20th Parliament · 1st Session
Mr. Speaker (Hon. Archie. Cameron) took the chair at 2.30 p.m., and read prayers.
– Yesterday I undertook to examine the position that had arisen as a result of an endeavour by the honorable member for Banks to direct a question to the honorable member for Warringah,. in his capacity as chairman of the Public Accounts Committee. Section 8 of the Public Accounts Committee Act states -
The duties of the Committee are -
The honorable member for Banks endeavoured to direct a question to the honorable member for Warringah in regard to a statement that is fully covered by paragraph (a) of section 8 of the Public
Accounts Committee Act. In any case, if it were the desire of any honorable member to refer a special matter to the Public Accounts Committee under paragraph (d) of the Act, it would be necessary to do so on a proper motion passed by the House. For those reasons, apart from other reasons quoted by May, I rule that the question of the honorable member for Banks is entirely out of order.
– I ask you, Mr. Speaker, whether you have observed the recent development by Ministers of the Crown of clairvoyant powers that enable them to anticipate the details of questions addressed to them by honorable members on the Government side of the House? Have you observed also that the exercise of those clairvoyant powers does not extend to questions asked by honorable members on this side of the House ?
– I witnessed an excellent example of the kind of thing of whichthe honorable gentleman has complained when a question was asked yesterday by an honorable member on his side of the House. I do not want to give the details of the incident, but I remember that the Minister concerned was able to cite figures to the nearest £1 note. If that question was asked without prior arrangement, I say that clairvoyancy does exist in this House. I point out to the honorable gentleman that, whilst I am not an authority on clairvoyancy, I recognize that many of the questions addressed to Ministers are of such a nature that they would require the archangel Michael to answer them in detail.
– My question to you, Mr. Speaker, is based on the question that I desired to ask the chairman of the Public Accounts Committee yesterday; Last week you permitted two questions to be asked of the Leader of the Opposition, although they were questions that did not relate to the business of this House. If I desire to ask the Leader of the Opposition a question at some time in the future, will you give me permission to do so ?
– It is possible that in somecases I have been a little lax. In fact, I have been far too lax in regard to questions. I have said previously that if my interpretation of the Standing Orders is correct, 90 ,per cent, of the questions now being asked should not be asked. I am quite happy to be tolerant about this matter, but I ask honorable members to confine their questions to matters for which the persons so addressed are responsible in this House. In this instance it is the Leader of the Opposition. The exact degree of responsibility is not always easy for me to determine, and it is impossible for me to decide, in advance, the nature of the subject-matter of the questions without notice about to be asked by honorable members of Ministers, the Leader of the Opposition or private members.
– Has the Minister for Commerce and Agriculture any information to give to the House about the administration of the recent pearl fishing legislation and the attitude of the Government of Japan to it?
– Proclamations in conformity with the terms of the pearl fishing legislation have been made. A licensing system will come into operation as from the 12th October. I hare no knowledge of the attitude of the Government of Japan or of Japanese pearling operators in this connexion.
– Will the Minister for Commerce and Agriculture say whether it is a fact that he has at his disposal certain funds derived from primary production pools in the past? Are those funds used at times for the purpose of . spreading knowledge of primary production methods through the medium of demonstration farms? Did the honorable gentleman inform me som? time ago that he would make available the money necessary for the establishment of n demonstration farm in the Moonlii-Ivootinga.1 district of Tamworth, which is, I understand, the largest poultry district in New South Wales outside the metropolitan area of Sydney? Will the Minister inform the House of the steps that have been taken to establish that farm and say whether the New South Wales Government has informed him that it concurs in the proposal?
– The honorable member referred to certain funds that have accrued to primary industries. It is true that there is a variety of funds that have so accrued from time to time, and which have been regarded as for the general credit of certain industries. From those funds the Australian Meat Board, the Australian Dairy Produce Board and various other bodies have been allotted sums of money for the carrying on of extension services or for the demonstration of certain agricultural or live-stock procedures. I believe that the information sought by the honorable member relates more to the special funds that have been made available by this Government during the last two years, and which will be available for at least a five-year period, to supplement the moneys provided by State governments and by the various agricultural industries for the carrying on of extension services. The funds available this year from the Commonwealth will amount to £300,00.0, under certain circumstances. Those are the funds that the honorable member has referred to. I did not say that I would make money available for the particular demonstration that the honorable member mentioned. I said, and I repeat, that if the New South Wales Government should ask that some of the funds which are allotted from these amounts to which I have referred should be made available to conduct a poultry, demonstration of a certain kind, and if that conforms to the general programme of our extension services, I shall certainly approve of the request. However, the initiative must come from the New South Wales Government.
– My question is directed to the Minister for Commerce and Agriculture. In view of the urgent need to increase food production in Australia to meet the demands of our rapidly growing population, is all possible encouragement being given to primary producers to adopt the use of the latest scientific methods of increasing soil fertility?
– Huge sums will bf> made available under the 1953-54 budget to the Commonwealth Scientific and Industrial Research Organization to enable it to conduct research activities which bear on the efficiency and production of the rural industries. To ensure that the results of the research so carried out, and other research, shall be made available to the farmers in the quickest and most comprehensive manner, this Government has initiated the policy to which I referred in answer to the previous question by the honorable member for New England. According to that policy, for a period of five years we are willing to make available not less than £200,000 a year and up to £500,000 a year if State governments and industries will make some commensurate contribution for this purpose. The Government’s action sets the stage for extension activities which will make available perhaps more than £1,000,000 for the purpose the honorable member referred to - that is, carrying to the farmers in the quickest and most comprehensive manner the results of new research and investigation of new products.
– Is the Minister for Territories aware that members of the armed services stationed in Papua and New Guinea are the only residents of that area who are called upon to pay Australian income tax? In view of the concessions granted to all other residents, will the Government take the necessary action to give a similar exemption to members of the fighting services, who since last June have also paid full duty on all goods that they have purchased, thus increasing their living costs ?
– The honorable member who has asked this question is much behind the times. The Government has removed the obligation to pay income tax from members of the armed forces serving in Papua and New Guinea.
– I ask the Minister for Labour and National Service to inform honorable members of the result of the conference recently held in Sydney between the miners federation, the Joint Coal Board and a Commonwealth Minister? What was the result of the conference, what conclusion was reached, and what is the present position of employment on the South Maitland coal-field and on the south coast coal-fields of New South Wales?
– The Minister for National Development was the Minister concerned in this matter. I understand that he met representatives of the miners federation and pointed out to them that if the federation was prepared to open its books in order to ensure the recruitment of additional miners required in the southern coal-fields, the Government would continue to stockpile coal and thus ensure continuity of employment in the northern coal-fields. I do not know whether any agreement emanated from those discussions, but I understand that since the discussions took place the representatives of the southern miners have indicated that their books would be open for a period of one month to make the necessary recruitment possible. So far as I am aware no unemployment of any consequence has resulted from any curtailment of coal-mining operations. As a matter of fact, the employment situation generally, both in the northern fields around Newcastle and in the Port Kembla district in the south, is particularly buoyant. I have received requests for a considerable volume of additional’ labour for both districts. I shall ascertain whether I can obtain any further information from the Minister for National Development which might be conveyed to the honorable gentleman.
– Will the Minister for Health tell me whether it is a fact that more than 70 per cent, of the people have already joined the hospital and medical benefits schemes that are so substantially subsidized by the Government? Notwithstanding the great success already achieved, however, there may still ;be people who either do not understand that they cannot participate in the benefits to be derived from the schemes unless they voluntarily join an approved organization or are carelessly allowing the matter to drift. Will the Minister, therefore, see that further publicity is given to the conditions and benefits of the schemes, so that the maximum number of people will be induced to join them?
– The position so far as New South Wales hospitals are concerned is that during the last quarter of the financial year 1952-53 the proportion of hospital patients who were covered by hospital insurance was more than SO per cent. The percentage in the Royal Prince Alfred Hospital, which is the biggest hospital in New South Wales, was 88 per cent., which is probably a reflection of the position in the community generally. I have just come from a meeting of the hoard of the Canberra Community Hospital at which I learned that in the last quarter of the last financial year the proportion of patients of that hospital who were insured was 57 per cent. Mr. Donnelly, of the board, stated that if employers agreed to collect premiums from employees on behalf of the insurance organizations, as the Australian Government and the State governments do, he was certain that in an incredibly short space of time the percentage of insured patients entering Canberra Community Hospital would rise to more than 80 per cent. Approaches have been made to the various big employing organizations throughout Australia about this matter, and I understand that the practice of deducting premiums from wages and salaries, at the request of employees who wish to participate in this great scheme, is becoming general.
– I ask the Minister for Health whether it is a fact that people are paying taxes for social services, which include health services? If that is so, on what grounds does he justify compulsory membership of medical benefits funds before persons are entitled to receive the Commonwealth health subsidy?
– The people of Australia are paying taxes towards the upkeep of hospitals throughout all the States of the Commonwealth. . About three-fifths of the total cost of every hospital is paid by the government of the day. If assistance had not been given through the hospital benefits fund that the Government has established 500 or 600 beds in the Prince Alfred Hospital and other Sydney hospitals would have become unavailable. A similar position would have arisen at the Royal Melbourne Hospital and other hospitals in Mel bourne. I have received the annual reports of those institutions, and they indicate that the only thing that has enabled the sick persons of this country to be properly treated has been the extraordinary response from people who desire to pay for their own medical care.
– What about compulsory membership of those funds?
– Membership is not compulsory. I believe that nearly every honorable member opposite is a member of one of these organizations - if not they jolly well ought to be.
– I ask the Minister for Supply whether, in view of the excessive turn-over of staff at the aluminium works at Bell Bay, in Tasmania, which is largely due to dissatisfaction and lack of proper management methods, he will give serious consideration to the appointment of a good personnel relations officer at the works, who will be able to bridge the gap in human relations between the management and the staff and the management and the men? Is the Minister aware that personnel relations officers are key men in all American and Canadian industrial projects, and produce harmony, trust and goodwill in industrial plants? If the Minister is likely to visit Bell Bay soon, will he check on this important matter during his visit?
– The honorable gentleman’s question contains at least two fallacies. The first is that there is an unduly large turn-over of labour at Bell Bay; the second is that there is mismanagement there. Neither of these statements is correct. Therefore, the question needs no reply.
– Is the Minister for Civil Aviation in a position to assess the degree of absurdity in the ill-considered allegation of the honorable member for Burke that, subsequent to the rationalization of the air transport services in the Riverina, fares have been increased by 100 per cent, by Australian National Airways Proprietary Limited ?
– The suggestion made by the honorable member for Burke in stating his question was that Australian National Airways Proprietary Limited, since it became the sole authority for the running of the air service in the Riverina, had increased the fare from Griffith to Melbourne from £5 to £10. I replied at the time that I would not believe such a statement unless proof of its accuracy were produced to me. I have since made inquiries and I have ascertained that no increase in the fare has been made. The fact is that, at the end of August, when Australian National Airways Proprietary Limited and Trans-Australia Airlines were both operating services to the Riverina the fare from Griffith to Melbourne was £5 12s. On the 1st September, fares were increased by 2-£ per cent, by both operators, which brought the fare charged by each of them for the journey from Griffith to Melbourne to £5 15s. That fare was charged by both operators until Trans-Australia Airlines ceased its service to the Riverina on the 23rd September. Since then Australian National Airways Proprietary Limited has continued to charge the same fare of £5 15s. and the company has informed me that it lias no intention of increasing it.
– I desire to make a personal explanation.
– Does the honorable member claim to have been misrepresented ?
– Yes. I have been misrepresented by the honorable member for Riverina who said, in effect, that I had intentionally misled the House. I have indisputable evidence that on last Sunday week a lady paid to Australian National Airways Proprietary Limited £10 19s. 6d. as the single fare from Griffith to Melbourne. I am willing to submit that indisputable evidence to the Minister on any occasion he desires me to do so.
– Will the Minister for Immigration state whether it is a fact that Mr. E. V. Elliott, the secretary of the Seamen’s Union of Australasia and three other leading Communists left Australia last week to attend a Communist gathering in Austria? Is it also a fact that they received every facility in their travel arrangements from his department, and in that respect were given the same facilities that are normally accorded to every other traveller who proceeds overseas on legitimate business ? If the answer to these two questions is in the affirmative, will the Minister indicate the real attitude of the Government to communism, and particularly to Communists who travel abroad to attend conferences designed to bring about the defeat of the Western democracies and the destruction of everything decent in our democratic way of life?
– I understand that certain persons, including the secretary of the Seamen’s Union of Australasia, have left for Austria to attend a conference to be held at Vienna. No other travel arrangements were made, nor were any greater or lesser facilities extended to them’ than are made and extended to ordinary citizens of the Commonwealth who seek to go abroad. The same Mr. Elliott was, I understand, an officially accredited delegate to the recent conference of the Australian Council of Trades Unions in Sydney where he was given the same facilities and the same hearing as were given to other duly accredited citizens. If he is a menace to Australian democracy as suggested in the question, the honorable member, with the influence he possesses in the trade union movement, should do everything he can to ensure that this man will be removed from his place of office in charge of the Seamen’s Union of Australasia.
– The Minister for Social Services is doubtless aware of the remarkable event which occurred yesterday in the important town of Gilgandra, where the wife of an ex-serviceman gave birth to quadruplets. Will the Minister inform me whether there are any constitutional means by which the Government can assist this remarkable family which, I understand, is not what is popularly known as well off?
– My attention has been drawn to the news of the event which has occurred at Gilgandra, in the electorate of the honorable member for Lawson, and I am sure that the honorable gentleman will be pleased to learn that Mrs. Hudson and the quadruplets are doing well. The Social Services Consolidation Act does not authorize the department to make a specific grant in such cases, but it has been the practice for the Treasurer to make an act-of-grace payment to families in which quadruplets are horn. I am sure that the House and the honorable member for Lawson can anticipate similar sympathetic consideration in respect of Mr. and Mrs. Hudson.
– Can the Minister for Social Services inform me of the number of rehabilitation centres and out-patient clinics for invalid pensioners that are now in operation? Have any of them been closed since they were established by the Labour Government ? What is the total number of pensioners who are now undergoing training at these centres?
– This is a rather difficult question to answer offhand, but I can tell the honorable member that we have re-organized .several rehabilitation centres. This does not mean that they have been closed down, I cannot say exactly how many people are undergoing rehabilitation at present, but we have put back into active employment more than 5,000 invalid pensioners.
– My question, which is addressed to the Minister for Social Services, arises from certain remarks made by an honorable member of this House, in the course of which he referred to a citizen of Sydney as being willing to pay 2s. 6d. a week to all age and invalid pensioners in West Sydney until such time as they received, to use his words, justice at the hand of this Government. Does the Minister know that the gentleman to whom, the honorable member referred has denied that he ever made such an offer ? Incidentally, the publication of the offer threatens to send a hitherto prosperous citizen to the poorhouse. If that gentleman is not the public benefactor referred to by the honorable member for West Sydney, who is the man? Can he he the honorable member for West Sydney himself?
– Order ! We have reached the point at which I must ask the honorable member for Henty to say whether he is basing his question on a newspaper report.
– I am not basing it on a newspaper report.
– Is the question based on a statement made in committee?
– No. I heard it broadcast by the Australian Broadcasting Commission this morning.
– I was pleased to hear the information that the honorable member for West Sydney gave to the House yesterday.
-Order! I was not in the chair when that took place.
– It was said in the House.
-I was in the chair at all times while the House was sitting yesterday, and I did not hear the honorable member for West Sydney make the statement to which reference has been made.
– I know that he is a little hard to understand.
– -Order ! The Minister should know that I am not in the least hard to understand. I merely say that any reference to a statement of the honorable member for West Sydney that was made yesterday, is out of order because the honorable member’s statement was made in committee.
-Shall I reply to the question, Mr. Speaker?
– Order ! Not if the matter is concerned with happenings in committee.
– It has been stated that a certain gentleman in the electorate of West Sydney intends to pay 2s. 6d. a week to age and invalid pensioners-
-Order ! I must have control of the proceedings of this House. If an attempt is being made to get around a ruling that I have just given in reference to the matter now about to be referred to having been put before honorable members in committee of the whole House, both the question and any answer to it are out of order. There is a time and a place for dealing with this matter. I wa3 not in the chair when the statement was presumably made by the honorable member for West Sydney.
– There seems to be a clear misunderstanding about this matter. A question was asked of the Prime Minister yesterday in the House by the honorable member for West Sydney, about a subject that is now the basis of a question which has just been asked of the Minister for Social Services.
-Order! If that is the matter to which the reference has been made, then it is in order. However, the Minister for Social Services referred to a speech that had been made yesterday by the honorable member for West Sydney. I did not hear any such speech.
– I regret that I did not’ make that plain to you, Mr. Speaker. In view of the fact that the Government is providing £153,000,000 for every year for this purpose, it is a matter for congratulation that some person is coming along to help. As to whom the honorable member mentioned in his question - that is, the person who is distributing this largesse - that seems to be a matter between the honorable member for West Sydney and his God.
– Has the Minister for Supply any information to give the House in respect of the question which I asked him yesterday concerning the cancellation of an instruction that maps of uranium-bearing areas in the Northern Territory be made available to the public ?
– The maps in question were to be issued as one step in the Government’s plan to throw open certain areas in the Northern Territory for the exploration and development of uranium. The maps were to have been issued at mid-day yesterday. At the last minute, however, a question arose on the desirability of releasing for the time being, some of the land included in the maps, so the maps were temporarily withdrawn. I hope that it will be possible to re-issue them in the near future.
– My question to - the Minister for Defence arises out of his recent announcement concerning national service training. Will the effect of the new training schedule result in a curtailment of actual training, as some people are now alleging, or does the Minister consider that the re-arrangement of the nominal instruction period will give recruits a more concentrated and efficient type of training, and thereby place them in a better position than previously to defend this country?
– The object of the re-arrangement of the national service training period is to improve the training of national servicemen. The variations were made on the recommendation of the Defence Committee in the light of experience of the operation of the scheme over the last two years. In the Royal Australian Navy, the longer period of continuous service, and the elimination of part-time training, are designed to secure a higher standard of efficiency to meet naval requirements. In the Army, the main feature is the curtailment of obligatory half-day and night parades. It was found that these parades did not yield results commensurate with the effort involved. Their curtailment will allow officers and non-commissioned officers of the Citizen Military Forces units, who comprise the hard core of the Citizen Military Forces, more time to organize week-end bivouacs and annual, camps and to proceed with their own specialist training. In the Royal Australian Air Force, more concentrated training will now be possible to meet the special requirements of that service, which is essentially a technical service. I am confident that the changes will result in an all-round improvement in national service training.
– Will the Minister for Air inform the House of the Royal Australian Air Force plans for the air defence of Queensland? Has consideration been given in those plans to the need to provide air-fields and facilities close to areas that are considered to be vital to the defence of Australia, the need for strategic air bases to enable the rapid deployment of the air force so that full flexibility may be achieved, the requirements of training and maintenance units to sustain the fully mobilized force, and provision for the expansion of that force after mobilization ? Do the plans include the building in Queensland of additional air strips capable of taking jet aircraft? If so, will the new approved version of the Canberra jet bomber be stationed in Queensland ?
– A complete answer to the honorable member’s questions would require the equivalent of a secondreading speech. However, if I may be permitted to generalize, I repeat the statement by the Minister for Defence that Australia’s general defence policy is based upon the mobility of the Air Force and its ability to concentrate when and where required. For this purpose the Government has decided to build a chain of airfields which will circle the northern part of Australia. Air-fields will be established at Pearce in Western Australia, Cocos Island, Darwin, Manus Island, and Garbutt and Amberley in Queensland. This inter-connecting chain of air-fields will permit aircraft of the most modern types to move at short notice to any point that may be threatened. I realize that the honorable member is particularly concerned a’bout Queensland. I have mentioned that both Garbutt, near Townsville, and Amberley, near Brisbane, will be fully developed. The Government has a policy that provides for the expenditure of over £10,000,000 on these air-fields, but that sum will probably be exceeded because of the effect of prevailing costs. Both Amberley and Garbutt fields will be specially treated. I emphasize the fact that the northern defences of Australia have not been forgotten. The Government’s policy is one of mobility based upon flexibility. The programme will be continued, and both Garbutt and Amberley fields will be developed as quickly as possible. The jet bomber wing will be based on Amberley. No. 10 General Reconnaissance Squadron will be based on Garbutt. The two fields will be brought to the highest standard and maintained in that condition.
– Is the Minister for Immigration aware of recent adverse reports in relation to food and living conditions at the Belmont immigrant hostel near Geelong? Can he tell the House of the true conditions that exist at this hostel and explain the general policy of the Government in relation to such establishments?
– I have had brought to my notice some correspondence on this matter from a limited section of critics in the Geelong area. I think every honorable member, including the honorable member for Corio, who has had an opportunity to see conditions at the Belmont hostel at first-hand, will agree that tho hostel is well conducted. My information is that the food supplied there is of the same high quality that managers of such hostels are authorized to procure. The diet has been recommended by experts, and it should be completely adequate from the viewpoint of nutrition. The independent committee that was established some time ago came to the conclusion that, having regard to the standards of accommodation, food and service provided, the tariff at the hostels was reasonable, judged by comparable Australian conditions. The committee made no special recommendation for improvements in that direction. I point out that, since the committee reported that the charges made at the hostels were fair and reasonable, the basic wage has been increased by nearly £1 but no increase has been made in the tariff.
– Will the Minister for Immigration state how the inquiry that he mentioned recently, about a missing departmental file connected with the illegal entry of aliens into this country, is progressing? When does he expect to make a statement about the matter to the Parliament ?
– While I was in Sydney last Friday I spoke to two of the senior officers of the Commonwealth Investigation Service, who are conducting this particular inquiry together with other officers of that service. They gave me an interim report about their inquiries, and I asked when those inquiries would be completed. They estimated that it would be within three or four weeks’ time. As soon as I am in a position to give useful and authoritative information to the House I shall do so.
– I understand that the Food Industry Sugar Concession Committee is conditionally voting a sum of money for the purposes of publicity for processed and canned berry fruits. Will the Minister for Commerce and Agriculture, through the good offices of the officers of his department who are responsible for trade promotion and publicity, assist the berry fruits industry to make the most economical and best use of that money?
– I assure the honorable gentleman, who displays a continuing intense interest in this matter, that the officers of the Trade Promotion Division of the Department of Commerce and Agriculture are in close and constant consultation with all sections of the berry fruits industry, with a view to assisting it on the lines he has indicated. That assistance will be continued.
– Will the PostmasterGeneral say whether it is the policy of his department to discourage the use of lettergrams? Does the despatch and delivery of lettergrams require any special staff? Is it a fact that some post offices in Australia will not accept lettergrams, even during normal office hours? Is it intended to limit this service to the capital cities?
– It is not the policy of my department to discourage lettergrams, the despatch and delivery of which do not entail the use of special staff or services. Lettergrams are accepted for transmission only at telegraph offices that remain open for business after 7 p.m. In the main, they are the chief telegraph offices in the capital cities and in a couple of dozen provincial centres. A lettergram sent to a post office that closes for business before 7 p.m., can be delivered after 7 p.m. if the sender is willing to pay the cost of telephoning the lettergram from that office to the addressee, but the general practice is to forward such lettergrams to the addressees by post the morning after they arc received at the office of destination.
– Has the Minister for Defence any information to give to the
House about the £60,000 army pay-roll robbery that occurred in Tokyo ? Has the Minister taken any steps to tighten up the control of public funds by his department ? Has any one been arrested for this theft? If not, what progress has been made in that direction?
– The question is obviously one for the Minister for the Army.
– The officer concerned in the robbery has been arrested. Special officers are conducting an inquiry into the organization of the department from which the money was stolen. I am satisfied that, when the results of the inquiry are known, even the honorable memberfor Watson will be satisfied.
– I bring forward a statement advising the Parliament that the Foreign Affairs Committee has forwarded to the Minister acting for the Minister for External Affairs a report of the committee’s functions and findings.
– Order ! I am not sure about this procedure. If the honorable member has a report to lay on the table, that is a matter for the House. If the report has been sent to the Minister,, that is a matter between the committee and the Minister.
Mr- WENTWORTH.- The decision, of the House provides that the committee shall in all cases forward its reports to the Minister for External Affairs, but on every occasion that it does so it shall notify the Parliament that it has so reported.
– Order ! I thank the honorable member, and stand corrected.
Debate resumed from the 9th September (vide page 87), on motion by Sir Arthur Fadden -
That the bill bc now read a second time.
