went for assistance. If any pressure was exerted on Mr. Balmford in any way this committee is entitled to know about it. The Prime Minister, with a wave of his hand, has invited the Opposition to prove that he has not told the whole truth in connexion with the matter. He indulged in high melodrama but kept strictly off the subject of this debate. There is an uneasiness in the mind of the general public, which considers that even if there has been no corruption there has been terrifically bad management.

As I said ‘before, this newspaper obtained its permit in the middle of a. battle between conflicting forces struggling for the control of a press monopoly in New South Wales. Permission was granted to a transaction which would worsen the position of newspaper ownership in New South Wales and throw journalists out of work. This was done at the weekend as a sort of aside. It does not look good and there is still a case to answer. If this is the highest single capital issue that has been approved by the chairman of the Capital Issues Board himself, why have honorable members experienced so much difficulty in obtaining assistance from the Capital Issues Board for their constituents? The Capital Issues Board is notoriously slow in making decisions and it is very difficult to get the hoard to make a decision on matters involving more than £100,000. I ask honorable members to compare the speed and celerity with which this matter was handled with the manner in. which the English firm of R. B. Davies Industries Limited had an application dealt with by the Capital Issues Board. This firm, which was engaged in important engineering work, was refused permission to raise fresh capital amounting to £100,000 although honorable members on both sides of this house tried to use their legitimate influence to have permission granted.

The consent of the Capital Issues Board was not granted to Associated Newspapers Limited for the purpose of increasing employment. The granting of the permission assisted two companies to engineer a newspaper monopoly, yet the transaction has been represented as a mere weekend whimsy. It has been represented as a matter so trifling that a typist could handle it. Many genuine people have failed to obtain permission from the Capital Issues Board to secure new capital. Two extraordinarily good cases submitted by firms in my electorate were rejected by the Board. At the time that the application of R. B. Davies Industries Limited was rejected by the Board the High Court was being approached by Marcus Clark’s Limited in connexion with a similar matter. The judgment of the High Court was a victory for that firm and the judgment also resolved the case of R. B. Davies Industries Limited. But it took that firm twelve months to obtain consent to raise new capital although it was engaged in important engineering work such as casting and forging. It is well known in Sydney that applications which have been refused by the Capital Issues Board have la tei’ been granted when submitted by another solicitor or through another firm. As I have not the complete facts in my possession I shall not mention the names of the firms concerned in such applications.

Why should opposition members who are engaged in a legitimate search for the truth be pilloried by the Prime Minister or his Ministers? Surely there is a case to answer in connexion with this matter which is surrounded by a fairylike atmosphere. Surely the Cabinet knew of the moves that were taking place to establish a newspaper monopoly in Sydney. I am concerned as a working journalist to know the outcome of these machinations. The honorable member for East Sydney did his duty as a member of this committee in raising this matter and the Government is extremely uneasy about it. The fact that somebody could ring up the chairman of the Capital

Issues Board on a Sunday, fly to Canberra with his private typist and typewriter and get the chairman to sign a permit to raise about £500,000 of capital is an indication of slipshod business management, even if it indicates nothing worse. Apparently no examination was made of the effect that the granting of such permission would have on the company concerned or the newspaper industry. Surely the Minister for Labour and National Service (Mr. Holt) gives some consideration to the maintenance of industries that can absorb some of the 69,000 people who are still out of work. If he does not do that then capital issues control is a farce and its farcical aspects have never been better illustrated than in this instance.

When the honorable member for East Sydney asked the Treasurer (Sir Arthur Fadden) whether he would furnish information regarding the approval given by the Capital Issues Board to a transaction whereby John Fairfax and Sons Proprietary Limited obtained at par unissued capital in Associated Newspapers Limited amounting to between £650,000 and £700,000, he was informed that the application for approval was first made on the 30th August, and that approval was granted on the same day. The honorable member was also informed that the application had been approved because it was strictly in accordance with the policy under which the Capital Issues Board was currently operating. Is it the policy of the Capital Issues Board to damage the working conditions of journalists? Does its policy include the worsening of that fine institution known as the Sunday Sun.* The office of that paper is one of the best places in which to work because there is no gestapo there. Is it the current policy of the board to undermine such a newspaper? Is it not the policy of the board to consider what effect its decisions will have on employment? The agreement between Associated Newspapers Limited and John Fairfax and Sons Proprietary Limited provided that the directors of those companies were to be retained but it made no provision for the retention of the journalists. Already 70 members of the staff of the newspaper have received notice, and it is expected that additional members of the staff will be dismissed. We make no apology for raising the matter of capital issues this evening. This debate provides us with an opportunity to thrash out such matters, and we consider that we have made out a valid case.

