20th Parliament · 2nd Session
Mr. Speaker (Hon. Archie Cameron) took the chair at 10 a.m., and read prayers.
-Some months ago I asked the Minister for Social Services a question regarding the reciprocal agreement between the Australian and United Kingdom Governments in respect of social services. The Minister said at the time that a bill to ratify the agreement would be introduced into this Parliament in sufficient time for payments to United Kingdom pensioners living in Australia to commence in January, 1954. As there is no information on the business-paper regarding this measure can the Minister say when this legislation will be introduced and whether payment will commence from the 7th January, 1954?
-It was found that it was not necessary to introduce the legislation because the Social Services Consolidation Act contained all the necessary provisions. The agreement has been ratified and will operate from the 7th January, 1954?
Mr.DEAN. - Can the Minister for Social Services say whether the Social; Services Consolidation Act will confer the benefits of the pensioners’ medical service on United Kingdom pensioners in. Australia ?
– Yes. Persons who come under this act will be pensioners in. the same sense as if they were Australian pensioners, and will be eligible for the medical benefit.
– Can the Minister for Social Services say whether it is a fact that his department has issued instructions to all officers that the pensions of pensioners who own their own homes but who are unable to live in them because of illness or infirmity, are to be cancelled until such pensioners have sold their homes and eaten out that portion of their capital which is in excess of the permissible amount? If that is so, will the Minister explain the difference between the position in which a pensioner who, because of ill-health, leaves his home and goes to reside with relatives, and that in which relatives go into the home of a pensioner to reside with him and care for him? Will he also explain, why one of those pensioners has his pension cancelled and the other is allowed to retain his pension? Will the Minister examine the matter with a view to removing this anomalous position ?
– I have no personal knowledge of any such directive, but I shall be pleased to examine the position and furnish the honorable gentleman with a full and complete answer.
-Can the Treasurer say whether consideration has been given to a request made by me some time ago, during an adjournment debate, concerning the payment of service pensions by cheque in specific cases where pensioners make such a request in writing because of hardship or difficulty occasioned in travelling to or from the local post office in order to collect their pensions?
– This matter’ has been adjusted along the lines desired by the honorable member. Upon request, service pensioners may, in future, receive their pensions by cheque.
– Will the Treasurer inform the House whether the Government will give consideration to the malting of a grant to assist those who suffered hardship and financial loss as a result of damage to their properties from storm and tempest within recent weeks or within the last few days? At Strathpine and Gaythorne in my electorate and at Mitchelton in the electorate of the honorable member for Ryan, recent cyclonic storms have caused unfortunate and most regrettable damage, and financial aid from the Government would do much to relieve distress.
– I assure the honorable member for Petrie that any representations that may be made by the State Government to this Government for the purpose that he has mentioned will receive sympathetic consideration.
– I desire to ask the Treasurer a question concerning the cost of newspapers, which is a considerable item in the budget of the worker. Some months ago newsprint cost £200 a ton. It now costs only £70 a ton, yet there has been no consequent reduction in the price of newspapers, although printers’ costs have fallen to such an extent that, in many cases, they have been able to reduce their price for the printing of trade journals by £30. Will the Treasurer investigate the delay in reducing the price of newspapers?
– The honorable member’s question should be directed to the Government of New South Wales, which is in control of prices in that .State. The matter is entirely in the hands of that Government.
– Can the VicePresident of the Executive Council, who is the Minister in charge of the Royal tour, inform me whether the Government has arranged for Her Majesty to meet personally representatives of the aboriginal race? Has the Government arranged for one of their leading representatives to be present at any official function in the States or in Canberra attended by the Queen, or is a colour barrier to be erected in Australia, as it was in Bermuda, at the beginning of the Royal tour this week?
– The answer to the first part of the honorable member’s question is “ Yes “. The answer to the second part of his question is “ No “. My reply to the third part of his question is that it is unfortunate that he should have introduced the colour barrier into a question before he receives from the responsible Minister a reply that throws that matter right back into his own teeth.
– I desire to address a question to the Leader of the Opposition. Will the right honorable gentleman inform the House whether the provisions of the Sydney City Council (Disclosure of Allegations) Bill are retrospective? If they are retrospective, can he tell the House how he reconciles that provision with the attitude of his party towards legislation introduced by this Government ?
– Order ! The question deals with a matter for which the Leader of the Opposition is not responsible. Does the right honorable gentleman wish to reply to it?
– Yes, I am quite prepared to give information to any honorable member, irrespective of whether it deals with matters within the jursidiction of this House. Last night, we debated for two hours a matter which did not come within the province of this House. You, Mr. Speaker, permitted that debate to proceed-
-Order! I ask the Leader of the Opposition to resume his seat for a moment. I point out to the House distinctly that, until last session, I always refused to allow debate on matters which were within the province of a State parliament. When I repeated that ruling one afternoon, the honorable member for MacArthur, supported by the honorable member for Mackellar, submitted a motion of dissent. The motion was supported by the entire Opposition, and was carried. Until that vote is rescinded by the House, I am bound by the decision, so that any matter within the province of a State parliament may be debated here.
– Personally, I do not care what matter is raised here, so long as there is some coherence and understanding about the ruling. The matter to which you, Mr. Speaker, referred had nothing whatever to do with the proceedings last night.
– Order ! The right honorable gentleman may not argue that matter except on a substantive motion.
– I cannot move a motion of dissent at this stage. I remind the House that the honorable member for Bowman asked me, as the Leader of the Opposition, a question about a bill that was introduced into the New South “Wales Legislative Assembly yesterday. The details of that legislation are not yet available to this House. I suggest that the honorable member consult the persons who organized the demonstration last night for federal political purposes, without waiting even to look at the bill, about which they displayed such conspicuous ignorance.
– Order ! I informed the Leader of the Opposition that the question dealt with a matter which, I thought, did not come within his jurisdiction, and I pointed out that it rested with him whether or not he replied to it. He chose to reply.
– I have answered the question.
– I direct a question ro you, Mr. Speaker. Will you closely examine the press gag legislation that was introduced into the New South Wales Parliament yesterday and advise members of this House, particularly honorable members from that State, how that measure will affect them? Will it affect them in any way in the discharge of their duties, either inside or outside this House, should allegations of graft court ro their notice?
– I should say that anything that may be done by the Parliament of New South Wales would have no effect upon the powers, privileges and immunities of honorable members of this House.
Mi’. ANDREWS.- Can the Minister for External Affairs inform me whether there is any substance in the rumour that the Ambassador for Eire will shortly call on him with the object of having his letters of credence to Australia withdrawn because of the dispute on the designation of an Australian representative to his country ?
– I am glad to be able to assure the honorable gentleman that there is no truth in the rumour. The distinguished representative of the Government at Dublin called on me last evening and we had a perfectly amicable discussion, as we always do.
– Will the Minister for External Affairs inform the House of the reason for the delay in completing the appointment of an ambassador from Australia to Ireland in view of the fact that a person was nominated for that position six months ago? Is the reason for the dispute over the appointment the refusal of the Australian Government to address the letter of credence-
-Order! A question relating to that subject is already upon the notice-paper. I regret that I must nile the question out of order.
– Has the attention of the Minister for Supply been drawn to the reported discovery of new uranium fields in Western Australia? If so, has he any information to give to the House concerning their importance and possible value?
– I have no specific information about this reported new find. Eoi- some time past it has been thoughtlikely that the type of country in which this new find has been reported was promising country from the point of view of the discovery of uranium-hearing ores. I can only say that I hope the report is true. It appears that the policy of this Government, which has been consistently pursued for some years, of promising rewards and giving wide publicity to the importance of prospecting for uraniumbearing ores is beginning to bear fruit. The Government will continue to give all the assistance it can to anybody interested, in Western. Australia and elsewhere, to encourage further prospecting and further finds.
– I address a question to the Minister for Air relative to the tragic air crash which ocurred at Mallala yesterday afternoon, as a result of which three Royal Australian Air Force officers lost their lives. Can the Minister say why it is necessary, in peace-time, for such a strict security check as that which has been made in regard to this accident ? Why have press photographers been prohibited from taking photographs of the aircraft, and why has a guard been posted all round the field in which it crashed? Is not this Bristol freighter similar to that, if not the identical aircraft, in which the Prime Minister travelled to Woomera in connexion with the Jindivick experiment? On that occasion, the aircraft in which representatives of the press travelled was of a similar type and was overworked like all the “Bristol freighters on the Woomera run. Was not one of those aircraft grounded at Woomera, and was not a similar machine flown there to take its place1 and found on arrival to have engine trouble? Will the Minister make a statement to the House at the first opportunity and give all facts in relation to the maintenance work that is done on these aircraft? Is he aware that rumours to the effect that all these aircraft on the Woomera service have been overworked and not adequately maintained are current in Adelaide today? Is he aware-
– Order ! The honorable member is introducing all sorts of matter which should not be included in questions.
– This is a serious matter, Mr. Speaker. Finally, is the Minister aware that the restrictions which precluded representatives of the press from photographing the crashed machine have added fuel to the rumours in relation to unsatisfactory maintenance of these aircraft?
– I regret that I have to announce to the House that a Bristol freighter aircraft crashed yesterday at Mallala and that three members of the Royal Australian Air Force were killed in the accident. The flight on which the machine was engaged was a normal training flight, and a slow turn was being carried out when the accident occurred. Fortunately, the Director of Flying Safety was not far from the scene, and an officer of the Aeronautcial Research Laboratories has been sent there to carry out a full investigation. Pieces of the aircraft were widely scattered, and it was thought that nobody should touch them before a complete investigation had been made. Therefore, restrictions were placed upon the movement of press representatives and other people into the area where it was thought that parts of the aircraft might be located. I endorse that policy. I think it was in the interests of air safety and efficient investigation. The honorable member’s statement on the maintenance of aircraft was a disgraceful assertion to make in this House on hearsay evidence, which the honorable gentleman obviously must have received over the telephone. The Royal Australian Air Force has an enviable record of safety in flying, and so, too, have civil aircraft, in this country. For an honorable member to raise such suggestions in this House without any real facts at his disposal-
– I asked a question.
– The honorable gentleman made statements in the course of his questions which would, in effect, discredit the Royal Australian Air Force and civil aviation companies in this country. That he did so, in my opinion, is most regrettable. I think that the information to the effect that the Prime Minister travelled in a Bristol freighter will be found to be inaccurate. The right honorable gentleman usually travels in a Dakota, not in a freighter, and on the occasion of his second visit to Woomera I believe he travelled in an Anson that was made available by the Minister of Supply. Three points arise from the honorable member’s questions.
First, his alleged facts were wrong. Secondly, it was a disgraceful statement to make in this House. Thirdly, a full investigation is being made. I shall make known the results of that investigation at the earliest possible moment.
– Is the Minister for Air satisfied that full use is being made of the Richmond Royal Australian Air Force station now that the improved airstrip there has been completed? As the facilities for the accommodation of Air Force personnel at the station have been improved and enlarged, is the Minister of the opinion that greater advantage could be taken of the station for the location of permanent staff?
– The air-strip at Richmond has been completed, as the honorable member has said. In recent months, the Royal Australia Air Force has decided to make several organizational changes. The head; quarters of the transport group will be shifted from Richmond to Canberra, and No. 11 Maritime Squadron will be transferred from Pearce, in Western Australia, to Richmond. Probably the honorable member knows that national service trainees have been shifted from Richmond to other Air Force stations throughout the Commonwealth. As a result of these changes, the number of permanent personnel and aircraft stationed at Richmond will be increased. The facilities for anti-submarine exercises by No. 11 Squadron will be improved. When the organizational changes have been completed, full use will be made of the airfield at Richmond.
– I ask the Minister for Immigration a question concerning Broughton hostel for British immigrants in Church-street, Burwood, in the electorate I represent. Is the Minister aware that rumours are strongly current in the district that the accommodation of immigrants at the hostel is shortly to be discontinued and that the premises are to be used thenceforth only for stores? Is this correct? Will the Minister bear in mind the long-standing wish of the Burwood Council, which has owned the property for years, to use it for municipal purposes, for which it is very badly needed? Is the Minister also aware that the council claims that a former government, the last Labour Government, gavethe council an undertaking that theproperty would be handed back to it assoon as it was no longer needed for defence purposes? Will he examine the possibility of returning the property to the council either now or at a definite date in the near future?
– The Government has noearly intention to vacate the Broughton hostel. It is fully occupied at the present time and is required for the purposes of the immigration programme. It wasacquired in 1942 from the Burwood Council by the Department of the Army, and in 194S approval was given for its use as an immigrant hostel. The Government has indicated that when the property is no longer required for immigration purposes, it will be returned tothe council. That confirms the honorable member’s suggestion that an assurance was given by some previous administration. However, I can see no possibility of that situation arising at an early date.
– Will the Minister for External Affairs, who is in charge of the Commonwealth Scientific and Industrial Research Organization inform the House how many pasture investigations and experiments are being conducted by the Commonwealth Scientific and Industrial Research Organization in northern Australia? Is some of this work being conducted in conjunction with State Departments of Agriculture? Have any results of major importance yet been obtained in those areas? Now that the Cape York Peninsula area is being developed by the introduction of a water-transport system by an enterprising company in north Queensland, will the Commonwealth Scientific and Industrial Research Organization assist in the development of that area by research and pasture investigations?
– -The questions that have been asked by the honorable member for Darling Downs are completely justified and to answer them fully would occupy considerable time. However, I shall give him such information as I have readily available. The Commonwealth Scientific and Industrial Research Organization has pasture research stations centred at Katherine, in the Northern Territory, the Kimberleys, in Western Australia, and Ayr, in Queensland. The Ayr station is largely conducted by the State government department concerned. In general, all Commonwealth Scientific and Industrial Research Organization work of that type is done in conjunction with the revelant State government departments. I believe I am correct in stating that the Commonwealth Department of Territories collaborates in the work at Katherine. Definite results have already been obtained in many avenues of research both in dry and irrigated pastures. I could obtain from the Commonwealth Scientific and Industrial Research Organization for the honorable gentleman a condensed statement of the general results that have been achieved at each of the three stations. The pasture research in the Cape York area generally is the responsibility of the Queensland Department of Agriculture and Stock. There is a land survey unit, and Mr. Christian, of the Commonwealth Scientific and Industrial Research Organization, will be working with it in the Cape York area for the next several years. Pasture research will be one of the matters with which the Commonwealth Scientific and Industrial Research Organization unit will concern itself permanently. Mr. Christian evolved and developed the land survey units that have done such extraordinarily useful work, particularly in the northern part of Australia over the past three to five years.
– A good Christian.
– He is a good Christian in all respects. I shall ask Mr. Christian to communicate with the honorable member for Darling Downs and he can fortify the information that I have given briefly.
– In view of the fact that medical opinion generally has agreed that lung cancer is mainly caused by inferior, low-grade cigarettes and tobacco, will the Minister for Health have low-grade imported cigarettes and tobacco analysed so that medical officers of the Department of Health and private practitioners can take steps to protect the health of Australian citizens?
– The honorable member has not stated the facts correctly. The opinion of many members of the medical world is that lung cancer is caused by excessive smoking of any kind of tobacco.
– In the absence of the Prime Minister, I address my question to the Treasurer. Will the Government re-introduce the practice, regrettably discontinued two years ago - I think on a decision by the Prime Minister - of making work available to age pensioners in this city for a couple of weeks each year? Does he believe that in the work of preparing for the Royal visit to the Australian Capital Territory next year, there are many avenues in which these worthy old men could be employed profitably? In considering this matter, will he recognize that in this city the Government also has the role of a municipal council and, therefore, should not do less than many municipal councils are doing in this connexion ?
– The Minister for the Interior will reply to the question.
– As far as I know, everything that is necessary to be done in connexion with the matter mentioned by the honorable member is being done. One difficulty in the Australian Capital Territory is that if we employ a temporary worker for a month, he is asked to pay a year’s dues to the appropriate union. We try to provide as much temporary work as possible when it is necessary to do so, but at the present time so much employment is available that I do not think it is necessary for my department to take on extra hands for the purpose mentioned by the honorable member.
Mr.FALKINDER. - I direct a question to the Minister for Supply, as the Minister concerned with the procurement of essential materials. Is the honorable gentleman aware that several raw materials, especially reinforcing steel, are very scarce in Tasmania, and that the scarcity is adversely affecting major projects such as the Port Huon wharf? Will the Minister take all steps possible to alleviate these shortages? Will he consult with the Minister for Shipping and Transport in an endeavour to speed up deliveries of essential raw materials ?
– I was not aware of any general shortage of essential defence materials within the categories for which I am responsible. I shall refer the honorable member’s question with respect to steel, to the Minister for National Development, who, I am sure, will give prompt attention to the difficulty that he has mentioned. I shall also refer the difficulty that the honorable member has indicated with respect to shipping to the Minister for Shipping and Transport. I am sure that my colleague will do his best to ensure that shipping shall be made available on the Tasmanian service, as he has done on many occasions in the past. It is common knowledge that when Tasmania has been suffering as a result of a shortage of shipping, the Minister has intervened and arranged for shipping to he made available to relieve those difficulties. I am confident that if the facts are as the honorable member has stated them, my colleague will do what he can to overcome those difficulties.
– Is the Treasurer aware that twelve members at the branch of the Royal Mint in Perth have been dismissed and that there is a likelihood that from fifteen to twenty other employees will be dismissed? Is thic; retrenchment due to a fall in the demand for coinage, principally bronze, which has been diverted to the ‘Melbourne branch of the Royal Mint? If this is so, will he issue an instruction that further work be directed to the mint at Perth in order to ensure the continuance of employment of artisans now employed there?