.- The Opposition and the people of this country expected that the Government would take much more definite action to remove what we regard as a completely unjust tax. That i3, the indirect tax levied in the form of sales tax. It is quite true, and I anticipate the argument of honorable members on the Government side in saying this, that the sales tax was originally imposed by a Labour Government. However, that was done in 1930 and the tax was regarded as an emergency measure. Surely 23 years later the people would be justified in demanding that the Government do something to remove this emergency tax. The tendency has been for such forms of taxation to be introduced as emergency measures and then to become permanent features of the taxing machinery.
Let us examine how the scope of this tax has been increased since its introduction. In 1930 sales tax produced £3,000,000. In the pre-war years, when it was levied on a uniform basis of 5 per cent., it swelled the nation’s revenue by about £8,000,000 a year. In the financial year 1949-50, which included the last six months of office of the Chifley Labour Government, and after the country had passed through the difficult war and postwar years, the tax brought in £42,500,000. At the end of 1949 the present Government, which claimed that it stood for tax reductions, was elected to office, and thereafter the whole position in relation to sales tax was progressively changed. As a result of the Government’s first budget, which the Treasurer (Sir Arthur Fadden) introduced in 1950, sales taxation of £57,200,000 was imposed. That figure represented an increase of £14,700,000 over the previous year. By the following year revenue from sales tax had risen to £95,500,000, an increase of £38,300,000 over the preceding year. In 1952-53 receipts were £89,100,000, which represented a reduction of £6,400,000 compared with the previous year. This financial year, according to the Government’s estimates, sales tax will produce £87,700,000, which represents a reduction of £1,400,000 compared with last year.
The Government, believing that that would not be a good figure to tell the public at present, when Ministers are claim ing that the. economy has been stabilized and that the nation’s financial position is good, has declared in its propaganda that sales tax is to be reduced by approximately £8,700,000 this year as compared with last year. I shall explain to honorable members how the Government has arrived at that fictitious figure. It claims that if the present rate of sales tax were imposed during this financial year the Government would receive an amount greater by £8,700,000 than the receipts at present estimated for the year. It therefore has told the public that sales tax receipts are to be reduced by that amount. In effect, however, comparing the Government’s own estimates for this year with the receipts of last year, the reduction would be only £1,400,000. Actually, because last year’s receipts from the tax were greater than the estimate by more than £1,000,000, and assuming that the. same position will obtain this year, it will be found, when the full accounts are available, that there has been no reduction of sales tax. In fact, this financial year sales tax will bring in £45,200,000 more than it did in 1949-50.
– Order ! The honorable gentleman is developing the whole subject of sales taxation.- I do not wish to attempt to restrict him unduly, but it might be useful if we had an understanding now on the scope of the debate, in view of the fact that nine sales tax bills are to come before the House. If it is the wish of the House that we have a general debate on sales tax at this stage, and thus facilitate the passage of the sales tax bills, that is a matter on which I am completely indifferent. I consider, however, that until we have an indication of the scope of the debate the honorable gentleman is getting on to matters that at the moment are outside the scope of this narrow bill.
– It is the wish of the Opposition to have the general debate now.
– That would be satisfactory to me, but I do not know the arrangement the honorable member for Melbourne (Mr. Calwell), who is in charge of the Opposition at the moment, has made with the Vice-President of the Executive Council (Mr. Eric J.
Harrison). I atn perfectly happy to have the debate concentrated, but I should like to know the arrangement that has been made.
– The arrangements are as I have stated.
– That means that there will be one general debate on the sales tax bills.
– I was proceeding to demonstrate that, in the few years since this Government came into office, sales tax receipts have increased. According to the Treasurer’s own estimate the yield this year will represent an increase of £45,200,000 compared with receipts in the Chifley Government’3 last financial year of office. That is an interesting fact, in view of a statement that the Prime Minister (Mr. Menzies) made in the joint policy speech of the Liberal and Australian Country parties during the 1949 election campaign. He said -
We will review the incidence of indirect taxes, which are a huge though sometimes unrecognized item in Australia, upon basic wage and cost of living items and housing costs.
An interesting position has arisen in regard to the Government’s budget proposals. Whilst the Government has argued that costs in Australia are too high - and there is no doubt that sales taxation increases costs of production - it is doing nothing about the general rate of sales tax, which is to remain at 12^ per cent. The general rate is levied on the great volume of goods purchased by the workers. Whilst the Government is doing nothing to reduce the cost of living, or even to stabilize it, the basic wage has been pegged. The workers are therefore in the invidious position of having their wages pegged with no concurrent action by the Government to reduce the cost of living, either by means of reductions of sales tax or, by the complete elimination of the tax, which the Labour party hopes to effect eventually. When the Labour Government left office the position was entirely different from the present position. The general rate of sales tax was then 8-& per cent., compared with the present 12£ per cent. In those days three-quarters of the sales made were subject to the general rate of tax. The highest sales tax rate, under
Labour, was 25 per cent, and that rate covered approximately 3 per cent, of the sales of goods regarded as luxury goods. The Government proposes to eliminate the the 50 per cent., 33J per cent, and 20 per cent, categories, and to introduce a 16$ per cent, category, with the general rate remaining at 12-J per cent. Everybody realizes that the bulk of the purchases made by workers are subject to the general rate of tax. An examination of the list of goods on which sales tax is to be reduced is interesting. Slot machines and totalisators which have been taxed at the rate of 33$ per cent., are to be taxed at the rate of 16$ per cent. That rate is also to be levied upon safety razors, safety razor blades, shaving brushes and other items that are essential to the workers and the community generally. According to the Government, totalisators and slot machines are as essential to the community as are safety razor blades and other shaving equipment.
During the budget debate we described the budget as a rich man’s budget. An. examination of the Government’s sales tax proposals provides every justification for that description. For instance, the rate of sales tax on jewellery and furs is to be reduced from 50 per cent, to 16$ per cent., which represents a reduction of 33-J per cent., whilst the tax on sporting goods is to be reduced from 20 per cent, to 12-^ per cent., which represents a reduction of only 7£ per cent. Surely every honorable member recognizes the importance of making sporting facilities available cheaply to the young men of this country, because the standard of fitness in the community is involved in the ready availability of sporting gear.
I should like the Minister for the Navy (Mr. McMahon), who is in charge of the House, to tell me how the community generally will benefit from the exemption from sales tax of aeroplanes for private use. Who will benefit except rich people and a few members of the Government, including the Minister for External Affairs, who, I understand, flies his own aeroplane? Only a select few people will benefit, because only very wealthy people can afford to fly private aircraft. The ordinary man who uses a private car to go about bis business will still have to pay a high rate of sales tax when he purchases a car. Aeroplanes used for commercial purposes, such as the aircraft that carry honorable members to and from the sittings of the Parliament, are to be subject to sales tax. If honorable members want to make a comparison, they have only to recall that the sales tax on toys, confectionery and ice cream, has been reduced from 20 to 16f per cent., a difference of a mere 3$ per cent.. Indeed, the reduction is so small that I understand it will not be possible to pass on the benefit to the consumers, the little kiddies in the community. I ask the Government why the parents of small children should have to pay sales tax on toy aeroplanes while very wealthy members of the community can purchase and fly their private aeroplanes without the payment of the tax. Such a state of affairs is too ridiculous for words. Washing machines are in the 12$ per cent, category, but washing tubs and scrubbing boards are exempt. The Government promised that the tax on household furnishings would be reduced, but it still remains at 12$ per cent. The Government claims that the budget which was introduced by the Treasurer is a family man’s budget, but whichever way we turn we find that the family man will derive no benefit from these proposals. How many wives of working men are able to buy expensive furs or jewellery? They are more concerned about the high cost of the very necessaries of life. How frequently do young couples who contemplate marriage have to postpone the happy day because they cannot afford to furnish their homes because the sales tax imposed by this Government places household furnishings beyond their means.
When Labour was in office in 1948 the present “Vice-President of the Executive /Council (Mr. Eric J. Harrison), who was then in Opposition, opposed the sales tax on household furnishings. The Labour Government imposed sales tax in an emergency period, and when the tax was originally imposed it did not take from the community more than £3,000,000 a year. The right honorable gentleman said -
The happiness, harmony, and satisfaction of young couples would mean far more to the country in the long run than the obtaining by the Government of even hundreds of thousands of pounds by way of sales tax on these commodities.
That statement was made by the VicePresident of the Executive Council, who to-day sits behind the Government and supports the continuation of this repressive kind of taxation. The honorable member for Petrie (Mr. Hulme) has said that it would not be practicable for the Government to reduce sales tax further or to eliminate it because it has to raise revenue for defence purposes. Is there any member of this Parliament who does not believe that in the final analysis the defence of this country is undertaken by the workers? Its defence is certainly not left to the money-bags. It is known to everybody that the workers bear an unduly high proportion of the cost of Australian defence. The sales tax is not levied on an equitable basis. The family man who has to make the greatest number of purchases because he has dependent children has to pay the same tax on his purchases as is paid by the millionaires and the richest people in the community. The tax imposes an unfair and unjust burden on the workers.
Let me pass briefly to the claim by the Government that it has reduced income tax. The truth is that this year the Government will collect an additional amount of more than £11,000,000 in income tax by comparison with the collections of the preceding year. It has been said that the Government will obtain more money from the proceeds of the sales tax because of ihe increased population. Let me cite the figures in respect of the cost of the tax for each person in the community. When the Labour Government left office sales tax collections represented approximately £5 5s. a head of the population. Under the administration of this Government the collections represented £7 a head in its first year of office. To-day they represent £10 a head of the population, or double the per capita collections when Labour left office and this so called tax reducing government took charge of the nation’s affairs. The Government might contend, as it has done on other occasions, that Opposition members are merely playing up the defects of the tax for political purposes. Surely no political party can take credit to itself for retaining sales tax at the present rate in respect of kiddies’ toys, confectionery and ice cream! As a member of the Labour party I unhesitatingly say that in my opinion a mistake was made when sales tax was first imposed on certain commodities. This Government, which claims to be a tax-reducing government, has had ample opportunity to rectify the anomalies in the legislation but it has decided to retain this intolerable burden on the workers in the community. The Treasurer, who stands up in this Parliament and seeks to justify the continuance of sales tax, said in 1948 -
Is there any parent who would allow his child to grow up through a toyless and partyless childhood, or without some indulgence in sweets or ice cream ?
It is only those of us who have experienced the intense happiness that children get from the simple pleasures, who can appreciate the official niggardliness that taxes them so severely.
This is the right honorable gentleman who has increased the tax on kiddies’ toys, confectionery and ice cream ! Some supporters of the Government have reminded us that the sales tax is imposed not only to obtain revenue to finance defence preparations, but also to force certain undesirable industries out of business. Honorable members will recall that when the Government was setting out to apply its policy of financial restrictions and it imposed excessively high sales tax on the products of certain industries, the Minister for Commerce and Agriculture (Mr. McEwen), frankly admitted that its purpose in so doing was to force out of existence certain so-called luxury industries, particularly those engaged in the manufacture of jewellery and in the importation and manufacture of furs and the like. Yet the very industries which, two years ago, the Government contended should be forced out of existence are the one’s which are now receiving the greatest benefit from this amending legislation. First, the Government did its best to eliminate them ; now it wants to restore them. I suggest that there is ample justification for the statement by the Leader of the Opposition (Dr. Evatt) that this is truly a fits and starts government. The people never know for certain to-day what its policy will be to-morrow.
There is another remarkable feature in this legislation. I do not know whether or not it is significant, but in view of the approaching Royal visit it is, to say the least, remarkable. During the Royal visit Government members probably expect to have an opportunity to display their decorations. One of the items in the list of goods exempt from sales tax is described as “ miniatures, of orders, decorations and medals “. I should like the Minister for the Navy (Mr. McMahon), who is in charge of the bill, to tell me how that exemption will benefit ordinary members of the Australian community. Will it reduce costs ? How will it benefit that section of the community which most urgently needs assistance? Honorable members know that those who will benefit most from it will be the very wealthy members of the community because they are the persons who are awarded most of the decorations. Wealthy people have been able to obtain honours in return for various services rendered. I do not know whether it is true, but I have often heard it said in Australia, that honours can be bought in that way. I well recall the scandal of the Lloyd George War Chest Fund of bygone years. Lloyd George was certainly not a member of the Labour party. A scale of contributions to the Lloyd George War Chest Fund was drawn up showing the honours and awards that could be purchased for appropriate donations to the fund. The awards varied according to the weight of the contribution to the fund. Who is to say that that is not the basis upon which a great many of the recommendations for honours are made in this country? Let us get way from all cant and humbug in this matter. The Government selects the person upon whom honours are to be conferred-
– Order ! The honorable member is getting well away from the sales tax.
– Reference is made in the bill to this matter because the miniatures of these decorations are to be exempt from sales tax. Remissions of sales tax on articles purchased by the community collectively are small, and there are some glaring anomalies. Miniatures of orders, decorations and medals awarded by authority of the Sovereign are to be exempt from sales tax, but the badges of schools and universities and trade unions are to be subject to sales tax at the rate of 12$ per cent. Why has this differentiation been made? The Government intends to tax a school badge at the rate of 12$ per cent., but the miniatures of the decorations that the Minister will buy, and wear at various functions, are to be free of sales tax. This discrimination by the Government cannot be justified and I should like to hear any arguments that can be advanced by honorable gentlemen opposite in support of this decision.
There is no doubt in the world that sales tax is a regressive tax. It is not based on ability to pay. Rich and poor alike pay the same tax upon the purchases that they make. This year a man in receipt of £15,000 per annum will receive a remission of income tax of £17 8s. a week. The pensioner is to receive an increase of 2s. 6d. a week. When the pensioner makes a purchase, he pays exactly the same sales tax on the article as is paid by the man in receipt of £15,000 a year.’ Where is the justification for discrimination of that kind? The Labour party and I, as a member of it, hope to see the clay when an indirect tax of this kind, which is most unjust, will be abolished. In my opinion, the only just way in which to levy taxation is in accordance with ability to pay,- and, therefore, the income of the individual should be taxed regardless of the source from which he may obtain it.
I point’ out again that the wages of the workers have been pegged. If the cost of living increases, their wages will not be subject to quarterly adjustments, as in the past, and their living standards will be reduced. Of course, this Government has set out to reduce living standards. The honorable member for Petrie has referred to the cost of defence. If defence expenditure must be maintained at the present level, he has no objection to a reduction of the worker’s standard of living, either by the imposition of direct or indirect taxes, or by a reduction of his wages. I emphasize that the sales tax is a completely unjust tax, and that the preceding Labour Government had intended to abolish it. The Labour Go vernment was dependent on direct taxes for 63 per cent, of its revenue in one year. But a previous anti-Labour government’s dependence on direct taxation in one year was as low as 16 per cent, of its revenues. The remaining 84 per cent, of its revenues was secured by the imposition of indirect taxes of various kinds upon the Australian community.
The Australian people would be most satisfied to witness the abolition of sales tax, and their satisfaction would be shared by the business community. The small businessman has great difficulty in understanding the sales tax legislation. He is not always thoroughly aware of his obligations under it, and he gets into all sorts of difficulties and trouble with departmental officers, because of the complexities of the sales tax acts. The abolition of this tax would remove a great deal of irritation and burden from honest traders. I have heard complaints from groups of wholesalers, who contend that the existing arrangement creates great difficulties for them. They point out that they have to pay sales tax within 21 days of the end of their trading month, but retailers are given up to 90 days’ credit, so that, in the intervening period, the wholesalers have to carry the sales tax, which they have not collected. Many wholesalers operate on overdrafts, and this sales tax practice creates an additional financial burden for them. In Great Britain, the period allowed for the payment of sales tax is extended to 90 days from the end of the trading month, so that British wholesalers are in a much better position in the administration of the sales tax law than are traders in Australia. I also point out that Australian businessmen are obliged to employ extensive clerical assistance, at considerable expense, to enable them to comply with the sales tax law. This volume of labour should not be tied up in unproductive work of this kind.
I do not claim to know everything about the sales tax legislation, but I guarantee that even members of the legal profession in this Parliament do not understand all the complexities of it. There are assessment acts, rates acts, acts dealing with exemptions and classifications and procedure, besides innumerable orders issued by the Commissioner of
Taxation. It is almost impossible for a trader, no matter how desirous he may be of keeping up to date, to understand his obligations precisely. There is nothing to recommend this kind of legislation, other than from the viewpoint of an antiLabour government, which argues that it is advantageous to levy an indirect tax because the worker is not aware that he is paying it. An anti-Labour government believes that an indirect tax is a method by which money can be painlessly extracted from the workers. It is only when a worker makes a purchase, and the sales tax is shown on the invoice, that he is aware he is paying this impost. Honorable members opposite speak of placing social services on a contributory basis. Have not social services always been on a contributory basis? Nearly every time a worker makes a purchase, he is contributing to Commonwealth revenues by the payment of an indirect tax.
This Government stands condemned for its failure to fulfil the promise thai was made by the present Prime Minister (Mr. Menzies) during the general election campaign in 1949 that if he were elected to office taxation would be reduced. Figures which have been handed to me suggest that this Government, since it came into office in December, 1949, has collected £327,500,000 in sales tax, or an average of £82,000,000 per annum, which is four times greater than the collections under the Chifley Labour Government. The Opposition considers that the Government should honour the pre-election promise that was made on its behalf in 1949 to reduce sales tax, but 1 emphasize that receipts from this source have more than .doubled compared with the receipts from sales tax when the Chifley Government was in office and was dealing with vast and difficult post-war problems. The present Government, although it has been able to reduce company tax to such a degree that Consolidated Revenue will lose £38,000,000 a year, proposes to reduce the sales tax burden on the workers in general by a little less than £1,500,000. Therefore, I contend that the Government should review the situation, and withdraw this bill, with a view to redrafting it in accordance with my suggestions.
Why has not the Government reduced the general rate of sales tax? The other rates have been reduced from 50 per cent., 33$ per cent, and 20 per cent, to 16$ per cent. What justification has the Government for leaving the general rate at 12^ per cent., so that the general community, who make the great bulk of purchases, will be obliged to pay this excessive tax? This is one tax which an incoming Labour government would at once review with the object of immediately lessening the burden on the workers and producers and adjusting its incidence in a more equitable way than exists at the present time, and with the aim, within a limited period, of abolishing this kind of tax. The substantial reduction or elimination of sales tax would do more to restore Australia’s economy than will be achieved by the reduction of company tax. I have heard Government supporters use the ridiculous argument that public loans have failed because the public has not enough money to lend and that, therefore, the Government has decided to reduce taxation upon the very wealthy so that they will have additional funds to invest. The Government, having handed money back to them in the form of tax remissions, now proposes to encourage them to contribute it to interest-bearing loans. This, the Government regards as a substantial contribution to the restoration of the economy! It would be more consistent if the Government, having supported a policy of wage-pegging, were to embark upon a policy of reducing sales tax in order to stay the rising prices of the various commodities that the workers must buy. Then it would have some cause to boast that it had helped to stabilize the economy. In any case, that is Labour’s view. We believe that workers and pensioners should not be asked to pay,, under any system of taxation, more than they are reasonably able to pay. This Government taxes such people beyond the limit of their ability to pay if they are to maintain a decent standard of living.
Statistics show that the larger families are to be found in working class districts. Because workers are raising children who will play a vital part in the future development of the country, they are forced to pay a disproportionate amount of sales tax, whereas the more well-to-do, who have smaller families and therefore need to buy fewer essential items, are let off lightly. From whatever point of view one examines the sales tax, it is a class tax unjustly imposed on the workers and their dependants. I suggest that Ministers and their supporters again. study the policy-speech that was delivered on their behalf in 1949, before they gained power. They should read again the statement that their leader made about the reduction of taxes.
– Especially indirect taxes.
– Yes. He laid stress on indirect taxes and said that, if he became Prime Minister, he would deal drastically with indirect taxation, because it bore substantially on the standards of the basic wage worker. In fact, this Government has increased indirect taxes. For example, it has more than doubled the revenue from sales tax since it has been in office. If the people really want to return to a system of equity in taxation based upon ability to pay, they can do so only by returning the Labour party to power, because this Government does not believe in equity. Notwithstanding the assertions of Government supporters that the Opposition take its directions from some source outside this Parliament, I venture the opinion that the Government parties obey the orders of wealthy interests, which subscribe to their party funds and direct their policies.
The Labour party is free to introduce a policy of tax reduction. Some of the reductions effected by this Government have not been completely justifiable. We do not believe that the benefits that it expects to accrue from these reductions will improve general conditions in Australia. The way to reduce the tax burden in order to give the greatest possible impetus to economic recovery is to lighten the load of the workers, who are the real producers. The sales tax bears far too heavily upon them in my opinion, and, therefore, I submit that the Government should withdraw this bill and reconsider the incidence of sales tax upon the different sections of the community. It should substantially reduce the impact of the tax upon the workers, as its leaders promised in 1949 and as Labour now demands. It is a sorry weakness in our system of government in Australia that we have no provision for the recall of governments. Under our Constitution, a government remains in office for at least three years unless some political crisis forces it to appeal to the electors sooner than that. I am convinced that, if we had a system of recall, the taxpayers would have called upon this Government long ago to account for its betrayal of them by its failure to honour the promises that were made by its members and supporters in the election campaigns of 1949 and 1951.
.- The Government has an excellent record of tax simplification. Two years ago there were six different schedules of sales tax charges. Last year one of those schedules was eliminated, and- now, under the provisions of the 1953-54 budget, the num-ber is to be reduced to two. This will result in a considerable simplification of tax procedure and will be of tremendous benefit to taxpayers generally. In addition, the Government has made provision for substantial reductions of sales tax on many individual items. It is easy for members of the Opposition, like the honorable member for East Sydney (Mr. Ward), to pick out particular items subject to sales tax, compare them with other items, and say, “ Why should this item be taxed as heavily as other items ? “ Such criticism results from an extremely superficial examination of the problems of sales tax. A thorough examination of the science of taxation shows clearly that the main body of tax revenue should bc levied either according to the ability of the individual to pay or according to the luxury nature of the items to be taxed. Under certain economic conditions, it is necessary for legislation to be designed so as to divert resources and materials for the production of non-essential goods to the production of essential goods.
In 1950 and 1951, Australia was subjected to dangerous inflationary pressure. The people clamoured for the Government to take steps to arrest inflation, and the Government, by means of measures which it knew would be unpopular, took the courageous step of diverting man-power and materials from luxury industries, which had plenty of labour at their disposal, to essential industries, which were starved of labour. As a result of this bold action, the economy of Australia has been restored to stability and we can look forward with confidence to an era of great productivity and prosperity. This improvement could not have occurred if the Government had not taken the economic measures that were demanded by the circumstances. The honorable member for East Sydney, with that tory conservatism that is now so popular within the Labour party, seems to think that legislation should be completely static, and that what was right 25 or 30 years ago must be right still. A sound and good government is a dynamic government which realizes that our society is a changing and dynamic society. Such a government will change its policy from time to time to meet the exigencies of the moment. Economic measures that were appropriate two years ago would be totally inappropriate at the present time. Two years ago, goods were scarce, there was an acute shortage of labour and available labour and materials were going into luxury industries rather than essential industries. At the present time, the policy of any sound government should be to encourage all industries to seize the wonderful opportunities now open to them as a result of the restoration of stability to our economy. Two years ago sales tax was imposed at a high rate on certain luxury commodities. That was done not to get more revenue but to help to check inflation and enable our essential industries to get the man-power and materials that they needed. Now that the stability of the economy has been restored, it is sound economic policy to remove those, high taxes on luxury goods. The removal of the taxes will bring the Government not less revenue but more revenue. I venture to say that, as a result of the reductions of sales tax on luxury items envisaged by this bill, the revenue will benefit, not suffer.
It is shallow thinking to compare the reductions of tax on some items with the reductions on others, because the purposes for which the reductions have been made are entirely different. It is true that the Government, in its desire for simplicity, has eliminated a number of schedules that carried very high rates of tax. They were designed to check inflation. Now that inflation has been checked, the schedules have been eliminated, and luxury goods do not bear an excessive tax. Consequently, purchases of those goods will be stimulated, more employment will be provided, and additional revenue will be obtained. “When we examine the reductions of sales tax made during the last two years, we find that the Government has a very impressive record. Before the budget was introduced last year, the highest rate at which sales tax was imposed was 66$ per cent. After the budget had been presented the rate was reduced to 50 per cent. Now it has been reduced to 16$ per cent. So the tax on goods subject to the highest rate of sales tax has been reduced from 66$ per cent, to 16$ per cent.
– They are all luxury articles.