The CHAIRMAN:

– Order ! The honorable member has exhausted his time.

Mr SWARTZ:
Darling Downs

– I refer to a matter which concerns indirectly the Department of External Affairs, and that is the supply of Australian coal for the American army in Korea. Early this year, two contracts to supply coal to Korea were secured by Australian firms, following tenders by the Japanese Procurement Agency. This agency is an integral part of the United States Security Force stationed in Japan. Procurement is confined to nonperishables, which are usually supplied from Japan, but some purchases, such as coal and timber, have been made from Australia. The first contract that Australia secured was through Scott and English (Australasia) Proprietary Limited for the supply of 100,000 tons of Collinsville coal from Queensland, to be delivered in Korea, between July and December, 1953. The second contract was secured by Heine Brothers, for the supply of 100,000 tons of New South Wales coal to Korea for shipment between the months of June and October this year. These firms were able successfully to tender for these contracts, within the limited time available, by having representation in Japan.

The United States Japanese Procurement Agency has invited open tenders from time to time for the supply of large quantities of coal. Calls generally have been for 100,000 tons each. The Australian Trade Commissioner Service has been of assistance to commercial organizations in the Far East by providing uptodate information about the business opportunities which are available for Australian trade. The Department of Commerce and Agriculture, apart. from this service, recently reviewed at some length in the journal Overseas Trade the methods of procurement under the various programmes, and stressed the opportunities which may eventuate for Australian manufacturers and exporters, in the requirements of the United Nations agencies, and the agencies of the United States of America, in the Far East. The need should be stressed for the establishment of suitable commercial representation in the Far East to maintain close liaison with the United Nations and United States agencies, to enable close attention to be paid to tender notices in view of the short period of notice, usually seven to fourteen days, which is normally required.

Certain difficulties have arisen over the delivery of Collinsville coal to Korea, and during June last, the Joint Coal Board was advised that owing to the delay in the arrival of certain equipment, the conversion of the Collinsville Coal Mine from hand labour to machine production had been delayed, and would prevent the commencement of shipments of coal on schedule. However, deliveries under the New South Wales contract commenced on time, but the position was complicated by industrial trouble at the principal New South Wales coal mine concerned.

Scott and English (Australasia) Proprietary Limited approached the Joint Coal Board for assistance in finding alternative supplies to meet the contract delivery dates, but at the time the board was unable to meet their request. Discussions were subsequently held with the Prime Minister’s Department and the Department of Commerce and Agriculture, and an approach was made direct to the Minister for National Development (Senator Spooner). In the meantime, the Collinsville agents were granted an extension of time by the Japanese Procurement Agency, and the Minister for National Development announced recently that the Joint Coal Board would provide one shipment of coal to enable the Collins- ‘ ville* agents to hold their contract.

It is rather significant to note that industrial trouble in New South Wales affected the coal mine that provided the type and, quality of coal required under the New South Wales contract, and at the same time delays occurred in the installation of machinery at the Collinsville State Coal Mine in Queensland, which was to provide coal to fulfil the other contract for Korea. Further industrial trouble recently developed at the

Collinsville State Mine, and the whole pattern of the developments appears to suggest some organized Communist attempt to prevent the provision of supplies under these two contracts to the American Army Agency in Korea. Now that Australian Government assistance has temporarily prevented the cancellation of the Collinsville contract, it is to be hoped the Queensland Government can rapidly rectify the present industrial situation, and meet the contract requirements for the supply of coal. There appears to be an opportunity for Australia to build up an export trade in coal. The London Mining Journal of the 3rd April has described the position in the following words : -

The continuance of a successful export trade in coal will depend upon freedom from strikes and other industrial trouble, which effectively destroyed that trade in the past.

The New South Wales arrangements to fulfil their contract can be maintained, but in view of the future prospects for Queensland, it is ‘essential that the Collinsville deliveries be made in accordance with the contractual arrangements,, and in view of. the importance of this situation, the Queensland Government should take early and effective action to overcome the present problems.