– I have no knowledge of any dismissals of staff at the Perth branch of the Royal Mint. the administration of which is the responsibility not of the Government but of the Deputy Master of the Royal Mint. The mint at Perth produces bronze coinage for the Australian Government, and there has been no diversion of this production to the mint at Melbourne. However, owing to the fall in the demand for bronze coinage it has recently been found necessary to reduce orders with the mint nt Perth for this coinage.
– Recently the” Minister for the Navy referred to the practice of permitting commanders of Australian naval vessels to take civilians on short cruises as paying guests. Will he furnish the following additional information : When was the rate of maintenance fixed at 9s. a day? Is this regarded as merely a nominal charge, or is it contended that it meets the actual cost of maintenance of a guest aboard ship? To whom is the cost of maintenance paid, and under what item of revenue would it appear in the departmental Estimates? Will the Minister ascertain and inform me of the total amount that has been, collected from this source in each of the last three financial years?
– I am afraid thai the honorable member is under a misapprehension about the atmosphere in which these cruises are conducted. He and another honorable member who dealt with this matter on a previous occasion conveyed the impression that those engaged in these cruises enter the land of lotus-eaters such as has been described by Homer and Tennyson, where they disport themselves on the deck of one of Her Majesty’s ships while attractive natives on the shore strum their guitars and endeavour to induce them, to leave their ships. The honorable member should turn his attention to the first ten verses of Coleridge’s Ancient Mariner, which I suggest, would convey a more appropriate impression of the nature of these training cruises. They are training cruises in every sense. I take no objection to accommodation being provided on these vessels for certain civilians who happened to be travelling to any of the places to be called at in the course of the cruises provided that the training exercises were not interrupted in any way. I shall consider the six questions asked by the honorable member, and if I find that I can give him any useful information about them I shall do so. If the honorable member would like to have a practical demonstration of what is involved, I shall be only too happy to accommodate him. I shall put my colleague, the honorable member for St. George with him, but I shall do it on the understanding that while all care is taken no responsibility is accepted.
– On the 19th November, the honorable member for McMillan (Mr. Browm) asked me a ques tion about the absence of telephone directories in party rooms. I have had that matter investigated, and I have ascertained that it is customary to supply these directories, but unfortunately now and again they seem to disappear. That is one of our difficulties.
– On the 19th November, the honorable member for Wilmot (Mr. Duthie) asked a question in which he suggested that headings should be placed on the reports in Hansard of members’ speeches on adjournment debates. Subject headings are now grouped at the beginning of the reports of adjournment debates, but there are certain difficulties in following the questions procedure in adjournment debates, because honorable members sometimes raise two or three different matters in the one short speech. That is the reason why the subject headings are grouped together at the beginning of the report of the adjournment debate.
Motion to Disallow Regulations. Mr. CLAREY (Bendigo) [10.38].- I move -
That the amendment of the Public Service Regulations made by Statutory Rules 1953, No. 03, bc disallowed.
The regulation concerned relates to the automatic adjustment of the wages of public servants. Shortly after the Com monwealth Court of Conciliation and Arbitration decided in 1922 that wages of persons employed in industry should be adjusted automatically in accordance with the cost of living, the Public Service Arbitrator and the Public Service Board adopted the same principles. The principles were finally embodied in regulation 106a. Regulation 93 repeals regulation 106a. In order that honorable members may understand the exact meaning of the regulation which I seek to have disallowed, it might be advisable to point out that three methods have been followed when the wages of public servants have been adjusted. The first is for the Public Service Arbitrator to provide in awards that he makes that the wages of a person covered by the award or determination shall be varied in accordance with regulation 106a. In a few other cases a special adjustment clause has been placed in the determination itself. However, to those who were not covered by a determination of the Public Service Arbitrator, the provisions of regulation 106a applied so that the whole Public Service was covered by this method of adjustment. When regulation 106a was adopted, it was agreed between the Public Service Board and the various organizations that come within the jurisdiction of the Public Service Arbitrator, that there should be no variation of the regulation without prior consultation between the organizations and the Public Service Board. So, when the question of the adjustment of wages of public servants was raised consequent upon the decision of the Commonwealth Court of Conciliation and Arbitration, the matter was referred to the Public Service Arbitrator. The result was that, in respect of those employees who had a wages adjustment clause in their award, that clause was struck out. In respect of those who came within the provisions of regulation 106a, the recommendation was that the regulation should be repealed. Consequently, the whole question has come before the Government in the form of a recommendation, and we now have regulation 93, the effect of which is to repeal regulation 106a. Thus, no further adjustments of the wages of public servants will occur.
In addition to repealing the costofliving adjustment provisions, regulation 93 inserts a provision which, in effect, means that the wages of public servants are to be frozen from now on. The regulation fixes salaries as the standard rate of salary as prescribed plus lie total amount of cost-of-living adjustment of wages up to the present, which in the case of a male officer aged 21 years or over, amounts to £198. The first effect of the new regulation is that public servants will no longer be compensated for the still increasing cost of living which, in the September quarter of this year amounted to £6 a year. In effect, therefore, price increases which occurred before the decision of the arbitrator was given, will not be reflected in the wages of public servants. To that degree their purchasing power has diminshed, and their standard of living has been reduced. I am informed that public servants under the control of the Public Service Board number 147,500. When employees of the many governmental instrumentalities such as the Parliament itself and the Australian Broadcasting Commission and others are included, the total reaches 200,000. On the figures for the September quarter alone, the loss of wages by those employees amounts to £600,000. If the Government refuses to permit the disallowance of this regulation, public servants in future will have to submit to a progressive reduction of their living standards. For those reasons the Opposition opposes the policy of the Government and asks this House to disallow the regulation. The Government should be condemned for its introduction of this regulation. There is no provision in either the Commonwealth Conciliation and Arbitration Act or the Public Service Arbitration Act 1952 which makes it mandatory for the Australian Government to follow the decisions of the court. At the very best, the court decides the minimum amount of wages that shall be paid, but it does not fix a maximum amount. The Government may pay more than the award rate if it so desires. The Government, by its decision to introduce this regulation, says, in effect, that it is pursuing a policy of wage reduction and of continuing reductions in the standard of living of public servants.
The Government may choose one of two courses. It may accept the decision of the Public Service Arbitrator or it may follow the decisions that have been made in Victoria and Queensland and ensure that, as the cost of living rises, public servants will be protected against any lowering of their living standards. The Government has chosen a course the result of which will be that, whether or not prices rise, the wages of public servants will be frozen and their standard of living will be reduced. Let me remind honorable members that on many occasions over the last two or three weeks supporters of the Government, with much satisfaction and glee, have made statements which indicated that they agreed fully with the contention of counsel who represented the Australian Council of Trades Unions that Australia’s economic position to-day was sound and that there was no reason for an increase in theworking hours of those engaged in industry or in the Public Service or for a reduction of their wages. One can assume that supporters of the Government believed that what counsel for the Australian Council of Trades Unions said in relation to the Australian economy was correct. The Government, by its decision to reduce the wages of public servants, has shown its true colours and has indicated that it is of the opinion that Australia’s economic position is not as sound as it should be, and that it is calling upon the public servants and other workers in the community to share the responsibility of improving that position. If honorable members look at the treasury figures that have been released up to date, they will see that Australia’s economic position to-day is better than it was at a corresponding period last year. The regulation reveals the Government in its true colours as a government which stands for wage reductions and a reduced standard of living. This is an exceedingly serious matter as far as the people of Australia are concerned, because the loss of purchasing power does not stop with the first disbursement of wages. Public servants will, in one quarter alone, suffer a reduction in the cost of living at the rate of £600,000 per annum. The mere fact that wages are frozen does not. indicate, or guarantee, that prices will not rise in the future, because the whole history of prices and wage movements shows that at various times wages can rise whilst prices are falling, andvice versa. Therefore, the action taken by the Government is no guarantee or safeguard against an increase of prices in this country. In point of fact, this Government, which has introduced the system of frozen wages and a reduced standard of living, has, even within the last few weeks, passed legislation which will, inevitably, affect the cost of living. I refer to the legislation in respect of the price of wheat. That will result in an increase of price of bread, one of the commodities heavily weighted and included in the 0 series index, and one which is necessary to every household. This Government says, in effect, on the one hand, “ public servants’ wages must remain stationary; their standard of living must decline. At the same time, wo will take action that will force prices to rise “. Before the effect of the loss of purchasing power by public servants is properly felt, the money that would have been dispersed by them probably would have gone through three cycles of purchasing power before tapering off. If we consider, in addition, the combined effect of the loss of purchasing power by the great masses of workers in Australia due to wages being frozen generally, it will be seen that the Government is setting into operation a cycle which might have disastrous economic consequences. The reduced purchasing power could result in the vital economic forces of the community being most adversely and seriously affected. It could result in a falling off of production, and a slowing down of the wheels of industry, causing losses to industry itself. It could bring about a cycle which, ultimately, would lead to greatly increased unemployment and greatly increased instability in industry itself.
I am. amazed at the Government’s action, because we have seen in other countries the results of the application of a policy aimed at increasing the wages of the working masses of the community. In the United States of America such a policy has been applied for very many years. The experience of that country proves that if the great masses of the people enjoy high purchasing power, the economy prospers and the country flourishes; on the other hand, if their purchasing power is reduced, the community becomes stagnant, business starts to decline, and the whole economic life of the country is endangered. Instead of the Australian Government applying a policy aimed at keeping wages high and endeavouring to force prices down, so that the greatest result can come to the community, it says, in effect, “ We stand for the freezing of wages and the gradual reduction of the standard of living, irrespective of its effect upon the community as a whole “. We could, in certain circumstances, have understood the Government’s action if it had said frankly, “Australia’s economic position is desperate. We must take steps to safeguard and strengthen it. We shall observe the terms of the decision of the Commonwealth Arbitration Court; hut in addition we shall take steps to control every other factor that enters into prices and costs so that the standard of living will remain intact and no person in the community will suffer “. Instead, the Government readily accepted the decision to freeze wages and took no steps to control the other factors which affect the economic life of the people. Prices may rise to any heights.No proposals have been advanced in respect to the control or freezing of such matters as the rate of interest, profits, the cost of services and the many other factors that so actively affect our economic life. Such a policy indicates either that the Government is unmindful or careless of the need to preserve the living standards of the people or that it does not know how to handle the situation. As the proceedings in the Commonwealth Arbitration Court could have so greatly affected our economic life, our standards of living and the purchasing power of the people, one would have thought the Government would be represented at the hearing. Instead of following the example of the previous government, which was always jealous of the interests of the people, this Government remained unrepresented at the hearing and silent upon the issues involved. Because the action of the Government indicates that it favours a policy of reduced wages and standards of living - a policy which will inevitably bring about its defeat; because this regulation places upon the shoulders of public servants, through the medium of reduced wages and lower living standards, the task of curing the economic ills of the country; because a policy of reducing purchasing power may have disastrous economic effects; because the circumstances of the Commonwealth do not warrant this retrograde step; and because the regulation will not prevent further price increases.
– Is the motion seconded ?
– I second the motion.
.- The honorable member for Bendigo (Mr. Clarey), who led the debate for the Labour party on this issue, has made an extraordinarily lame attack on the Government. I can understand his embarrassment on being called upon to submit some of the arguments that have fallen from his lips in the course of his presentation of the case for the Opposition. The honorable member has devoted a great deal of his life and his career to the development of the system of arbitration in Australia upon which improved standards of living, higher wages and better conditions have been based. He realizes, perhaps better than any honorable member who sits behind him in this chamber, the value of the system of arbitration to working men and women and to the trade unions throughout Australia. So, when he was asked, in effect, to take a course of action designed to destroy confidence in the arbitration system, to prove that arbitration has outlived its usefulness and can no longer better the working conditions of men and women in Australia, I can well imagine what little heart he would put into his task. I was astonished to hear some of the expressions that the honorable member for Bendigo used. He said that he was amazed at the course of action that had been followed by this Government. I do not know whether he was really amazed or not, but clearly, the federal public servants were not amazed with the course of action that the Government followed.
– They knew what to expect.
– If they did, it was only because it had been the consistent policy of all governments, irrespective of their politics, since 1927. Ever since 1927, Labour governments and non-Labour governments have followed the broad decisions of the arbitration system in determining conditions for public servants. That is what has happened in this case. Why should this Government be criticized for adopting precisely the same, approach that has been adopted by every government since 1927 ? An article under the heading of “ Cost of Living Adjustment” in the October issue of the Journal of the Federal Public Service. a reputable and authoritative publication, reads as follows : -
It would lie h matter of some difficulty on the information available to advance any logical argument against the abolition of quarterly cost of living adjustments in the Commonwealth Public Service in line with the decision of the Full Court. The principles enunciated by the Full Court in respect of the basic wage have always been followed in the Commonwealth Public Service.
The organ of the Commonwealth Public Service has not given vent to any great outcry in connexion with this matter because, being intelligent and responsible men, Commonwealth public servants are just as interested as anybody else in maintaining the stability of our economy, and they have faith in the impartiality, ability and integrity of the judges who sit in the Commonwealth Arbitration Court and decide the course to be followed by our economy in order to maintain stability. No attempt has been made by the honorable member for Bendigo to show that the process that has been followed in this connexion is not in accordance with that which has been followed by every government since 1927. The honorable member said that two courses of action were open to the Government. He said that the Government, could have followed the lead that was given by the Public Service Arbitrator. That is the procedure which was followed in this case. The decision of the Public Service Arbitrator was only made after he had taken into consideration the special considerations that might be deemed to apply to the Commonwealth Public Service in view of the decision of the Commonwealth Arbitration Court. and only after the unions and the public service organizations concerned had had the opportunity to intervene in the proceedings before him. The honorable member continued by saying that, as an alternative course of action, the Government could have ignored the decision of the court as some of the State governments have ignored, it, and that the Government could have by-passed the the decision of the Public Service Arbitrator. That course of action has never been taken by any government since 1927. Had the Government done that it would have demonstrated a lack of confidence in, and a lack of support for the Commonwealth Arbitration Court and the Public Service Arbitrator.
I believe that the Government has the unanimous support of those who sit on this side of the House in this matter. A once great Labour party has reached the tragic stage in its development at which it is utterly unable to pursue any consistent course in relation to Arbitration. It lacks any realistic policy despite its past lip-service to the Arbitration Court. It lacks any real policy in its approach to the problems of government. That fact has been demonstrated by the motion that has been moved by the honorable member for Bendigo and the attitude of honorable gentlemen opposite to which he has given expression. This motion must cause honorable members to consider for a moment the decision of the Commonwealth Arbitration Court. The court sat patiently and sifted a great deal of evidence over a long period. It had before it applications from the employers for an increase in working hours, a reduction in male and female wage rates, and the suspension of quarterly adjustments to the basic wage. The court has been accused by the honorable member for Bendigo of lowering the standards of wage-earners. Consequently it is interesting to note that the court rejected all those applications which sought to increase hours of work and reduce wage rates. In other words, it confirmed the boom-wage rates and the shortest working hours that have ever been awarded by any tribunal in this country after it had come through a period of economic adjustment. What an abuse of the privilege of this House it is to accuse this tribunal which has dealt in this way with these matters of a lack of sympathy for the wage-earner! The court has awarded the shortest working hours in the history of this country, and in 1949 it laid the foundation for subsequent increases in wage levels. After a long, protracted sifting of evidence the court came to a conclusion which confirmed the great gains that the trade unionists of this country had made. Yet the honorable member for Bendigo has suggested that the court is lacking in sympathy for the workers and that it is undermining their standards.
One matter in respect of which the court did, to some extent, meet the viewpoint of the employers was the suspension of the quarterly adjustments of the basic wage. But did the court do that in order to destroy the working standards and living conditions of people in this country? Anybody who makes that claim must have failed to have read the judgment of the court. It is perfectly clear from that judgment that the court sought to ensure that industry would be able to continue to pay the highest wage that it could afford to pay. It must be remembered that at least several of the members of the court were appointed by a Labour government. But apparently honorable gentlemen opposite take the view that there is no limit to what industry can afford to pay.
– Is there a limit to what profit it can make?
– I shall come to that point in a moment. The honorable member for Bendigo, who is the recognized specialist and authority on industrial matters of this kind, and speaks for the Labour party on them, has suggested that we might follow the example of the United States of America by allowing our wage rates to soar. I should have thought that even a child who had made a. cursory study of economics would know that the situation of the United States of America, which has a domestic market of 160,000,000 persons and exports only 4 per cent, of gross national production, is in a vastly different position from that of Australia, which depends for its economic survival upon its capacity to export its primary products in competition with those of other countries. Quite obviously, we cannot afford to allow our wage structure and cost levels to reach such a point as to render us incapable of selling our export products in the markets of the world. That fact should be apparent to a child, yet the honorable member for Bendigo has seriously expressed the view that Australia might well emulate the policy of the United States of America, which has found it desirable in order to increase purchasing power, to allow wage rates to rise in accordance with increases of national productivity. Australia has a problem, not only in terms of productivity, but also in terms of selling its goods abroad in competition with those of other countries.
The other extraordinary charge made by the honorable member was that this Government has been culpable, in some way, because it did not put views before the Commonwealth Arbitration Court, during the hearing of the basic wage case, which would have influenced the decision of the tribunal. The honorable member claims that this Government has not followed the example set by previous governments in that direction. I find it difficult to understand his reasoning on. that point. I respect him greatly, and I do not think that he would deliberately set out to mislead this Parliament, but I find it difficult to believe that his memory is so short that he has forgotten that the Chifley Labour Government took precisely the same attitude of neutrality thi u ugh out the long hearing of the previous basic wage application.