– I agree with the honorable member for Darebin (Mr. Andrews). As I have already explained, a very high tax was imposed on luxury goods solely for the purpose of checking inflation. Now that inflation has been checked, there is no’ justification for the retention of such a high tax, and the Government will get more revenue by reducing the tax to a reasonable rate. Prior to the budget of last year, toilet and cosmetic preparations and toilet requisites were taxed at the rate of 50 per cent. After the budget was introduced, the rate was reduced to 33$ per cent. Now it has been reduced to 16$ per cent. Does the Labour party object to that? It can be, and has been, argued that they are luxury or semiluxury commodities. Nevertheless, in a period of two years this Government has reduced the rate of sales tax on them from 50 per cent, to 16$ per cent. Two years ago, sporting equipment was taxed at the rate of 33$ per cent. Last year, we reduced the rate to 20 per cent., and now we have reduced it to 12$ per cent. Is not that a substantial reduction of the tax on sporting equipment in the space of two years?
– Not necessarily, because sporting equipment is not a luxury.
– Whether we regard it as a luxury, a semi-luxury or an essential, no one can deny that a reduction, of the rate of tax from 50 per cent, to 16$ per cent, in the space of two years is a substantial reduction. Last year, the
Government eliminated the 25 per cent, schedule and reduced the number of schedules from six to four. Now there are only two schedules - the I63 per cent, schedule and the 12$ per cent, schedule. Last year, the Government totally exempted from sales tax certain goods used by universities and schools not carried on for profit. That was a very valuable concession to those institutions. A great number of other items were totally exempted from sales tax last year. They included printed matter for agricultural societies, kiddies’ ice blocks, candles, tooth brushes, babies’ cots, bassinets, babies’ bedding, perambulators :ind stroller covers. The sales tax on dragline excavators used for primary production, wireless sets, radiograms, gramophones and musical instruments was reduced to 20 per cent. This year, other valuable reductions have been made. The tax on sporting goods has been reduced from 20 per cent, to 12$ per cent., and that on toys, confectionery find ice cream has been reduced from 20 per cent, to 16§- per cent. Each year, as the prosperity of the country continues to increase, the Government will be able to continue to reduce sales tax.
Let us not forget that this tax was introduced by a Labour government. It is all very well for honorable members opposite to say now that it is an unfair tux. If it is unfair, why did Labour introduce it? Labour introduced it because it was a tax that brought in a considerable volume of revenue quite quickly. Labour, during its eight years of nile, showed no inclination either to abolish or reduce the tax. It remained for this Government to restore the economic stability of the country and, as soon as it had done so, to make substantial reductions of sales tax. The honorable member for East Sydney has repeated the misleading statement that the revenue from sales tax now is greater than it was during the last year of Labourrule. He has entirely overlooked the fact that there are almost a million more people in Australia now than there were in 1949. He has also overlooked the fact that the people are far more prosperous now than they were after eight years of Labour mismanagement. As there are more people in the country, and as they are more prosperous than they were, there are greater purchases of goods subject to sales tax. So long as this Government remains in office and the prosperity of the country continues to improve, the sales tax will bring in more and more revenue. That is a very desirable thing. I am confident that the Government will continue to reduce sales tax from year to year, and I trust that, with each reduction, there will be more revenue from the tax.
The honorable member for East Sydney has suggested that sales tax should be abolished in respect of a number of items in the 12$ per cent, schedule. I agree that those items should be exempted from sales tax, and I am sure that they will be exempted if this Government remains in office, as I am confident it will do, and the prosperity of the country continues to improve in the way in which it has improved during the last two years. I hope the day will come when we can get rid of the system of sales tax that Labour chose to introduce. The sales tax legislation is only one phase of legislation introduced by the last Laboursocialist Government. I should like it to be entirely removed from the statutebook, but I point out that it will take some time to clean up the mess left after eight years of socialist rule. This Government, in its three and a half years in office, has done a great deal to clean up that mess, and I am certain that in another two or three years we shall see many of these unfair taxes removed from the statute-book.
It is not correct to say, as the honorable member for East Sydney has said, that a tax based on ability to pay is the only fair tax. There is no more justification for taxing people on their incomes, or on their ability to pay, than there is for taxing people who choose to spend a major part of their incomes -on luxury goods or luxury pleasures. If we wish to arrive at a fair and just system of taxation, we must say that the two main principles that should guide a government in levying taxes are, first, a tax based on luxury items, and, secondly, a tax based on ability to pay. In considering the tax on luxury goods, we must consider the rate at which it should be levied in order to produce the maximum revenue. It is obvious that if the tax is too high, there will be a buyer resistance to luxury goods and a reduction of revenue. Therefore, every year of its operation has to be examined according to the conditions of that year, and the tax on luxury items must be considered to be the optimum. That is, that a tax should be imposed which will provide the maximum amount of revenue from the items that are considered to be proper and just subjects for taxation. Having ascertained how much revenue may be derived from that source, we are then able to determine the rate of tax on incomes, based upon the ability to pay, in order to obtain the revenue required for social services and other necessary functions of government. Therefore, I say that honorable members, particularly those of the Opposition, should avoid superficial dogmas which suggest that all taxes should be levied on one source or another. There are certain principles of taxation, and as far as it is possible to do so those principles must be followed. However, the principles that may have applied in the year 1950-51 will not necessarily apply in the year 1952-53 or the year 1953-54.
The Treasurer (Sir Arthur Fadden), through his reductions of sales taxes over the last two years, has shown a very sound knowledge of economic principles. “When it was necessary to put a heavy tax ou luxuries in order to check inflation, he had the courage to do so. As soon as the emergency had passed, he decreased the tax on goods that were useful even though they were not essential. Then, after inflation had been entirely checked, with a view to getting more rather than less revenue, he decided to make a slashing reduction of the higher schedules of the sales tax. Now the Treasurer is virtually saying, “ If you want luxuries you will be able to get them, and you will have to pay only a reasonable tax when you do get them “. The right honorable gentleman has shown a masterly understanding of the current economic position of this country as it has changed from year to year during the last three years. An examination of his budget speech will reveal his guiding principles in each of those years. Two years ago the principle was, “However much it hurts, whatever the cost might be, we must check inflation” and he checked inflation. The guiding principle for last year’s budget was, “ We are now through the inflationary crisis, things are becoming stable, we are now able to relieve the people of some of their burdens although we are not yet in a position to encourage unlimited spending on luxury goods “. This year we find a different principle adopted. The financial policy this year is to increase and stimulate production, and to increase spending and saving. I believe that the budget recently before the Parliament will achieve the objective that the Treasurer has set out to achieve. I commend this bill to the House because it is one that will give greater concessions in sales tax than have ever been given by any government in the history of the Commonwealth. The measure will provide a tremendous stimulus to trade and industry, and the Government will not lose a great amount of revenue by the very valuable concessions that it intends to make.
.- Despite the astonishing excuses for the Government’s actions that have been submitted by the honorable member for Sturt (Mr. Wilson), the fact is that the reductions proposed in this measure are totally inadequate. In fact, the circumstances surrounding the statements by the Government before the presentation of its financial proposals, and the nature of those, proposals when finally put forward, can be summarized in the words of the old fable - “ A mountain was in labour but it brought forth only a mouse “.
The honorable member for East Sydney (Mr. Ward) submitted very illuminating comparisons of the rates of sales tax during the last five years, and in a frantic endeavour to controvert those arguments the honorable member for Sturt has said that the reason why sales tax returns are more than twice as high now as they were originally is because the people are more prosperous. That is not so. The real reason why sales tax revenue is higher to-day is that the general rate of the tax is 50 per cent, higher; and the general rate covers about 75 per cent, of the goods affected by sales tax. When the Chifley Government relinquished office, the general sales tax rate was 8$ per cent. Later it became 12$ per cent., which it is to-day, and that is the reason why the collections from the sales tax have increased from about £42,000,000 in 1949-50 to an estimated £8S,000,000 in the present financial year. Surely that indicates that the argument of the honorable member for Sturt has no substance. The so-called decreases that honorable members on the Government side have said so much about turn out to have merely minor value when they are properly analysed.
I intend to submit logical reasons why the sales tax should not be imposed upon the wide range of goods that are affected by it at present. Under this Government’s policy, basic consumer goods which are used by basic wage-earners and pensioners, as well as others, are taxed at the same Tate as luxury goods that are purchased only by the well-to-do. There is practically a flat rate of tax for many different varieties of goods. Therefore, the present sales tax contravenes every sound principle of taxation. I suggest that in arriving at a decision as to whether a certain method of taxation should be retained, we should consider first, what have been its practical results during its period of operation, and, secondly, how has it been accepted by the people who are required to pay it. When we apply these tests, it will be seen that sales tax can no longer be justified. During the last two or three years business has been stultified, unemployment has increased and sales of goods have fallen. Public resentment has been widespread because of the inability of people to purchase goods on account of the extraordinarily high prices due to the sales tax. The honorable member for Sturt made great play about the fact that the sales tax was introduced by a Labour government. I point out to the House that there are periods in the history of a nation when a sales tax can be justified, and the economic conditions that prevailed in this country in 1930, and which caused the introduction of the tax, are certainly not comparable with the economic conditions of the country to-day.
In 1930, the world was entering a great depression, and the Australian Government was faced with extraordinary difficulties in securing sufficient revenue to carry on. Ours was not the only government in difficulties, because governments all over the world were faced with record deficits as the recognized channels of taxation began to dry up. Because of that state of affairs governments discovered it necessary to open up new channels of revenue to enable them to carry on the essential affairs of their countries. The receipts from income taxes in Australia receded to a low level, and the then government had to increase its income by other means. Consequently, it imposed the sales tax. However, it believed that the sales tax was only a temporary measure and would be abolished when the revenue from income tax returned to normal. But, since the time of its imposition it has tended more and more to become a permanent feature of our financial organization. The Chifley Government recognized the inequity of the sales tax, and progressively reduced it during the last four years of its administration. When the tax was first imposed the general rate was 3 per cent. It increased gradually until at the beginning of the last war it was 5 per cent, and used to return about £8;000,000 a year. During the time of the depression the only tax that had any measure of stability was the sales tax, because it was levied on goods that people had to buy. The income tax was very unstable because of unemployment, the universal low level of wages and the small returns of industry. Thatstate of affairs does not exist to-day, and there is therefore no excuse for the retention of the sales tax at its present high level. Since this Government assumed office the wrath of the taxpayers has gradually increased because of the steady and increasing amount of revenue returned by the sales tax.
In 1939 this country became involved in a war, and the commitment of the Australian Government were greatly increased. It found it necessary to raise money wherever it could, and, consequently, it increased the sales tax. The people had no objection to that because, as a perusal of the speeches of that time in Hansard will show, the Labour members of this House recognized the inequitable incidence of the tax and promised that the rate would be reduced at the end of hostilities. That promise was honoured by a progressive reduction of sales tax during the four years following the end of the war. The general rate was increased to 8$ per cent, which applied to three-quarters of the taxable sales made in the community. The general rate on similar goods is now 12$ per cent., which is why the yield from tax has risen so much while the Government has been in office. The Government expects to collect about £SS,000,000 from sales tax this financial year. It is idle for Government supporters to pretend that the proposed reductions of sales tax will appease the people. They will do nothing of the sort, as the Government will find to its great sorrow at the next general election. The Labour party rightly asserts that under present conditions the imposition of sales tax is not essential. The Government will find it hard to sustain its argument that sales tax is now an inevitable form of taxation. Conditions now differ from conditions 23 years ago when the tax was introduced. Sales tax certainly cannot be reconciled with the tenets that govern equitable taxation. This unnecessary taxing of goods that include the essentials of life runs counter to the principle that taxes should be levied according to the taxpayer’s ability to pay. That is why the Labour party indicts the continuance of sales tax under present conditions.
It is incontrovertible that the less money a taxpayer earns that greater is the proportion of his income that is affected by sales tax. It has been computed that the average person spends 40 per cent, of his income on goods on which sales tax is levied, and that affluent people spend only 5 per cent, of their large incomes on such goods. By its very nature sales tax, as the honorable member for East Sydney (Mr. “Ward) has pointed out, is levied without consideration of personal economic circumstances. The rich man and the poor man pay the same amount of sales tax on essential consumer goods, but they do not pay in sales tax the same proportion of their income. The principle that taxation should be levied according to ability to pay does not apply to sales tax.
Before 1950, the taxpayers had no great objection to the payment of sales tax because the rates were low and the public realized that the Labour party’s policy was to reduce the tax progressively. In fact, the Labour Government reduced it year after year. Under the Labour Government the continuous collection of comparatively small amounts of sales tax on millions of items purchased by a multitude of buyers amounted to more or less painless extraction. The increase of sale3 tax rates by this Government in .1951 changed the public’s attitude to this tax. The 1951 budget, which provided for terrific increases of tax on many goods, incurred the wrath of the people. The public suddenly was startled into a realization of the unfairness of the incidence of sales tax. In order to placate the people and lessen the wave of public indignation the Government in its last budget reduced sales tax revenue by an estimated £6,000,000. This year, after a great fanfare, it will reduce sales tax collections by an estimated £1,000,000. But the Government proposes to retain the whole vicious incidence of the tax, and is making no effort to eradicate its worst features. The only way in which the Government can eradicate the worst features of the tax is to reduce the general rate from 12$ per cent, to S$ per cent., because the general rate is the rate that most affects the majority of the community, as it applies to essential consumer goods.
If the Government’s protestations about relieving the people of tax burdens were sincere it would reduce the general rate of sales tax to 8$ per cent. One of the most deleterious features of sales tax is that under the Government’s proposals, it will still cause a great reduction of the real purchasing power of consumers which, in turn, will mean a diminution of the consumption of goods and services, with consequent unemployment. The Government’s last two budgets will not greatly affect that position because 80 per cent, of the amount to be collected in sales tax this year will still be extracted from the ordinary taxpayers, the people who are struggling to maintain a not very high standard of living in an era of high prices. Sales tax is an increased burden on the people, because it raises prices. I have grave doubts regarding the sincerity of the Government’s professed desire to help the wage-earners. One tangible move it could have made to help the wage-earners is a genuine reduction of sales tax, especially a reduction of the general rate of tax from 12$ per cent, to S;’( per cent. Most wage-earners would rather have a reduction of sales tax than an increase of wages, because under present conditions increases of wages merely force prices up. A reduction of sales tax would mean an increase of the real purchasing power of the consumer.
It is idle for Government supporters to deny that sales tax increases that have occurred since the Government took office have been responsible for unemployment. All honorable members have received protests from various sections of the community, including commercial interests, pointing out that in some instances distressingly large numbers of people have been rendered idle as the result of the imposition of sales tax. The validity of such protests has resulted in some concessions having been made by the Government, but the most outstanding feature of those concessions has been their inadequacy. As the honorable member for East Sydney has pointed out there are alternative methods of securing revenue which would spread the burden more equitably on the people. I agree with him that income tax is the fairest way of collecting revenue. A government should always take into consideration the economic well-being and stability of the comumnity when it imposes taxes. It follows that unless compensatory advantages can be found in a tax which falls inequitably on a large section of the people, then that tax is opposed to sound taxation policy, which should be based on the principle of ability to pay rather than on ability to resist the tax. The adoption of that principle represented a tremendous social achievement which must be safeguarded at all costs. Recognition of it has been achieved painfully and slowly as a result of many years of endeavour on the part of the Labour party and other sections of the community. Sales tax cuts across that principle to a very marked degree. The
Labour party will fight to the death to defend a principle that is approved by the majority of the people. Sales tax must be condemned in all circumstances because it conflicts with sound principle.
I shall devote the remainder of my time to a discussion of the details contained in some of the schedules which, to say the least, bristle with anomalies and injustices. The schedules show that the proposed reductions of sales tax on essential goods are almost infinitesimal. We have been told that the reductions will help the family man. I checked prices in furniture shops in my electorate to discover how the consumers would be affected. They give an indication of how little the purchasers will benefit by the proposed reductions. The price of one wireless set which was £19 19s. 6d. before the budget was introduced is now £19 12s., a saving of 7s. 6d. Another which was priced formerly at £21 will now cost £20 13s. 6d., ‘ a reduction of 6s. 6d. Another, priced formerly at £24 3s., will now cost £23 16s., a reduction of 7a. How will such reductions make any appreciable difference to the wage-earner ? The reduction of prices of bedroom suites as a result of the Government’s proposals is also negligible. Bedroom suites are essential consumer goods. The proposed reduction of the sales tax payable on a bedroom suite priced at £108 14s. 3d. will be £10 19s. 3d. The saving on another suite priced at £90 10s. will be £9 2s. 5d. One practice which I deplore is the practice of furniture dealers, in Melbourne at least, of calculating the selling price of furniture. Sales tax is added to the cost price and then the profit margin is worked out on the total cost. That practice is grossly unfair and should be discontinued. The people affected by this unfair practice are young couples who are starting out on married life. An anomalous position exists in regard to sales tax on essential items of bedroom furniture. The sales tax rate levied on bedding, mattresses, and pillows is 12$ per cent., but blankets and sheets are free of sales tax. Bedding, mattresses and pillows are as essential as blankets and sheets, yet they are taxed. Kitchen wall, sink and floor cabinets are tax free, but tables and chairs, which are as essential in the kitchen, are taxed at the rate of 12$ per cent. A mattress overlay is tax free, hut if the furniture shop happens to call it a mattress protector, tax of 12$ per cent, has to ‘be paid on it. That is too ridiculous for words. Furniture for a threeroomed house is computed to cost at least £400, at least £40 of which is represented ‘by sales tax. Removal of sales tax would benefit young married couples by that amount. Surely the Government should have taken these factors into consideration, and should have taken action to help young couples who are starting off in married life.
Another point on which I join issue with the Government is in relation to the tax on refrigerators and washing machines. I believe that anything designed to ease the burden of work of the housewife is desirable. Nowadays refrigerators and washing machines are necessities, although they may have been considered luxuries in the past. After “all, we must move with the times and use the benefits made available to us as a result of scientific advances. A washing machine is a necessity in the home because it relieves the housewife of a great deal of the backbreaking drudgery of washday. Washing machines, therefore, should be free of sales tax. However, despite representations made to it, which in my opinion were incontrovertible, the Government has foolishly decided to retain the tax of 12$ per cent, on washing machines. An increase of sales tax on furs and other luxuries, and a commensurate reduction of tax on refrigerators and washing machines would have been better for the Government. The housewives will show the Government, at the next general elections, what they think about sales tax on essential items and about the Government’s unpardonable sin of neglecting to make things easier for housewives. All honorable members will agree that the services rendered to the community by housewives are immense. The Government could have expressed appreciation of the part played in the community by women if it had reduced sales tax on commodities that are essential in the home. In other directions also, the housewives of Australia have been given very scant consideration by this Government. Why did it not give serious and sympathetic consideration to the representations made to it by the representatives of the pastry industry for relief from, sales tax? I am satisfied that they submitted a case which could not be controverted. In this industry we have a classic example of decline in the production of essential consumer goods resulting from the sales tax legislation. Pastry manufacturers have stressed the point that the exemption of their products from sales tax would confer a threefold benefit on their industry. First, it would restore a measure of prosperity to the industry ; secondly, it would bring about full employment in the industry; and, thirdly, it would substantially increase the consumption of nationally important raw material foodstuffs. Yet the Government has done nothing about the representations and k has allowed other glaring anomalies to remain unrectified. Representations have been made to me by a company in my electorate which is engaged in the manufacture of puff paste, a product used ia large quantities by housewives for the home baking of such items as pies, pasties, sausage rolls and the like. At present puff paste is subject to the 12$ per cent, rate of sales tax. However, pies, pasties or sausage rolls bought from a shop are not subject to sales tax/ Thus, the housewife who is industrious enough to do a little home cooking is treated unfairly. The Government can in no circumstances justify the retention of the sales tax on this item.
A perusal of the sales tax schedules proves conclusively that the Government has erred considerably in compiling them. It has reduced the tax on luxury goods too greatly having regard to the fact that it is unwilling to reduce the rate of tax on basic consumer goods to 8$ per cent., which applied during the regime of the Labour Government. An examination of the sales tax schedules demonstrates the Government’s complete incapacity to consider, this tax from the viewpoint of the well-being of the average Australian citizen. In this legislation it has merely attempted to appease a section of its supporters which has been very wrathful because of impositions on certain sections of industry. Because of that demonstration of anger on the part of its supporters, it has granted sales tax concessions which, to say the least, constitute blunders of the greatest magnitude. If the Government wishes to do the fair thing it should review the sales tax schedules and withdraw this bill and recast it with the object of reducing the general rate of tax to Si per cent, and of reducing the 16$ per cent, rate to 12$ per cent. The Government has refused to deal with the kernel of this problem. Members of the Government may be of the opinion that it lias every reason to preen itself because they believe that the reaction to this bill will be satisfactory, but I assure them that the representations that have been made to me and to other Opposition members by people throughout the community indicate in no uncertain way that they are completely dissatisfied with the provisions of this legislation and that they will take the earliest opportunity to turn the Government out of office and replace it by one which will stand primarily for the maintenance of a reasonable rate of sales tax and ultimately for its complete abolition. The imposition of harsh forms of indirect taxation is indefensible except in certain circumstances, such’ as an economic depression or a period of war, which do not exist to-day. When a Labour government assumes office it will progressively reduce the sales tax burden on the people and ultimately wipe the tax from the statute-book.
.- I support the bill. At the outset I propose to deal with some observations made by the honorable member for Batman (Mr. Bird). In a general, sweeping statement the honorable member said that there had been no reduction of sales tax on basic consumer goods. By interjection I endeavoured to ascertain to which goods the honorable member referred, but he did not mention them. I assume that he referred to the goods purchased by the average basic wage earner because he had been referring to the plight of the basic wage earner. The honorable member did not even qualify his statement by saying that very few food commodities are now subject to sales tax. I expected him to refer to the subject of ice cream.
– He may well have done so. The imposition of sales tax on ice cream is indefensible.
– I expected the honorable member for Batman to repeat the catcall of the Opposition members that the Government imposes sales tax on kiddies’ ice creams. The honorable member for Ballarat (Mr. Joshua), who has just interjected, being an economist of some repute, or so we are led to believe will undoubtedly be an authority on that subject. Most foodstuffs are exempt from sales tax, as is also clothing, building materials, drugs and medicines, surgical goods and books, all of which are used by the basic wage earner. Let me refer to the position of another element in the community whose needs are completely opposite to those of the basic wage earner. I refer to the primary producer. Almost every article which a primary producer uses on his farm for the production of foodstuffs is exempt from sales tax. That fact alone must reduce the prices of goods which are consumed by the basic wage earner and the general public.
The honorable member for Batman, at a later stage in his speech, referred to: the sales tax on specific commodities such as furniture, refrigerators and home labour-saving devices. Most honorable members on this side of the House agree with his remarks in relation to those commodities, but we realize that it is not yet possible for the Government to exempt them completely from sales tax. From time to time the State Premiers attend conferences of Commonwealth aid State Ministers at which they demand reductions of taxation on the one hand and larger tax reimbursements on the other. Before any of these demands can be considered the Government has to decide from which sources it will collect its revenue.
The honorable member for Batman also referred to what he described as the inequitable incidence of sales tax. Like the honorable member for East Sydney (Mr. Ward) he wanted to know how this legislation would affect per capita collections of sales tax. Honorable members opposite cannot have it both ways. When comparisons of revenue yields or of expenditure are made Opposition members invariably demand that, because of inflation, the figures that relate to the later years be equated to the value of the £1 in 1949. Only as recently as last night when we were discussing another matter an Opposition member said, “ The amounts of money with which we are dealing must be properly equated to money values in earlier years “. If that argument holds good in a debate of that kind it holds good in all debates. In 1949-50 sales tax collections per capita amounted to £5 10s. If Opposition members claim that the value of the £1 to-day is only one-half of the value of the £1 in 1949-50, it would be reasonable to assume that sales tax collections this year per capita should be £11. The latest population figures which I have obtained from the Commonwealth Statistician show that sales tax collections per capita are now a fraction under £10. Thus, on a per capita basis, and applying the argument put forward by the Opposition, sales tax collections are slightly lower than they were it 1949-50.
The honorable member for Batman, in dealing with the sales tax on goods used by the average consumer, said that, as the result of the Government’s sales tax reductions, the cost of a wireless receiving set in his electorate had been reduced by only 7s. 6d. An examination of the schedules show that the tax on wireless receiving sets has been reduced from 20 Der cent, to 16§ per cent., or, in other words by one thirty-third. If the average price of a wireless receiving set is, «ay, 30 guineas, the reduction of the rate from 20 per cent, to 16$ per cent, should result in a saving to the purchaser of £1. One of the factors which has prevented the price of wireless sets from being reduced by that amount is the price-fixing regulations, which have been most viciously applied in all States which are governed by Labour governments. Opposition members do not better their case by citing figures of this kind.