Mr MORGAN:
Reid

.- I seek information about the expenditure of the Department of External Affairs. It is unfortunate that .the Minister for External Affairs ‘(Mr. Casey) is on one of his periodical tours round the world, because he is the only Minister who can give honorable members full information about this matter. I regret that the Estimates are being rushed through the Committee of Supply before the Minister returns to Australia. Honorable members will not have the opportunity to obtain all the information about these matters to which they are entitled. However, I am sure that the Minister for Territories (Mr. Hasluck), who is representing the Minister for External Affairs during his absence, will, do his best, with t-lie limited facilities at his disposal, to answer our inquiries about the department, and give us courteous explanations. A visitor who witnessed the spectacle in the chamber earlier this evening, might be excused for thinking that Opposition members were guilty of a sin when they sought information about the Estimates. This discussion should not be an occasion for party political, acrimony and bitterness, because we are merely seeking information to which wo are entitled as the elected representatives of the people. If the Government declines to answer our questions fully and courteously, these proceedings will become a farce.

The Department of External Affairs appears to be getting out of all proportion to the importance of Australia. Perhaps we are trying to bolster our prestige with the establishment, on a grandiose scale, of embassies throughout the world, even in countries with which we have hardly any dealings at all. Perhaps some of the bright boys of the Minister for External Affairs, and the starry-eyed members of the diplomatic corps, are doing their best to improve the situation, but we who live “ down under “ have little in common with some countries in other parts of the world. Australia, which has a population of approximately 8,000,000 persons, is establishing huge embassies in various countries, and we have not even trade relations with some of them. The expenditure on the maintenance of those embassies is out of all proportion to the expenditure on our trade relations with them. The total amount provided for trade representation and commercial intelligence abroad is £160,000, compared with the amount of £2,000,000 provided for diplomatic representation. Our trade relations with the United States of America are valued at £100,000,000 per annum. We expended only £19,000 on trade representation rr-d commercial intelligence in America last year, and the provision this year is £27,000, yet the Government proposes to expend £252,000 on our diplomatic representation with the United States and on all the trappings which, we understand, have been provided in Washington. This expenditure is out of all proportion to the advice that we can offer to the Americans. We have practically no trade relations with Russia but our diplomatic representation in that country this year is to cost us £95,000 compared with £84,000 last year. What is the use of spending all that money? A former Australian ambassador to

Moscow, Mr. Moloney, said after spending a couple of years in Russia, that he had been given no opportunity to contribute anything to diplomatic relations between Australia and the Soviet. Virtually he had been “ frozen out “ of Russia, and he came back here very disillusioned. Surely Australian representation in Russia on the present scale is a sheer waste of money. Mention has alredy been made in this debate of Ireland, so I shall not deal further with that country. I find however that £30,000 is being provided for Australian representation in Brazil. “What is the necessity for that? It is true that we have some trade relations with Brazil but it is mostly one way trade. Trade representation in Brazil cost us £1,562 last year, and will cost £1,706, in the current financial year. Perhaps if we had better trade representation in Brazil, our trade with that country would improve. It seems to me that too great stress is being placed upon the importance of diplomatic representation. Our trade with Israel is insignificant, but diplomatic representations in that country will cost us £36,000 this year compared with £31,000 last year. Expenditure in Egypt will be £44,000. What return can we expect for that money? Representation in Vietnam, Laos and Cambodia will cost us £40,000 this year. Surely diplomacy in those lands could well be left to the French and the other nations already attending to affairs there. What can we possibly hope to accomplish with an expenditure of £40,000 on diplomatic advice in those countries ? Another item about which we have very little information is the proposed expenditure of £226,000 on consular representation abroad. Surely we can be told what the Government hopes to achieve by that expenditure. Overseas representation including capital expenditure, will cost us more than £2,000,000 this year. In view of our limited means I believe that much of that money could be more profitably expended in other directions. Indeed, much of it could be expended in this country itself on schools, hospitals, developmental projects and so on. We have been given little information about what this country is doing in India, but recent press reports indicate that the Department of External Affairs is planning to build offices and homes at New

Delhi. Three houses are to be built at a cost, we are informed, of £45,000. That is £15,000 each; and those residences are not for the High Commissioner but for underlings. The entire project will cost £300,000. At Tokyo, according to newspaper reports, the Department of External Affairs has four cars, one jeep, and five chauffeurs.

Mr Haylen:

– What, no dancing girls ?