– The Labour Government was represented in the court.
– Of course it was represented in the court, and this Government was represented in the court by Queen’s counsel, whose function was to give the court any assistance that it might seek from him, to bring forward information which the court might desire him to obtain, and to call any witnesses in the government administration whom the court might wish to hear. This Government adopted precisely the same attitude, which, I believe, was the correct attitude on a matter o.f this kind, as was adopted by the preceding Labour Government. It is bad for this country when great industrial issues become the plaything of party politics, and when politicians bargain for the votes of the wage-earners in a reckless and irresponsible fashion which could smash our economic system.
I do not know of any country in the English-speaking world in which the parliament tries to legislate on great industrial matters of this kind. Indeed, we can only view with dismay the actions of State Labour governments in recent years, which have sought to make industrial matters of this kind the playthings of party politics, and have taken out of the hands of industrial tribunals decisions on working hours, long service leave and wage rates. Where does the Labour party stand on these issues ? In the past, lip service has been paid to the cause of arbitration, but the actions of State Labour governments in recent times show that the Labour party is interested only in one-way arbitration, and not arbitration in the proper sense of the meaning of the word. We are told now that the reason why State Labour governments are continuing the system of cost-of-living adjustments is that it is a settled aspect of policy that has stood for the last 30 years. I could have a little more regard for such an argument if it were not for a recent decision of the Queensland Labour Government. When the cost of living declined, that Government refused to allow the downward movement to be reflected in wages. That decision clearly reveals where the Labour party stands on these matters. It obviously does not regard this as an inviolate aspect of policy.
I believe that working men and women, trade unionists and wage-earners in general, have rather more sense on these matters than they are given credit for by honorable members opposite. They do not really think that the Menzies Government is a low-wage government, because they have seen their wages rise to record heights while this Government has been in office, and they have known a level of prosperity under this Government which they had never expected to experience in the post-war years. They are well aware of the kind of propaganda to which we have been subjected in the past by the Labour party. They know that the Labour party accused us of being desirous of establishing a pool of unemployment. The House will remember the slogan of honorable members opposite, “It is mighty cool in the Menzies pool of unemployment”, and that sort of tripe. They have- lived to see the time when this Government has been able to maintain employment at such a. level as to provide additional work opportunities. This Government has been able to check a sharp rise in living costs, which were giving considerable concern to the preceding Labour Administration. I wonder whether the late Ben Chifley would have expressed the same views as the honorable member for Bendigo has expressed this morning. He realized the danger to the Australian economy of the inflationary pressures which were gathering momentum when he was in office. It has fallen to our lot, as a government, to check those pressures. We are told that the cost of living has soared, and, therefore, that the honorable member for Bendigo was bound to raise the matter to-day. I wish to deal for the moment with the facts.
We have only to consider the submissions made by Mr. Eggleston, q.C., who was the counsel for the trade unions in. the basic wage case. I shall not read a lengthy slab from his argument on behalf of the unions^ but the. essence of his views was that the inflationary pressure had virtually disappeared, and that the evidence showed that reasonable stability had been achieved. That point of view, quite clearly, was adopted by the court. Is it seriously suggested that the last minor upward movement in the basic wa.ge, which amounted to 2s. a week in Victoria, where the basic wage is between JE11 10s. and £12 a week, and 3s. a week in- New South Wales, revealed a sharp upward trend?
– The increase was 10s. a week in Tasmania.
– The honorable member for East Sydney (Mr. Ward) may answer any questions about the policy of the Labour Government in Tasmania, because it is responsible for the operation for prices control in that State. I am giving the position in the principal industrial States. Reference to the wholesale price (basic materials and foodstuffs) index in the Monthly Review of Business Statistics for September last reveals that the basic materials item in September last year stood at 352 points and in September this year had declined to 335 points. The foodstuffs item in September last year stood at 314 points, but in September this year; it had risen to 333 points. That increase is represented: almost entirely by an abnormal and seasonal increase in the price of potatoes. I suggest that the basic materials index gives a truer indication of the. stability that has been, achieved.
– Order! The Minister has exhausted his time-.
Br. EVATT (Barton- Leader of the Opposition) [11.19]. - I support the submissions made by the honorable member for Bendigo (Mr. Clarey). Of course, nothing can satisfy the Minister for Labour and National Service (Mr. Holt) . He is always right. He never admits that any criticism is justified. No other Minister is so dogmatic so frequently, and so wrong so frequently, as he is. He cites a few figures from the Monthly Review of Business Statistics, and talks about full employment.. The Minister for National Development (Senator Spooner), in a public statement a few days ago, said that the inflationary trend is returning. That statement, probably, is true. One cannot be dogmatic about it. Another statement by the Minister for National Development shows that tho level of unemployment to-day, compared with the position eighteen months ago, has declined by from 50,000 to 60,000 persons.
However, I shall not discuss those matters at length;. The honorable member for. Bendigo has raised a specific matter for which the Government cannot evade responsibility.. The Minister says it is only machinery. He should know that it is just as much a law as is an act of Parliament passed by this Government. The- Government cannot shelter entirely behind the decision of the lull Court of the Commonwealth Arbitration Court. The. Minister, true to his habit of taking statements out of their context, quoted a statement from one of the Public Service journals. The honorable member for Banks (Mr. Costa) who, before becoming a member of this Parliament, was an official of one of tho largest Public Service organizations, has informed me that that body represents only a comparative handful of the 200,000 persons affected. This statutory rule does not mean what the Minister says it means. Its purpose is to ensure that when this matter comes before Mr. Castieau, the Public Service Arbitrator, he will have no choice but to follow the decision of the Full Court. This Government saw to it that he would have no choice, because Mr. Castieau has been providing better conditions for public servants, in accordance with the traditions of the great judges who looked after Public Service matters in the past, such as Mr. Justice Powers and Mr. Justice Higgins.
The present Minister for Labour and National Service wishes to see legislation enacted so that all decisions of the Public Service Arbitrator can he taken on appeal to the Full Court, notwithstanding the fact that one of the most able and outstanding lawyers in the Public Service has been appointed to the position of federal conciliation commissioner. The conditions of the Public Service cannot be altered unless the government of the day introduces the necessary legislation in this Parliament. That legislation is to take the form of a statutory rule, but it should not be thought that, because it is in that form, it is unimportant. It is just as much legislation as is any act of Parlia ment in the statutes. Therefore, when the Minister speaks about mere machinery, his remarks are so much eyewash. They are intended to indicate that a kind of sausage machine will be used to deal with inevitable processes. Nothing of the kind will be done. A statutory rule is just as much an act of the Parliament as is the act passed by the Victorian Parliament to prevent the application of the suspension of quarterly adjustments.
The attitude of the Minister in this matter was hypocritical. He asked what Mr. Chifley would have thought. “What did he say about Mr. Chifley when the late right honorable gentleman was alive ? I suggest that nobody blackguarded’ him more frequently than did the Minister.
– Order ! I think that such matters had better be kept out of the debate.
– Perhaps the worst feature of the Minister’s attempt to call to his aid opinions of people who are no longer with us is the fact that he doe? not mean what he says. That is the real sham. His comments this morning concerning the honorable member for Bendigo were typical. Nobody is able to state a case more fairly than is the honorable member for Bendigo, but, of course, that does not suit the Minister. In reply to his question, “What would Mr. Chifley have thought of the honorabel member for Bendigo?”, I say that Mr. Chifley would have thought, as he always thought, that the honorable member had stated the case correctly.
I regard this matter as important because we have before us, in effect, a bill. It is true that it does not take the form of a bill, but that of a statutory rule. Nevertheless, each House of the Parliament must express its opinion about it. What is the point of the Minister’s references to other aspects of the judgment, such as the fact that hours and the basic wage generally remain unaltered, when one of the key features of the basic wage, the system of quarterly adjustments, has been suspended indefinitely? Is that sound? The basic wage, which was £6 9s. a week under the ‘Chifley Government in 1949, had increased to £10 a week by February, 1952, and to £11 16s. a week by August of this year. I mention that only to indicate how the wage has increased, with a consequent change of living standards. Broadly speaking, costs have risen to a degree which warrants the retention of the quarterly adjustment system. If, as the Minister claims, inflation has been arrested, there is no need to alter the system, because the quarterly adjustments will indicate economic stability. Consequently, there will be no need for quarterly increases.
If, as the Minister claims, costs are going down and will continue to go down, surely the basic wage will decline accordingly. Mr. Justice Powers, and Mr. Justice Higgins, who were two of the greatest judges concerned with the foundation of the arbitration system, appreciated that fact 30 years ago. The quarterly adjustments take care only of changes in the .cost of living which have occurred already. That is the point which the honorable member for -Bendigo made, and in my opinion it is most important. Money is paid for necessary commodities within the regimen over a period of three months. It has been often contended, and I share the opinion, that the adjustments are not assessed on a sufficiently broad footing. Nevertheless, they are assessed. What that means in practice is that, at the end of the quarter, the basic wage-earner is actually paid that additional money, whether it be 3s. a week, as in New South Wales, 2s. a week as in Victoria, or 10s. a week as in Tasmania. Money has already gone from the pockets of wage-earners. Therefore, the quarterly adjustments simply take care of payments that have already been made. The setting aside of the system scorns to me to be an act for which this Government, being responsible, deserves condemnation. It should not receive the approval of this House. Every honorable member opposite who votes in favour
Df the Government on this issue will, in effect, be voting for the injustice I have tried to describe. I emphasize that the responsibility rests, not on an arbitration tribunal, but on this Parliament. It is perfectly true that this Parliament has no power whatever to alter the judgment so far as it affects the majority of the people covered by federal awards. We have no legislative power whatever to do that, but does that mean that we should look on and not criticize a situation if we think that it is deserving of criticism? Of course, it does not. We are bound to criticize it.
The Government has taken a typical attitude in this matter. It briefed counsel to appear before the court. Incidentally, counsel did not say one word on this question in the court; yet Ministers spoke about it outside the court while the case was pending. The Minister for National Development months ago advocated the suspension of quarterly adjustments. On the very morning of the judgment, the Treasurer of the Commonwealth (Sir Arthur Fadden), rushed in with a statement welcoming the decision of the court and praising it as a wonderful one. He said that it proved that the Government had completely stopped inflation. He did not seem to know, or did not take into account, that it was possible for the next quarterly adjustment to indicate an increase of the inflationary trend. The Minister for Labour and National Service, with the aid of carefully prepared statements which emanate from his chief departmental officer, always chides people whose views differ from his own. He has said that the court, in effect, did a good job. He has praised the court. The Prime Minister (Mr. Menzies) has referred to its judgment as “luminous and penetrating”. I say that, if the judgment of the court is open to praise, it is also open to criticism. The judgment deserves analysis and criticism from the point of view of principle because this Parliament has defined the basic wage. I ask honorable members to remember also that the decision was a majority decision, not a unanimous decision as is generally believed.
Section 25 of the Conciliation and Arbitration Act defines the basic wage and shows clearly the principle that should be applied by the court. The Parliament, during the regime of the Chifley Government, defined the basic wage as -
That wage, or that part of a wage, which is just and reasonable for an adult male, without regard to any circumstance pertaining to the work upon which, or the industry in which, he is employed.
Honorable members will appreciate the importance of that definition at once. The Parliament also defined, in those terms, the average person in employment according to the Harvester approach of Mr. Justice Higgins. The court, when it determines the basic wage, is required, under that provision, to consider what is a just and reasonable weekly payment for the ordinary man in the community. The act instructs the court not to take any notice of any skills that the man may have, of the particular job that he does, or of the industry in which he is employed. In view of that fact, the court must take account of the needs basis of the basic wage. Apparently, the law must be altered again in order to make that clear to the court. The basic wage always was considered to be based upon needs to some degree, even in judgments which emphasized capacity to pay, as I can demonstrate by reference to some of those judgments. Upon what basis did the court found its latest decision? I know of no argument that “would justify the alteration of the quarterly adjustment system, which simply involves reassessment of wage justice in the light of events as they have occurred during the preceding quarter. I did not hear - of any government altering the system when the tendency of prices was to go down during the long years of depression. The wage decreased every quarter for years during that period. The quarterly adjustment system was applied against the interests of the workers in time3 of depression. Why should it he terminated when costs are rising?
I submit that the decision was completely erroneous and that the Parliament must face up to that fact. We cannot avoid our responsibility. Ministers have hailed the decision with praise, and therefore it is open to criticism. I refer, of course; only to the suspension of quarterly adjustments of the basic wage. Section 25 of the Conciliation and Arbitration Act clearly indicates the standard that should be observed. That standard must take account of the needs of the worker. For the information of honorable members, I shall refer briefly to two judgments that were given by the court in 1950. Chief Judge Kelly said, according to the official report at page 62 -
Summarizing my approach to what I have called the function of the court, I would say that the court must bear in mind that its purpose and duty is to determine an amount to be paid as a wage or a part of a wage; an amount which will be just and reasonable for an adult male or adult female as the case may be . . .
That comment, of course, merely repeats the definition contained in section 25 of the Conciliation and Arbitration Act. Chief Judge Kelly continued -
That shows that Chief Judge Kelly, who dissented in that case two years ago, incorporated the needs basis in his reasoning. Later, he made much the same comment, as recorded at page 63 of the official report. He said -
I take the view that the requirement that the “ wage “ or “ part of a wage “ referred to in section 25 oi the Act must be “ just and reasonable “ cannot be fulfilled unless the Court has regard for both the “ needs “ principle and the “ economic capacity “ principle.
– That is what the court did.
– Yes, but it departed from the needs principle in its latest judgment and emphasized entirely the economic capacity to pay. It even went further and asserted that in the past the court had departed from the needs principle. I submit that that is not so.
Judge Foster, when he gave the majority judgment in. 1952, made a statement which, I submit, is conclusive. It is reported at page 102 of the official report. Judge Foster, of course, sat on the Bench only during a part of the hearing which resulted in the suspension of quarterly adjustments of the basic wage and then withdrew from the case. His statement in 1952, to which I have referred, is as follows : -
Nothing short of calamity should induce the Court to lower those higher standards thus created and sustained.
He referred to the standards of the basic wage-earner- that had been established in previous judgments of the court. He continued -
But this has, since 1037, had an indirect effect; it has accustomed Australian workers to live at this rate of wage and so created a new standard of living, so that now their “ needs “ should be measured by that new standard.
Thus, Judge Foster emphasized capacity to pay as a part of the majority judgment, and Chief Judge Kelly, dissenting, referred to the principle that I ha.ve tried to describe.
– The right honorable gentleman has said that the decision of the court on the 12th September was a majority decision. What does he mean by that?
– I should like the Minister to find out at some stage precisely what it does mean. That decision was the decision of five judges, Judge Mclntyre having died.
– There was one judgment
– The decision of the court was reached in accordance with the precise directions to be followed under section 24 (7.) of the Conciliation and Arbitration Act. That provision deals with dissent and provides for disagreement to be resolved by taking the judgment of the majority of the court. The statement of reasons for judgment issued by the court announced that the decision had been made in accordance with that provision and added -
This statement indicates the effective reasons therefor.
Therefore, there seems to have been dissent. It is most unusual for the court not to note the extent of the dissent or those responsible for it. I am glad that theMinister asked me that question by interjection.
To sum up, I say that the case made out by the honorable member for Bendigo has not been answered, and, in fact, that it is unanswerable. If needs are to be considered, and if the costs that the basic wage-worker has to bear change during any quarter, the change must be taken account of as a matter of wage justice in accordance with the historic principle that has applied for 30 years. We, as a parliament, must deal with that matter now. Even those quotations that I have made from the 1952 judgment of the court indicate that we must do so. It is not the basic wage-worker alone who is affected. The marginal worker, too, is affected because all salary and wage-workers-
– Order ! The right honorable gentleman’s time has expired.
– As I sat here and listened to the Leader of the Opposition (Dr. Evatt), I could not imagine the right honorable gentleman, in his former capacity as an eminent jurist on the High Court of Australia, tolerating criticism in this Parliament of any judgment that be had given on a case presented tohim. Why, he would have tossed his wig in the air with indignation! Now, apparently, there is nothing to prevent him from entering this House and criticizing a judgment of the High Court which he well knows to be of great importance. I believe that I detected a twinge of conscience, however, when he implied that because the Prime Minister had praised the decision of the court, he could now criticize it.
I turn my attention now to observations that were made by the honorable member for Bendigo (Mr. Clarey), who was supported, of course, by his leader and by the honorable member for East Sydney (Mr. Ward). By way of interjection, the honorable member for East Sydney asked, “What about the control of profits?” The honorable member for Bendigo made that point as well. I remind them and the Leader of the Opposition that the control of profits is in the hands of the five Labour State governments because they control prices. If any action is necessary to control prices, the power lies in the hands of the Australian Labour party through the State Labour governments, who have failed to exercise that power. Honorable members opposite rise in this House and try to twist the failure of their own party in the States into a Commonwealth responsibility. They are merely trying to bolster their lamentably weak case.
The Leader of the Opposition and the honorable member for Bendigo have set themselves up in this debate as a higher authority than the Commonwealth Court of Conciliation and Arbitration. They want arbitration. According to the Australian Labour party platform, they believe in it. The fact is that they believe in arbitration when the decision of the referee is in their favour, but when the decision is adverse to them, they forget their principles. They pose as a higher authority than the court and jettison the principles for which their party has stood for years. For what reason? They do so for political advantage and for a few votes. They would sell their heritage for a mess of potage. Honorable members opposite must find the political winds strongly against them when they adopt such an attitude. The Leader of the Opposition referred to the suspension of the quarterly wage adjustments and said it had been applied to the Public Service. The right honorable gentleman knew very well that his statement was not correct. The Commonwealth Court of Conciliation and Arbitration has stated that it will be prepared to review the circumstances associated with the quarterly adjustments from time to time. The Public Service Arbitrator is following the lead of the court, and if the court reviews the quarterly adjustments, a similar review will be applied to the Public Service as well.