The honorable member for East Sydney (Mr. Ward) has said that whilst, the Government is making great play on its claim that its sales tax reductions will amount to £8,760,000 this year, the actual reductions will amount to a little more than £1,000,000. If the Government collects £8,760,000 less in sales tax this year as the result of the reduction of tax rates, obviously the people will benefit by relief from this form of tax to that amount. Opposition members may juggle the figures as they like, but they cannot get away from the fact that the Government’s sales tax reductions will save the people a total tax bill of £8,760,000. Dealing with the same aspect of the subject, the honorable member for Batman said that the high sales tax imposed on certain commodities had resulted in a diminution of sales. The figures cited by the Treasurer in his budget speech last year showed that, whereas the estimated receipts from sales tax in 1952-53 amounted to £88,000,000, the actual collections amounted to £S9,067,000. Those figures do not uphold the honorable member’s contention that high rates of sales tax have resulted in a diminution of the demand for products subjected to the tax. If the honorable member’s contention were true, collections of sales tax should have been less than the estimated receipts.
The people appreciate the reductions that have been made in the sales tax rates by this Government, and the fact that the number of categories has been reduced from, five to two. Most of the articles on which the’ rate of sales tax has been reduced to 16$ per cent, cannot be specifically classed as basic consumer goods, but the rate is not so high as to prevent any person who wishes to buy such articles from doing so.
I shall now deal briefly with the history of the sales tax in Australia. As Opposition members are painfully aware, the sales tax was introduced by the Scullin Labour Government in 1930 as an emergency measure during the economic depression. The people were in desperate straits and, in the words used so often by members of the Labour party, not thousands but literally hundreds of thousands of people were unemployed. Labour members claimed then, as they claim now, that they have the prerogative of looking after the interests of the workers, yet the Scullin Labour Government imposed the sales tax upon the people during a time of great economic difficulty. I remind Opposition members who protest against the retention of sales tax, that the economic position of Australia and its people is much better to-day than it waa in 1930. The people are relatively affluent at the present time by comparison with their condition 20 years ago. Deposits in the banks exceed £1,000,000,000. Did the people possess in 1930 the facilities and amenities that they have to-day? Of course, they did not ! Yet Opposition members protest against the retention of the sales tax. Those honorable gentlemen who examine the situation objectively will find that the basic requirements of the people, with a couple of exceptions, are exempt from sales tax. I agree with the remarks of the honorable member for Batman on those exceptions. When the Sales Tax (Exemptions and Classifications) Bill 1952 was before the House, the honorable member for Melbourne (Mr. Calwell) complained that knives, forks and spoons were subject to a high rate of sales tax. I suggest that Opposition members should read the sales tax schedules carefully in order to discover the articles on which sales tax has been reduced-
– Knives, forks and spoons are still subject to sales tax.
– Are they? That is interesting. The honorable member for Darebin (Mr. Andrews), before he became a member of this Parliament, held a responsible position in the Education Department of Victoria. He has educated some of the children of that State-
– What has that to do with the sales tax on knives, forks and spoons ?
– I am endeavouring to show that some people have paid little attention to the details of this bill. The Treasurer (Sir Arthur Fadden) has circulated a statement which sets out, inter alia, the goods transferred from the category subject to the 50 per cent, rate to that subject to the 16$ per cent, rate of tax. Those goods include plate and plated ware, but do not include knives, forks, spoons, or other cutlery, or scissors, which are subject to sales tax at the rate of 12$ per cent. I have heard it said repeatedly that such articles have been subject to the rate of 50 per cent, but honorable gentlemen who have made that complaint do not compliment the Treasurer on having reduced the rate this year to 12$ per cent. If the critics of this bill will take the trouble to examine it, they will find that knives, forks and spoons are not subject to the higher rate of sales tax.
– They are still subject to the 12$ per cent. rate.
– Yes, but they are included in the list of goods to be reduced from 50 per cent, to 16§ per cent. However, as will be seen, they come under a different sub-heading to that of last year.
– I did not mention the 50 per cent. rate.
– I have not said that the honorable gentleman did so.
– Then why has the honorable member said that I do not know the details of the bill?
– I merely said that the honorable member for Melbourne repeatedly stated that knives, forks and spoons were subject to the higher rate of sales tax.
I am perfectly well aware that thepeople are in favour of a reduction of rates of sales tax, but I point out that noarticles that are subject to the rate of’ 16 J per cent, can be classed as absolutely necessary basic consumer goods. The- new list of goods which are exempted from sales tax is worth consideration. Some- of them are of immense importance to the people. I am gratified that electricity generators and generator sets and electricwelding sets for use in the agricultural industry are to be exempted from sales tax. This equipment is of vital importance to primary producers in remote areas, who have to repair their own agricultural machinery, so that the cost of production! will not be excessive. I have particularly in mind a farmer whose property is situated 80 miles from the nearest engineering workshop, and even that establishment is on a small scale. Recently, the primary producer purchased an electric welding set, on which he had to pay sales tax. The exemption fromsales tax of the equipment to which I have referred will be of great value toprimary producers in remote districts. I also notice that fruit juice cordials areto be exempt from sales tax.. This remission will appeal to orchardists^ particularly the growers of citrus fruits.
The consumer, of course, will also benefit from this sales tax remission.
– The honorable member forWatson (Mr.Curtin) was highly critical of the honorable member for Sturt (Mr. Wilson) when he mentioned that miniatures of orders, decorations and medals awarded by authority of the Sovereign, or the acceptance of which has been approved by the Sovereign, were to be exempt from sales tax. The honorable member, if he desires to avoid any unpleasantness in this House, should say nothing more about medals, decorations and orders.
– I have all the medals thatI am ever likely to receive.
– Some of us have earned our medals.
– Order! I ask honorable members not to interject.
– I dealt, by way of interjection, with the honorable member for Watson during the speech of the honorable member for Sturt. The orders, decorations and medals cannot be purchased by the honorable member for Watson, regardless of how much he possesses of this world’s goods.
I regret that fox baits have not been exempted from sales tax. At the present time, such articles as fumigators for the extermination of rabbits, poison carts and poison bait layers and poison bait distributors, poisons and other preparations for use in the destruction of rabbits, are exempt from sales tax. I point out that foxes have caused serious losses of sheep and poultry. Primary producers and businessmen in small country towns are prepared to do everything in their power to destroy these vermin, the depredations of which are having an effect on food production. The Government should take this opportunity to exempt fox baits from sales tax, irrespective of their composition
Mr. Curtin interjecting,
– The honorable member for Watson would not recognize a fox bait if he saw one. I should go in fear and trembling if he were in a paddock in which strychnine baits had been laid for foxes, because he is not as cunning as a fox, or even as cunning as he thinks. I appeal to the Government to exempt fox baits from sales tax at the earliest possible moment.
I am not particularly concerned about the rate of sales tax applicable to sporting equipment, but I am gratified that guns, rifles and ammunition, which have formerly been taxable at the rate of 20 per cent., are to be transferred to the general rate of 12½ per cent. The majority of men who live in the country districts are in favour of the exemption of ammunition from sales tax, but I am aware of the difficulties that would arise in policing the exemption. One solution of this problem would be to require the purchaser of ammunition to make a statutory declaration that the cartridges would be used solely in the destruction of vermin which were affecting primary production. This matter has been the cause of a considerable volume of correspondence, and a good deal of debate over a number of years, and I believe that the time has arrived when ammunition for this purpose should be exempt from sales tax. Perhaps the position could be controlled by the pastures protection boards in the various States, although I understand that some States are averse to doing this job, and consider that the primary producers should make their own arrangements in the matter.
I shall not labour this subject because the sales tax reductions and remissions of sales tax speak for themselves. They will be of considerable benefit to the people. The effect of some of the concessions has already been felt, because business people have made corresponding reductions of the prices of their goods. In addition, the Government has received some excellent propaganda, because many shopkeepers display in their windows great notices which read, “ Budget reductions. Come inside and purchase “. I support the bill.
.- I attach great significance to the dearth of speakers on the Government side in this debate. Honorable gentlemen opposite are not rushing for places to-day. I have come to the conclusion that
Government supporters are somewhat ashamed of this hill. The honorable member for Batman (Mr. Bird) has commented that, apparently, some one has laboured and brought forth a mouse. I am inclined to the view that the labourer has brought forth a fish, and lest I be misunderstood, I hastily add that I have in mind the old French adage which states, “When a fish goes bad, it is the head that goes first “. I apply that expression to this bill.
It is unfortunate for the Government that the only defence that has been offered of this bill has been made by the honorable member for Sturt (Mr. Wilson). His stand has gained for him some publicity, although it is out of all proportion to the circumstances. He has conveyed the impression that the economic crisis has passed, and that our inflationary problems have been solved. Nothing could be further from the truth. Inflation is still a danger. I am glad that the Minister for the Navy (Mr. McMahon), who is at the table, has the reputation of being an economist, because he will understand what has been said about this matter, and will make some kind of a reply if he possibly can. The Australian economist, Mr. Colin Clark, informs us, and I understand that the Minister agrees with him, that any tax in excess of the rate of 25 per cent, may be regarded as inflationary. I pointed out in my speech on the budget that taxation last year amounted to 30 per cent, of the net national income, and will amount this year to 27 per cent, of the net national income. Consequently, the effect of the Government’s taxation policy will still be inflationary. Therefore, the Statements of the honorable member for Sturt about buyer-resistance to the purchase of luxury goods are more appropriate to present conditions than to the position some years ago.
The rate of tax on luxury items is to be reduced from 50 per cent, to 16§ per cent., whereas the charge upon necessaries will be unaltered, or only slightly reduced. Thus, the reductions will be completely disproportionate. There would be some excuse for maintaining high rates of sales tax on luxury items, such as jewellery and furs. Certainly the huge reduction that is proposed in this bill cannot be justified in the light of the proposal to reduce the rate on essential items either from 16§ per cent, to 12$ per cent, or not at all. This bill has evoked a great deal of interest, because it will affect so many people unfairly. Members of the Government and their supporters must be well aware of that fact by now. I am opposed to indirect taxation because, it is responsible for a high proportion of government revenue. The estimated income from sales tax during the current year is over £89,000,000. This form of . levy merely shifts the load of taxation from the shoulders of those who should contribute a major portion of the Government’s revenue to the shoulders of people who, in most cases, should not becalled upon to pay indirect taxes in any form. Many people will be unjustly penalized by the considerable burden that” will be placed upon them under the termsof this bill. The new rates of tax and the different categories of goods represent scarcely any improvement upon the sales tax arrangements that applied in 1952-53. The reductions proposed are so slight that the taxpayers are expected to benefit by only £1,500,000. The rates of sales tax will still be one-third higher than they were when the Chifley Government was in office. The Treasurer (Sir Arthur Fadden) said in his second-reading speech -
The cost of all these concessions in a full year is estimated to be £11,700,000, and, for the financial year 1953-54, £8,700,000.
Only one conclusion can be drawn logically from that statement, and it is relevant to the comments that have been made by the honorable member for Sturt.. As the Government expects to obtain almost as much revenue from sales tax this year as it obtained last year, it must anticipate heavier buying during the current, year. The only increase of buying that we can reasonably expect will affect luxury items, which will benefit from a considerable reduction of sales tax. We may assume that two fur coats will be bought this year for every fur coat that was bought last year, but the revenue,’ from the sale of two coats will be greater than was the revenue from ‘ the sale of one coat last year, when the high rate of tax induced buyer resistance. This- trend no doubt will apply also to jewellery- and many other luxuries. Probably, the Government’s estimate of the revenue reduction is extremely conservative, and it is possible that income from sales tax this .year will equal last year’s income as a result of the lower rate applicable to luxury items.
This bill represents another example of the Government’s facility for breaking the promises that it made to the people. In order to gain power, the present Government parties promised the people that they would reduce taxation. In fact, this bill will provide very little relief for the average taxpayer. In that respect, it will be no better than other measures that will be enacted under the 1953-54 budget. Under the new scales of sales tax, the people who, in my estimation, count for most in the community and to whom the greatest relief should be given, will continue to bear a heavy and unjust burden. I have in mind particularly the family man, the taxpayer who at present is most in need of assistance because of the relationship of the basic wage to the cost of living. “We should encourage the family man because, unless Australians have large families, the nation will be forced to incur extravagant expense in order to compensate for its population deficiency. That is why I maintain that the family man should be offered more incentives than any other citizen. This bill will not provide him with substantial relief. That fact is the greatest indictment of the Government’s budget for 1953-54 that could be uttered. Although I am totally opposed to indirect taxation, it would be idle for me to believe that all indirect taxes could be abolished at one fell swoop. That would be too much for even the most optimistic of us to expect. In these circumstances, I am justified in making a critical examination of the categories of sales tax for which the bill provides. I submit that the gradings should have been much more carefully examined than they appear to have been examined, unless, of course, the lists were produced without any regard for the needs of various sections of the community.
By what system of logic did the Government decide that sales tax should be imposed upon almost every item associated with education? Obviously it has not thought of offering incentives to parents who wish to provide their children with good educations. School badges, for example, will be subject to sales tax at the rate of 12$ per cent. I do not know of any sound reason for the imposition of such a charge. The tax on this item will affect almost every parent in the community because it has become the practice of every school, for excellent reasons in my opinion, to make sure that every pupil shall wear the mark of the school. In other words, the school badge has become part and parcel of the educational system. “Wherever a child goes with the badge of his school, there also he carries the example of his conduct. A child, being aware . of this, naturally is careful of his conduct when he wears the school badge. It seems to me that this is a most important item. Other items that will be subject to sales tax are fountain pens and propelling pencils, which are almost essential to modern education. These will be taxed at the rate of 16f per cent. Lunch cases and music cases will be taxed. Surely there is no justification for taxing music cases as though the Government wished to discourage even the cultural aspect of education. Musical training, of course, usually is undertaken voluntarily by the parents. I do not believe that the Government can produce any logical reason to support this levy on education and the promotion of culture in the community. Surely it will not endeavour to suggest that these items are luxuries. Strangely enough they are lumped in the same category as slot and coin machines, and even totalisator and totalisator effects.
Apparently there are public servants who have great difficulty in assessing relative values on the basis of common sense when they draft sales tax schedules. In addition to goods that are used for educational purposes, there are many items in the sales tax schedules that are associated with trades, professions and callings. Fountain pens and propelling pencils, which I have mentioned already, are essential to the pursuit of various occupations. The inclusion of other items can be similarly criticized. Scissors are an example. Marine glasses, as distinct from opera glasses, also are essential equipment in various callings. Yet they will be taxed at the same rate as opera glasses. Watches are used by almost everybody in the course of a day’s work. They should not be regarded merely as an item of personal adornment, but they are to be taxed as though they were luxury items. Worse still, in my estimation, is the inclusion in the schedules of goods that are used in every household. Sales tax will continue to apply, for example, to furniture. This is a glaring example of injustice. Another instance is the inclusion of knives, forks and spoons, which the honorable member for Canning (Mr. Hamilton) incorrectly said would be excluded from the schedules. These are essential to every household, of course. The honorable gentleman said, something about teaching the teacher. I only wish to heaven that I had had the opportunity to teach him when he was younger so that he would not now rush in so impetuously to make misleading statements in this House. The rate of tax on cutlery bought in cases will be reduced to 12$ per cent., which is the rate that will apply to knives, forks and spoons bought separately. Perhaps the Government considers that the industries that produce these goods need no stimulus. If so, I disagree with that view. Of all the industries that have been harshly treated, perhaps the most outstanding is the pastry industry. There seems to me to be no logical reason why it should have been singled out. Strong protests have been received from bakers and pastrycooks against the proposal to levy sales tax on pastry. Undoubtedly the result will be to maintain buyer resistance to this commodity. I have been told that leading hotels have almost ceased to buy pastry, because of the tax imposed on it. Most households have given up pastry almost completely owing to its excessive cost, which is due largely to the tax imposition which the Government has, most illogically, determined to continue. I hope the Minister will explain why the Government has decided to continue to impose sales tax on pastry which is almost a necessity in every household.
The fact that sales tax will still be imposed on toys shows that the Government has very little sympathy for the family man. Everybody knows that toys are necessary in almost every household.
The poorer the household, the greater is the necessity for toys. There is not a parent in the community who can resist buying toys for his children at certain times of the year. At Christmas it is absolutely essential for parents to buy toys, even at the cost of going without a certain amount of food. It is very difficult to understand why toys are still included in the category of goods subject to sales tax. I take it for granted that the Government realizes that our toymaking industry will be faced with severe competition from toys made in Japan and other cheap-labour countries. If there is one industry in Australia that requires stimulus, it is the toy-making industry. The price of toys is almost prohibitive. Dolls and other things that children love so dearly are beyond the reach of parents who are struggling on the basic wage. The continuation of this impost on toys seems to me to be the height of injustice. I agree with the honorable member for East Sydney (Mr. Ward) that the abolition of sales tax on aeroplanes and the retention of the tax on toys indicates a peculiar frame of mind. If ever there was a tax on families, it is the sales tax on toys. While this impost continues, there can be no doubt that the Government has very little sympathy for the family man.
The tax is to be retained on instruments used by bands and orchestras. It is already very difficult to persuade people to join bodies of that kind. Consequently, municipalities are encountering great difficulties in organizing municipal bands or orchestras as adjuncts to municipal life in order to spread culture through the community. . A government that imposes sales tax to the present degree on such instruments is showing a lack of desire to spread culture through the community or to improve the pastimes of the people. It is acting in a manner that may be to the detriment of the economy, because there is no doubt that worthwhile recreation increases a person’s capacity to work. Any money spent on worthwhile recreation would be money well spent.
Reference has already been made to sporting equipment. Apparently, the many protests that have been made against the retention of sales tax on sporting equipment have fallen on deaf ears.
The tax is to he reduced from 16$ per cent, to 12$ per cent. On luxury goods, it is to be reduced from 50 per cent, to 16$ per cent. It is most desirable that there should be an ample supply of sporting goods in any - community. The Government should have shown sympathy for those who desire to encourage the spread of sport, but instead, by retaining the tax on sporting equipment, it is discouraging sport. Many sporting clubs are short of funds, especially those associated with churches. They are encountering great difficulty in paying even nominal rents for football and cricket pitches. Their difficulties will be accentuated by the retention of a fairly substantial sales tax on sporting goods. The honorable member for Canning has referred to the tax imposed on rifles and ammunition. Surely those things, which are valuable adjuncts to our defence system, should receive better consideration from the Governin en t.
I take the strongest exception to the imposition of sales tax on toilet preparations. It seems that the Government regards toilet preparations almost as unnecessary, but I think every honorable member agrees it is desirable that toilet preparations shall be used to a reasonable degree by the womenfolk of this country. In the matter of toilet preparations, the married women want to keep pace with their single sisters, who are much better placed financially than they are, but, due to the rate at which sales tax is imposed upon those articles, many of them find it impossible to do so. It is evident that the Government does not care whether the wives of some of the ordinary working people of the community become slatterns. Toilet preparations are necessary for women, and the Government should take cognizance of that fact. The last straw is the imposition of sales tax upon hairbrushes, hair combs, clothes brushes, hat brushes and manicure sets. Those articles have been treated as if they were of no consequence in the community. Surely we should give people every incentive to make frequent use of things of that kind, if only to improve the hygiene of the community. The retention of the tax on toilet requisites shows that the Government has not made a careful survey of the sales tax field.
I turn now to a matter in relation to which I criticize the sales tax most severely. I agree with the honorable member for Batman that there is not the slightest doubt that a number of retailers in the community, indeed the majority of them, are making a profit on the sales tax. “When I was last in Melbourne, I secured a number of invoices which indicate clearly that retailers are making bigger profits as a result of the imposition of sales tax on some articles. That is a very serious matter. If I remember rightly, it was only a little while ago that Mr. McGovern stated that the Taxation Branch was looking out for cases of that kind. To explain my point, I have selected an invoice supplied by a furniture manufacturer. The article sold cost £72. After sales tax had been added at the rate of 12$ per cent, and a discount of 5 per cent, had been allowed for cash received within seven days, the figure was a little over £77. The retailer’s invoice shows a figure of £72 plus 8$ per cent., which is his immediate compensation for the 12$ per cent, less 5 per cent. That brings the figure up to £18. To the £78 he adds a profit of 42 per cent., or £32 14s. I understand that he is permitted to make a profit of up to 45 per cent. . Then he adds a half of the 8$ per cent., which represents a sum of £3.
– What is that for?
– I do not know what it is for. All I know is that it is there. It will be seen from this invoice that the retailer has based his profit on the price of the article plus 8$ per cent. The higher the purchase price, the higher is the profit made on the sales tax. This is a very serious position. Apparently Mr. McGovern is very interested in cases of this nature. As a result of visits that I made to three or four manufacturers in my electorate when I was last in Melbourne, I can assure him that what was done in the case to which I have referred is the general practice. There is not the slightest doubt that retailers are basing their profit on the price paid to the manufacturer plus sales tax. The Taxation Branch would be well advised to look into this matter.
-Order ! The honorable member’s time has expired.
.-This measure is typical of the general approach of the Government to taxation matters. Very few real concessions have been given to the people in relation to sales tax. Such concessions as have been given relate to a few articles which most people cannot afford to buy. The sales tax proposals that we are discussing show that there is no real desire by the Government to forfeit any revenue from the tax. Propaganda spread by the Government and by newspapers acting surreptitiously on its behalf gives the impression that sales tax revenue will be reduced by millions of pounds. That is not true. Revenue from sales tax this year will be only £1,000,000 less than last year. In 1952-53, the taxpayers of Australia paid £89,000,000 in sales tax, irrespective of their capacity to pay. This year, despite so-called concessions, they will pay £87,700,000, or just over £1,000,000 less than last year.
It is interesting to study the promises to reduce taxes that were made by the Government parties when they were in Opposition and contrast them with the Government’s actions since it came into office. Revenue from sales tax was £42,000,000 in 1949-50. It will be £88,000,000 this year. That represents an increase of 107 per cent. In 1950-51, the Government, elected in the previous year on a promise to reduce taxes, received £57,000,000 from the sales tax. But in the following year, in the horror budget, an extra £35,000,000 was budgeted for from the sales tax, and £95,500,000 was secured. I challenge the remarks of the honorable member for Sturt (Mr. Wilson) that under that budget no effort was made to secure greater revenue from the sales tax. In fact, the 1951-52 budget speech of the Treasurer (Sir Arthur Fadden) indicated quite clearly that an attempt of that sort was to be made. He said -
It is proposed to increase rates of sales tax bo as to secure additional revenue amounting to approximately £35,000,000 during the current financial year (1951-52), or £52,000,000 in a full year.
The receipts from sales tax in that year amounted to £95,500,000, and a reduction of £6,000,000 only was made in the following year. During the present financial year, any remissions that have been given will affect only a few items that not many people can afford to buy. Therefore, sales tax has been practically doubled by this Government which was elected to office on a pledge to reduce it. The assumption in the present measure before the House is that inflation will continue. In 1952-53, because of inflation more than £1,000,000 more was collected from sales tax than was budgeted for. In the present budget proposals it is implicit that the existing rates of sales tax are expected to bring in the Government almost £9,000,000 more, and this will occur at a time when there is a tendency for the total volume of consumption expenditure measured in terms of quantities purchased to decrease. The basic assumption of the sales tax proposals is not that people will buy more goods in the present financial year, but that the inflation engendered by this Government and fostered by nearly every measure that it has introduced, will continue. Therefore, it is clear that far from granting any real remission, the Government expects to collect the same amount of revenue from the sales, tax this year as it collected last year, and it is quite obvious that most of that money will come from the tax on goods that the ordinary people purchase. In any consideration of rates of taxation it is relevant to consider our economic condition in 1949, and the irresponsible promises of the present Prime Minister (Mr. Menzies) when he placed his policy before the people just before the general election of ‘that year. In his policy speech, the Prime Minister said -
We believe that rates of taxation must be steadily reduced as national production and income rise, and as economies are effected in administration. . . . We will review the incidence of indirect taxes, which are a huge though somewhat unrecognized item in Australia, upon the basic wage and cost of living items and housing costs.