Mr MORGAN:

– They might be a sideline, and perhaps in India there will be a retinue of elephants as well. The whole programme is absurd. It is time we called a halt to expenditure that is quite out of keeping with the present state of our finances. The Government is restricting expenditure on vital services for the Australian community. Surely it could set an example of economy in expenditure on representation overseas. I hope that if the Minister for Territories cannot answer the questions that have been asked about the activities of the Department of External Affairs, we shall be given all the information that we have sought when the Minister for External Affairs returns to this country. I do not know exactly what his mission abroad is, but apparently he is checking up on how our money is being expended.

Mr HOWSE:
Calare

.- The honorable member for Reid (Mr. Morgan) has attacked our overseas representation and preached a policy of isolation. Apparently he wants us to concentrate upon our own affairs and to ignore the outside world completely. That was the policy pursued in the United States of America years ago when the people of the middle west said “Let us contain ourselves within America. Let us ignore the rest of the world.” But the air age is with us and Australia, now a nation, must behave as a nation. That means that we must watch world events. Therefore, we must be represented overseas, and that representation must be adequate. Overseas happenings can affect us vitally. The last two wars were not of our making. They resulted from events in far off countries; but we had to join in those conflicts to defend our ideals. Since 1914 it has been impossible for us to remain in glorious isolation. We have to make up our minds now bow we are to be represented overseas. It is easy to criticize expenditure by the Department of External Affairs, but let us have a good look at the work of the department before we do so. It is true that when one is confronted by the formidable figure of £2,000,000, one is inclined to be cautious and to ask how that money is to be expended. We all want to be sure it is to be expended wisely, and that we are to get value for it. What kind of representation do we want overseas? Do we want our diplomats to be regarded as poor relatives at overseas posts ? Do we want people of other nations to say “Australia cannot afford tobe properly represented “ ? Let us not under-rate Australia’s position in the world. Other nations will judge us largely by our representatives abroad. We must measure our expenditure against that of other countries, particularly of our sister dominions. It is very easy to assume that costs abroad are in line with living costs in this country and to ask therefore why so much money is to be expended in, say, Russia. We must understand, however, that in many other lands the cost of living is much higher than it is in Australia, and that if we are to be properly represented there we must ensure that our representatives shall be properly equipped and properly paid for their work. I believe that although Australians are comparative newcomers to the diplomatic field, they have a tremendous advantage. I have had the privilege of seeing Australians at various posts overseas and at the United Nations.

Australians have a great advantage because they present a fresh and frank point of view. They are not bound by old prejudices or hates. They are very useful in negotiations because of their practical outlook. They bring the enthusiasm of a young country to the problems of the world. That is why they stand very high in international councils. Instead of trying to hamper them, therefore, we should support and assist them. After all, they represent us. The need to maintain a foreign service springs from various considerations. One of these is security, which requires the maintenance of good relations with many countries, particularly those whose security is related to our security. Australia must be adequately represented in many parts of the world, and especially in South and South-East Asia, where we have real interests and great responsibilities. I direct the attention of honorable members to the relative costs of diplomatic representation of various British Commonwealth countries. The Public Accounts Committee has examined this matter, and it has established that expenditure on diplomatic representation by Commonwealth countries is related to national budget expenditure in the

Those figures show that Australian expenditure on overseas representation is not unreasonable. Unfortunately, Australia has often been regarded as the poor relation at international conferences. I sincerely hope that we shall provide our representatives abroad with adequate allowances so that they can do their job properly and represent their country without embarrassment.

One item of expenditure to which I direct attention particularly is the provision for the Australian National University. The honorable member for Oxley (Dr. Donald Cameron) is a member of the university board and has done splendid work in that position. I admit that the Australian National University grew from a magnificent idea and that it is making a great contribution to education and culture in Australia. Nevertheless, it appears to indulge in extravagant expenditure and I hope that the Public Accounts Committee will carefully examine its finances and inform the Parliament of the purposes to which the money is devoted. The proposed vote for the current year, which has been submitted to the committee without a proper explanation, provides for a capital works programme of £975,000 and an ordinary income of £325,000, which amounts to a large total. State universities are keenly interested in this expenditure, and the Parliament is entitled to know whether the money is being used wisely. If the report to which the honorable member for Oxley has referred is not ready in time to be considered by honorable members during the discussion of the Estimates, I hope that the Government at least will provide some information on the broad purposes of this considerable item of proposed expenditure.

Progress reported.

page 668

ADJOURNMENT

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

That the House do now adjourn.

Mr WARD:
East Sydney

.- Mr. Speaker-

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

That the question be now put.