What is the meaning of the references by the Opposition to the suspension of quarterly adjustments? The matter is wide open, and if circumstances warrant, it will be reviewed by the court.
In the course of an impassioned address, the Leader of the Opposition said that if the Government did not interfere it would do a disservice to the Public Service. He said that a decision should be made by the Parliament and that it must override the Commonwealth Court of Conciliation and Arbitration. The Government will not interfere with decisions made by the court and it will not attempt to interfere with the Public Service as previous Labour governments have done. I well remember a Labour government interfering with the Public Service to the extent of paying an additional emolument to all members of the Public Service who joined a union. It gave them additional facilities, but penalized other members of the Public Service who did not join a union to the extent of witholding wage emoluments and facilities. Now, the Leader of the Opposition mouths platitudes about freedom and justice to the Public Service and demands that this Government must interfere in those matters.
I invite honorable members to consider the case that the Leader of the Opposition has presented. He suggested that the Government should act in direct opposition to a. decision that has been given by the Commonwealth Court of Conciliation and Arbitration, whose decision has been closely followed by the Public Service Arbitrator. The Arbitrator reached the same conclusions as the court and applied a similar decision to the Public Service. The Opposition suggests that the Government should ignore that decision and grant cost of living increases to the Public Service. The Opposition knows that if that suggestion were adopted and the cost of living increases were granted to the Public .Service, the whole basis of the arbitration system would be destroyed by that one selfish act. If that were done the Opposition would use it as a precedent to force similar action in the industrial field outside the Public Service. In other words, that would be the basis upon which the Opposition would fr. Eric j. Harrison. approach the industrialists and the governments outside. It would inform them that the Australian Government had set an example by ignoring the Commonwealth Court. of ‘Conciliation and Arbitration in favour of the Public Service.
As always, the Leader of the Opposition supported the honorable member for Bendigo and paid lip-service to arbitration. He used it as a matter of convenience and for no other purpose. Honorable members will remember that, when the Commonwealth Court of Conciliation and Arbitration was considering hours of employment, the Labour Premier of New South Wales at the time, Mr. McGirr, abandoned the principle of arbitration, although support of arbitration is a platform of the Australian Labour party. Mr. McGirr made a political decision upon hours of employment. In doing so, he destroyed at one stroke the decision of the court.
– The 40-hour week.
– Yes, I was referring to the 40-hour week. That was achieved by a political move and not by the Commonwealth Court of Conciliation and Arbitration because the issue was forced by a political decision. The honorable member for Bendigo charged the Government with penalizing the Public Service. I remind honorable members that when the court gave its decision upon the quarterly adjustments of the basic wage, the present Labour Premier of New South Wales, Mr. Cahill, ordered his Railway Commissioner to withdraw an application for the suspension of the quarterly wage adjustment.
– Hear, hear!
– That, was -blatant political interference. It was an outrageous act. Although the Premier of New South Wales promised to pay an additional 3s. a week to the transport workers, that amount has not been paid. He ordered the withdrawal of the application, but he was afraid to take his action to its logical conclusion. He found that arbitration was stronger than the Premier of New South Wales. That was a blatant attempt at political interference with the machinery of arbitration. One Premier of New South Wales interfered with the processes of arbitration in relation to hours. Another Premier of that State, in an attempt to attract the votes of a few people, has taken action in relation to the suspension of quarterly adjustments of the basic wage which, if pursued to its logical conclusion, would destroy our arbitration system. But he is not prepared to pursue it to its logical conclusion. He is the gentleman who, in April, 1952, said -
Something must be done to end this perpetual wage-price see-saw. Every time the wags goes up, prices race to a new peak. In the final check, wage-earners aru worse off.
He said also -
This is an endless spiral that lead* to frustration. It is demoralizing to our economy unci is undermining our rural and industrial stability.
The Premier of New South Wales, having mouthed those platitudes, has challenged a decision of the Commonwealth Arbitration Court in order to gain some political advantage, but he has not enough courage to proceed with the action that he has initiated, because he realizes it might break the court.
The Minister for Labour and National Service (Mr. Holt) referred to the case presented by the trade unions in the recent wages and hours case. Counsel for the trade unions said -
It is submitted that the capacity of the economy to sustain a high level of real wages is better than in 1949-50; productivity has greatly increased, not only because labour and material shortages have been almost eliminated, but because of the high rati- nf capital investment in recent years. Primary production is flourishing. Employment is rising. Inflationary pressure has virtually disappeared.
The contention of the trade unions was that we were much more prosperous now than at any time previously. The court accepted that statement, and rejected the application of the employers for a reduction of the basic wage. The trade unions contended that there was economic stability and that inflationary pressure had virtually disappeared. The court accepted that contention, and said it would take advantage of the state of economic stability to suspend quarterly adjustments of the basic wage and so check the cost spiral. In view of the case presented to the court by the trade unions, it is useless for the honorable member for Bendigo to say that we are facing an economic crisis. Now the honorable member for Bendigo, who was a very successful trade union advocate, has declined to accept the decision of the court. In the hope of political gain, he has swallowed the principles that he has enunciated over the years. Let us see what the Leader of the Opposition has said about arbitration. In 1952, that great jurist said -
The increased cost of production due to increased wages must cause further increases in prices, and all families on fixed incomes not only get no benefit from the adjustment but receive a further set-back ae costs go higher.
At the annual conference of Australian Labour party industrial groups held in the Sydney Trades Hall last July, the right honorable gentleman said that Labour’s aim should be to make arbitration work. On that occasion he is reported to have said also -
You who represent the Labour movement, political and industrial, must see that the arbitration system is on the alert, that decision is not postponed, and that matters are dealt with speedily, because it is the alternative to the weapon of strike action.
Although he expressed those sentiments on that occasion, he has supported in this House to-day a proposal for the disallowance of a regulation which, if it were accepted, would prevent the arbitration system from working properly. Is the right honorable gentleman sincere when he asks his brethren of the trade union movement to preserve arbitration and make it work, or is that only a front ? His actions in this House prove conclusively that it is only a front. He has supported a proposal for the alteration of a decision that flows from a recent decision of the Commonwealth Arbitration Court. He realizes that, if this regulation were disallowed, he could go into the industrial field and say that the Commonwealth had set an example and, in the teeth of the decision of the court, other authorities should continue to make quarterly adjustments of the wages paid to their employees. During my political life I have seen some rather strange things.
Mr. Ward interjecting,
– Possibly the strangest is the honorable member for East Sydney. It is strange that an eminent jurist, who would have resented any criticism of a judgment that he delivered while he was a High Court judge, is prepared to toss his principles to one side and attack a decision of the Commonwealth Arbitration Court based on a case presented to it by the trade unions. He is prepared to destroy the arbitration system of this country in order to gain a temporary political advantage. By applying to the Public Service a decision made by the Commonwealth Arbitration Court, this Government is following the example of Labour governments. But because the right honorable gentleman is looking for a new band-wagon, he is prepared to throw over- board a principle that has been adopted by all governments since 1927. He has lent the weight of his authority as a jurist to an attack on a principle that is a part of the platform of the Australian Labour party and that he has espoused publicly. I have seen many strange things while I have been a member of this House,but possibly that is the strangest.
Mr. WARD (East Sydney [11.58].- As the debate will conclude automatically at 12 noon, I have time to say only a few words.I want to make it clear at the outset of my remarks that the VicePresident of the Executive Council (Mr. Eric J. Harrison) has tried to lay a smoke-screen to prevent this Government frombeing seen in its true colours and revealed as a low-wage government.The Government is not obliged to apply decisions of the Commonwealth Arbitration Court to its employees. It will be the Government’s responsibility, and only its responsibility, if the wagesof these men are reduced. The Opposition will force a vote on this matter.
Motion (by Mr. Ward) agreed to -
That thequestionbe now put.
Question put -
That the amendment of the Public Service Regulationsmade byStatutoryRule 1953, No. 93, bedisallowed’.
The House divided. (Mr. Speaker - Hon. Archie Cameron.)
Majority … … 9
Question so resolved in the negative.
Sitting suspended from 12.7to 2.15 p.m.
Presentation to the Govern or-General.
-(Hon. Archie Cameron). - Accompanied by honorable members,I waited this day upon His Excellency theGovernor-General at Government House,and presented to him the Address-in-Reply to His Excellency’s Speechontheoccasion of the opening of the SecondSessionof the Twentieth Parliament, agreedto by theHouseon the 12th November. His Excellency was pleased to make the following reply:-
I desire to thank you for your Address-in- Reply, which you have just presented to me. It will afford me much pleasure to convey to Her Most Gracious Majesty the Queen, the message of loyalty from the House of Representatives of the Commonwealth of Australia, to which the Address gives expression. [Quorum formed.’]
Bill presented by Sir Arthur Fadden.. and read a first time,
– by leave - I move - That the bill be now read a second time.
The purpose of this bill is to amend the Life Insurance Act 1945-1950. The Original act, which came into force on the 20th June, 1946, set up in Australia for the first time an up-to-date and comprehensive code of laws for the conduct of life insurance business and provided a measure of protection for policy-holders. It replaced six different State acts. The administration of the act during the last seven and a half years has revealed a number of anomalies, imperfections and minorpractical difficulties. Some of them have been pointed out by the life offices themselves, and others have been brought to the notice of the Government by the Insurance Commissioner. The Governmentis satisfied that all the proposed amendments are desirable for purposes of clarity. None of them weakens the act or prejudicially affects the rights of policy-holders in any way. Many of them are of a technical nature, and have been carefully examined by the Insurance Commissioner and the Parliamentary Draftsman. They deal in particular with the purposes of the statutory fund, which all companies are required to maintain, a simplification of the arrangements for the assignment of policies, and a modification of the arrangements for the handling of policies and the payment of the sums assured. In addition to the amendments to which I have referred, the bill will remove those sections of the main act which provide for the establishment of a government insurance office, to which the Government has always been opposed. I commend the bill to the honorable members.
Debate (on motion by Dr. Evatt) adjourned.
Motion (by Mr. Kent Hughes) agreed to-
That leave be given to bring in a bill for an act to amend the Commonwealth Electoral Act 1918-1952.
Bill presented, and read a first time.
– by leave - I move -
That the bill be now read a second time.
The war-time electoral acts of 1940 to 1945 having been repealed by the Statute Law Revision Act 1950, the law now contains no special provision with regard to voting by members of the defence forces who are overseas. Such servicemen will in the future have to vote by postal vote in the ordinary way, although the Commonwealth Electoral Office will make all the necessary arrangements. Under the legislation passed last year an assistant returning officer will be appointed who will distribute the postal votes immediately applications are received. Nevertheless there is probably a considerable number of men in the forces who will not be able to vote because they will not be on the registered rolls of the Commonwealth. Some of them will not be shown on the rolls because they will have been struck off on account of absence from Australia for a long time, and others will not be on the rolls because they will have attained the age of 21 years while serving overseas. This measure is designed to make provision for men of those categories to vote at future elections. There is only one operative clause of the measure which reads - 3.. After section thirty-nine of the Principal Act . the following section is inserted in Part VI.:- “ 39a. - (1.) Where a member of the Defence Force who is on service outside Australia is not an elector but-
Act, be deemed to be an elector and, subject to sub-sections (4.) and (5.) of the last preceding section, is entitled to vote at elections under this Act as if his name appeared on the Boll for the Subdivision in which, immediately before his departure from Australia, he. ordinarily lived …”
When a man makes an application for a postal vote, he will be required to make declarations about his age and the place of his residence before going overseas. The particulars that he gives in his declarations can be checked with the Army records, if necessary, so that all precautions may be taken to ensure that no declarations contain false information. The main purpose of the bill is to allow members of the defence forces overseas to be put into the same electoral position as members of the defence forces under the war-time electoral regulations. Sub-section (2.) of the proposed new section states -
For the purposes of the last preceding subsection, a person not being a member of the Defence Force, who accompanies a part of the Defence Force shall be deemed to be a member of the Defence Force and on service with that part of the Defence Force.
The intention of that provision is that persons such as accredited war correspondents and Red Cross workers who, in the legal term, accompany a defence force - I understand that is the language used in earlier legislation-
– It is a very dangerous term.
– I questioned it at first and I was informed that it is the phraseology used in previous acts and is correct. The purpose of the provision is to allow such people in addition to members of the defence forces to exercise the same right of voting by post as they had under the war-time regulations.
Debate (on motion by Mr. Haylen) adjourned.
Motion (by Mr. McMahon, through Mr. Eric J. Harrison) agreed to -
That leave be given to bring in a bill for an Act to provide for the application of the share of the proceeds of Prize captured during the state of War that commenced on the third day of September, One Thousand Nine Hundred and Thirty-nine, that is available for the benefit of members of the Royal Australian Air Force.
– I move -
That the bill be now read a second time.
I am confident that this bill will have the support of every honorable member of the House. There are no controversial clauses in it, and its only object is to bring up to the standard of a new international convention our legislation on safety matters connected with the construction and operation of ships. The Navigation Act was amended in 1934 to give effect to two important international conventions which the Commonwealth then ratified. They were the Safety of Life at Sea Convention of 1929, and the Load Line Convention of 1930. A further conference was held in London in 1948, to revise the safety convention. The desire for a revision of that convention was brought about by the great advances made in safety methods and devices under the stress of war, and by new knowledge gained of the behaviour of ships when damaged, and of particular types of cargoes. Australia sent two of its principal technical officers to the conference. They were Captain N. G. Roskruge, Director of Navigation, and Mr. S. Pollock, Engineer and Ship SurveyorinChief, both of the Marine Branch of the Department of Shipping and Transport. Mr. J. Dobbyn, a wireless expert of the Postmaster-General’s Department, also attended. Australian shipowners were represented by Captain H. J. M. Phoenix, of Adelaide, and the maritime unions by Mr. A. H. Moate, of Sydney.
As the result of the conference, at which thirty nations were represented, a completely new convention was adopted, to replace the 1929 convention. It has since been ratified by 26 countries. Of those, 21 were represented at the conference and five including Japan were not. The nine countries which attended but have not yet ratified are Argentina, Brazil, China, Egypt, Greece, Panania, Poland, Onion of Soviet Socialist Republics, and of course, Australia, but our ratification will follow the passage of this bill. All these countries are parties to the old convention of 1929 and they will (no doubt adopt the new convention when they are in a position to do so.
It may be thought that it would have been a simple matter to make amendments to the old convention instead of adopting a new one which must, in any case, repeat many of the provisions of the old convention. The conference, however, adopted a new drafting method in 194S. The convention itself is confined to fifteen articles which cover what may be called the political aspects such as the agreement to adopt the convention, the ships to which it is to apply, power to suspend in time of war, abrogation of previous treaties and conventions, future amendments, and the interim arrangements between the application of the old convention and the new. The technical provisions, which constitute more than 90 per cent, of the whole, are then annexed. They are divided into six chapters on general- matters, construction, life-saving appliances, radio telegraphy and radio telephony, safety of navigation and carriage of grain and dangerous goods. A departure is the method of securing amendments of the convention. Prior to the last war, the general procedure for amending the convention was to obtain unanimity amongst all the nations which had accepted the convention. That proved to be a great hindrance, because, apart from the disturbed state of the world since the last war, one small country with little interest in a particular question, could prevent an amendment from being made simply by not lodging agreement with it. The new safety convention may be amended by a two-third3 majority qf the Assembly of the International Maritime Consultative Organization of the United Nations, and an amendment so agreed to will become effective for those adopting it. Until the Maritime Consultative Organization comes into being, however, this machinery cannot operate, and in the meantime complete unanimity will he necessary before any amendment can be made.
There is one important feature of the new convention which should be mentioned because it adopts a practice that ha3 been followed in Australia for many years. Some countries, but by no means all, have required the hull, boilers and machinery of cargo ships to be surveyed, but usually they have left the surveys to be carried out by the great societies such a3 Lloyds, which survey and classify ships for insurance purposes. The necessity to obtain insurance has, in fact, been a compelling reason for having periodical surveys, even though they have not been required by legislation. In Australia, under the Navigation Act, cargo ships have been compulsorily surveyed but for those ships classification certificates have been accepted for hull, boilers and machinery. A.ustralia, however, has gone further than most other countries by requiring also the survey of a cargo ship’s equipment, and “certificates of equipment “ have been issued covering all life-saving and fire appliances. The new convention has now adopted the principle of safety equipment certificates for cargo ships on international voyages without, however, requiring governments to legislate for surveys of the hull, boilers and machinery.
It is not proposed, of course, by anything in this bill, that the compulsory legislation we have had in Australia in regard to surveys of hull, boilers and marchinery of cargo ships shall cease merely because the convention has not adopted it. Those surveys will be required by law, as hitherto, and the existing provision for acceptance of certificates issued by classification societies will continue. Another new feature that is being adopted internationally is the supply of stability information when a ship is built, and the keeping of this information on board. This enables a shipmaster to determine how loading will affect the stability of his ship. Provision is made for some new types of certificates in addition to the safety equipment certificates already mentioned. Certificates for “short international voyages “, radio telephony certificates and exemption certificates where modifications are permitted will be provided for. Fol the first time, international agreement has been reached on some rules for the carriage of grain and dangerous goods, but up to date only a few broad principles have been dealt with in that manner. In Australia, and in some other countries, there have been very detailed regulations in relation to these matters for many years.