That is one promise that the Government has never honoured. Of course, the Government reviewed the incidence of the sales tax on household items, cost of living items and the general range of goods most needed in the community, but it increased the general rate from 8$ per cent, to 12$ per cent. Honorable members should note that that is a mere 50 per cent, increase. Because this Government will go to the country within a few months, it has attempted to camouflage its methods to give the public an impression that some concessions are being made, but it has not reduced the general rate of sales tax on the articles which most people pay most money for. Consequently, although the Government is prepared to reduce the rate of taxation on jewellery and imitation jewellery, which none of the pensioners in my electorate can afford to buy, and on precious and semi-precious stones and so on, it has not shown that it is prepared to reduce the 12$ per cent, rate of sales tax on cakes, pastry, scones, buns, puddings and biscuits. It has, however, reduced the tax rate from 50 per cent, to 16$ per cent, on plate, plated ware, silver and gold articles, but it has not found it possible to remove the 12$ per cent, rate on crockery, glassware, cutlery or soap. The rates of sales tax that have been reduced are, to the extent that they have been reduced at all, one step in the right, direction ; but it is not a significant measure of the relief required at this particular time of our economic life. Whatever reductions have been made are reductions of rates on items of a comparatively luxury character, that were actually imposed by this Government in 1951-52. They were all reductions of rates on goods of a less essential character. The Treasurer said, in his 1951-52 budget speech, that the time had come to impose - effective restraints on the many demands for goods and on the indiscriminate production of less essential goods.
So he then chose to increase the rates of sales tax, particularly on the less essential items. They are the rates that he now proposes to reduce in the hope that the people will consider that he has done something for them. However, it is quite obvious that he has done nothing for them. When one studies the statistics of the Commissioner of Taxation one discovers that three-quarters of the revenue from the sales tax is drawn from the tax on items included in the general rate of 12$ per cent. It should be noted
Again that they are the goods most generally used by the majority of the people. The most necessary form of relief from sales taxation is to reduce the rate of tax on the items included under the general rate of 12$ per cent. But the
Government, in spite of its promises, has failed to do that. We ‘ have only to remember 1946, when the general rate of 12$ per cent, was reduced by the Chifley Government to 10 per cent., and 1949-50, when the Labour Treasurer reduced the general rate to S$ per cent., to perceive how this Government has not made any effective reduction of the sales tax but has perpetrated its own increases. It cannot be too strongly emphasized that 75 per cent, of the total sales tax revenue in 1951 was derived from the sale of articles in the general group, but this Government, instead of reviewing the tax downwards, reviewed it upwards and increased it by 50 per cent, to 12$ per cent., where it still remains. In preparing this budget, the Treasurer had the traditional choice of conservative governments. He could reduce the prices of all those goods which are subject to sales tax and which affect the cost of living of the ordinary man and woman, or he could increase profits. Quite plainly the choice of this Government was to increase profits irrespective of how the subsequently increased dividends were disposed of. Consequently, the Treasurer reduced the sales tax on the majority of the items that most of the people do not purchase. I remind honorable members that that was done in the face of the promise made once again by the Prime Minister in his policy speech during the general election campaign of 1951. At that time the right honorable gentleman said -
This is not the occasion for a new policy. What we ask for is n fair chance to carry out our existing policy in the sound .Australian phrase “a fair go”.
The phrase, “ Give the Government a fair .go “, was bandied around all the electorates, including my own, but the Government has since interpreted it as a. fair go to profit-makers by increasing the sales tax by 50 per cent, on the general range of items, refusing to decrease it subsequently, and now making the choice to increase profits and dividends at the expense of the people generally.
The main aspect of the sales tax legislation is its social effect on the people. All taxes have a social effect, and it appears to me that the approach of conservative governments to taxation is on a different social plane to the approach of
Labour governments. So, whatever relief has been given by this Government, has been given as a reduction of its own increases of rates in 1951. At that time the Treasurer regarded the items upon which remissions have now been made as goods that it was preferable that the people should not purchase, because of their less essential character. The real burden of the sales tax has been left, as usual, on the shoulders of those who are least able to bear it. They are the family men, the pensioners and the superannuated public servants, who are just as much victims of the inflation engendered by this Government as any other section of the community. It is interesting to remember that during the life of this Government the proportion that the sales taxation bears to the total taxation revenue has progressively increased. Under the last Chifley budget £412,000,000 was collected from sales tax, and that amounted to only S.4 per cent, of the total taxation revenue. In the following year this Government increased the percentage to 9.4 per cent, and, in the 1951 budget, it increased it to 10$ per cent. ‘ There were slight remissions in 1952, but the Government still collected from sales tax 10 per cent, of the total taxation revenue. This year the Treasurer proposes to collect the same 10 per cent, of the total taxation revenue from sales taxes, irrespective of the so-called remissions that he has given in his budget.
The honorable member for Canning (Mr. Hamilton) chose to misinterpret the figures given on page 19 of the budget papers. He mentioned the receipts from indirect taxation, including sales tax, per head of population, and tried to show that the figures represented a 7s. decrease per head. I point out that he has chosen completely to ignore the fact that the Australian population is increasing at the rate of approximately 3 per cent, per annum. If that 3 per cent, is taken into account in assessing the taxation per head of the people, we shall discover that in 1952-53 it caused a reduction of sales tax of 6s. a head per annum. Accordingly, 6s. of the 7s. reduction mentioned by the honorable member for Canning has not been caused by any action of the present Government, but has been brought about by the natural gain in population in this country, made up of natural increase plus immigrants. Therefore, it will be plain that the Government has deliberately chosen to increase profits and not reduce prices for the people. All the workers will suffer, as well as the pensioners such as those who live at the Brotherhood of St. Laurence, at Carrum Downs, and Lotus Lodge, at Rosebud, in my electorate, and all the others who live in so many parts of the electorates of other honorable members as well as in my own.
Sitting suspended from 6 to 8 p.m.
– As I was pointing out before the suspension of the sitting, the Government on its own estimate will extract from the people £45,200,000 more in sales tax this year than was collected in 1949-50. That is an increase of 107 per cent, of the rates existing when the Government took office.
– That increase is not of the rate, but of the yield.
– The Government attained power as a result of its promises, one of which was to reduce sales tax and I direct the attention of the Minister for Territories (Mr. Hasluck), who has just interjected, to the statement about indirect taxes that I have already quoted from the joint policy speech made by the Prime Minister in 1949. In that speech the Prime Minister also referred in condemnatory terms to the total increase of annual tax revenue of £200,000,000 that had occurred since the most critical period of the war. Having made such a criticism, the Prime Minister at least should face the fact now that yearly taxrevenues have increased by £370,000,000 since this Government took office and should do something’ about reducing that increase. Sales tax yield now is twice as big as the yield in 1949-50.
The general rate of 12$ per cent, which applies to three-quarters of goods purchased was increased to that rate by this Government from the rate of 8$ per cent, that obtained in 1949. The reductions proposed by the Government are discriminatory. The 50 per cent, rate, which has applied to furs and articles made wholly or principally of fur skins. fur trimmings and fur skins, tanned, dressed, or otherwise processed, is to be reduced to 16$ per cent. The average members of the community,’ including pensioners, people on fixed incomes and almost all superannuated public servants cannot, and do not, purchase furs and fur goods. It is significant that although the Prime Minister promised in 1949 to review the incidence of indirect taxes that affected . housing costs, the Government refuses to give relief to the public by reducing to at least its former level of 8$ per cent, the 12$ per cent, general rate on household requisites, such as floor coverings, blinds and bedding. It also refuses to reduce the general rate as it applies to refrigerators, washing machines, electrical appliances, brooms, brushes and kitchen hardware. If the Government’s promise in 1949 to reduce sales tax on items affecting housing was sincere - and it apparently was not - why has it not reduced the rate of tax on items essential to newly married couples who are faced not only by inflationary prices but also by insecurity of employment, and sorely need relief so far as the price of furniture is concerned? “Whilst neglecting to reduce the tax on such essential items the Government has chosen to reduce from 33$ per cent, to 16$ per cent, the sales tax payable on slot machines, coin machines and token machines. The Government has been gambling with fate, and it is going to lose. It has also chosen to reduce from 33$ per cent, to 16$ per cent, the rate of sales tax payable on totalisators and totalisator equipment; but still no relief for the wage-earners, particularly those on the lower wage levels, who suffer most under this Government’s administration. The Government is maintaining the present rate of tax on exercise books which every parent must buy when children reach school age. The Government is not giving encouragement to people either to get married or to have children once they are married.
I urge the Government to review its sales tax proposals and to alter the concessions it proposes to make. The people who are entitled to concessions are the average people of the community. The Government has already done enough, for. the wealthier classes by remitting taxes worth £33,000,000 payable by big companies. It should withdraw its present proposals and introduce new proposals to provide for a reduction of the general rate of sales tax to the 1949 level. It could thereby prove that at least one of the promises it made in 1949 was sincere. In fact, if it were to keep that promise, it would reduce the general rate to below the level of 8$ per cent, that operated in that year. The few honorable members opposite who have spoken in this debate have refused to face this issue.
– Nonsense !
– We are waiting for some honorable member, perhaps the honorable member for Riverina (Mr. Roberton), who has just interjected, to explain, first, why the Government increased the general rate to 12$ per cent, and, secondly, why it does not propose to reduce it at least to its former level so as to give people on low incomes some relief from the inequitable sales tax burden that they now carry. We want to know how the Government can reconcile its 1949 tax promises with its failure to reduce sales tax fairly, and its actual increase of the general rate. The ordinary people, particularly those on fixed incomes, are suffering under a burden of inflation which is accentuated by increased prices due to sales tax. I criticize the budget and the sales tax proposals as unbalanced and inequitable from a social point of view in their impact on the community, and particularly on the people least able to pay. There is a wide gap between the Government’s treatment of wealthy people, who are to receive the benefit of reduction of sales tax on luxury goods, and its treatment of pensioners, to whom it proposes to give a miserable increase of 2s. 6d. a week. Pensioners have to buy cakes, pastry and other items that are subject to the general rate of sales tax of 12$ per cent.
The Government will face retribution at the next elections for its neglect to give tax relief where it is most needed. Its present proposals shift part of the burden of taxes from the shoulders of the rich to the shoulders of the poor. The pensioner, the family man, the superannuated public servant’, and the taxpayer on a fixed income have been sold out by this Government for the benefit of the big companies.
.- I wish to deal with one point made by the honorable member for Flinders (Mr. Ewert). He suggested that no loss of revenue was involved in the proposed reductions of sales tax. He pointed out that in the current year the estimated total yield of sales tax will be only about £1,000,000 less than last year’s yield and that, in effect, there has been little or no loss of revenue. Honorable members will recall the second-reading speech that the Treasurer (Sir Arthur Fadden) made when he introduced the measure, in which he said that in a full year the saving to the people would amount to £11,700,000, and in the current financial year would amount to £8,700,000. Apparently the Labour party has found a new approach to this matter of tax reduction, which I believe to be a most mischievous approach. Honorable members opposite suggest that because of the increased tax revenue that the Government will receive this year, notwithstanding reductions that are estimated by the Treasurer to be worth to the taxpayers about £11S,000,000, the proposed reductions actually will not have been given. The honorable member for Flinders and most of his colleagues have used that argument. It is obvious that the Labour party completely overlooks certain factors when it makes such assertions. First, Australia’s population has increased over a number of years. It stands to reason that an increase of population means an increase of the number of taxpayers. The statement on national income, which was distributed to honorable members when the budget was introduced, shows that, in 1949 the national income was £2,302,000,000, and rose to £3,250,000,000 in 1951-52, and to £3,579,000,000 in 1952-53. All honorable members who are honest will agree that the national income in the current year will be higher than the national income was last year, which must mean an increase of the flow of money throughout the community, and, even with tax reduction in operation, an increase of total tax revenue. Opposition members are apparently not prepared to take into consideration these important economic factors which we have considered in this Parliament during the last three or four weeks. If they did so they would not make these ridiculous assertions, which, I believe, are made only for the purpose of trying to influence the electorate because there is to be a general election next year, or because they are still endeavouring to promulgate the idea of the likelihood of a depression in Australia.’ The honorable member for Flinders (Mr. Ewert) gave some reason for this belief when he claimed that during this year there would be a tendency for spending on consumer goods to decline. I could not believe that any member of this Parliament, let alone an honorable member who is a chartered accountant, would make such an assertion. It is obvious to everybody in the community that far from the purchase of consumer goods being likely to decline the tendency is in the opposite direction.
It is very interesting to hear Opposition members criticize the sales tax on the ground that it is unrelated to earning capacity. They say, in effect, “ The sales tax legislation is poor legislation and we should not have it. It is a type of tax which should not be indulged in by any government.”
Opposition Members- - Hear, hear!
– I am pleased to hear honorable members opposite assent to that proposition because this afternoon I went to the trouble of looking up the Hansard record of the debates of the 30th July, 1930, in order to ascertain what was said when the first sales tax legislation was introduced into the Commonwealth Parliament. In introducing the legislation the then Prime Minister and Treasurer, Mr. Scullin, said -
It has become necessary for the Government to look for new sources of revenue. The proposed sales tax will tap a source of revenuevery much akin to that exploited by the customs duty.
Despite that interesting comment by a Labour Prime Minister, 23 years latermembers of the party to which he belonged tell us that Mr. Scullin should never have introduced the sales tax because it is a poor type of legislation which should not have been placed upon the statute-book.
– It was introduced in the middle of the financial and economic depression.
– When Mr. Scullin was speaking the honorable member for Moreton (Mr. Francis) interjected and asked -
Is this temporary legislation?
The honorable member for Batman (Mr. Bird) has said that the legislation was introduced in the middle of the financial and economic depression. The honorable member apparently believes that Mr. Scullin intended the legislation to be of a temporary nature. Let me disabuse his mind on that point. In reply to the interjection by the honorable member for Moreton, Mr. Scullin said -
How long it will operate, I cannot say. 1 do not assert that it is temporary or emergency legislation.
So, it is quite obvious that when Mr. Scullin introduced the sales tax legislation in 1930, depression or no depression, it was his intention that it should remain on the statute-book. We all know that generally speaking when taxing legislation is placed on the statute-book, unless it has been introduced by a LiberalAustralian Country party government, it usually stays on the statute-book. Only Liberal-Australian Country party governments give any indication of intention to remove such legislation from the statute-book. That was evidenced last year by the repeal of the land tax. It has again been evidenced this year by the repeal of the entertainments tax. Mr. Scullin went on to outline the history of the sales tax. He pointed out that the tax was not peculiar to Australia and that quite a number of countries imposed what was known as turnover tax. I submit that the turnover tax imposed in many countries at that time was very different from the sales tax in that it applied to the same goods no matter how many times they were sold or resold. That defect was avoided in the Australian legislation. Mr. Scullin pointed out that legislation of this type had been introduced in Germany in 1918, in France, Canada and Czechoslovakia in 1920, in Belgium, Italy, Hungary, Roumania and Russia in 1921, and in Austria, Poland and Turkey in 1925. He said that at one time 24 per cent, of Canada’s national revenue came from sales tax. We also know that a purchase tax has been imposed in the United Kingdom for a considerable number of years. Therefore, when Labour members stand up in this Parliament and in a debate of this kind suggest that the sales tax is a wrong form of taxation they are completely at variance with the views expressed by their former leader who introduced the legislation in the Commonwealth Parliament the first time in 1930. It is a pity that Labour members cannot speak with one voice on matters of great importance.
When Mr. Scullin introduced the original legislation in 1930 he said that one of its principal features was its simplicity in administration, firstly, from the viewpoint of the department, and, secondly, and more importantly, from the viewpoint of the business community. As the years went by we drifted away from that idea, but in the last two years this Government has returned to it. It is desirable to remind honorable members of the words of the Treasurer (Sir Arthur Fadden), when he introduced this measure. The right honorable gentleman said -
The reduction oi the number of rates from four to two will also be appreciated in commercial circles, as this will considerably facilitate the classification of goods for the purposes of invoicing and simplifying the compilation of sales tax returns by those merchants who deal in numerous classes of goods.
I do not think that any one who knows something about business procedure, organization and management will not concede that this legislation will simplify the work done by the business community in the preparation of invoices and information necessary for the compilation of monthly returns of sales tax collections prior to payment of the tax to the Taxation Branch. The commercial community has applauded the Government for what it has done to assist it in one of the onerous responsibilities which have been cast upon it by governments over the years.
During this debate we have heard from Opposition members nothing but words piled on words which mean nothing. T remind them that when they formed the
Government - they were in office for eight years, from 1941 to 1949 - they did not produce a great deal of action in relation to the sales tax. It has remained for this Government to simplify the tax and reduce it. Last year it reduced the number of categories of items subject to the tax from six to four. Previously there had been six categories with rates of 12$ per cent., 20 per cent., 25 per cent., 33$ per cent., 50 per cent, and 66$ per cent. Last year two categories were removed covering the 66$ per cent, rate, which was the highest rate, and the 25 per cent, rate, which was in the intermediate group. Honorable members will recall that on that occasion we reduced the tax on toilet preparations and cosmetics from 50 per cent, to 33$ per cent., and on sporting equipment, toys and radio receiving sets from 33$ per cent, to 20 per cent. Now we have reduced the tax on toilet preparations and cosmetics and on toys and radio receiving sets to 16$ per cent, and on sporting equipment, to 12$ per cent. This year we again abolished two categories so that now we have only two categories subject to tax at the rate of 12$ per cent, and 16$ per cent, respectively.
Opposition members, particularly the honorable member for Flinders, have criticized the Government for not having reduced the tax on goods in the 12$ per cent, category. The Government is moving in the right direction. Its first task was to remove a considerable number of the categories. As I have said, it removed four of them in a period of less than two years. Now only two categories remain. The concessions this year represent a total benefit to the taxpayers of more than £11,000,000. If this Government remains in office for the next few years, as it is sure to do, there will be further reductions of the number of categories until we reach the ideal situation in which we have only one category which, will cover less essential goods. We can then concentrate on the reduction of the general rate. The Government definitely has such a proposal in mind and will give it effect at the earliest possible moment.
This legislation makes provision for certain exemptions from tax. In previous debates on this subject members of the
Labour party have pressed for the exemption of matches. In this bill the Government has totally exempted matches from the tax. Previously, the tax was imposed on children’s colouring books. That item has been removed under this legislation. Opposition members have previously criticized the imposition of sales tax on skim milk and similar preparations. There are very few foodstuff items which are subject to sales tax at the present time. An examination of the reductions made by the Government in this legislation reveals that it includes such items at motor cars, confectionery, ice cream, toys, gramophones, wireless receiving sets, gramophone records, musical instruments, the tax on all of which has been reduced from 20 per cent, to 16$ per cent.
– To what rate did the Government increase the tax on those items before reducing it?
– If the honorable member for Port Adelaide (Mr. Thompson) does not realize, as the people did, that the Government had to find ways and means of increasing the revenue to provide for defence, I cannot understand why his constituents continue to send him into this Parliament. The Government reduced sales tax on watches and clocks from 50 per cent, to 16$ per cent. It has also reduced the tax on fountain pens, travelling bags, handbags, baskets, hampers, cameras, toilet and beauty preparations from 33$ per cent, to 16$ per cent. These are valuable reductions the benefit of which will be felt by the community in general. Whether or not the Opposition is pleased about them does not matter ; what matters most is the reaction of the people of Australia. I believe that the people have reacted most favorably to this legislation which was into.duced by the Treasurer a. few weeks ago. Opposition members have complained that the basis on which the sales tax has been applied to certain items is illogical. I invite any honorable member opposite to produce an authority who can evolve a logical basis for sales tax schedules so that it will not be criticized by any person. Certain Government supporters who have interested themselves in this matter, have examined sales tax schedules over the last three or four years and made representations to the Treasurer. We say definitely that it is impossible for any person, or group of persons, to introduce a logical basis for the determination of sales tax classifications which will not be subject to criticism by some person or section of the community.
I return to the criticism of the general rate of sales tax by the honorable member for Flinders, who is not in the House at the present time. He tried to make great play on the fact that the general rate should have been reduced in the interests of the family man. We have become sick and tired of members of the Labour party seeking to represent, from time to time, the interests of a particular section of the community. All honorable members on this side of the chamber will recall, even if Opposition members have forgotten the fact, that members of the Labour party appeared to be ardent supporters of the wool-growers two years ago. I am not so sure that they were genuine supporters of the wool-growers at that time. Indeed, I am of the opinion that Opposition members were merely shedding crocodile tears for the wool-growers in the hope that they would win one more section to the Labour party, and gain a few more votes at a general election. I believe that members of the Labour party who claim to present the views of the family man in this debate, are merely engaged in a vote-catching expedition. They have no real interest in the family man.
This bill is only a part of the general plan of the Treasurer to obtain the revenue necessary to meet the essential expenditure of a government. The House is perfectly well aware that a government must have a certain amount of money in order to enable it to meet its commitments, and fulfil its obligations. From time to time while I have been a member of this House, members of the Labour party have endeavoured to prove that we need a lot more expenditure, and less taxation. How a Labour Treasurer will balance the budget in future, if the Labour party is ever returned to office again, is completely beyond my comprehension. Labour members have made that assertion year after year, in budget debate after debate. It is not necessary for me to expose the fallacy of that argument, other than to say that a Treasurer cannot increase expenditure and reduce taxation, as suggested by Labour and, at the same time, balance his budget. Opposition members have claimed that taxation equivalent to 25 per cent, of the national income is the maximum that a government should take. The net expenditure required 25.3 per cent, of last year’s national income, and will require, I believe, less than 25 per cent, of this year’s national income. Yet the Opposition claims that the Government must spend more and tax less. That is an impossibility. My only comment is that every honorable gentleman opposite is qualified to be a member of the Taxpayers Association. I regard the Tax.payers Association as one of those organizations which say that a government must provide everything hut must never take a penny from the taxpayer. The honorable member for Melbourne (Mr. Calwell) taunts us from time to time with being the representatives of the Taxpayers Association; but I believe that every member of the Labour party should belong to that association. The people expect Opposition members to show a spirit of realism. The electorate will not return to office a party that is so lacking in realism, and I believe that the Labour party is doomed to stay in the wilderness of Opposition for a long while.
As has been stated by the Treasurer, this legislation will stimulate production and trade. As some Opposition members may disagree with me, I shall remind some of them of some of the results of this legislation on industry during the last few months. Most business houses have benefited by increased sales since the introduction of this budget. I believe that every sports shop can report substantially increased sales of sporting equipment, and that every business which sells radios, gramophones, gramophone records and musical instruments, has had increased sales since the new sales tax schedules were published. This legislation has assisted considerably to restore confidence in the community. I am certain that the people believe that the Government is well on the way to accomplishing its objective, which is to reduce taxation generally. I support this bill wholeheartedly, and I believe that the Government’s policy has the overall support of the people, “who will be our judges a few months hence.
.- The nebulous collection of comments of the honorable member for Petrie (Mr. Hulme) is typical of the negative approach of the Government to the subject of sales tax. This afternoon, member after member of the Opposition spoke on this bill, but honorable members opposite did not rise in their places to defend the sales tax proposals of the Government. Obviously, honorable members opposite were ashamed of the bill. The Government’s approach to this matter is completely negative. A few of its supporters have endeavoured to extract some comfort from the fact that sales tax has been progressively reduced from £95,000,000 in 1951-52, to £89,000,000 in 1952-53, and that collections will be approximately £87,750,000 during the current financial year. Those honorable members say, without much conviction, that the people will be much better off this year than they were last year, and that the Government is treating them in a wonderfully generous manner. That attitude is typical of the negative approach of the Government to the subject of sales tax.
I remind honorable gentlemen opposite that the Chifley Labour Government was in office in war-time, and during the period of post-war reconstruction, but it did not collect more than £39,000,000 from sales tax in any one year. The average receipts from sales tax while the Chifley Government was in office were less than £35,000,000 per annum. Yet the present Government estimates that its collections from sales tax this year will amount to £87,750,000. The people have been mulcted in even larger sums in sales tax by this Government in the last few years. The honorable member for Petrie has tried to prove that the sales of many lines of goods have increased since the publication of the new sales tax schedules, and that the public will benefit from the concessions this year by approximately £10,000,000. However, an examination of the budget papers reveals that the honorable member’s argument is completely without substance. On page 19 of the budget papers are shown the amounts per capita collected by way of sales tax.
This Government imposed a crushing burden through sales tax in the previous year, and the collection amounted to £11 3s. 7d. a head of the population. The Government then made what it regarded as a most generous gesture, and reduced the sales tax by 9 per cent, so that the collection per capita would be £10 3s. 8d. Honorable members should not overlook the fact that the receipts per capita cover every man, woman and child in the community. Think what that means to a man with a dependent wife and half a dozen children! The burden is terrific, but the Government does not take that fact into account. What is the effect of the reductions under this bill? The collections per capita will be reduced by 7s. to £9 16s. 8d., or less than 3$ per cent.