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

AYES: 55

NOES: 35

Majority . . . . 20

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

House adjourned at 11.36 p.m.

page 668

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Capital Issues

Mr Ward:

d asked the Treasurer, upon notice -

Will he furnish the following information regarding the recent approval given by the Capital Issues Control Board to a transaction whereby John Fairfax and Sons Proprietary Limited obtained at par unissued capital in Associated Newspapers Limited amounting to between £650,000 and £700,000:- (a) What was the date upon which the application for approval was first made?(b) When was approval granted? (c) Were any representations made supporting the application or requesting the expediting of a decision, either in person, by telephone, or in writing, by any member of the Government or by any other person; if so, by whom?; and (d) What were the special reasons upon which the Capital Issues Control Board based its approval of this application when apparently more justifiable applications have been rejected?

Sir Arthur Fadden:
Treasurer · MCPHERSON, QUEENSLAND · CP

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

30th August, 1953. (b) 30th August, 1953. (c) No. (d) The application was approved because it was strictly in accordance with the policy upon which the Capital Issues Board is currently operating.

Taxation

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Treasurer, upon notice -

Will he arrange for a full list of permissible deductions to be printed on income tax returns?

Sir Arthur Fadden:
CP

– The answer to the honorable member’s question is as follows : -

The return forms which are designed for use by salary and wage-earners and by recipients of other non-business income already contain a list of the classes of deductions which may be claimed, and set out within each class the conditions which govern the allowance of the deductions referred to. It would notbe practicable and would unduly complicate the forms if any attempt were made to print on the forms every possible class of deduction which might be allowable in the case of a small minority of the taxpayers. The forms which are designed for use by businessmen, including primary producers, cover such a multitude of possible deductions that it would not be reasonably practicable to set out in the forms a full list of those deductions, even if it wore practicable to compile such a list. When these forms are distributed to the public, they are accompanied by an instruction sheet, which sets out the classes of deductions which may be claimed.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Treasurer, upon notice -

Were arrangements of any kind made with certain retailers, prior to the introduction of “the budget, for tac suspension of sales tax on certain commodities which were subsequently exempted under the budget; if so, was the benefit passed on to the consumer or retained by die retailer?

Six ARTHUR Fadden. - The answers to the honorable member’s questions are as follows: -

No arrangements pf any kind were made by the Government or the Taxation Department with retailers, before the introduction of the budget, for the suspension of sales tax. on any commodities which were subsequently -exempted under the budget. The Commissioner of Taxation had official knowledge of instances in which steps had been taken by wholesalers. to delay the passing of property in ‘ certain goods to retailers so as to defer the occurrence of the transactions which would give rise to sales tax liability^ These steps were legitimately open to “the wholesale merchants. The Government is not aware of any retailers having failed to pass on to the public any benefit so gained.

PUBLIC Service. “Mr. Menzies. - On the 23rd September, the honorable member for Banks (Mr. Costa) asked the following question: -

Has the Prime Minister been requested to seek an amendment of the Commonwealth Public Service Act with a view to removing an

Anomaly caused by a conflict between section 48 of the act and the Superannuation Act as a - result of which en officer who has been retired -through invalidity but subsequently recovers to health sufficiently to enable him to return to -work in the Public Service is prevented from doing bo? If the Prime Minister has no knowledge of this matter, will he say whether the Government intends to propose the amendment <if any section nf either of those acts in any -way during the current parliamentary session ?

I have examined, the matter raised by the honorable member and I find that the Public Service Board last week submitted this very question to a Cabinet committee, legislation to give effect to the Government’s decision will be introduced as soon as practicable.

Textiles.

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

on. - On the 15th September, the honorable member for “Wannon asked the following question: -

Will the Minister for Commerce and Agriculture inform me whether any action has 3>een taken, or is likely to be token, to enforce the textile labelling regulations, which were introduced by the Chifley Government?

The Minister for Trade and Customs has furnished the following answer to the honorable member’s question: -

The regulations relating to the marking of imported textiles introduced by the previous Government in 1949 were found to be impracticable to administer and consequently could not be fully enforced. However, the provisions of the regulations have now been amended and provide a practical means of protecting Australian wool interests against unfair competition and also the public against any misdescription of imported textile goods. These new provisions are contained in Statutory Rule No. 54 of 1953 and came into operation on the 5th September, 1953. “

Cite as: Australia, House of Representatives, Debates, 24 September 1953, viewed 22 October 2017, <http://historichansard.net/hofreps/1953/19530924_reps_20_hor1/>.