Other new requirements of a technical nature are as follows:-
New provisions to minimize danger on the outbreak of fire.
Higher standards of sub-division for ships carrying passenger? under conditions involving special risks.
Protection of passengers from dangers connected with electric installations.
Application of certain life-saving provisions to cargo ships of 500 tons gross and over.
Tankers of 3,000 tons gross and over to have four lifeboats attached to davits, two to be aft and two amidships.
An extension of the period? of wireless watchkeeping at sea. This is now to cover all passenger ships and cargo ships of 1,600 tons gross and over.
S mallei’ cargo ships- to have radio telephony if they have, not a wireless installation and operator.
All passenger ships and all cargo ships over 1,00.0. tons gl’OSs to have direction finders-. Previously only the larger passenger ships were required l:o have this equipment.
It- will be seen that many- of the convention requirements are extremely technical and that no attempt has been made to incorporate them in the bill. They will be included in regulations.
Already the new convention, which commenced in November, 1:952. received sufficient ratifications to bring it into force. This bill has been drafted in order to bring Australian, legislation, into line with, the new- provisions or to permit the making of regulations that would enable that to be done. In fact, much of the new legislation, has been drafted in a manner that will authorize the making crf regulations, because it would be inappropriate to bring before the Parliament the great amount” of detail for which provision must ho made. During the process of drafting, pome corrections “have been made to the Ifr. *Anthony- text of the original act, and in some cases, advantage has been taken of the opportunity to rewrite a section in order to make it clearer and in order to bring it into conformity with, modern drafting practice. Alterations of this nature are generally found to be necessary when revising old legislation, but all the alterations that have been made are related to the subject-matter of the bill. Each of the clauses may be explained in detail in committee, but I have no hesitation in recommending the bill as one that can be accepted by all parties. It does not represent a very great advance in our own safety measures, becau.se Australia has not been behind the rest of the world in its maritime legislation. Shipowners will be required to incur little extra expense. The proposed legislation will keep our rules and procedures in line with those of other countries which have adopted the new convention. It also will enable convention ships from abroad to bc surveyed here and to be issued with convention certificates if their owners and governments so wish.
Debate (on motion by Mr. Clarey) adjourned.
Debate resumed, from the 19 th November (vide page 275), on motion by Sir ARTHUR Fadden-
That the bill b.e now retail a second time
– I have pointed out repeatedly that the Chain’ cannot be a party- to such arrangements. However, they are quite- practicable, and if the House wishes to. debate the four measures at the one time that will be all right from my point of’ view, but I must make it clean that if any honorable member wishes to speak on the motion for the second reading of one of the other related bills, I shall be bound to give him the call.
– I propose to speak ro the motion for the second reading of the Income Tax (International Agreements) Bill 1953. I have no doubt that any arrangement that has been made by the honorable member for Melbourne (Mr. Calwell) with the Vice-President of the Executive Council (Mr. Eric J. Harrison) will be honoured. I submit that we cannot discuss this bill fully, so far as the second reading is concerned, without referring to the provisions of the three related bills. The four measures ire really integrated. If necessary, there can be a separate discussion on the other three bills later. I now propose, subject to the approval of the House, to make all my observations on the two international agreements that are mentioned in this bill. One agreement is between Australia and the United Kingdom, and the other is between Australia and the United States of America. The agreement between Australia and the United Kingdom is set out in the Second Schedule to the bills. In substance, it merely consolidates the agreement that was negotiated by Mr. Chifley, the former Prime. Minister, in 1946, on behalf of the Australian Government.
The agreement that was negotiated by Mr. Chifley with the British Government was given effect to by a vote of this House. It. was subsequently unbodied in the statute law of this country, and it is now, by way of implementation, incorporated in one of thu series of four bills with which I am now dealing. The object of that agreement was to minimize what is called double taxation, which has been defined in Cope’s Double Taxation of Companies, from an international point of view, as follows: -
International double taxation arises where various sovereign countries exercise their sovereign power to subject the same person to tux of a substantially similar character on the same object.
The word “ object “ in. that context is equivalent to “subject-matter” in Australia. The essence of the new proposal before us is that this House should approve of an agreement with the United States Government which conforms in principle to the agreement between Australia and the United Kingdom, which is already in force. The Opposition, after carefully considering this matter, does not oppose that proposal. Speaking for myself, I consider that this is an important step forward.
The Treasurer (Sir Arthur Fadden) frankly summed up the position in his second-reading speech. He pointed out that, as the double taxation agreement between Australia and the United Kingdom facilitated the investment of United Kingdom capital in Australia, it thereby assisted the development of this country. I think that that is what was hoped for, from an Australian point of view, apart from the inherent justice of the principle that double taxation should be either avoided or minimized between friendly countries or friendly states. The Treasurer stated, with equal frankness, that in view of the success of the agreement with the United Kingdom, the Australian Government commenced negotiations with the United States of America for a similar agreement. As a matter of fact. Mr. Chifley was in favour of that in principle, but he was seised with the necessity to take care over the manner in which these negotiations should be conducted. Indeed, the Treasurer has pointed out, by implication, that the negotiations have occupied a considerable time,’ because pf the very important nature of the matter.
I shall now deal with the general question of what is called double taxation. It is quite wrong to say, “ Oh, well, in certain respects this is an advantage to the United States of America or the United Kingdom and this country which might not otherwise exist “. That is true, but what is this question of double taxation? Let us consider the situation that existed in Australia before uniform taxation was introduced to get rid of many anomalies. Prior to its introduction we had Commonwealth income tax, and six State income taxes - seven in all. Case after case arose because some manufacturing enterprises conducted businesses in more than one State. I shall give one illustration to pinpoint the difficulty.
The Broken Hill Proprietary Company Limited originally carried on business at Broken Hill, within the State of New South Wales, and subsequently extended its operations in another capacity to Newcastle. In those clays the colony of New South Wales - some of these cases arose before federation - said, in effect. “ As this enterprise i« carried on at Broken Hill, and the natural wealth of Broken Hill is used to a substantial degree by this company, the company must pay tax to New South Wales Then the colony of Victoria came into the picture, because the company was resident in Victoria. Although it is difficult to appreciate the fact, companies have a residence although they are not natural persons. The residence is where their principal office is located, a.nd where they are incorporated. The Broken Hill Proprietary Company Limited was resident of Melbourne, in the State of Victoria. It was, in fact, a citizen of Victoria. Therefore it was subject to Victorian income tax. There were six authorities before federation, and seven authorities after federation, all claiming the right to tax a company in respect of the profits it made from the one operation as far as Australia wa3 concerned. Case after case arose in the courts. The State of New South Wales would say, for instance, “ Never mind the question of residence; as the profits have been made at Broken Hill, we will tax them 100 per cent.”. The court said that technically the colony could lawfully do that without any breach of the Constitution. When a case arose in connexion with “ residence “ of the same company, the court held that all of the profits of a resident company, including profits from sources outside the colony, could be taxed by the colony. In that instance the company paid tax on more than 100 per cent, of its profits. Obviously, if one State could tax a company on profits made in that State, and another State could tax it on the same profits, because of residence, the company would be taxed to a greater degree than if it had conducted its business entirely within one State.
The States enjoy sovereign powers under the Constitution. The Common-
Or. Evatt. wealth has a taxing power which is only restricted by the fact that there shall not be discrimination on the ground of residence in a State. One of the greatest achievements of uniform taxation in Australia was that, it enabled great companies to be taxed on a uniform basis. I prefer to call them manufacturing concerns, as most of them provide employment, not confined to one State. Under uniform taxation, no company which carries on its business in more than one State is in a worse position than it would be if it carried on its business within the confines of a. State. Uniform taxation put those companies and their profits on a basis of uniformity and justice. They are, of course, bound to contribute to the revenue of the Commonwealth. When that principle is applied internationally the same kind of problem presents itself in connexion with enterprises in Australia in which citizens of the United. Kingdom are interested. The United Kingdom Government said, in effect, “This ‘is a British company, carrying on business in Australia and making profits. As most of the shareholders are resident in Great Britain, we must have our proportion of taxation So there arose the situation in which double taxation was imposed. I think the best way of stating the position that arose in relation to the United Kingdom was that adopted by Mr. Chifley. When he spoke in the House on this subject on the 2nd August, 1946, as reported in Hansard, volume 188, at page 3616, the right honorable gentleman stated -
One of the biggest obstacles which lias hindered the British industrialist from extending his enterprise to Australia or from expanding his business already established in this country is the heavy weight of the combined United Kingdom and Australian taxation on the profits, and on dividends paid out of those profits, where the Australian business is carried on through the medium of a separate subsidiary company.
The purpose of the negotiations between the United Kingdom and the then Australian Labour Government was to facilitate and encourage United Kingdom investment in Australia. An illustration of the success of the negotiations which I have never forgotten is the establishment in this country of a branch of the great enterprise familiarly known as Courtaulds. Courtaulds (Australia) Limited would probably not nave been formed and the industry established in Australia but for the legislation which mitigated or removed double taxation in the ease of such great United Kingdom enterprises.
The view of Mr. Chifley and of the Labour Government of the time was that a choice had to be made between the practice of allowing the products of the British company to come into Australia, after having passed through the tariff barrier in competition, no doubt, with the products of somewhat similar concerns in Australia, and encouraging the company to establish a branch here, to employ Australians, and to develop new techniques and important industrial processes and manufacturing “ know how “ in this country. Naturally no difficulty was experienced in making the choice between the two courses from the point of view of the progress of Australia. No doubt, the establishment of an Australian branch helped the parent company and its shareholders, but the view taken by the Prime Minister and the government of the day which, I have been reminded by my colleague, the honorable member for Perth (Mr. Tom Burke), which has always been the view of the Australian Labour party, was that we should do everything possible to encourage the speedy development of Australian manufacturing capacity to the maximum degree. The great and striking success achieved by Courtaulds (Australia.) Limited in the comparatively few years during which it has been established in Australia, is ample evidence of the soundness of the policy adopted by the Chifley Government. Later, an agreement was negotiated with the United Kingdom Government in which Australian interests were protected. Mr. Chifley’s second-reading speech on the Income Tax Assessment Bill, which he introduced in the Parliament on the 27th March, 1947, is reported in Hansard, at page 1262, volume 191. He referred to the problem in this -way -
Double taxation has arisen by the levying of tax, first, by the country in which the income has its origin and, secondly, by the other country in which the recipient of the income is resident.
Exactly the same problem arises between the Commonwealth and the six States.
Mr. Chifley continued ;
The agreement applies to all income which is taxed by both the United Kingdom and Australia., and its application to taxpayers in the two countries will have the effect-
And this is a very important phrase - of removing the taxation barriers that have adversely affected commercial and industrial relations between the United Kingdom and Australia.
Mr. Chifley continued
The removal of these barriers provides an incentive to British industrialists either to extend their businesses to Australia, or to expand businesses already established in this country. The relief from double taxation should result in an increased flow of capital to Australia and lead to a consequential development and expansion of Australian secondary industries, thereby increasing the field of employment and the national income
Of the quotations I have made, the first was from a speech in 1946, and the remainder from, a speech in 1947. Mr. Chifley expressed the view of a great statesman who looked forward to the development of better economic relations with the Motherland and also, and per- hups more importantly, to the development of manufacturing industries in Australia and consequent greater employment opportunities for its people. That was the. purpose of the negotiations which preceded the agreement with the United Kingdom. As the Treasurer said in his second-reading speech on this bill, those objectives have been achieved. I mentioned the establishment of a textile manufacturing business in Australia by Courtaulds (Australia) Limited only by way of illustration. Probably dozens of similar examples could be cited.
I turn now to the problem as it relates to the United States of America. It is preposterous to think that, between countries which are so friendly and so closely allied as are the United States of America and Australia, a similar approach should not be possible. An agreement between the two countries on this matter is desirable from the point of view of the preservation of these good relations and equally from the point of view of Australian industries. Investment of overseas capital is absolutely essential to the development of Australia in the direct industrial field and in that field in which the profits are not quite so sure and not so well safeguarded. I refer to the field where enterprises do not yet exist in areas in which the physical surface of the country must first be developed in preparation, for their establishment,
I come now to the immediate position. In my study of the problem, I have been greatly helped by my colleagues, the honorable member for Perth and the honorable member for Melbourne Ports (Mr. Crean) who, no doubt, will deal with the details of this matter. We must keep steadfastly in mind, first, the importance of the development of Australian industries ; and, secondly, the need to attract investment capital from overseas. It is true that an inadequate proportion of our national income is allotted to investment. Perhaps the causes of that can be removed. ‘ No harm could possibly come to Australia if we took exactly the same step in relation to the United States of America as we did, in 1946 and 1947, in relation to the United Kingdom. From the point of view of international relations between the two countries there can be no objection to the taking of such a step, because, since 1941, the relations between the two countries have been of such an intimate character that the nam.es of the great men who have been associated with the United States of America, despite their political differences in their homeland, are honoured and treasured names in Australia, and they always will be. I refer to men like MacArthur, Truman and Eisenhower, all of whom have been and are great and good friends of Australia. That is an important fact. Looking at the matter from a cold business point of view, no doubt it will be said - some of wy colleagues believe that this is a matter of importance which should not be neglected - tha,t the volume of Australian investment in the United States of America is minute compared with that of American investment in Australia. That is true, but I .do not think that it matters. Undoubtedly, that situation will .change as the years go on. We should take .exactly .the .same line with the United States pf America as we took with the Government and the people of Great Britain. It has proved to be signally successful. Individual enterprises pf American origin will and fairly can be criticized. One that’ has been made the subject of a great deal pf criticism is the great enterprise known as General-Motors Holden’s Limited, which manufactures the Holden motor
Gar. I can at least say that the establishment of that enterprise in Australia was specifically encouraged by the Labour Government. We wanted a motor car to be manufactured in Australia and we gave to the company every possible assistance and encouragement. J shall not deal with its profits. When we deal’ with the profits of companies of that kind there is always a .danger that we may be guilty of fallacious reasoning, The authorized capital .or the subscribed capital of such a company cannot be accepted as the true capital because millions of pounds of profits have been retained in the business over many years for the further development of the industry, the further employment of people and the further encouragement of Australian manufacturing.
I want the close relationship between this country and the United States of America to continue. Is there anything unjust about this agreement? Justice does not require that a person should pay tax more than once on the total amount of his profits. The double taxation which is brought about by the sovereignty of different nations is an injustice. That is why .conventions in relation to taxation have been entered into between so many nations. When individuals seek out new fields for investment, that action in itself deserves encouragement. I am .satisfied that th,e Government should not do less in this respect for the United States of America .than has been done for the United Kingdom, The success of the agreement with ,the United Kingdom augers well £pr the success of the present agreement although the United .States of America. will not ge$ the full advantage of the agreement ;be,tween Australia and the United Kingdom in relation t.p double taxation. I look at this matter from the point pf view of .our .expanding manufacturing industry, which.’ is the main source of employment of our people. Full employment is a basie part of the policy of the Labour party in relation to these problems. The Labour party has adopted thai approach knowing perfectly well that the employment of the great bulk of the people must lie in industry and that the encouragement of industry is of primary importance. As I have already mentioned, the relationship between our people and the people of the United States of America will be strengthened by this agreement. Therefore, I welcome the hill. I have covered the principles involved in it. No doubt it will be dealt with in detail by other speakers, but I felt that I could not say less than I have said in. favour of the measure.
.- The speech of the Leader of the Opposition (Dr. Evatt) contained one very refreshing feature and one somewhat distressing feature. The refreshing feature of his speech was his reference, in tones of admiration, to the great Australian companies. For once he forgot to be doctrinaire and he revealed his true feelings. The distressing feature of his speech, and. it must have been distressing even to him., was that part of it in which be made it clear that certain members of his party had views which were diametrically opposed to his own. .Unfortunately, from the point of view of the Leader of the Opposition, it is becoming apparent even in this House that that is so. Double taxation is brought about by the exercise by sovereign States of their sovereign rights, which it is natural that they should wish to exercise to -the utmost extent. But in exercising those rights they do not always consider the more remote consequences of their actions. Very often they consider only what is immediately under their eyes and they endeavour to obtain as much revenue as they can for their own purposes. Consequently, one person often finds himself subject to the payment of ;a ,gr.eat load of taxation in mors than one country. “When income is earned in one country and received in another, it is often taxed in the country where it is earned as well :as in . the country where it is received. In the case of estate duty, the estate may be taxed -fox duty purposes In the country where the deceased person was domiciled and also in the country where the estate is situated. It is in order to overcome problems of that sort that this bill has been brought before the House.