The truth is that the people will receive little benefit from what appear to be large reductions of sales tax. The fact that the rate of 50 per cent, is to be reduced to 16$ per cent, on some lines of goods will not mean a great deal to the family man. What does the public buy? On what articles does the public pay sales tax? It does not matter what the public does not pay sales tax on; we must approach this matter in a positive way and ascertain the articles on which the public does pay sales tax. The list of goods subject to sales tax is not published in the budget papers. The Government has obvious reasons for withholding that information from the people. However, a huge list of goods is subject to the sales tax. This Government increased the general rate from 8$ per cent, to 12$ per cent., and the bulk of the items which the people buy are subject to the general rate. As I have stated, the Government is careful not to specify the articles subject to the general rate.
– Tell us about them.
– I shall do so. The people pay sales tax on cakes, pastry, scones, buns, puddings and biscuits and other foods such as jelly crystals, custard powders, junket tablets, spices, curry powder, pepper, salt, imported canned fish. Aerated waters, cordials and other beverages are also subject to the impost. Even soap has not escaped. Every family uses a considerable quantity of soap in the course of a year, and must pay sales tax on that important- item.
Crockery and glassware are subject to sales tax. “What family gets by without breaking a few cups and plates each year? Sales tax is levied on furniture and household requisites, including floor coverings and blinds, which make a home a little brighter. Then blinds, bedding, and sewing machines are subject to this impost. What family can do without a sewing machine? Electrical appliances, brooms, brushes and kitchen hardware have not been forgotten by the Treasurer. Sales tax is also levied on all printed matter in the form of programmes, advertising matter, catalogues, business cards, tickets, posters, maps, stationery, paper and paper products including paper bags, wrapping paper, and paper patterns from which the housewife makes frocks for herself and the children. Sales tax is even imposed upon bicycles which the workers use as a cheaper form of transport to and from their places of employment. The worker also pays sales tax on bicycle tyres and tubes.
Rubber goods, hot-water bottles, rope and cordage, canvas goods, hand tools, including garden tools and lawn-mowers are subject to sales tax. Can there be any wonder that the sales tax will yield approximately £87,000,000 during the current financial year? The people are paying more than twice as much by way of sales tax as they paid under the Chifley Labour Government.
The honorable member for Petrie criticized a former Labour Prime Minister, the late Mr. Scullin, for having introduced the sales tax in 1930. I remind the honorable member that the Scullin Labour Government was compelled to introduce that tax during the worst economic depression that Australia has known in an effort to fulfil his administrative commitments. Some honorable members opposite have criticized the Chifley Government for having retained the sales tax. Have they forgotten that the Chifley Government bore the heat and burden of World War II. and the post-war era? The Chifley Government was beset with troubles which had been unknown in Australia in the past. The present Government has enjoyed the fruits of four bountiful seasons, with record high prices for our primary commodi- ties. How dare honorable members opposite criticize the policy of the Labour Government in view of the conditions that it encountered? Criticism of that kind is shameful.
The honorable member for Batman (Mr. Bird) and the honorable member for Darebin (Mr. Andrews) spoke of pastry goods, which are subject to sales tax at the rate of 12$ per cent. This is a. most unfair levy which should have been reviewed by the Government. There is no excuse for the Government’s failure to rectify the anomaly because I and many other honorable members have frequently written to it on the subject. What family does not buy something from the pastrycook now and then? There is no reason for maintaining the tax on these goods. Pastrycooks are in serious difficulties at present, partly because of the high price of eggs, which are more expensive to-day than ever before. The Government does not seem to bother about such problems, but the pastrycooks are having plenty of bother. Sales tax on pastry goods is not assessed on the finished products. The pastrycooks have to pay sales tax on the flour, eggs, butter and other ingredients that they use. They receive no allowance for wastage, although very often they have to throw out spoiled batches of goods and frequently do not sell everything that they bake. Everybody knows that, when a pastrycook’s shop is closed each day, certain lines remain unsold. These goods have to be discarded because the public will not buy stale pastry, but the pastrycooks must pay tax on them and bear the loss. This is a very serious matter. Pastrycooks have great difficulty in attracting custom under present conditions. At one time, a lucrative part of their business consisted in selling trifles and cakes to hotels. But hotels do not pay sales tax on the ingredients of such confections, and so they do not buy them from pastrycooks any longer but have them baked in their own kitchens. This has had a considerable adverse effect on the pastry business. Because of this, many pastrycooks are putting off hands, and this no doubt is the reason for much of the unemployment, in Australia to-day.
Pastrycooks also have other troubles. Their businesses are not profitable, and every pastrycook’s shop in the electorate that I represent is now up for sale.
Government Supporters. - Oh!
– They have great difficulty in retaining their premises. Other businesses that are favoured by the Government are progressing, and they are trying to obtain extra shop space. I have in mind particularly clothing shops, the owners of which are competing for pastrycooks’ premises which, as a rule, ure situated in the best trading positions. All these troubles involve pastrycooks in extra expenditure amounting to thousands of pounds.- The work of assessing sales tax charges on pastry goods is considerable, and this necessarily adds to the retail prices. The Government is showing a minimum of common sense in neglecting such anomalies in the sales tax system. Apparently it is merely trying to extract as much as possible from the people in the hope that the people will not notice what is happening. Well, the people will soon realize what it is doing. The housewife who looks at the goods in a pastrycook’s window and notes the prices almost invariably says to herself, “No, I will not have those; I can make them cheaper at home “. She does not know as a rule that the high prices in the shop are largely due to the sales tax. The removal of this unjust imposition would make life easier for her because she would be able to buy cakes and pastries economically and would be relieved of the obligation to bake them at home.
The Government has placed emphasis with great gusto on certain items in its revised list of sales tax classifications and exemptions, and has boasted that the reductions and exemptions will be of great benefit to the community. The truth is that the proposed alterations have not been well considered and will not be of much help to the people who provide most of the sales tax revenue. If it honestly wanted to provide worth-while relief for the community at large, it would withdraw these lists and revise them. Statement C, which has been circulated to honorable members, sets out the list of goods to be transferred from the 20 per cent, tax category to the 16$ per cent, category. It includes confec tionery and ice cream. Ice cream costs 4d., 5d., or 6d. according to size. What difference will a sales tax reduction from 20 per cent, to 16$ per cent, make to the retail price of ice cream ? Obviously, the price will not be reduced even by one halfpenny.
Mr. Wheeler interjecting,
– Order ! I ask honorable members on my right to maintain order. A spirit of levity has come into the House in the last twenty minutes. This is not the place for it.
– Statement B lists the goods to be transferred from the 33-.,- pei- cent, category to the 16$ per cent, category. Other members of the Opposition have already mentioned watch chains, bands, straps and parts. Everybody who wears a wrist watch knows that a new wrist band is needed for it every year. Yet we have to pay sales tax on such items. I have consistently complained of the sales tax on fountain pens and propelling pencils, which are used by school children and by almost everybody else in the community. They are essential items, and the tax on them is an injustice, particularly to parents of large families. They should be completely free of sales tax, like university goods. Another group of items in this list consists of handbags, purses and shopping bags, all of which are items of everyday use. The whole community suffers from this imposition. Obviously the Government has not attempted to lift the burden of sales tax from people in ordinary walks of life. Toilet and beauty preparations, cosmetics, powders and so forth all will bear sales tax at the rate of 16$ per cent. All these commodities are in everyday use, and there is no reason why they should be taxed at such a high rate. The Government should direct its energies to reducing sales tax on goods that are so widely used. The same objection applies to the sales tax on razor blades, shaving brushes, and shaving sticks. I am sure that all honorable members will agree with me on this point.
Statement A in this remarkable collection of sales tax variations relates to goods that are to be transferred from the 50 per cent, tax category to the 16$ per cent, category. All of these goods are luxury items, very few of which can be afforded by the ordinary working popula-tion. It is completely specious to say that any benefit will accrue to ordinary men and women from the reduction of the tax on such articles. The Government’s proposals sound impressive, but they will be of little advantage to the community. Exemptions, whether the goods affected are used much or little by working men and women, are important. The more exemptions there are the better will it be for the people. However, some of the items in the list of proposed exemptions appear to be merely left-over articles that were not included in the list of clothing items that this Government previously exempted from sales tax. No doubt the Government was prompted by the clothing industry, with which it is very friendly, to extend exemption to these items. Some of the proposed exemptions are intended to apply to the products of industries that are in financial difficulties. I do not object to helping any industry that is in trouble, but there is no justification for exempting goods from sales tax on that ground. In the time of the Chifley Government, industries did not have such difficulties. The Government has sold out the family man, the retired man, the pensioner and all others on fixed incomes. The proposed reductions and exemptions will not benefit anybody of any consequence in the community.
The Labour party’s approach to sales tax is completely positive. It believes now, as it always has believed, in reducing the incidence of indirect taxation and increasing the incidence of direct taxation. This policy is much fairer than the Government’s policy, and the Labour party can be relied on to continue to pursue it. The honorable member for Petrie talked about removing this, that and the other form of taxation. Every intelligent Australian will agree that the first thing that ought to be removed is the Government. When that is done we shall get somewhere.
.- The honorable member for Ballarat (Mr. Joshua) concentrated most of his remarks on what he described as the injustice of the sales tax on pastry goods.
– That argument is stale.
– I should be inclined to agree with the honorable member but for the fact that the best pastrycooks do not pay sales tax. I refer to the “ mums “ and their home cooking. Although I am filled with sympathy for the poor unfortunate pastrycooks who are required by circumstance to live in the electorate of Ballarat, I am certain that my sympathy is not needed to the same degree by other pastrycooks. For example, in Queensland, where there has been considerable uncertainty in connexion with the future of the wheat and flour trade, with the result that pastrycooks have been operating under a quota system, there has been strong pressure from most pastrycooks in favour of increased wheat rations. They are not losing money because of the sales tax, but, in fact, are prospering. The honorable member for Ballarat has wasted his eloquence in a cause that is undeserving of his, at times, very much warmed-up sympathy.
Most members of the Opposition who have spoken in this debate have referred to the fact that the Government expects sales tax revenue to amount to £87,750,000 in the current year, whereas annual revenue from sales tax when the Labour Government was in office was only a few million pounds. The argument that they advance, in effect, is that, if tax collections from 100 people in one year amount to £100 and from 200 people in the succeeding year amount to £100 the burden on the individual is just as great in the second year merely because total receipts are the same as in the previous year. That argument falls to the ground. It is to the credit of the Government that it has collected over £87,000,000 in sales tax, because sales tax collections reflect the turnover of goods in the country. The present revenue from the tax indicates the degree of prosperity to which the people of Australia have been lifted and shows that their spending capacity has been increased by the fine efforts made by this Government since it came into office.
The Government increased the rates of sales tax. It explained why it had done so, and the explanation was accepted by the people. It regarded rubber tyres as being of far more importance to the people than tennis balls, and it did its best to encourage the production of tyres rather than of tennis balls. It realized that the production of agricultural machinery and capital equipment for industry, which could be used to create and expand employment, was far more important than extra toys for children. The increases of sales tax were designed to encourage industry to expand in directions that would improve the stability of the economy. Even honorable members opposite will not deny that the Government’s efforts to expand production have been tremendously successful. The results of the increases have justified the Government’s decision to make them. !N”ow sales tax is being remitted as far as possible. 1 ask honorable members opposite to remember that the tax is not imposed upon the -basic needs of the community. We have heard a lot from them about the family man. They have talked about the heavy burden imposed on the individual because he has to pay sales tax on a. pair of scissors, a hairbrush or a school badge. Their argument is based on the assumption that the payment of sales tax on articles such as those imposes a heavy burden on the people. They have criticized the Government because a pensioner or a superannuated civil servant is required to pay sales tax on an article which, having regard to the goods that he has accumulated at his stage of life, he may not need. Ice cream has been the subject of a great cry. Honorable members opposite have criticized us because we have not reduced the tax on ice cream to a greater degree. Let me remind them that, an ice cream costs from 4d. to 7d. We pay 4d. or 7d. for a teaspoonful, if that, of froth and bubble. I admit that ice cream has a certain nutritional value, but if we spent 7d. on milk or milk products we should get something of real value as a food. I should like ice cream to be much cheaper, but. we must be realistic in these matters. If we reduce the sales tax on ice cream so that children can buy a little more froth and bubble with their money, shall we try to make up the revenue lost by that reduction by imposing sales tax on milk?
All of the basic needs of a family are free from sales tax. A housewife does not buy a pair of scissors every day, but she uses bread, butter and tea every day. Those articles are not subject to sales tax. The tax is imposed only on things that she buys infrequently. The family mau pays sales tax only on articles that aru nearly in the luxury class. The higher the price of an article, the higher is the sales tax paid on it. Too much emphasis cannot be laid on the fact that every-day purchases are exempt from sales tax. The howl by the Opposition because safes tax has not been removed from articles such as hairbrushes, scissors and school badges is so much silly nonsense.
I note with great pleasure that the Government has included in the list of exemptions from sales tax a number of products in respect of which representations were made to the effect that the application of the tax to them imposed a burden on some sections of the community. In giving relief from sales tax, obviously the Government has acted upon the principle that when anything is required for use in primary production or in manufacturing industries it shall be exempted from sales tax as far as possible. The Government takes the view that if an article is used in a production process, the burden of taxation should be removed from it as far as possible. A noteable item in the list of exemptions is plant used on farms to generate electricity and power for farming operations. That exemption is a move in the right direction. It is something to which the Opposition cannot properly object, because every piece of equipment installed on a farm means an increase of primary production and, therefore, an increase of the wealth of the country and of our capacity to buy from overseas more of the goods that we require. The policy of the Government is to encourage production in both primary and secondary industries.
I am sorry that no provision has been made for a revision of the system of application of sales tax. The tax is charged on the wholesale price of an article. Generally, that price includes transport costs and other charges. Under the present system, people in South Australia are obliged to pay more sales tax on a shirt made in Melbourne and bought in, say, Adelaide, than is paid by people in Melbourne. That is due to the cost of transporting the shirt from Melbourne to Adelaide. States that have not been developed industrially obtain most of their manufactured goods either from the eastern States or from overseas. Western Australia, being a patriotic State, buys all that it can buy from the eastern States, but due to the operation of sales tax, a heavier burden is imposed upon taxpayers there than is imposed upon those in the eastern States. The remedy is simple. I urge the Government to investigate the method of applying sales tax. If the tax were levied on the cost of an article at the port of entry or the manufacturer’s store, consumers throughout Australia would be treated on the same basis. This1 matter is becoming more important because many of the manufactured articles used in Western Australia are carried there by air. Air freights are considerably higher than sea or rail freights. Therefore, the sales tax paid in Western Australia on an article made in, say, New South Wales, is much greater than that paid in the eastern States.
I point out to honorable members who represent outlying country districts in Victoria, New South Wales, Queensland and South Australia that the people they represent in this Parliament are required to pay a higher sales tax if goods not produced locally are sole wholesale in those districts. If an article is sold wholesale only in the capital city of the State in which it is manufactured, purchasers in country districts do not pay sales tax on the freight charges, because freight is treated as a separate item. But let us assume that a wholesaler in, say, Perth, buys goods from an eastern State. He sells them to retailers at a certain price, and makes no mention of freight charges, although they have been included in the price. In such a case, sales tax is charged on the wholesale price, which includes the freight charges.
I turn now to a matter mentioned by the honorable member for Darebin (Mr. Andrews), which was brought to light at a meeting of the Public Accounts Committee. I refer to the grossly un- scrupulous and dishonest practice of wholesale-retail firms charging sales tax on the retail price of goods sold by them direct to the consumer, and remitting to the Government only sales tax based on the wholesale price. Even firms that remit to the Government the full amount of sales tax that they have collected are robbing the purchaser by taking from him more money in sales tax than he should pay. This offence is very prevalent among motor car spare parts distributors and hardware firms which deal on a wholesale basis with agencies or retail stores, and charge the agencies or stores retail prices, subject to a trade discount of 20 per cent, or 33$ per cent. The articles are sold to the retailers at the full retail price, less a trade discount, and sales tax is levied on the basis of the retail price, less the discount. But if a man goes to one of those firms and buys an article over the counter, he is charged the retail price, without a discount, and is asked to pay sales tax based on the retail price. Mr. McGovern admitted that that was occurring, but he said that, unfortunately, it was very difficult to police the law. I ask him, as I ask this Government, to impress upon the people that they al’e not required to pay sales tax based on the retail price of an article. The tax is assessed only on the basis of the wholesale price. If a man buys an article from a wholesalerretailer, he should pay only the sales tax applicable to the wholesale price. Considerable sums of money are being taken from the taxpayers by the methods to which I have referred.
Much has been said, not only by members of the Opposition but also by persons representing interests outside the Parliament, about the necessity to abolish sales tax. Groups of people have circulated to all members of the Parliament representations for the removal of sales tax on particular items, or its abolition. It is recognized that once a tax has been imposed it is extremely difficult to have it removed. This Government is most exceptional because within the short time that it has been in office it has abolished certain taxes altogether. Surely the Government must be given due credit for that most unusual action. If there is a possibility that the sales tax will be removed in time to come, then this is the only Government that can be expected to remove it. We have proved our bona fides in that respect in the last two or three years. The sales tax is easily collected, and consequently it will not be easy for any government to remove it. Moreover, it should be remembered by those who clamour for tax removals that the Government must get money from somewhere to carry on the ordinary business of the country, and if the sales tax is to be removed from one article let the critics of the Government submit alternative forms of taxation, or tell the Government how it is to carry on its business with a reduced income. The attitude of the average person towards taxation is, “I know that you have to have taxation, I know that I have a duty) but damn it, do not call on me to do it. Take the money from somebody else, anybody else at all, but not from me “. That is a wrong attitude. As long as the Government is fulfilling its responsibilities and is recognizing the needs of every section of the people, and taking particular care of the groups that the Opposition professes to represent, it is performing its proper functions. The House should support the Government in the fine efforts that it is making to assist the country, and should support this measure which will bring substantial relief to the taxpayers.
.- I have listened with interest to a number of speeches about this measure. I believe that the people are entitled to be told by the Treasurer (Sir Arthur Fadden), or by some other representative of the Government, the principles which were followed in the Government’s decision to introduce this measure. We should be told why certain items were to be exempted from tax and why the tax rates were to be altered on other items. I listened carefully to the Treasurer’s explanation of the bill, and I have listened to the few honorable members on the Government side who have endeavoured to justify it, but I have heard no justification at all for the Government’s actions. The honorable member for Moore (Mr. Leslie) has just spoken about sales tax for twenty minutes, but he has not mentioned the principles underlying the measure. He has informed us that certain individuals and companies are acting unfairly with regard to the sales tax, and that some person in his State are paying more in sales tax than are people in Victoria and New South Wales, but he did not prove his statements. The honorable member for Petrie (Mr. Hulme) spoke on similar lines, but he appears to think that because the sales tax was first imposed by a Labour government in 1930, every honorable member on this side of the House should uphold the Government in any action that it chooses to take about sales tax. That is one of the most specious arguments that I have ever heard. He did not attempt to justify the Government’s actions, he merely complained about our criticisms of the attitude of the Government towards sales tax and other forms of taxation. He was rather bitter about the matter, but his argument lacked information.
According to the Treasurer, the collections from sales tax this year will amount to almost the same as last year’s collections. Perhaps they will total about £1,250,000 less. The Treasurer also said that there would be a saving to the people during this financial year of £7,800,000. I challenge that particular statement, and suggest that although the rates have been reduced the Treasurer will still collect about £87,000,000 this year as against a little over £88,000,000’ last year. The honorable member for Petrie said that because our population had increased, more people would pay the tax and therefore the collections would be much the same as before. That argument is neither reasonable nor satisfactory to the Opposition. The main reason why the people will pay almost as much this year as last year, despite the proposed reductions, is that the Government has mismanaged its business in other directions. Members of the Government have told us that the country is on a stable economic footing, and that inflation has been halted; but if the sales tax collections this year turn out to be almost the same as last year, it will indicate that inflation has not yet been halted. The Government obviously expects living costs and personal incomes to increase, so that the people will not have any greater purchasing power than they had last year. If the Government’s expectations are fulfilled, then the people will reap no benefit from the proposed reduction of sales tax. Last year the Treasurer reduced the sales tax rates, but at the end of the year it was found that collections were almost as great as the collections during the previous year. That was caused by increased costs and consequent increased prices.
The Government is trying to hoodwink the people by saying, “Ve shall give you reductions which will put money into your pockets “, whereas the fact is that the Government will take more money from the pockets of the people after granting the reductions than it had taken before the reductions. In 1949-50, £44,000,000 was collected from the sales tax, but despite the fact that the Treasurer bitterly attacked this tax when he was in opposition, he will take £88,000,000 from the people this year as a result of the same sales tax. I repeat that this is the right honorable gentleman who claimed, when he was in opposition, that the sales tax should be reduced or abolished. Since he has been Treasurer of this country he has brought down a budget each year which has clearly shown that he intends to collect larger and larger sums from the sales tax. When Labour relinquished office in 1949, 25 per cent, was the highest rate of sales tax. After the present Government assumed office the Treasurer increased the highest rate to 33 per cent., then to 50 per cent., and then to 66$ per cent. The honorable member for Petrie has congratulated the Treasurer, and has stated that this Government is endeavouring to abolish the sales tax altogether. To prove his contention, he told us, in a very serious tone of voice, which sounded as though he was almost in tears, that last year the Government abolished two categories of sales tax and that this year the Government would abolish the 33$ per cent, category and the 20 per cent, category. He said that instead of six categories there would lie now only two. The honorable member forgot to inform the House that this Government increased the categories to six, and that it still intends to collect £88,000,000 this year, although in its last year of office the last Labour government collected only £44,000,000.
The Treasurer informed us that many requests had been received by the Government for the reduction of sales tax. Evidently the making of reductions depends on the amount of pressure brought to bear by certain people. Honorable members do not know from where the representations came, nor do we know whether they were fair or otherwise. The Treasurer said -
Consideration has ‘been given to many requests that have been made from time to time for exemption or reduction of the rate of tax in respect of numerous classes of goods, or in respect of goods for use for particular purposes.
We do not know who made those representations. He also said -
It has been decided that the true avenue of relief should be by way of eliminating the higher rates of sales tax which have been in force since the 1951-52 budget.
The right honorable gentleman did not tell us the principles that he worked on in arriving at his decision to abolish or reduce the tax. Before 1951-52 the lowest rate of sales tax was 8$ per cent., but the lowest rate to-day after the sweeping reductions claimed by the Government is 12$ per cent. That is a much higher rate of tax than was imposed in 1949-50. Why have these changes been made ? The Treasurer has not taken us into his confidence, nor is any other member of the Government prepared to give a reasonable explanation of why it was done. Aeroplanes for private use are to be exempt from sales tax. Was that decision a result of a special request made by the Minister for External Affairs (Mr. Casey), who pilots his own aeroplane and perhaps intends to buy a new one, or by some other member on the Government side who uses an aeroplane for private travelling? Motor cars are in more general use for private travel than are aeroplanes, and are more necessary to the community. Many people on medium incomes can afford to buy a motor car. Included in the price they pay is sales tax, which is now to be reduced from 20 per cent, to 16$ per cent. That reduction of 3$ per cent, is only small and in the case of a car costing £1,100 would be worth about £27. That is an infinitesimal amount compared with the amount that would be saved, as a result of exemption from sales tax, by a person who purchased an aeroplane for his private use. Under the Labour Government in 1949 the rate of sales tax on motor cars was about 10 per cent. Even after this magnificent tax reduction gesture by the Government, the rate this year will be 16$ per cent. The House is entitled to an explanation of why and how the Government arrived at such a decision. It is also entitled to an explanation of why the sales tax on watches, fountain pens and propelling pencils is to be reduced to 16$ per cent, and not to, say, the general rate of 12$ per cent., or even eliminated. Does the Government still consider such articles to be luxury goods? In previous years the Government taxed these articles at a rate of 33$ per cent., compared to the rate of 66$ per cent, that applied to jewellery, imitation jewellery and other expensive luxuries. Now the formerly highly taxed items are to be taxed at the same rate as that which applies to items previously taxed at a lower rate than they were. Why did the Government change its mind? It says now, in effect, that furs and jewellery should bear the same rate of tax as watches, clocks, fountain pens and propelling pencils. The House is entitled to know why the Government has arrived at a conclusion entirely different from the conclusion it reached two years ago, or even last year in regard to those items.