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House of Representatives24 September 1953

SUPERANNUATION

Petition

Mr LESLIE:MOORE, WESTERN AUSTRALIA

QUESTION

EMPLOYMENT OF WOMEN

Dr EVATT:BARTON, NEW SOUTH WALES

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

QUESTION

WHEAT

Mr ADERMANN:FISHER, QUEENSLAND

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

QUESTION

NATIONAL SERVICE

Mr KEON:YARRA, VICTORIA

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

QUESTION

WATERFRONT EMPLOYMENT

Mr PEARCE:CAPRICORNIA, QUEENSLAND

Mr HOLT:LP

QUESTION

ARMED FORCES

Mr ANDREWS:DAREBIN, VICTORIA

Mr FRANCIS:LP

QUESTION

SOCIAL SERVICES

Mr DAVIS:DEAKIN, VICTORIA

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

Mr HULME:PETRIE, QUEENSLAND

Mr MENZIES:Prime Minister · KOOYONG, VICTORIA · LP

Mr LAWRENCE:WIMMERA, VICTORIA

Mr TOWNLEY:

Mr Haylen:

Mr SPEAKER:

Mr TOWNLEY:

QUESTION

IMMIGRATION

Mr CREMEAN:HODDLE, VICTORIA

Mr HOLT:LP

QUESTION

GOVERNMENT LOANS AND FINANCE

Mr KEKWICK:BASS, TASMANIA

Mr MENZIES:LP

QUESTION

LAND SETTLEMENT OF EX-SERVICEMEN

Mr WHITLAM:WERRIWA, NEW SOUTH WALES

Mr KENT HUGHES:CHISHOLM, VICTORIA · LP

Dr Evatt:

Mr KENT HUGHES:CHISHOLM, VICTORIA · LP

Mr Whitlam:

Mr KENT HUGHES:CHISHOLM, VICTORIA · LP

Mr Curtin:

Mr SPEAKER:

Mr KENT HUGHES:CHISHOLM, VICTORIA · LP

QUESTION

HEALTH AND MEDICAL SERVICES

Mr DALY:GRAYNDLER, NEW SOUTH WALES

Mr TOWNLEY:LP

QUESTION

AUSTRALIAN WAR MEMORIAL

Mr McLEAY:Minister for Shipping and Transport · BOOTHBY, SOUTH AUSTRALIA · LP

Mr KENT HUGHES:CHISHOLM, VICTORIA · LP

Mr Ward:

Mr KENT HUGHES:CHISHOLM, VICTORIA · LP

QUESTION

ATOMIC WEAPONS

Mr CALWELL:MELBOURNE, VICTORIA

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

QUESTION

POSTAL DEPARTMENT

Mr MINOGUE:WEST SYDNEY, NEW SOUTH WALES

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

QUESTION

FILMS

Mr SPEAKER:

DAYS AND HOURS OF MEETING

ENTERTAINMENTS TAX ABOLITION BILL 1053

Second Reading

Mr CALWELL:Melbourne

Mr Thompson:

House of Representatives
24 September 1953

Mr LESLIE:
MOORE, WESTERN AUSTRALIA

Dr EVATT:
BARTON, NEW SOUTH WALES

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

Mr ADERMANN:
FISHER, QUEENSLAND

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

Mr KEON:
YARRA, VICTORIA

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

Mr PEARCE:
CAPRICORNIA, QUEENSLAND

Mr HOLT:
LP

Mr ANDREWS:
DAREBIN, VICTORIA

Mr FRANCIS:
LP

Mr DAVIS:
DEAKIN, VICTORIA

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

Mr HULME:
PETRIE, QUEENSLAND

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

Mr LAWRENCE:
WIMMERA, VICTORIA

Mr CREMEAN:
HODDLE, VICTORIA

Mr HOLT:
LP

Mr KEKWICK:
BASS, TASMANIA

Mr MENZIES:
LP

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

Mr TOWNLEY:
LP

Mr McLEAY:
Minister for Shipping and Transport · BOOTHBY, SOUTH AUSTRALIA · LP

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

Mr CALWELL:
MELBOURNE, VICTORIA

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

Mr MINOGUE:
WEST SYDNEY, NEW SOUTH WALES

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

Mr CALWELL:
Melbourne

Mr HASLUCK:
Minister for Territories · Curtin · LP

Mr MULLENS:
Gellibrand

Mr WHEELER:
MITCHELL, NEW SOUTH WALES