The object of the Government is to bring about a uniformity of taxation procedure in certain respects between Australia and the United States of America. Taxation law is very complicated and double taxation may arise in a number of ways. The result of double taxation is that industry is stultified. Persons who have money to invest are not prepared to invest their money overseas if they will be subject nol only to the risks of building and extending their business overseas but to the burden of paying taxation both at koine and abroad. Consequently, the free flow of capital between countries is hindered by the incidence of double taxation. As a result of double taxation, the whole of the income earned may be taken by the taxation departments of two countries. In such a case, double taxation may be described as a confiscatory levy. Double taxation prevents international trade and, consequently, its effects are of importance not only to the individual but also to the nation. The matter has to be considered from the point of view of international trade. Long before the advent of the Chifley Government, in fact in the 1920’s, the League of Nations, in conjunction with the International Chamber of Commerce, first began to arrange conventions on double taxation between two or more countries. These conventions were attended by administrators and high officials of taxation departments as well as businessmen of experience and understanding who were well equipped .to find solutions for the problems that faced them. The aim of such conventions is to establish principles of uniformity which can be applied not merely between the countries subject to one convention but throughout all the conventions as far as possible. The convention with the United States pf America and the convention with the United Kingdom have two purposes. One of them is to bring about uniformity of taxation between Australia and the other party to the convention. The other purpose is to provide for the co-operation of the taxation departments of the two countries in order that the relief measures, for which provision is now made by the conventions, shall not be used for the purpose of tax evasion. In effect, these conventions provide a major change in fiscal policy, and result in the abolition of hitherto impassable tax barriers. The main object is to provide that income tax shall be paid by a taxpayer to the government of the country in which he is residing. If that principle is not adopted, the specific instances in which it is to be disregarded, are stated. Similarly, provision is made for the payment of estate duty and gift duty. In other words, uniform provisions have been agreed to, and double taxation is to be ended as far as possible. Of course, it is difficult to reach an agreement between two countries on such a subject, and it is undoubtedly a great feather in the caps of the three countries concerned that they have been able to arrive at an agreement on these matters. The agreement with the United Kingdom was reached as long ago as 1946, and has already been embodied in Australian taxation law. The United States convention is not entirely on all fours with the United Kingdom convention, but is similar to it. A comprehensive body of tax relief is given in this way on income from all sources, such as commercial and industrial undertakings, capital investment, annuities and royalties.
Considerable difficulty has been experienced, because of double taxation, in inducing persons with capital in the United States of America to invest money in Australia.
– Double taxation is not the only reason, of course.
– I am discussing double taxation, and I see no reason to introduce other matters which are not relevant to that subject. Double taxation has impeded the free flow of capital from the United States of America to Australia. Other reasons may exist for the restriction. Perhaps certain honorable members of the Opposition are not liked by certain persons in the United States of America. I did not propose to mention those matters, but the interjection of the honorable member for Perth (Mr. Tom
Burke) has obliged me to depart from my original intention.
As the result of this agreement, we shall have an unrestricted flow of capital from the United States of America toAustralia, certainly as long as this Government remains in office. In consequence, opportunities for employment will be greater, new industries will be commenced here, existing industries will expand, and the national income and national wealth will increase. Any small amount of revenue that may be temporarily lost as the result of the agreement will be more than offset by the amount of revenue that will be obtained through the great industrial expansion that those conventions will produce.
Mr. CREAN (Melbourne Ports) [“3.19’j. - The two previous speakers have indicated that the difficult problem of double taxation arises when two sovereign taxing bodies decide to collect tax on income, one in the country of origin, and the other from an individual who is domiciled within its boundaries on all the income received by him, regardless of whether it is received at home or abroad. It is because the same income becomes liable to tax in the country of its origin, and again when it is transmitted to the country in which the taxpayer is domiciled, that this difficult problem of double taxation arises. An ethical concept is involved in this attempt to mitigate the effects of that kind of difficulty. Apparently, this Government, in its approach to the problem, has not been completely motivated by the ethical concept. The Government has had in mind a more practical problem, which is the attraction of American investment to Australia. I refer to page 49 of the explanatory memorandum on the Income Tax (International Agreements) Bill 1953, which reads, in part, as follows : -
Although the laws of Australia and the United States contain provisions which mitigate the effects of double taxation by the two countries, it became clear that the burden of taxation on incomes earned in Australia by United States enterprises was a deterrent to further investment of United States capital in Australia.
So, even before this convention was drafted, a form of agreement existed between the two countries for the alleviation of the effects of double taxation. The ethical concept, which is that there should be some justice to an individual who pays tax to another country on income which he derives there, is a problem in itself. The other matter involved, which is that the present, arrangements have been a deterrent to the attraction of American capital to Australia is arguable, and can be distinguished from the one with which this agreement should be primarily concerned, and that is, the lessening of the evils of double taxation. I shall deal first, with the details of the agreement.
Australia, under the system of uniform taxation, has only one income tax. A dual system of taxation operates in the United States of America. A Federal income tax is imposed, and each State levies a separate income tax. This agreement, on the part of Australia, applies only to the federal income tax, and, in its application to the United States of America, affects only tax paid by an Australian resident in that country to the federal government of the United. States of America, and not to the State governments. Apparently even under this agreement, an Australian who derives income in America is still liable to be taxed by the State in which he lives. The whole position was considered by the Foreign Relations Committee of the United States Senate, which presented its report to the Eighty-third Congress on the 29th June, 1953. The following statement appears on page .12 of that document : -
The convention would be applicable, so far us United States taxes are concerned, only to the Federal income taxes. It would not apply to taxes imposed by the several States of the United States, District of Columbia or the Territories or possessions of the United States.
So far as Australian taxes are concerned, the convention would apply to the Commonwealth income tax and social services contributions, including the tax at the further rates of tax payable in respect of income from property and the additional tax assessed in respect of the undistributed amount of the distributable income of a private company.
There is at least that difference as far as America and Australia are concerned. In addition to the agreement between the United States of America and Australia, this legislation embodies an agreement between the United Kingdom and Australia. There are certain differences between the treatment of United Kingdom and American taxpayers who operate in Australia, a significant difference being in respect of dividends. Dividends derived by a United Kingdom parent company from operations in Australia are entirely free of tax. That does not apply so far as dividends derived by an American parent company are concerned. Although such dividends are subject to taxation, the rate of tax will be lowered. At the moment, an American holding company pays taxes in full on profits derived in Australia. The rate of tax payable where the income is more than £5,000 per annum is ‘7s. in the £1. If an American company which operates in Australia makes a profit, it is subject, in the normal way, to taxation at the present, rate of company tax of 7s. in the £1. In addition, if that company remits some of its dividends overseas, those dividends also are subject to tax at the rate of 7s. in the £1. By reference to the Second Schedule, it will be seen that each £1 of profits earned by a company of American ownership from operations in Australia, is subject to tax at the rate, of 7s. in the £1. If the residue of 13s. were distributed it also would be taxed at the rate of 7s. in the £1, which would amount to an additional 4s. 6.6d., so that the aggregate amount of tax payable would be lis. 6.6d. Under the agreement, the company will continue to be taxed as an entity in Australia at the rate of 7s. in the £1, but in respect of profits remitted, the tax will not exceed 15 per cent., or 3s. in the £1. By so restricting the amount of tax on dividends, the aggregate of the Australian taxes will be generally 8s. 11.4d. for each £1 of profit distributed. It will be seen, therefore, that an American taxpayer who receives a dividend will benefit to the extent of approximately 2s. 7d. in the £1.
At this point I wish to draw the attention of the Treasurer (Sir Arthur Fadden) to what I regard as a weakness in this agreement. The right honorable gentleman stated that the ostensible purpose of the agreement is to encourage further investments by American interests in Australia. In other words, it is concerned not so much with enterprises already established in this country as with those which may come here iti the future. I suggest that certain American companies have anticipated the passage of this agreement, and have withheld the payment of dividends. In the interests of the Australian revenue, I consider that the agreement should apply only to profits earned after the commencement of the agreement. I do not think that that would be difficult to arrange, aor do I think that any injustice would result. Recently, the Commonwealth Statistician published the results of a survey of companies which have overseas affiliations. The survey, which covered all foreign companies operating in this country, revealed that the undistributed profits accruing to overseas parent companies were as follows: -
l.n other words, there has been a distinct increase of the amount held by companies which, theoretically, could be distributed its dividends. I do not know how much nf those undistributed profits apply to American companies, but I suggest that the Treasurer, in the interests of the Australian revenue, at least, should explore the possibility that an unfair bonus will be given to companies which have 1,pen sufficiently shrewd to. withhold dividends pending the passage of this agreement. There should be no difficulty in identifying profits which were earned before the agreement was reached.
The honorable member for Balaclava (“Mr. Joske) referred to model conventions which had been determined beforehand by bodies set up by the League of Nations, in the past, and, more recently, by the United Nations in an attempt to ad judicate concerning the problems that arise from double taxation. One of the matters considered was the taxation of aircraft and shipping interests. The procedure adopted has been that the profits which arise from the operations of aircraft and ships should bc taxed in the countries in which the aircraft or ships are registered. The idea behind that, is probably that there is as much traffic by aircraft and ships in. one country as in another. The system avoids difficulties which .arise if income is taxed in a country other than that in which the aircraft or ships are registered. In some of the model conventions, reference has been made to the fact that this procedure shall apply only in respect of ships and aircraft which operate internationally, or between the principal portsof the two countries concerned, and not to those which operate interstate. Such, a proviso does not appear in the convention that is at present before the HouseTheoretically, it would be possible for American companies to acquire interestsin interstate shipping and to register their ships overseas, so that no tax could be levied on the interstate operations of such ships. I suggest that consideration should be given to that aspect. It may be that, because these documents are very complicated, it is sometimes difficult for the layman correctly to interpret their verbiage. Perhaps the matters to which I have referred are covered by the agreement, but if they have not been, I suggest that the Treasurer should consider them. Those are one or two of the criticisms that we may legitimately direct at the agreement, although we may agree with it in principle. We should try to be just to taxpayers in other countries who derive income from sources within Australia and who, at present, are taxed on that income both here and in the country where they are domiciled. The principal concession that will be granted under the agreement will apply to dividends, and it is fair to point out that this concession will be largely unilateral because, although there is very little Australian investment in the United States of America, there is considerable American investment in Australia, The statistical survey to which I have already referred gives details of companies incorporated in the United States of America that have establishments in Australia. The total face value of their paid-up capital in Australia a’t the end of June, 1952. was £33,300,000. The document also lists another category, which the Statistician has described as capital directly invested in Australia. Such capital amounted to £31,500,000 at the same date. The amount of paid-up capital inUnited States companies held by Australian companies at the same date was £100,000. In other words, there is a great difference between the amount of
American company holdings in Australia and the amount of Australian company holdings in America. Theoretically, the agreement will provide equality of treatment for both groups in relation to dividends, but there is no doubt that the main benefit will flow to individual taxpayers in the United States of America.
According to the memorandum and the Treasurer’s second-reading speech, the main purpose of the agreement is to encourage United States investment in Australia. In order to view the matter in the correct perspective, honorable members should be aware that American interests already have considerable investments in Australia. I have here a schedule prepared by the Department of National Development which contains a list of some hundreds of names of American manufacturing companies that have established or acquired interests in Australia, or otherwise developed Australian manufactures. The companies are listed according to their holdings of capital in the United States of America and in Australia. This schedule was published in September, 1952, and, at that time, 455 large American companies had established interests in Australia each with capital investments of more than £A1,000,000 dollars. This fact shows that considerable American investments have been made in Australia even without the aid of the agreement. An interesting feature of these investments is that much of the capital belongs to large concerns, such as oil companies. For the information of honorable members, I shall quote an excerpt from a lecture delivered at Princeton University in the United States of America on the 12th February, 1951, by Sir Arthur Salter. He is no radical, and, in fact, until recently he was a member of the present Conservative Government of Great Britain. His lecture at Princeton dealt with American investments, and the following extract from it appears to me to be significant: -
Taking into account the reinvestment of foreign earnings, the purpose and geographical distribution of new investment, and the source of such new capital as was supplied from United States domestic sources, the position can be simply summarized. A few American companies with foreign subsidiaries and branches abroad (though less than % oi such companies) have invested $2$3 billion in them from their internal resources, the great bulk coming from .oil companies, and some 5 of the total being on the American continent. Private foreign investment (in which the general investor risks his money either in portfolio or in direct investment has been practically non-existent.
All efforts to encourage genuine foreign private investment therefore start almost from scratch.
At this stage, it is advisable to sound a warning in relation to investment in Australia, both private and public. The Department of National Development recently published an interesting collection of statistics covering business investments in Australia over a period of five years to the 30th June, 1952. That review shows that most of the new projects started in Australia over that period were local enterprises. The amount of foreign investment from all sources was comparatively insignificant. It appears, therefore, that the future development of Australia must be undertaken largely by Australian business organizations and governments. The annual investment in Australia, as revealed by the latest issue, of the White Paper on National Income. is about £1,000,000,000 a year, of which about £600,000,000 is provided by private investment and about £400,000,000 by government authorities of one kind or another. In my opinion, the problem of investment is distinct, in many ways from this bill. Yet the ostensible reason for the negotiation of the agreement is the encouragement of foreign investment in Australia. Perhaps a certain amount of foreign investment is needed in certain fields of activity, but the Government should examine all overseas investments critically. Certain interests in Australia are clamouring for what they describe as dollar investment, not because they care particularly whether or not industries are established in this country by American companies, but because, for the time being, the dollars that are transmitted to Australia as a result of such investments will enable them to buy consumable goods from the United States of America and help to balance the unbalanced state of trade between Australia and the United States of America. I suggest that two separate problems are being confused. There is, first, the problem of investment in Australia, which is a long-term problem ; and there is also the balance of Australian accounts, and the sterling area as a whole, with the dollar area, which is a short-term problem. I suggest that the way to achieve that balance is not necessarily by means of foreign investment iri. Australia. In fact, looked at objectively and from the poin t of view of world peace and economic development as a whole, it would seem that the greatest need to-day for foreign investment is not in countries such as Australia and Canada. Rather it is in the under-developed eastern countries such as Malaya, Burma, Indonesia and similar parts of the world. The main problem is that they have no industries. Too many of their population must be engaged in agriculture because there is nowhere else to employ them. Having no industrial potential of their own, they <;a.n get it only by receiving technical know-how from other parts of the world. The Colombo plan is at least the beginning of an attack upon the problem that must be tackled, but as yet it is only a -small beginning.
If the United States of America has capital that it wants to export, Australia should not be too greedy in seeking it as a long-term proposition. Rather should it go to Pakistan, Burma, Malaya and any of the eastern countries whose millions cannot be adequately clothed and fed at the present level of their economic development. We should take a broader view of this problem. We should not seek investment indiscriminately from any part of the world, and say how thankful we are that we are receiving that kind of investment. As Sir Arthur Salter has paid, when Americans invest privately they do not do so beneficently but in ca.culated fashion according to the dividends that will be received. When a risk is taken, it is not accepted by private individuals but by corporations who are seeking an outlet for their investment. In many instances an organization is formed in a foreign country because that country has closed out American investment by normal methods of tariffs or import restrictions. The investors establish the industry to escape a tariff rather than with any beneficent plans in mind.
As I said earlier, at least two distinct problems are involved in this legislationThere is the question of double taxation. If a country has foreign investment, it should be just in the manner in which it treats the investment so far as nationals of the investing country are concerned,, but whether it requires further investment is another matter.
– Order ! The honorable, member’s time has expired.
– The most important of the bills that the House is discussing on the avoidance of double taxation is the Income Tax (International Agreements) Bill. As previous speakers have pointed out, this bill contains as the first schedule, a copy of the agreement entered into between the Government of the United Kingdom and the Australian Government for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxation on income. The bill also contains the convention between the Australian Government and the United States of America for the same purpose. The agreement with the United Kingdom was signed in 194G by the Chifley Government and was given effect by the Parliament in 1947. The law was changed to give effect to that agreement by an amendment to the Income Tax and Social Services Contribution Assessment Act of that year. I believe that the method adopted here to repeal the provisions of that act insofar as they relate to the agreement with the United Kingdom, and to incorporate the agreement with the United Kingdom and the agreement with the United States of America in the one bill, and to have clauses giving legal effect to both agreements in one piece of legislation, is a good idea. It rather simplifies the approach to the matter to have the two agreements in the one bill.
It is rather interesting to note that in Australia we have only these two agree. ments for the avoidance of double taxation. We have one with the United Kingdom and one, with the United States of America. The United States of America, however, has entered into similar conventions with a number of countries including the United Kingdom, Canada, New Zealand. South Africa, Ireland, Australia, in this case, and a number of European countries. The thought occurs to me and I pass it on to the Treasurer (Sir Arthur Fadden) that Australia should enter into negotiations with New Zealand and Canada in order to obtain the benefit of similar agreements with our sister dominions. There is a certain amount of flow and exchange of capital between Canada and Australia. At the moment, Canada is enjoying the soundest economy of any country in the world. The development there has been remarkable in all spheres of the economy. Despite the vicissitudes of the post-war era. and the threat of inflation, the economy has gone from strength to strength.
– I can endorse that statement.
– The honorable member for Wilmot (Mr. Duthie) visited Canada recently and he has been able to endorse my comment. I believe that there is considerable scope in Australia for an inflow of Canadian capital and know-how. I saw some evidence of the possibility of development in that direction in the North em Territory recently. That undeveloped part of Australia is of vital importance to us because of its strategic geographical position. It is situated in close proximity to the vast area of SouthEast Asia. It is a. large tract of country with practically no population and with rich natural resources. Some interest has been shown in the Northern Territory by Canadian and American concerns which have seen in it possibilities for large-scale capital development, particularly in the mining industry. Every encouragement should be given to development in that direction because in the Northern Territory, in particular, there is a vast untapped store of mineral wealth, not merely in the sphere of uranium where tremendous developments are taking place, but also in many other minerals of great value. Some Canadian firms appear to be interested, and I suggest to the Government that it should take up this matter actively with the Canadian Government with a view to signing a further convention for the avoidance of double taxation on the lines that we are considering so that we can encourage the flow of Canadian capital. Similar considerations apply to our neighbouring dominion, New
Zealand. I think negotiations should take place with that dominion also.