The Government takes the view that it has made its decision on sales tax, and that the Opposition is not entitled to any form of consideration or explanation. The Government may be able to get away with arrogance in regard to sales tax and a number of other matters now, but the time is not far distant when it will have to answer to the electors for its high-handed conduct. I assure honorable members opposite that the electors will soon understand the implications of this measure, and will not be hoodwinked by the ballyhoo that has been published in the press. They will not regard the budget as the vote-catcher that the Government expected it to be when it was introduced. The people will realize, as they continue to bear the burden of taxation that is getting heavier each year the Government is in office, that the best thing to do is to change the Government.
The repercussions on the electors of the Government’s tax policy will drive another nail in the Government’s coffin and the sooner all the nails are in the better it will be for Australia.
– The Government has noteven removed sales tax from medals and badges worn by school children.
– I doubt whether the Government will condescend to give us any explanation about the sales tax on school badges. In its arrogance the Government acts as if the Opposition should not be here, and as if we were not entitled to any consideration, but should merely vote like dummies when the gag is applied, as no doubt it will be applied in relation to this bill.
-Order! The honorable gentleman must not anticipate a vote of the House.
– I am not anticipating; I am merely speaking from experience. The fact remains that while exemptions have been given to a few small articles in common use- and big reductions have been made in relation to others, the Government will collect almost as much revenue from sales tax this year as it did last year. In its preparation of the schedules to the bill the Government has not given fair consideration to people on low incomes. I point out that two years ago the Government was endeavouring, by means of sales tax, to tax certain luxury industries out of existence. The fur industry, the artificial flower industry and the cosmetics industry are cases in point. The Government said at that time that it had to prevent the flow of capital into those industries and channel it in other directions. It also said that it had to channel labour into the right directions. It was going to channel labour into primary industry, but primary industry is in its present favorable position not because of any action of the Government but because we have, enjoyed exceptionally bountiful seasons. It is interesting to compare the Treasurer’s statements this year with the statements he made two years ago, when he told this House that the Government was introducing heavy sales tax on luxury goods because it was necessary to retard the industries that produce them. He is now saying that the Government believes that the concessions made in relation to such goods will not only provide substantial benefits to the purchasing public by way of reduced prices, but will also serve to stimulate the manufacture and sale of goods, and maintain employment. Now the Treasurer wants to do the very thing that he endeavoured to prevent two years ago. That is typical of the Government’s actions since the day it took office. The Treasurer has told us that he estimates that this huge reduction of sales tax will mean a saving of £8,700,000 to the people, but he still expects to collect almost the same amount of money as he collected last year. I suggest that if prices are reduced as a result of this measure the yield this year will be £58,000,000 or £68,000,000 and not £88,000,000. I believe that in that connexion the Treasurer is definitely misleading the people.
I wish to refer again to the big reductions of sales tax on luxury goods. In two years the Government has reduced the tax on expensive furs from 66 per cent. to 16 per cent. Only a small proportion of the people can afford to buy expensive furs. The wife of the average wage-earner will not be able to buy furs, nor will the wife of a man in the middle income group. The reduction of the tax rate on furs will be of no benefit to the average taxpayer. The same applies to the reduction of sales tax on a number of other luxury goods. If prices of those goods are reduced as a result of this measure the people who will benefit will be people in the high income groups, who can afford to buy such articles whether the rate of sales tax on them is 16 per cent. or 50 per cent. People in the lower income brackets will not be able to buy these articles, and in any event the majority of them would not want to buy them. A worthwhile relief could have been given to the people generally by reducing the general rate from its present level of 12½ per cent. to the level of 8 per cent. that operated when the Chifley Government left office. Such a reduction would give some real benefit to the people who need assistance because of the continued increase of prices that has occurred since the Government took office. Not only are the ordinary people suffering from the increased cost of living, but they also have to bear the greatest share of the sales tax burden. The basic wage-earner on £12 a week now can buy only as much with that money as he bought with a wage of £6 a week five years ago ; but he has to pay a higher rate of tax on his doubled wage. He also has to pay a higher rate of tax than before on the consumer goods that he buys, so that he is actually worse off on £12 now than he was on £6 five years ago. The same statement applies to people in the middle income groups, and even to public servants who receive £1,000 a year or more. It is time that the Government gave some thought to the needs of the people generally. It proposes reductions of sales tax that will be of the utmost value to its friends, but will be of no value to the community generally.
Motion (by Mr. Eric J. Harrison) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. Archie Cameron.)
Majority . . 16
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.
(Nos. 1 to 9) 1953.
In Committee of Ways and Means:
Consideration resumed from the 9th September (vide page 85), on motion by Mr. Eric J. Harrison -
That, on and after the tenth day of September . . . (vide page 84).
Questions resolved in the affirmative.
Standing Orders suspended ; resolutions adopted.
That Mr. Eric J. Harrison and Mr. McMahon do prepare and bring in bills to carry out the foregoing resolutions.
Motion (by Mr. Eric J. Harrison) - by leave - agreed to -
That so much of the Standing Orders be suspended as would prevent questions in regard to the first and second readings, committee’s report stage, and third readings, being put in one motion covering several or all of the Sales Tax Bills Nos. 1 to 9, and the consideration of several or all of such bills together in a committee of thewhole.
Bills (Nos. 1 to 9) presented by Mr. Eric J. Harrison, and passed through all stages without amendment or debate.
Debate resumed from the 10th September (vide page 111), on motion by Sir Arthur Fadden -
That the bill be now read a second time.
– This bill is designed to amend the Estate Duty Assessment Act 1914- 1950 which relates to the imposition, assessment and collection of duties upon the estates of deceased persons. The legislation has always been regarded as having been designed solely for the purpose of raising revenue. The original act received the Royal assent in December, 1914. It was introduced into the Parliament in that year solely for the purpose of raising revenue to help finance Australia’s participation inWorld War I. It is pertinent to note that when the original legislation was introduced by the Labour Government, opponents of that Government insisted that, as it was merely a tax-gathering device, it shouldbe reviewed at least every year with a view to its removal from the statute-book at the first available opportunity. The purpose of the Labour Government in imposing estate duty in 1914 was to collect additional revenue by a means that was least liable to disturb the economy. Honorable members, when they are considering the Estate Duty Assessment Act, should bear in mind that the States, in addition to the Commonwealth, raise revenue from this source. Indeed, the States imposed estate duty before the introduction of the original Commonwealth act. However, I do not propose, in my contribution to the debate, to analyse the details of the legislation of the respective States. I shall devote my attention to the Commonwealth act. Estate duty is expected to yield £9,000,000 in this financial year and we should satisfy ourselves that the Government does not intend to take more than its share from this source.
– The receipts from estate duty are increasing.
– The revenue from this source has doubled since this Government has been in office. The bill has two main purposes. The first is to increase the amount of the statutory exemption for estate duty purposes. The Estate Duty Assessment Act now provides that when the whole of an estate passes to the widow, the children or the grandchildren of the deceased, there shall be a deduction of £2,000 ; hut that amount diminishes when the value of the estate exceeds” that figure. The provision for the deduction of this amount has been in operation for thirteen years, and the bill proposes to increase the deduction in such cases to £5,000. When no part of the estate passes to the widow, children or grandchildren of the deceased, a statutory deduction of £1,000 is now allowed, but that amount also diminishes according to the value of the estate. The bill proposes to increase this amount to £2,500.
If the value of an estate exceeds the amount of the statutory deduction, the amount of the deduction diminishes in accordance with a prescribed formula. The statutory exemption of £2,000 decreases by £1 for every £10 by which the value exceeds £2,000 up to a value of £10,000, and, thereafter, the deduction decreases by £1 for every £2 by which the value exceeds £10,000. Consequently, no exemption is allowable under this formula if the value of the estate is £12,400 or more.
The lower statutory exemption of £1,000, which is applicable when an estate does not pass to a widow, children or grandchildren of the deceased, diminishes at the present time at the rate of £1 for every £10 by which the value of the estate exceeds £1,000 up to a value of £6,000, and, thereafter, at the rate of £1 for every £8 by which the value exceeds £6,000. The exemption in such cases disappears if the value of the estate is £10,000 or more.
The purpose of this bill is to alter the formula in order to avoid an anomalous situation. The exemption of £5,000 would be exhausted if the value of an estate amounted to £19,000, and the exemption of £2,500 would vanish at £23,200. Therefore, the bill provides that the amount of the statutory exemption will diminish by £1 for every £3 of the excess value of the estate. Thus, if the whole estate passes to the widow, children’ or grandchildren, the statutory exemption will cease to apply where the value of the estate reaches £20,000. If no part of the estate passes to the widow, children or grandchildren the exemption will disappear at £10,000. No one can quibble with those two provisions.
The Opposition is more concerned with the second purpose of the bill, which is designed to amend the existing act in order to give to members of our forces who serve in Korea and Malaya the same protection as was given to members of our forces by the Labour Government in 1942. The Opposition proposes to submit an amendment in committee with the object of extending this protection to all members of the forces-
– Wherever they are serving?
– Yes. I shall explain my reasons for holding this view.
– Including Malaya?
Mr. E. JAMES HARRISON.Malaya, New Guinea and all those places where our forces may serve under the United Nations.
– Including Australia ?
– Yes. To-night we saw a motion picture exhibited by a Minister, and I am led to say that our servicemen in Australia should be considered on the same basis as our servicemen in theatres outside this country.
– Does the honorable gentleman really hold that view?
– Yes. I advise returned servicemen in this chamber not to think that they will always have a close preserve. It has always been a Labour government that has given protection to the relatives of deceased servicemen. A Labour government introduced the original act in 1914, section 9 of which provided as follows : -
Nothing in this Act shall apply to the estate of any person who during the present war or within one year after its termination dies on active service or as a result of injuries received or disease contracted on active service with the military or naval forces of the Commonwealth or any part of the King’s Dominions.
The Menzies Government introduced legislation to amend the Estate Duty Assessment Act in 1940, but made no attempt to afford protection to servicemen. It remained for the Labour Government to* introduce amending legislation in 1942, the purpose of which was to apply to the estates of deceased servicemen an outright deduction of £5,000. Thus the wife of a serviceman who lost his life through injury or sickness in “World War II. was able to claim, in respect of the estate, a deduction of £5,000, and then the exemption which applied to the estates of civilians. Opposition members believe that the time hasarrived to make the deduction applicable to the estate of every man who dons this country’s uniform. The loss to revenue in consequence of this consideration would not be large.
– Does the honorable member propose to include the Citizen Military Forces?
– I am all in favour of it.
– The Labour Government, when it introduced the original act in 1914, expected to raise £1,500,000 from estate duty. An exemption of £1,000 was allowed, but the worst feature was that, when the exemption was exceeded, the whole of the first £1,000 became subject to estate duty. The original act provided, in effect, that the widow, children or grandchildren of a deceased person should pay only twothirds of the amount of estate duty that would be payable by a person outside the family group who inherited the estate. In the original act, duty was payable at the rate per cent, of £1, when the value of the estate exceeded £1,000 and did not exceed £2,000, and increased by one-fifth of £1 for every £1,000 in value or part thereof in excess of £2,000, but so that the percentage should not exceed £15. Only estates of a value in excess of £71,000 were subject to the maximum rate. I ask the House to take into account the progressive increases of estate duty when considering the submission that I shall make in respect of servicemen. The rates in the original act remained static until 1940. It became necessary during World War II., in the opinion of the government of the day, to increase the amount payable from £1 to £3 per cent” At that point, the deduction in respect of the wife and. children or grandchildren was increased from £1,000 to £2,000, and the maximum rate of duty, which is all I propose to deal with in this debate, rose to 20 per cent, where the value of the estate for duty was over £500,000. The rate was increased further as the need for finance became pressing during the war until, in 1947, the maximum rate of duty reached the level of 27$ per cent. This source of revenue has been increasingly prolific, and to-day it provides the Government with £9,000,000 a year. Before I discuss the amendments that I propose to move in the interests of servicemen, I shall raise several other points of criticism,- not in a carping sense, but in order to engage the serious attention of this Parliament. The first matter affects multiple deaths. When we consider that income from estate duty has been doubled during the last four years, surely we must admit that the time has come to consider some relaxation of the present provisions as they bear upon multiple deaths. In Australia there i« no provision for relief when a second, or even a third, death in the same line of succession occurs within a brief period. However, in Great Britain, a rebate system applies if the estate on which duty is payable consists of any land or business not carried on by a company or any interest in land or such a business, and duty becomes payable for a second time within five years on the same property. Should death duty become payable for the second time within twelve months, the amount due is reduced by 50 per cent. If it becomes payable within two years, the reduction is 40 per cent., and so on until, if it becomes payable within five years, the rebate is 10 per cent. Having regard to the large volume of revenue collected from this source in Australia, I suggest that the time has come for the Government to consider the adoption of a similar system.
Another aspect of the estate duty law which causes me concern would apply, in the event of death, to some business organizations in the Blaxland electorate, which have prospered in recent years. Their assets, in the main, consist of raw materials, partly manufactured stock and so forth. The law at present might adversely affect the beneficiaries of a thrifty man who had purchased, say, three houses in his life-time. The act provides that the full amount of estate duty must be paid within the brief period of two years after the death of the owner of the property. Failure to pay the amount in that period may lead to the imposition of a 10 per cent, levy, although the Commissioner of Taxation has power to waive it in certain circumstances. In my opinion, the legislature should amend the law in order to prevent that provision from operating harshly. I ask honorable members to bear in mind the fact that the progressive tightening of the estate duty law has led to the inclusion of capital realized from, life insurance policies for the purpose of calculating estate duty if the premiums have been paid by the deceased person. Revenue from estate duty in 1915-16 was only £626,215. Even as late as 1930 it. was only slightly more than £2,000,000 a year. In 1941-42,. after the amendment of 1940, revenue was still only £2,817,000. During the last year of office of the Labour Government, the amount collected was £4,761,000, but the amount raised last year was £8,392,727. Those figures show how the field of estate duty collections has extended in an ever-widening circle. It is hoped, of course, that the raising of the statutory exemption to £5,000 will have the effect of relieving estates in the lower scale, but when we realize that a brick home that was worth £1,000 in 1914 would be worth at least £5,000 to-day, we can only reach the conclusion that the field of estate duty collection is continuing to expand. The Treasurer has said that in this year, when the Government declares that it will reduce taxation, the proposed reduction of estate duty collections is £S0,000. However, in fact, the Government proposes to collect from this source during the current year £737,000 more than it collected from the same source last year. The expected revenue is £9,120,000.
I now ask honorable members on the Government side of the House, particu- larly those who are ex-servicemen, to pay attention to the purpose of the amendments that I propose to move. I hope they will agree with me that the provisions of clause 3 in relation to the estates of persons who may die as a result of active service should not be confined to the relatives of men who served in World War I. or World War II. The nation now has a responsibility to provide for servicemen and ex-servicemen in a much wider category than that. I refer, for example, to young men who are conscripted for national service and to members of the Citizen Military Forces. The field is ever-broadening, particularly having regard to Australia’s obligations to the United Nations, and we should protect in every possible way the interests of young men who are called upon to render military service. The amendment that I propose to move in relation to clause 3 will provide that -
From the value of the estate, of a person who is or has been a member of the naval, military or air .forces of the Commonwealth and who during service as such member or within three years of the termination of such service dies as a result of injuries received or disease contracted during such service, there shall be deducted in respect of such part of the estate as passes to the widow, children, grandchildren, parents, brothers, sisters, nephews or nieces of the deceased a sum of Five thousand pounds or where the value of that part is less than Five thousand pounds, an amount equal to the value of that part.
I intend also to move a further amendment to provide for the settlement of any dispute that may arise. The reasons on which these proposals are based are very sound. They do not indicate criticism of the Government’s proposals in the bill ; they merely reflect our view that the bill will not go far enough. Let us examine these proposals realistically. I shall be astonished if any honorable member on the Government side of the House can see his way clear to deny their wisdom.
What are the terms upon which young Australians may be required to render home service in defence of the nation? I shall refer specifically to the Army rather than to all three armed services because we have recently been provided with definite information in relation to the activities of national service trainees and the Citizen Military Forces.
Furthermore, army exercises may be regarded as being less dangerous than those of the Navy and the Air Force. The role of the Army is to provide forces as may be required for possible commitments to the United Nations, including regional arrangements in the Pacific and participation in the British Commonwealth Forces. The Army must also provide the basic organization for expansion in time of war and provide for the local defence of Australia and its territories. I want honorable members to keep these facts in mind, because the amendment I have foreshadowed provides for men who may be injured or become ill, for example, in Malaya. Nobody will complain of the Government’s policy of providing forces as may be required in order to meet Australia’s commitments. These commitments include the provision of additional forces for operations at home or abroad as may be required, garrison forces for the local defence of Australia against raids and for the internal security of vulnerable points for which the Army is responsible, and a command training maintenance organization to ensure the correct and efficient functioning of the forces, the obligation to raise and train such expeditionary forces as may be required in time of war, and the provision of facilities for any allied force which the Government may care to supply from Australia. In this activity the Australian Regular Army plays a prominent part. It is through the Australian Regular Army that Australia has manifested its support for the United Nations. Let us not forget that the Royal Australian Regiment, comprising the third, first and second battalions, has served with distinction in Korea. A total of 8,000 men of all ranks of the Australian Regular Army has served in Korea since the outbreak of hostilities, and more than 2,000 have served in Japan in order to give administrative support to the men in the field.
It is obvious that the 8,000 men who have served in Korea will be covered by the bill. I presume that the 2,000 men who have served in Japan will be covered also. Can it be argued that there is a great deal of difference between the position of the 2,000 men who served in Japan and the members of the present Citizen Military Forces, having regard to theramifications of that force? In May of this year, it was reported that the strength of the Citizen Military Forces was 73,500 men, comprising broadly two infantry divisions; three infanty brigades plus divisional troops for a, third division ; two nucleus armoured brigades, each of two armoured regiments and supporting units ; non-divisional supporting arms and field administrative units; and certain base units required in Australia for the raising of the field force on mobilization. The Government has claimed consistently that the Citizen Military Forces are scientifically organized and contain every element of a modern and efficient army. We do not disagree with that claim, but we say that if anything happens to the members of that force in the course of their duties, we should do the right thing by their relatives. The Citizen Military Force includes army units, motorized units, amphibious units, light and heavy mechanized artillery, anti-aircraft units, engineer and workshop units and a modern infantry, all of which are equipped and trained according to the most modern doctrines. It* has been urged strongly in this House that we should contrast that organization with the horse-and-buggy outlook of the Army in pre-war days. That is what we are trying to do. We are trying, in our humble capacity, to visualize what . the Army is to-day, and to ensure that its personnel receive the justice to which they are entitled.
Quite recently, we were told of the formation of the Pacific Islands Regiment, a unit of the Australian Regular Army. The formation was completed in September, 1952. The regiment is now maintained at an average strength of 600 natives, with Australian officers and senior non-commissioned officers who have had overseas service. In January of this year, a company group of the unit was established at Vanimo, on the northern coast of New Guinea, approximately fifteen miles from the Dutch border. The Papua and New Guinea Rifles, a Citizen Military Forces unit of volunteers from the local population, is established at Port Moresby, Lae and Rabaul. In the event of war, it is intended that this unit shall provide the officers and senior non-commissioned officers for additional battalions of the Pacific Islands Regiment, which may be embodied in the defence scheme for Papua and New Guinea. Can any honorable member say that the dangers that those men may face are not dangers to which we should pay some regard when dealing with duty payable on their estates ? Could we draw a line of demarcation between the men of those regiments and our men in Malaya? How could we attempt to do so? If we gave a concession to the Army generally and neglected to give a similar concession to these men, we should be neglecting a body of men which was entitled to our consideration.
There is a great need for us to consider the well-being of the relatives of’the men who are component parts of our modern army. They are volunteers and members of the national service training organization, all undergoing basic training with the most modern equipment. In the handling of modern war equipment, dangers are ever present. Their training is intense. Let me quote to the House a statement that was made by the Minister for the Army (Mr. Francis) recently. The honorable gentleman said -
I am strongly of the opinion that the National Service trainee, upon completion of his basic training, is more efficient than were we who went to World War I. and those who went to World War II.
We say that, in respect of estate duty, we should extend to the men who are undergoing training in modern methods of war the consideration that we shall extend to other servicemen under this bill and have extended to servicemen in the past. All that the Opposition is asking is that the relatives of those who lose their lives on active service for this nation shall be treated at least with consideration, not by any means generously. We are not asking the Government to adopt the principle that was adopted by Labour in 1914. All that we are asking the Government to do is to extend to all servicemen the concessions that it proposed to extend to men who served in Japan and who did not see Korea at all. That is not much to ask. Section 9 of the act of 1914 stated -
Nothing in this Act shall apply to the estate of any person who during the present war or within one year after its termination dies on active service or as a result of injuries received or disease contracted on active service with the military or naval forces of the Commonwealth in any part of the King’s Dominions.
We are not asking the Government to go as far as that. We are making an appeal to the Government to do something that we believe will have the effect of inducing men to join the forces. The death of a serviceman is not something that just does not happen.
In conclusion, I quote the words used by the present Minister for Labour and National Service (Mr. Holt) when he was discussing the Estate Duty Bill introduced by a Labour government in 1942. The honorable gentleman made an impassioned speech on behalf of servicemen who might lose their lives and appealed to the government of the day to give to the relatives of servicemen some relief from estate duty taxation. He said -
We have come to a sorry pass if, in order to finance our war effort, we have to -rely on imposing duty on the estates of deceased soldiers.
That is what I say now. This nation will have- come to a sorry pass if, in order to raise revenue, we impose duty on the estates of servicemen who give their lives in the service of their country, whether in Rabaul, New Guinea or Australia. We say that their relatives should receive the consideration for which we are asking. Our proposals could not have a great effect upon revenue, having regard to the resources that the Government has at its disposal. In view of the size of the present budget, the concession could not have any real effect upon the national finances, but it would have a tremendous effect in the homes of servicemen who lost their lives in the interests of this country. “Atomic weapons were tested at Monte Bello some time ago. Possibly similar tests are going on in the centre of Australia at the present time. There are great movements on foot in this country, which is becoming the arsenal of the British Empire and the centre for testing the devices of modern warfare. If our men make the supreme sacrifice, the least we can do for them is to extend to their relatives the concession for which we are asking. I repeat that we shall have come to a sorry pass if, in order to finance the country, we have to rely on imposing duty on the estates of deceased soldiers. I appeal to the Government not to delay action in this matter until a war breaks out in Papua or somewhere else. We should not have to meddle with bills of this kind on every occasion that we do something for the United Nations. Let us be realists. Our duties to the United Nations may require our men to go anywhere at any time. ‘Let us be big enough to look at this problem broadly and do the right thing now, and avoid the necessity to bring down legislation piece-meal from time to time.
.- Legislation of this type is very familiar in British-speaking countries in which duties are imposed upon the estates of deceased persons. The duties have different names in different places. Sometimes they are called probate duties and sometimes death duties. In Australia, they are known as estate duties. The principles upon which they are administered vary to some degree in accordance with the names given to them. For that reason, it does not follow that the suggestions made by the honorable member for Blaxland ‘(Mr. E. James Harrison) in relation to future amendments of the act are applicable to our legislation. In England, the rates of duty are very much higher than they are here. Before adopting either of the honorable member’s Suggestions, the Government would have to ask its legal officers to consider them very carefully.
This measure is a part of the legislation to implement the budget. Its object is to decrease rates of taxation. Time and again, the policy speech delivered by the Prime Minister (Mr. Menzies) in 1949 has been quoted. In that speech, the right honorable gentleman stated clearly that, as national wealth expanded, rates of taxation would be decreased. He did not say that the total amount of taxation would be decreased, because he was well aware, as a responsible member of the Parliament, who within a short time was likely to become the Prime Minister of the country and to be charged with the duty and responsibility of administering its finances, that a government has a great many obligations and that it is essential that a government shall have the necessary money to enable it to carry out its many duties, particularly in the field of social services. This measure is entirely in line with the policy enunciated by the Prime - Minister in 1949, which was that, as national wealth expanded, rates of taxation would be reduced. In pursuance of that policy, the bill provides for the statutory exemption to be greatly increased. Where an’ estate passes to the widow, child or grand- ‘. child of a deceased person, the statutory exemption is to be increased from £2,000 to £5,000, and a sliding scale will begin to operate at £5,000, and the amount by which it will decrease is £1 for every £3 instead of £1 for every £2. There iff an increase of the exemption from £1,000 to £2,000, where any part of the estate passes to persons other than the widow, children or grandchildren! of the deceased. That is in accordance with the distinction contained in the principal act between near relatives and those who are not so closelyrelated, or who are not related at all to: the deceased. There can be no objection . to legislation of this kind, which is very important, having regard to the fact, as mentioned by the honorable member for Blaxland (Mr. E. James Harrison), that, the value of property has increased greatly during the last few years, and that a man may now possess property valued at- £5,000 which some few years ago . could have been assessed for duty at £1,000 or £2,000. Another matter raised by the honorable member for Blaxland is connected with the assets of persons: who die while on active service. The . honorable member insisted that servicemen in Japan should be covered by this provision.
– I said that they would.
– I do not know that they will be covered. The legislation simply refers to “ a person who has been on Korean or Malayan war service”.
– Do not let the lawyers ‘ get it.
– That is a matter which ‘ will have to be determined eventually by a court. This is a. piece of legislation being discussed in a responsible Parliament, and one would think that honorable’ members would be glad to have it clarified. The bill does not refer to Japan.
The relevant provision relates to persons who have been on Korean war service. I suggest that some clarification of that matter is needed.
Opposition members interjecting,
– Honorable members opposite may get as angry as they like about this matter, but they should realize that if there is any doubt about any legislation at all that is presented to this House, the matter should be clarified. It cannot be clarified by honorable members opposite shouting.
– The Minister said that the legislation would embrace servicemen in Japan.
– Yes, I am merely stating, as a lawyer, what I see before me. If the House does riot agree with me it is welcome to disagree, but I am stating my opinion of the matter. I suggest that this House should know exactly what it is doing, and I point out the terms of the legislation. I draw the attention of the House to the fact that this proposed amendment, which appeared in its original form in section 9 of the principal act, deals with persons who die on active service, or who sustain injury or contract diseases attributable to active service. That is the provision that we are proposing to amend by inserting another sub-section. The principal act was introduced in 1942, and amended in 3947. Both of those legislative actions were taken by Labour governments, and those governments apparently aimed at covering persons who die on active service or who die within three years of their active service as a result of that active service. The present legislation is on the same lines as the previous legislation. It deals, not with persons who die in Australia or who die in national service camps or. Citizen Military Forces camps, but. who die on active service, or of injuries or diseases sustained on active service. A great distinction is drawn’ between the two classes of persons that I have mentioned, and I do not believe that the view put forward by the honorable member for Blaxland would be regarded as the right view by a great number of people in this country. Consequently I am not prepared to vote for the amendment.
– It should be pointed out that estate duty does not seem to have attracted a great deal of attention in this House at any time. There have been few fundamental alterations of the original act of 1914, and very little consideration has been given to the principles which should underlie any scientific estate duty legislation. The Government has accepted the reality of inflation in the sphere of death as well as in the sphere of life, by increasing the statutory exemption from estate duty from £2,000 to £5,000. Except for that, and the amendment to deal with the estates of servicemen, the bill before us will do little to establish a proper system of estate duty. We have all come to accept a progressive system of income tax, and I suggest, as a logical corollary, that there should be a more progressive approach to the matter of taxing the estates of people. In order to show that progressive death duties are nothing new, I shall mention two opinions neither of which can be regarded as the opinion of a socialist. The first is an opinion of Sir William Harcourt, who was Chancellor of the Exchequer in Great Britain in 1894. When he introduced the first probate duty bill in that country, he said -
Upon the devolution of property of all descriptions the State takes its first share - before any of the successors in title are benefited. The reason on which this is founded is plain. The title of the State to a share in the accumulated .property of the deceased is hh anterior title to that of the interest to be taken by those who are to share it. The State has the first title upon the estate, and those who take afterwards have, a subsequent and subordinate title. Nature gives man no power over his earthly goods beyond the term of his life. What power he possesses to prolong his will after his death - the right of thi* dead hand to dispose of property - is a pure creation of the law and the State has the right to prescribe the conditions and the limitations upon which that power shall bc exercised.
That seems to put very well the foundations upon which estate duty legislation should be built. The second opinion comes from an apostle of American private enterprise, the late Andrew Carnegie. When he was describing the growth of large fortunes in America, he said -
Now who made that growth? The growth of the American public; - that is where that wealth came from and that is the partner in every enterprise where money is made honorably; it is the people of the United States of America.
I say the community fails in its duty and our legislators fail in their duties if they do not exact a tremendous share, a progressive share.
I understand that the executioner will kill this debate at eleven o’clock, and that certainly indicates the kind of interest that this Government takes in very important matters of legislation, and how little facility is given for a proper consideration of important principles. As I see the executioner approaching-
– Order ! The honorable member is out of order in using such terms. The decisions to which he apparently refers will be decisions of the House.
Motion (by Mr. Eric J. Harrison) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. Archie Cameron.)
Majority … . . 13
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
Clause 3 (Estates of persons dying on active service).
– I move -
That, at the end of sub-clause (1.) the following paragraph be added: - “ (f) by adding the following subsections: - (5.) From the value of the estate of a person who is or has been a member of the naval, military or air forces of the Commonwealth and who during service as such member or within three years of the termination of such service dies as a result of injuries received or disease contracted during such service, there shall be deducted in respect of such part of the estate as passes to the widow, children, grandchildren, parents, brothers, sisters, nephews or nieces of the deceased a sum of Five thousand pounds or where the value of that part is less than Five thousand pounds, an amount equal to the value of that part.
Subject to sub-section (3.), the question as to whether a person has or has not died as a result of injuries received or disease contracted on service as a member of the naval, military or air forces of the Commonwealth may on the application of the legal personal representatives of such person or a person beneficially interested in his estate be determined by a Judge of the Supreme Court of a State or Territory and the Supreme Court of a State is vested with Federal jurisdiction for the purposes of determining the question.’.”.
In considering the amendment the Minister for the Navy (Mr. McMahon) who is in charge of the bill, might well take into account the view that has been expressed by a Government back-bencher that the legislation as drafted will not cover the 2,000 men who are in Japan on administrative duties connected with the Australian forces in Korea. The Minister has said that it will do so. I do not profess to be a legal man, but I consider that a division in the Government’s own ranks in relation to whether or not such men will be covered by the measure requires careful consideration. The Minister is a legal man, but a greater legal brain on the Government back-tenches avers that the view that the Minister has expressed is wrong. If ever there was a time when something should be done along the lines of the amendment I have submitted, this is it, so that the division of opinion that has arisen in the Government’s ranks will be cleared up once for all.
Mr. Glyde Cameron interjecting,
The CHAIRMAN (Mr. Adermann).Order! The honorable member for Hindmarsh (Mr. Clyde Cameron) is out of his place. That is definitely disorderly. Government members, including the Minister for Supply (Mr. Beale) had better be quiet.
– I rise to order. Is there any special place in the chamber in which an honorable member has to sit during the committee stage of a bill? I ask that question because Chairmen in t]U past have stated that in committee of the House there is no set place for an honorable member to sit. I raise the point of order in order that you may inform honorable members whether during proceedings in committee honorable members may be away from their places.
– As Opposition Whip, the honorable member knows that the same procedure applies in committee as applies in the House, and that an honorable member may. move from place to place, but is distinctly disorderly if he interjects from a place other than his own.
– If there is ever to be sweet reason in this chamber let it be on this important matter. We are not asking the Government to do something that will cost it a great deal of money. All we are asking it to do is the right thing in order to ensure that the provisions of the measure will apply to a serviceman who loses his life either in or out of Australia. As I have said, a difference of opinion has already arisen between a legal member on the Government side, and the Minister for the Navy. Per sonally, I should be more inclined to take the view of the back-bencher on this matter than that of some of the other legal men on the Government side who are interjecting so much.
– What is the division of opinion ?
– I have stated the point on which there is a division of opinion. If the Minister for Supply had been in the chamber to listen to the debate on this important clause he would have heard my explanation. The Minister for the Navy says that the 2,000 men who are in Japan performing administrative duties in connexion with the 8,000 men of our forces in Korea will be covered by this bill. A legal backbencher says that they will not be covered. I am prepared to bet that the Minister-
– Order! The honorable member may not bet here.
– I am prepared to say that the Minister will not now claim that his opinion is right.
– I rise to order. Is the Minister for Commerce and Agriculture (Mr. McEwen) in order in conversing with members of the committee away from his place ?
– Order! The honorable member for Blaxland will resume his speech.
– My amendment will provide legal protection for men who will not be protected under the bill, as it stands.
– The Government will not accept the amendment that ‘has been suggested by the acting Leader of the Opposition.
– I rise to order. I want to know why the Minister for the Navy (Mr. McMahon) made the insulting reference to the honorable member for Blaxland (Mr. E. James Harrison) as the “ acting Leader of the Opposition “. The honorable member should be described as the honorable member for Blaxland.
– The Minister should refer to the honorable member by the name of his electorate.
– I did not think that the honorable member for Melbourne (Mr. Calwell) would be so touchy about my reference. The Government rejects the amendment. The existing legislation, was framed so that a member of the forces who died either on active service or on service abroad or as a result of injuries received or disease contracted whilst on active service should have the benefit of the provisions of the legislation. Under the proposed amendment, the benefits of the legislation would be extended to any person who joined the armed forces whether or not he joined for the purpose of serving overseas, elected to serve overseas, or chose to serve only in Australia. The acceptance of the proposed amendment would be a breach of a fundamental principle in the repatriation law of this country which has been accepted ever since the repatriation legislation has existed. The proposed amendment concerns much too important a problem to be dealt with immediately. It is possible that if the Government accepted the proposed amendment it would introduce many anomalies. Consequently, the Government is not prepared to accept the amendment at this moment. Before it would incorporate such a provision in this legislation it would consult returned servicement organizations.
I am sorry that I have to disagree with the opinion that the honorable member for Balaclava expressed concerning service in Japan. Apparently the honorable member has overlooked clause 3, subclause (1) paragraph (e) of the bill, which reads as follows: -
By adding at the end thereof the following sub-section : - “ (4.) For the purposes of this section the expression ‘Korean or Malayan war service’ has. in relation to a member of the naval, military or air forces of the Commonwealth, the same meaning as the expression ‘war service’ has in Division 8 of Part III. of the Repatriation Act 1920-1952, . . . “.
Only a few months ago the Government decided that members of the forces who had enlisted for service in Korea and who were serving in units which: although stationed in Japan, were nevertheless supporting operational units in Korea would be covered by the provision? of the Repatriation Act. A few soldier.? serving in Japan are not supporting units on service in Korea and they would not be covered by the provisions of the act. But all members of the Air Force and the Navy are covered by the act. By far the great majority of army personnel have enlisted for service in Korea. The Government has given the most generous treatment to members of the armed forces.
Opposition members interjecting,
– Opposition members are a fine group of people to champion the cause of the ex-serviceman ! During the two years that I have been a member of the Government seldom a month has passed without some concession or additional consideration being given to ex-servicemen. The Menzies Government has treated ex-servicemen generously and will continue to treat them in that way. If the Government were to accept this amendment it would have to do so without giving it adequate consideration. But perhaps I should mention that two distinct groups of servicemen are treated differently. I refer to troops on war service and troops on home or garrison duties. In considering this matter, it is of no use to pay attention to service which carries a concession relating to death duties without considering other conditions relating to garrison service and war-time service. The two types of service must be considered together. Honorable members will find that the Government has tried to establish clearcut distinctions in determining what conditions should apply to each kind of service.
– Order ! I can hardly hear the Minister.
– You are lucky.
– Order ! If the honorable member for Lalor (Mr. Pollard) offends again he will find himself outside the chamber.
– I have just been informed by the Repatriation Department that I have stated the position correctly. But if it is found after legal investigation that the position as I have stated it is not correct the Government will agree to the matter being raised again in the Senate. On behalf of the Government, I reject the amendment.
.- The attitude that was adopted by the Minister for the Navy (Mr., McMahon) in replying to the honorable member for Blaxland (Mr. E. James Harrison), on behalf of the Government, was most peculiar, to say the least of it. The Minister began with an offensive remark concerning the honorable member for Blaxland.
– I rise to order. My remark was not offensive.
– That matter has been dealt with.
– The Minister’s speech began with a remark that the Opposition thought-
– Order ! That subject has been dealt with.
– Later in his speech, when the Minister was attempting to avoid explaining his opposition to this very simple amendment, he said ironically, that Opposition members were a fine lot of people to champion the cause of returned servicemen. The Opposition takes offence at that remark also, but we believe that it was made because the Minister could not answer the case of the honorable member for Blaxland, who took some pains to explain the anomalies in this matter. These anomalies are simple and do not require a legal explanation. I doubt whether the Minister is capable of giving n legal explanation of them. The honorable member for Blaxland has based his argument on the human merits of the case. The Minister stated that the Navy and Air Force were covered by the provisions of the bill and the Opposition agrees with that statement. But the people about whom we are concerned are those who suffer some disability and who are not provided for in the Bill. Why should they be left outside the scope of this measure ?
– The honorable member for Parkes (Mr. Haylen) obviously has not read the amendment.
– I have. No explanation has been offered of the attitude of the Government, which is consistent with the attitude that it has adopted all through the life of this Parliament. The Government has protested undying friendship for the cause of servicemen. Yet it has made the position of servicemen worse by means of this bill.
.- I propose to move a further amendment. I do not intend to discuss it at length, because I think that it is self-explanatory. Honorable members on this side of the chamber need not necessarily rely on advice from a department when they believe that something is being done which involves servicemen and ex-servicemen.
M’.r. Curtin. - Hear, hear !
– The honorable member for Watson (Mr. Curtin) has no real right to speak on this subject. I propose to move -
That iii proposed sub-section (1a.) of section 9, after the words “ been on Korean or Malayan war service the following words be added: - “including any period of service in Japan “-
– Order ! The honorable member would not be in order in moving that amendment unless the honorable member for Blaxland (Mr. E. James Harrison) withdraws his amendment.
– In that case, I give notice of my intention to move the amendment in the terms I have stated.
– I have already given an assurance that this matter will be considered when the bill is before the Senate.
– The House of Representatives has a right to express its opinion on this matter.
– I rise to order. Would the honorable member for Blaxland be in order in withdrawing his amendment temporarily in order to permit the honorable member for Bowman to move his amendment ?
– That may be done only by the leave of the committee.
– I ask for leave to withdraw my amendment temporarily in order to permit the honorable member for Bowman to move the amendment he has foreshadowed.
– Is leave granted?
– The Chair cannot accept a qualification of that kind without the approval of the committee. Is leave granted for the honorable member for Blaxland to withdraw his amendment temporarily?
Government Members. - No.
– Would it be in order for the honorable member for Blaxland to withdraw his amendment now, and thereby enable the honorable member for Bowman to move his foreshadowed amendment?
– Only by the leave of the committee.
– I rise to order! The amendment moved by the honorable member for Blaxland has not yet been circulated.
– The Chair is in possession of a written copy of the amendment, which is in order.
– It has not yet been circulated.
– It has had a limited circulation.
Social Services - Unemployment Benefit - Postal Department - Telephone Services
Motion (by Mr. Eric J. Harrison) proposed -
That the House do now adjourn.
.- I am sorry that the Minister for Social Services (Mr. Townley) is not present in the House, because at question time yesterday I promised to prove that he had misled the House, I believe deliberately, in his reply to a question which I had asked him. On a number of occasions, I have stated that certain tactics have been adopted by the Department of Social Services for the purpose of keeping down the number of persons eligible to receive the unemployment benefit. One of the methods adopted by the department is to compel unfortunate unemployed persons to produce evidence, to its satisfaction^ that they have made reasonable efforts to secure work. Registration with the department as an unemployed person is not sufficient to establish a right to the unemployment benefit. Applicants must satisfy the department that they have perused the newspapers and responded to various advertisements of vacant positions, which may suggest suitable employment. Yesterday, I asked the Minister whether that was a requirement of the department, and, if it was, why he did not recommend to the Government that a special allowance be paid to unemployed persons to meet the cost of newspapers and fares, because of the inadequacy of the unemployment benefit. The Minister, in reply, stated that the answer to both questions was “ No “, that this practice had not been followed by the department, and that for that reason, he was not prepared to recommend the payment of an additional allowance to unemployed persons. I have the Minister’s own correspondence, bearing his signature, to prove my point. One letter, which is dated the 14th August last, reads as follows: -
Registration for employment with the Commonwealth Employment Service is in most cases accepted as sufficient compliance with the requirement of the law that the claimant must take reasonable steps to obtain work. Tt is proper, however, for my department, where it considers it necessary, to require a person claiming or reciving an unemployment benefit to state what other efforts he made to obtain work . . The daily newspapers fre quently contain advertisements of many vacant jobs, and it is reasonable to expect a man receiving an unemployment benefit to peruse these advertisements and follow up any which would seem to provide suitable work.
The Minister is asking unemployed persons to supply the names of the employers whom they have approached, on their own initiative, and unless such information is regarded as satisfactory to the department, the persons concerned are not registered, and receive no benefit. Apparently, the Minister was unaware, when he answered my question, that he had written another letter on the subject. On the 16th June last, he wrote a letter to me in the following terms: -
Whilst the Commonwealth Employment Service renders all possible assistance, the onus of finding suitable employment rests with the beneficiary and, in order to ensure that this requirement is observed, every beneficiary is requested from time to time to furnish the Registrar of Social Services with details of the efforts he has made in that direction.
That statement is clear and definite. The Minister, in his correspondence, has freely admitted that this practice is followed by his department, and that every beneficiary has to answer inquiries from departmental officers satisfactorily, or be deprived of the unemployment benefit. Notwithstanding that, the Minister stood up in his place in this House yesterday, and denied that the practice, to which I have referred, is being followed by his department. From the evidence which I have produced, it will be seen that the statement I made is perfectly true. The Government is keeping down the number of persons in receipt of the unemployment benefit by various means. It is doing so, not by finding them employment and having them absorbed in work, but by using various devices to reduce their numbers. I have proved conclusively the truth of the statement which I made yesterday that the Minister was not telling the truth when he said that this practice was not being followed by his department.
I wish to refer now to several matters that relate to the administration of the Postal Department. About last Christmas a number of female employees were dismissed from that department after many years of satisfactory service. They had entered the department during the war to take the place of officers who had enlisted in the Services, and they had performed their duties satisfactorily. They were dismissed, no doubt, because men became available to take their positions. But what happened in regard to their furlough ? Earlier this year this Par- 1liament passed the Commonwealth Employees’ Furlough Act, under which these women would have been entitled to pro rata pay in lieu of furlough; but the department decided to exclude them from the benefits of the act. It was argued that the women were not being retrenched in accordance with the terms of the act, but were being replaced. As the result, those women have been deprived of what I consider to be their right, and I think the Government should take some action to correct the position. Before one of the bright boys in the Postal Department thought this one .up, a number of women had already been paid, and now the department is trying to get the money back. I understand that the women either have not got the money, or are refusing to pay it back because they consider that they have received only their rights under legislation passed by this Parliament. The Government and the department are most anxious to get themselves out of this predicament. I will tell the Government how it can get itself out of the predicament. It should review this stupid decision. The explanation that the women who have been dismissed have not been retrenched in accordance with the terms of the Commonwealth Employees’ Furlough Act will not be accepted by any reasonable section of the community as sufficient grounds for depriving them of their rights.
The people of my electorate are experiencing the same difficulties as are the people of other electorates as the result of the failure of the Postal Department to provide adequate telephone services. However it is not about my own electorate that I propose to speak to-night. The people of some other electorates have the misfortune to be represented by other than Labour members, and they have to depend on Labour men to bring their complaints to the notice of the Parliament. I elI… before me a copy of the Nambucca District News, which contains an article headed -
Macksville Solicitor Critical of PostmasterGeneral’s Department.
I understand that Macksville is in the electorate of the honorable member for Lyne (Mr. Lucock). The solicitor referred to is apparently a live-wire member of the community because he complains that this important town of 4,000 people on the north coast of New South Wales has to depend on a dilapidated post office, a picture of which I have in my hand. The solicitor says that some applicants for telephones have been waiting for up to three years. Here is what he writes in the newspaper article -
Some months ago I wrote on behalf of these “ silent “ citizens, a letter to the Shire Council requesting its assistance in asking the Postmaster-General for phones in the “ black out” areas. This letter went through the usual channels to the Postmaster-General and in due course his reply, per our local Member, was forwarded to me. Inter alia, it stated that the reason for no phones in our area was shortage of cable and that “ within “ eight weeks work would commence to relieve the complained of “ area “. This statement of “ within eight weeks “ intrigued me and I checked on the calendar. My reaction was like a bucking broncho as I interpreted it as a direct insult to my intelligence. Eight weeks from date of his letter (17th March, 1953) was the Tuesday after the Senate election. The old political creed, “ promise anything as long as you retain your votes “.
I understand Nambucca Heads is in a similar plight. It makes one think that this electorate needs a change of party, that we are too safe and consequently get no service until the borderline electorates are assisted.
I understand that the Postmaster-General (Mr. Anthony) has a pineapple farm 3 or 4 miles from Ballina - and that not long ago, although many people in the district have been waiting for years for telephones, a telephone service - the number is Ballina 391 - was installed at this pineapple farm. I am informed that it was necessary to run a special line for some distance to this property. I think that residents of that area who have waited for years for telephones are entitled to be very indignant at the action of the Postal Department and at the complaisance of the honorable member for Lyne, who, I understand, represents a large section of that district for accepting this situation without protest.
-(Hon. Archie Cameron) . - Order ! The honorable member’s time has expired.
– The honorable member for East Sydney (Mr. Ward) referred in his opening remarks to the absence from the chamber of the Minister for Social Services (Mr. Townley) . I said by way of interjection, thinking that the honorable member might have some regard for the circumstances, that- my colleague was absent because he has been .receiving medical attention for some days and was not able to remain in the House at night. Under those circumstances, and particularly as a. charge was being levelled against the Minister of having supplied false information to the House, I thought that common decency would have suggested to the honorable member for East Sydney that he should defer his remarks until the Minister was present and had an opportunity to answer the charges. I have no doubt that the Minister will be able to deal with those matters to the entire satisfaction of the House. We may have our own views about the motives which impelled the honorable member for East Sydney not only to make those charges in the absence of the Minister, but also to relate them to our conduct in respect of the payment of the unemployment benefit. It is suggested that payment should be made for expenses incurred in seeking employment. It is well known that the unemployment benefit begin very shortly after a person ceases to be employed. The general level of employment in this country has been so high that only the most thriftless of people could not have saved something to meet their needs in the event of unemployment.
– What a contemptible thing to say.
– Order ! The honorable member for Eden-Monaro must withdraw his remark that the Minister is guilty of contemptible conduct.
– I withdraw.
– I say that having regard to the employment situation over the last five or six years, any man who is not able to cater for his own needs during a temperary period of unemployment when he has the supplementary payment of the unemployment benefit, did not make reasonable provision when his position was more fortunate. We hear from honorable members opposite continual attacks upon the employment situation. Those attacks are not in accordance with reality, but are designed to procure a political result. Day after day I ‘ am being pressed by different sections of industry to supply labour for their needs. If honorable members opposite have a genuine case of a person seeking employment, I invite them to bring it to my notice. Only in the last week, in New South Wales, a State which has been alleged to have the greatest degree of State unemployment, a State instrumentality has been pressing us to provide unskilled workers urgently. I refer to the Department of Railways.
– The New South Wales Department of Railways.
– We shall see about that.
– I shall be very glad to give the honorable member for Watson (Mr. Curtin) confirmation. Other industrial establishments also require labour. I can only assume that all this sort of synthetic passion, which is whipped up on this issue, flows from the very understandable disappointment of honorable members opposite that the rapidly improving employment situation has deprived them of what they had hoped would be an important political card to play against us in the course of the next few months.
.- Mr. Speaker-
Motion (by Mr. Eric J. Harrison) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. Archie Cameron.)
Majority . . . . 14
Question so resolved in the affirmative.
Original question resolved in the affirmative.
The following paper was presented : -
Overseas Telecommunications Act - Seventh Annual Report of the Overseas Telecommunications Commission (Australia) for the year ended 31st March, 1953, together with financial accounts.
House adjourned at 11.40 p.m.
The following answers to questions were circulated : -
n asked the Minister representing the Minister for Trade and Customs, upon notice -
– The Minister for Trade and Customs has supplied the following information: -
Cite as: Australia, House of Representatives, Debates, 7 October 1953, viewed 6 July 2017, <http://historichansard.net/hofreps/1953/19531007_reps_20_hor1/>.