The conventions that the United States of America has entered into with thu United Kingdom, Australia and other countries follow a broad general pattern, although they differ in detail owing to differing tax structures. Certain general principles apply to all agreements, the purpose of which is to avoid the incidence of double taxation. I think every honorable member agrees that it would V unjust to continue double taxation. The general opinion seems to be that if a company or a business that is domiciled or resident in one country carries on operations in another country, t/he company or business should not be required to pay taxes in both the country of origin of its profits and the country in which it is resident or has its domicile. There is general agreement on the principle that double taxation should be avoided. With regard to the manner in which it should be avoided, I prefer instate the principles in a manner rather different from that in which the honorable member for Balaclava (Mr. Joske) stated them. It seems to me that the first principle is that if a company carries on it3 business in two countries, taxes should be paid in the country of origin of the profits, and if the company remits » part of its profits from what I shall refer to as the country of origin to the country of residence, the country of residence should allow a credit for the taxes paid in the country of origin. I believe that to be the most important principle.
– It is a vita! principle.
– As the honorable member for Perth (Mr. Tom Burke i has said, it is a vital principle. It is especially vital to Australia, which is, so to speak, a recipient in this connexion. Firms are coming to Australia from other countries and investing their money here. It seems to me that, from our point of view, and also from the broader point of view, the primary principle on which we should work out a convention for the avoidance of double taxation is that the country of origin of profits should be the country that imposes the primary taxation and the country of residence. its I describe it3 should give a credit for the taxation imposed in the country of origin. The honorable member for Balaclava said the first principle should be that the country of residence should impose the taxation and that an exception should be made to that general rule so that, in certain cases, the country of origin of the profits would have the right to impose taxation. I prefer to say that the country of origin should impose the taxation, that the country of residence should make the concessions and that, as an exception to that principle, in certain specified cases only, the country of residence should impose taxation and the country of origin should grant exemptions in those cases.
That principle seems to have been applied in this convention between Australia and the United States of America. The explanatory memorandum that has been circulated sets out limited and specified kinds of income in respect of which the residence basis of taxation is adopted. Income earned in those specified ways is taxed only in the country of residence, not in the country of origin. The explanatory memorandum refers to the profits of shipping and air transport companies; business profits where the recipient has no permanent establishment in the country of origin of the income; royalties in respect of literary, dramatic, musical or artistic works; remuneration received in cases where a businessman is on a temporary visit to another country, not exceeding 183 days in an income year; and remuneration paid to teachers and professors who are temporarily absent from their own countries for periods not exceeding two years. In those eases, the exceptional principle, as 1’ prefer to call it, that taxation should be imposed on a residence basis is applied.
There is no doubt that this convention will give some real advantages to the United States of America. I do not criticize the convention for that reason, but it is a fact that real benefits will flow to the United States of America from it. The agreement is of a reciprocal character. Each article provides that certain things shall be done, and that the benefits of those things shall apply equally to Australia and the United States of America. But, as the honorable member for Melbourne Ports (Mr. Crean) has pointed out, the amount of American investment in this country is considerablygreater than the amount of Australianinvestment in the United States of America. There is practically no Australian investment in the United States of America. I understand that only one Australian firm of any consequence is operating actively there. It is the Kiwi boot polish organization. Apparently it represents the total Australian investment in the United States of America. The fact that the company has been able to establish itself in the United States of America in that way is a tribute to its product and its efficiency. It is logical that we should not have large investments in the United States of America. Apart from the fact that the industrial field there is very competitive, any surplus capital resources that we have should be invested in our own country. We are suffering from a great shortage of capital resources, and we need to invest in our own country as much as we can lay our hands on. We have a negligible investment in the United States of America, but American investment in this country is worth over £60,000,000. We hope that, as a result of the agreement, more American money will be invested here. Although the agreement is of a reciprocal character, the traffic will be largely oneway traffic. The benefits will flow in one direction because there is a great deal of American investment here and practically no Australian investment in theUnited States of America.
A corollary of what I have just said is that the United States of America will benefit from the agreement as a result of the transmission of dividendsto that country by American-owned companies in Australia. The operation of the convention will mean that a number of American companies carrying on business in Australia and transmitting dividends to the United States of America will pay less tax in this country than previously. There will be a loss to the revenue of Australia. It has been pointed out that at the present time, prior to the operation of the convention, American companies in this country pay primary tax at the normal rates, that is, 5s. in the £1 on the first £5,000 of their profits and 7s. in the £1 on the remainder. They will continue to do so after effect has been given to the convention. The companies pay an additional tax on dividends transmitted to America, which brings the rate of tax up to a maximum of lis. 6d. in the £1. E understand that that is higher than the rate at which tax is levied on companies in the United States of America. American companies operating in Australia transmit their dividends to the United States of America and pay tax at a rate up to lis. Gd. in the £1 in Australia, but they do not receive in the United States of America credit for the full amount that they pay in this country because American rates are lower; and it Ls to that point that they now pay a certain amount of double tax on their profits. This convention will do away with that double taxation by reducing the rate of tax on dividends payable in Australia to 15 per cent., or 3s. in the £1, making the new maximum rate of tax 8s. lid. in the £1. By reducing by 2s. 7d. in the £1 the rate of tax payable by American subsidiary companies in Australia, the Australian Government, as I have pointed out, will lose some revenue, but those companies will be exempt from payment of double tax on the whole of their profits. Under this convention they will be taxed only at the higher rate prevailing in the two countries.
Whilst this will be a real concession to American companies, it will involve a loss to the Australian Treasury because it will apply in theory but not in practice in Australia. Nevertheless when this matter was considered by a sub-committee of the Committee on Foreign Relations of the United States Senate in June last, it was pointed out that the advantages conferred upon American businesses operating in Australia were not equivalent to those that operated in respect of United Kingdom, companies operating in this country as such British companies are not taxed at all in Australia on dividends transmitted to the United Kingdom. Such British companies pay only the basic company tax in Australia. Our negotiators were not prepared to extend a similar concession to American companies, which will be liable to pay additional tax at the rate of 15 per cent; on dividends transmitted from Australia. The United States of America endeavoured to obtain that further concession but was unsuccessful. Nevertheless, it has expressed satisfaction with the agreement. In broad outline those are the ways in which American companies will benefit under this agreement. They will pay tax at a lower rate in this country and will not be double-taxed on profits that they make in this country. That will act as an inducement to American companies to invest in Australia. When I said earlier that the benefits of the agreement will flow in only one direction, I should have qualified that statement by saying that its financial benefits will flow in only one direction. It would be incorrect to say that no. benefits will accrue to Australia as a result of this convention. By ratifying it Australia will fall into line with the United Kingdom and other members of the British Commonwealth of Nations which have double taxation conventions with the United States of America under which they have eliminated double taxation between their respective countries and the United States of America. In those circumstances, it would be rather odd if we refused to grant a similar concession to the United States of America. More important still is the fact that this agreement will encourage a greater flow of American capital to Australia.
– Who told the honorable member that?
– If the honorable member for Tarra (Mr. Keon) does not agree with that statement, he is at liberty to put his views forward. I do not know whether the honorable member disagrees with the Leader of the Opposition (Dr. Evatt) on this point, but that right honorable gentleman pointed out that the double taxation convention with the United Kingdom which was signed several years ago resulted in considerable benefit to Australia in the influx of British capital. It is reasonable to believe that similar results will flow from this agreement with the United States of America. For the benefit of the honorable member for Yarra, I shall cite an extract from a report that was published in the Sydney Daily Telegraph on the 25th June last.
– Does the honorable member cite the Daily Telegraph as an authority in this matter?
– I shall ignore that interjection. The report gives a concrete illustration of the fact that Australia will gain some benefit as a result of this convention with the United States of America. That report states -
U.S. Firm MAY open in Australia.
Two American businessmen arrived in Sydney yesterday to survey the prospects of launching a new industry. Abolition of double taxation attracted them to Australia. The businessmen are Mr. E. 1). Landels and Mr. Cloyd Gray.
Mr. Landels is chairman, and Mr. Gray president, of the W. R. Ames Company, San Francisco, one of America’s biggest manufacturers of irrigation equipment. The Ames Company may establish an industry in Australia, in partnership with Australian interests.
It is very desirable that American and British interests should set up in business in this country in partnership with Australian interests. The report continued -
Mr. Landels said : “ The signing of double taxation agreements between the Australian and U.S. Governments would stimulate American industrial interest in Australia. The Ames Company producer) equipment for flood, furrow, and sprinkler irrigation. . . . We hope to establish here a factory to produce this irrigation equipment for Australia and the whole sterling area,” he said.
That news item i3 very significant. This American firm has been induced to investigate prospects of setting up in Australia in partnership with Australian interests not only to provide Australia’s requirements of equipment which will be most valuable in the development of our economy but also to export such equipment to the whole of the sterling area. The conclusion of this double tax agreement with the United States of America has been an important factor in the negotiations should that industry be established here, and engage in the manufacture of equipment for flood, furrow and sprinkler irrigation, it would represent an important gain to Australia. Even those who doubt the efficacy of the concession that is to be made under the agreement will acknowledge our need, to promote the flow of capital to this country.
– That is only a report that has been published in the Daily Telegraph. Who will take any notice of that?
– The honorable member is entitled to his views about the Daily Telegraph, but I have no reason to doubt the report or the importance of the matter that I have quoted from it. There is no doubt that Australia needs capital. We must develop our country, and increase our population as quickly as we can if we and our descendants are to be secure in the future. It is rather frightening for people with young children to speculate on some of the dreadful possibilities that may lie ahead of Australians if we do not take active measures to develop our country and increase our population. It is a good thing to look at the world map occasionally and consider Australia’s geographical relationship with the other nations of the world, particularly the nations of the Pacific area. Our immediate neighbours in the north are all peoples of the Asiatic race. In our far north lies Asia itself with it3 teeming millions of people; to the south of the Asiatic continents lies SouthEast Asia extending into’ the Malayan Peninsula, and Archipelago, and the southern-most point of the lands in~ habited by Asiatics, is Indonesia. And I remind honorable members that Indonesia is our closest neighbour in the north. Most of the Asiatic peoples have very low standards of living, and nationalism is stirring right throughout Asia. Even in Indonesia at the present time there is talk of insurrection against the established government, and that government could collapse and a Communist regime take over the rule of millions of Indonesians. If peace is arranged in Korea, trouble may flare up in Indo-China. The flood of communism is close to our shores and that fact, together with the overwhelming numerical preponderance of the Asiatic peoples, makes it vitally necessary that we should develop Australia as quickly and as extensively as possible. At the same time we should increase our population so that we may be able to hold the country in the future whatever may happen in Asia. I do not believe that even the honorable member for Yarra, who has been interjecting rather persistently during this debate, will deny that Australia is considerably underdeveloped. Although we have great and valuable developmental projects in hand, other potential projects would go ahead much more quickly if we had sufficient capital.
– Order ! The honorable member’s time has expired.
– I shall not examine the legislation before the committee from a technical viewpoint.
– Tell us how much the oil companies will get out of it.
– If the honorable member for Yarra (Mr. Keon) adopts the worm’s eye viewpoint, perhaps he may feel himself entitled to make a remark like that, hut I am trying to raise the level of the debate from the worm’s eye viewpoint to the broad Australian viewpoint. We must develop this country in our own generation, and ensure that it shall be further developed in the generations to come. Australia is a young country,, and is still in the developmental stage. Indeed, it is still in the pioneering stage; and every country in that state is capital-hungry. The surplus of earnings over current expenditure of all individuals and companies in Australia totals many millions of pounds each year, but it is quite insufficient to allow us to develop at the rate we should in order to survive in the years ahead. What I have said applies not only to Australia, but perhaps also to New Zealand, India, Pakistan, Ceylon, probably some South American countries, and other countries whose resources and raw materials are far from being fully developed.
I was very conscious of the need for capital in Australia in the 1930’s, when r was Treasurer of the Commonwealth, and I believe that we still need capital and must continue to need it for many years to come. We can achieve a certain rate of development, but that rate is not nearly as great as the rate that I and many other people believe is necessary if we are to hold the country. Australia is richly endowed with natural resources, and if we do what should be done in this country it can become one of the great future homes of the Englishspeaking people. But if that dream is to become a reality, we must do a great deal of work and thinking in this genera tion. There are only a few nations from which we can import capital. They are the nations of North America, and our mother country, Great Britain. From no other countries can capital be made available to Australia for investment, in private enterprise, or as loan moneys. This measure is directed towards removing one of the principal disabilities in the way of the investment of private capital in Australia by the United States of America. It is wrong to speak of this measure as being one for the encouragement of overseas investment in Australia, because it could more properly be described as an attempt to remove discouragements to private investors. I do not believe that private enterprise can, by any action of this Government, be encouraged to invest capital in this country, because it must satisfy itself that there is a field for profitable investment here. No government can give such an assurance, and therefore private capital has to assure itself that it can invest with confidence. However, there are certain minima which investors from the United States of America have to take into consideration. One of those is that profits from investment moneys in this country will be rationally treated from the taxation point of view and will not be double taxed. I am not without knowledge of this subject, because I have discussed it in the United States of America and in this country with executives who know what they are talking about and can influence the movement of investment funds from the United States of America to Australia. I speak not only of recent months or of recent years, but of the whole of my adult life. New York people, particularly, have always put double taxation well towards the top of their list of disabilities suffered by investment money in Australia.
Apart from my attitude as Minister for External Affairs, I warmly welcome this measure as an Australian. I believe that it will remove one of the greatest obstacles, or what the Americans believe to be one of the greatest obstacles, which, of course, is the same thing, that have stood in the way of a greater flow of American money to Australia. A few years ago, I took the trouble to compile from all sources available to me a list of the amounts of American money that had been invested in the principal developmental countries of the world. I found that, on a population basis, American investment in Australia was relatively small. There are not many American organizations in this country apart from a few motor car and oil companies and some merchant companies. I have frequently been told by Americans who have command of the direction and pattern of American overseas investment that double taxation has been an important factor in retarding American investment here. There is no party politics in this bill, but undoubtedly Australia’s future, is to a considerable degree dependent upon the clearing away of the disabilities under which foreign capital, particularly capital from North America, has laboured up to the present. “We can u3c a lot of American money if the Americans choose to send it here. That will depend upon Americans coming to this country and being convinced that there is scope for profitable investment. Australia must, of course, stand up to the competition of other countries, particularly South American countries and other British countries, as a locale for American investment.
– Eastern countries as well.
Mr. OA SET. ;Yes. Private capital in the hands of Americans is not invested for charitable purposes. It is sent to countries that offer safety and a reasonably profitable investment. Do not let us throw stones at people who adopt those criteria when considering where they will invest their money. Every one of us does exactly the same thing every day. I trust that this bill will initiate a larger flow of American capital to Australia once the Americans have assured themselves that all the conditions that exist or are likely to exist in this country are favorable to investment. We want them to be certain of their investment here and not to take a chance, and I should welcome visits by Americans in whose judgement American enterprises have confidence. Broadly speaking, I should be content With the judgment of men who I know will take a large and long view of whether or not this country has a future, and that, after all, is the main factor that determines investment. The Americans are long-sighted people. I am speaking of Americans in particular because this bill deals in particular with them. There will be further legislation dealing with at least one other country before we are very much older, and it will be on the same general pattern as this legislation. I repeat that I warmly welcome this measure, both as Minister for External Affairs and as an average Australian.
– I agree with the Minister for External Affairs (Mr. Casey) that we should view this bill in the light of ite probable effect on the development of this country. We should not take a narrow view of it. Whilst I believe that, to the greatest possible degree, the capital required for Australian industrial development should be obtained from within Australia, it is undeniable that without overseas capital we would not bp as advanced industrially as we are to-day. There is ample evidence of that in my own electorate, in which several big overseas companies have established undertakings. I refer not only to American companies, but also to British companies. Those industries have had a profound effect on the employment situation in Adelaide. Indeed, without them, I do not think that Adelaide could possibly carry its present population, nor could the people of that city have their present standard of living. Take, for instance. General Motors-Holden’s Limited, one of the biggest organizations in my own district. That company employs about 6,000 people, and pays an average weekly wage of ?15. Originally, of course, we had the purely Australian organization known as Holden’s. That company was engaged principally upon the manufacture of motor-car bodies and I have an intimate knowledge of its history over the past 30 years. When the Chifley Government decided to encourage the production of an Australian car, overseas assistance was necessary, and the General Motors Corporation of America came into the picture. There has been much talk of the big profits made by General MotorsHolden’s Limited. I, too, was disappointed at the high cost of the Holden motor car. I thought that the Australian car would have been marketed at a much lower price. Undoubtedly the profits have been high, particularly in the last financial year, but they have been largely ploughed back into the industry. It may be argued that the profits have been re-invested in the industry because, had they been sent overseas, taxation at the rate of Ils. 6d. in the £1 would have been levied upon them. Be that as it may: the fact remains that had the profits gone overseas, General Motors-Holden’s limited would not be providing nearly as much employment as it now provides.
– A Liberal conception.
– The honorable member for Petrie (Mr. Hulme) may call it a Liberal conception, but I call it a common-sense conception.
– That is the same thing.
– I was considering the word “ liberal “ in its political sense rather than in its .ordinary sense. Undoubtedly General Motors-Holden’s Limited has helped Australia considerably. Not only does the organization provide direct employment for 6,000 people in South Australia, but also it provides considerable indirect employment through small sub-contractors who are engaged upon the production of Holden components. There are many such firms and most of them are financed by local capital. I am not keen about the introduction of foreign capital to Australia if Australia can manage without it, but the result of its coming has been the expansion of industries that are doing work for General Motors-Holden’s Limited.
The Finsbury munition works were established in my electorate during the war. «The Government erected huge buildings which provided space in which a large amount of manufacturing work could be done. At the conclusion of the war firms were looking to Australia. One of those firms was Rubery Owen and Kemsley Proprietary Limited. The manager of that firm told me a few years ago that they were bringing out more than £1,000,000 worth of plant to install in those buildings for the purpose of making heavy steel pressings. To-day the majority of wheels that are pressed in Australia are pressed in .that company’s factory. That company has been able to do a large amount of work, not only in relation to the pressing of wheels for motor cars, but also in relation to other heavy steel pressings. Before the war, Imperial Chemical Industries of Australia and New Zealand Limited also established in my electorate a factory to produce soda ash. That commodity was formerly imported from England. It was not practicable to establish two factories in’ Australia and there was competition between the States for the establishment of the industry. When that company and other British, companies decided to come to Australia, every State government, whether it was a Labour government or a Liberal government, offered concessions in order to entice them to its own State. South Australia was very fortunate, because during the war it had these large munition factories. The buildings were already there and it was not necessary for the.se companies to erect new buildings. Australian Cotton. Textiles Industries Limited also established a factory in South Australia. Overseas capital ayas invested in that company. Davies Coop (South Australia) Limited came from Victoria and established a factory in my electorate. That factory was in operation, but it did not produce the type of cotton goods that Australian Cotton Textiles Industries Limited produced. Any one may go to Melbourne or Sydney and purchase sheets that are already wrapped and ready to put on the bed that have been made at Australian Cotton Textiles Industries Limited factory at Woodville, in South Australia. British Tube Mills (Australia) Proprietary Limited also established a factory in my electorate. That company is drawing steel tubes of all sizes and descriptions and it is employing a large number of men. It employed capital that came principally from outside Australia. I know that Australian capital has been invested in some of these industries, but. speaking generally, if overseas companies had not .established these industries, Australian companies would not have been prepared to do so. If we exclude such companies as Broken Hill Proprietary Company Limited, we find that the majority of these large industries have been established by companies from overseas.
We must be realists. An overseas company would not come to Australia if it thought it would not earn any profit. The British and American companies do not come to Australia for some patriotic reason. They will not come unless they can get a reasonable return on the capital that they invest. I know also that, if they were not given an opportunity to make a reasonable return on their capita] when they came here, they would sell out or would not expand their production. I do not intend to speak at length, but I do think that the world generally should know that Australia does appreciate the efforts that the Australian Government and the State governments have made in order to attract these companies to Australia. Australia has been enabled to support a population that ii: would not have been able to support otherwise. Honorable members speak about opening up the land and about settling people on it, but any honorable member who has had any experience in opening up new country knows that, despite the expenditure of a large sum of money, only a few hundred people are settled in one area. Employment can be given to the number of people to whom it is desired to give it only if those people can be employed in various secondary industries. If we are sincere in our belief that Australia must increase its population and in our desire to keep Australia as a British community, we must expand our industries. The establishment of large secondary industries helps the primary producer. Australia should make it possible, not only for the companies that are already established to continue their production, but also for other companies that come here to receive a reasonable return. It Iia? been stated that many of these companies are charging too much for their products. I do -think that in some cases the profits are too high, but 1 invite honorable members to examine the position. I invite them to assume that these companies make a taxable, profit of £10 on every £100 that they invest. If this bill is not approved, the American companies will have to pay the Ils. 6d. in the £1 tax to which reference hn? already been made and. instead of receiving 30 per cent, on their capital, they will receive only 5 per cent. If they are required to pay lis. 6d. in the £1, they will not come here. Although the Opposition is firmly of the opinion that Australian capital should be employed in the production of its goods, it recognizes that Australia must look elsewhere for the necessary capital. I support the bill.
.- I am not altogether sure that the arrangement set out in the bill can be regarded as a blessing for this country. It is called a reciprocal taxation agreement, but there is not much reciprocity about it. It is a one-sided agreement. 1 am given to understand that the amount of fullysubscribed American capital invested in this country is £33,300,000, while the amount of Australian capital invested in the United States of America is only £100,000. The gentleman who negotiated this arrangement, and no doubt benefited substantially as far as his interests in Goodyear Tyre and Rubber Company (Australia) Limited are concerned, is none other than Sir Percy Spender, the Australian Ambassador to the United States of America. I should like to know what has been his reward for negotiating this remarkably one-sided agreement between Australia and the United States of America. It seems to me that the Australian Government is making a grant of about £3,000,000 a year in connexion with our overseas payments. It is noteworthy that whilst the Government is very generous in making these concessions to American investors in this country, itcontends that it has not the financial capacity to increase by more than 2s. 6d. a week the pensions of aged and invalid members of the community, and those paid to ex-servicemen who helped to defend Australia. Let us examine the situation. It is quite true that this country needs developing. If the Government were to apply a proper financial policy, there is no reason why this country could not do a great deal more to further its own development than it has so far been permitted to do. The previous Labour Government adopted the very wise policy of reducing Australia’s overseas indebtedness. It reduced Australia’s overseas borrowings because it realized that the greater the amount of foreign investment in this country, the less is our degree of domestic independence. 1 make it clear that every member of the Labour party recognizes the necessity to establish’ great industries in this country. However, foreign capital invested in a country does not always bestow benefits on workers engaged in industry in that country. Honorable members have only to consider the position in colonial empires in order to appreciate that the investment of foreign capital in those countries has not always proved to be a blessing.
Some honorable members have referred to the necessity to establish industries in order to provide employment for our people. It is quite true that in order to obtain the things we need, we should have a diversity of industry. But surely supporters of the Government do not believe that that was the sole reason for inviting the investment of overseas capital in Australia. The investment of foreign capital in the colonial empires to which I have referred resulted in full employment, but that state of affairs was accompanied in most instances by slavery, and the lack of decent industrial conditions. Many American companies, impressed with the profit potentiality of this country, invested large amounts of capital in Australia. Supporters of the Government contend that this one-sided agreement will encourage the investment of additional overseas capital in Australia. I believe that the agreement may have the opposite effect, f believe, also, that General MotorsHolden’s Limited may have deliberately refrained from sending all its surplus funds abroad because of the application of the so-called double taxation principle. Let us consider how this company has exploited the Australian people. I do not think that anybody could contend that the company needs any encouragement to invest additional capital in Australia. Assisted by the Australian Government, it has established an Australian motor car industry. I understand that only £2,300,000 of American capital is invested in the company. The great bulk of the capital that has been ploughed back into the industry comprises money that has been earned by Australian workmen in the company’s factories. Of what benefit has this been to the Australian community? It is quite true that the company has produced a motor car which is efficient in the fields in which it operates. But it is also true that, on its ordinary capital, which was subscribed by American interests, the company made a profit in one year equivalent to 227 per cent. How can it be contended that this company needs further encouragement? I am sure that American investors would be delighted to invest additional funds in this country if they were assured of such a high return on their investment.
Let us look at this matter realistically. I am directing my attention to the investment of American capital in this country because one of the bills that we are considering gives the force of law to an agreement between Australia and the United States of America in relation to taxation. As an Australian, I do not like the idea of any imperialist power extending its influence over Australia. I should resent that happening irrespective of the quarter from which the influence came. I am convinced that this country could do much more than it has so far been permitted to do in relation to development. As our great industries develop, they become less satisfied with the home market that is provided by only approximately S,500,000 people. During another debate this morning, the Minister for Labour and National Service (Mr. Holt) informed us that American industry needs only a. 4 per cent, export market in order to absorb the nation’s total industrial production. Although American industry has a great home market, Australian industry is not so favorably situated. Therefore, as our industries expand, they will seek to obtain export markets. Supporters of the Government, emphasize the need to reduce costs. They have stated that Australian export industries in particular are handicapped by the high cost structure in this country. That high-sounding term means that they consider that wages are too high and the working hours per week too few. In time, the Australian community will be urged by the opponents of Labour - as it has been previously - to accept a longer working week and lower wages, so that industries that have been established in Australia by foreign capital will bo able to exploit markets throughout the world. Does any honorable member believe that that would be of great benefit to the Australian people? In many countries in which great industries have been established, there exist depressed living and working standards. I point out to the honorable members opposite, who are so enthusiastic about the desirability of encouraging the investment of foreign capital in Australia, that in recent years there has developed a tendency for overseas financial interests to pay close attention to Australia because of the favorable opportunity that this country offers to them to invest their surplus funds. Representatives of big financial organizations visit Australia, examine our industries and programme of works and consider the policy of the Government of the day before they decide whether or not they will approve an extension of dollar loans to Australia. I remind and warn members of the Labour party that on many occasion.representatives of American financial organizations have criticized what’ is known as the “White Australia policy. As honorable members are aware, the Labour party bases its stand on the socalled White Australia policy, not on a theory of racial superiority, but on the belief that such a policy provides a measure of protection against cheap ls hour from overseas. Overseas’ industrialists who establish big industries in Australia want to man them with cheap labour. They have not the same inhibitions as we have in regard to mixed races. They do not view the problem as Australians do. They would be willing to flood Australia with cheap Asiatic or coloured labour in order to break down Australian industrial conditions. In making that statement I do not want it to be thought that I do not appreciate, as some honorable members will undoubtedly suggest, the efforts made by the Americans to preserve the security of this country during World War II. Such a- suggestion is often introduced into discussions of this kind in an endeavour to play upon sentiment and thereby induce the Australian Labour party to change its attitude to legislation of this kind. The Labour party and the people generally have the greatest appreciation for the manner in which the Americans assisted to secure the defence of Australia during the war* The point I make is that the American people who made great sacrifices in the interests of our defence will not benefit from legislation of this kind. In nations throughout the world only the workers make the sacrifices, do the fighting and the defending. After the war American workers who had served in the forces were cast upon the scrap heap and were very poorly treated by the American Government as, indeed, have many of our” ex-servicemen by this Government.
I turn now to some other aspects of this measure. The Labour party believes that Australia should be developed as quickly as possible.
– How should the task be undertaken?
– Are honorable members opposite able to tell us their plans for national development? Do they think that foreign capital will be used to develop the dead heart of Australia? Of course not! When persons or corporations have capital to invest do they take into account where an industry can best be established, in the national interests ?
-They do not. They do what the honorable member for Riverina (Mr. Roberton) would do; they invest their money where it can be most profitably employed.
Mk: ROBERTON.–Rubbish !
– They invest it in areas where transport is available to carry their products to available markets. Development in Australia has proceeded all along the eastern seaboard because of the availability of cheap sea transport and the existence of great coal resources in the northern coastal areas of New South Wales. Despite the fact that government after government has talked about decentralization, the interior of Australia still remains undeveloped. The only governments that made serious attempts to develop the interior of Australia and to apply a policy of decentralization ‘ were tile Chifley and Curtin Labour governments which were in office during the war years. After the war ended, and ‘ the Labour Government wanted to extend its constitutional powers to enable it to continue those activities, honorable members opposite and those who support them- challenged its right to do so. Eventually they forced it to dispose of great national factories that could have done much for the future development of Australia.
Australia should try to reduce its overseas indebtedness and its dependence on foreign capital.
– That would, be quite wrong.
– I invite the honorable member for Warringah (Mr. Bland) to indicate how he would make up the loss of revenue that will result from this onesided agreement. Does he know how seriously the revenue will shrink as a result of the agreement?
– Does the honorable member know the answer to that question?
– Government supporters, who should know these things, expect a member of the Opposition to answer questions such as this. I assure the honorable member that the loss of revenue that will result from this agreement will bc very substantial. This Government has said that it cannot provide additional funds to increase social services payments beyond the existing rates because it has not the requisite financial capacity to enable it to do so, yet it proposes to make this gift to wealthy foreign companies. It is true that American-owned industries established in Australia will pay company tax at the appropriate rates, but they will benefit considerably from this legislation in respect of the payment of overseas dividends. They are already being very well treated and they do not require additional encouragement to invest their capital in this country. The Australian Ambassador to the United States of America has put this proposal over the Australian community on the plea that it will help our development, knowing very well that he will benefit from it in a personal way because of his investments in the Goodyear Tyre and Rubber Company (Australia) Limited.
Recently in this Parliament we discussed the establishment of an Australian national flag. When honorable members opposite spread themselves on that subject one would imagine that they believed in a great Australian nation; yet it is apparent that they have no strong objection to Australia becoming the 49th State of the American Union. They would surrender our independence completely. They indicated their attitude to that matter when they attacked the Leader of the Opposition (Dr. Evatt) in relation to his plea in regard to the Manus Island base. They were indignant because the right honorable gentleman on behalf of the people of Australia showed his determination to do everything possible to protect our interests in relation to that base and they described his efforts as an act of treachery against Australia. Honorable members opposite neither think nor act as Australians. Can any honorable member on the Government side deny that the more we increase our overseas indebtedness and become dependent upon foreign invested capital, tho more we sacrifice our independence? Let us examine for a. moment this socalled reciprocal agreement. Earlier I pointed out the disparity between the volume of United States capital invested in Australia and Australian capital invested in the United States of America. Speaking of reciprocity, is there any reciprocity in regard to Australians who visit the United States of America? As every honorable member knows, an Australian who enters the United States of America is not permitted to work in order to earn his livelihood without first obtaining special permission from the American authorities. Similar restrictions do not apply to American citizens who visit Australia. Let us examine the serious threat to Australian domestic policy which is inherent in this agreement. The stage could easily be reached at which great external pressure could be brought on this country to alter its immigration policy because certain foreign industrial groups wished to secure cheap labour. Does anybody imagine that honorable members opposite worry about the possibility of Australia being compelled to alter its immigration laws to permit an influx of cheap labour ? They would welcome it. A member of the Liberal party, who formerly represented the electorate of Boothby, Dr. .Grenfell Price, on one occasion advocated the. introduction of Asiatic labour for the purpose of developing the Northern Territory. This policy has been advocated on many other occasions.
We can develop this country, not by the present haphazard method of encouraging foreign capital to exploit our markets and exploit our community, but by the election of a government that is big enough and determined enough to develop the resources of this nation, not merely on its seaboard, but in the interior. The Government has stated that Australia urgently needs dollars. Nobody denies that we need many essential imports from the dollar area in order to meet our urgent requirements. But what has the Government done to improve the dollar position? A wonderful discovery of uranium resources has been made in this country. The full extent of our uranium wealth is still unknown because uranium deposits have not been properly surveyed. But it is well recognized that the quantities of uranium obtainable in Australia could secure an abundance of dollars. But what has the Government done to develop uranium deposits? It has sacrificed Australian interests ,by giving uranium away at bargain prices. The Government should know that it has made a bad deal. It has said that it is bound by the terms of its agreement not to divulge the price at which uranium is being sold. It has tried to suggest that the only people who want to know the price that Australia is receiving for uranium are the Communists. Yet the daily press of this country has been clamouring for information on this very important subject because the press magnates realize the great value that the discovery of uranium will be to Australia in the future. So the Government stands condemned if it can only support this legislation on the basis of a plea for dollars. As Opposition members have said, at this stage it is not an easy matter to withdraw from an agreement that has already been negotiated, and that has been ratified by the American Congress. But in future negotiations of this kind it should be made clear that both parliaments will be consulted before a date is fixed for the operation of any agreement.
It appears to me that there is not a great deal that the Opposition can do about this agreement at the moment. I think that the future will prove that the decision to make this agreement was unwise so far as Australia was concerned. I think that we will live to regret the day when we decided to encourage the domination of this country by foreign capital. I know that some people will raise the argument that we have our own Parliament and make our own laws., and that we can control foreign capital in this country and decide what shall happen to the industries in which it has been invested. Do not be too sure that that is so. Is it not a fact that when a threat is made to the interests of the citizens of a major industrial nation who have invested great wealth in another country, unless agreement can be achieved, war eventuates? Probably more world wars have been caused by trade rivalry and the fear of losing some investment than by any other cause. The more Australia keeps itself free from such entanglements the better it will be for the future welfare and the peace of this country. At the moment the Opposition is not in a position to do much about this agreement because it is not in office. But I do not regard the agreement, and other Opposition members do not regard the agreement, with anything but grave misgivings. I hope that my fears will prove to be unfounded. If they do I shall be the first to admit it. But I should feel much happier and more satisfied that Australian interests were being properly safeguarded if a Labour government with an Australian outlook were occupying the treasury bench instead of the present Government, which would not hesitate to sell the interests of the Australian people if such action would place a few more pounds profit in the pockets of its wealthy political friends.
.- The speech that has just been made by the honorable member for East Sydney (TAr.
Ward) clearly demonstrated the split that exists in the Labour party at the present time. The honorable member for East Sydney criticized the bill in most violent terms and stated without hesitation that it was not a good bill. The Leader of the Opposition (Dr. Evatt) said that the bill was a good bill and that it would confirm and strengthen friendship between the United States of America and Australia. Yet the honorable member for East Sydney said that Australia, would regret the day when it passed this bill which would encourage domination by foreign i-apit.nl. He said that the only reason why he would not oppose the bill was that it would not be easy to withdraw from the agreement. The answer to that statement is that the agreement will not become operative until this bill has been passed by this Parliament. The honorable member for East Sydney, as we know from long experience, hates America and hates Americans, and during the whole of his career he has done everything to pedal the Communist line of propaganda, which aims at dividing the United Kingdom and America. I believe that the security of Australia and the free world depends on the maintenance of friendly relations between the English speaking democracies. Therefore, just a? honorable members on this side of the House supported the agreement that was made by the Labour Government with the United Kingdom Government in relation to taxation, so we support this bill which provides for a similar agreement with the United States of America. The Leader of the Opposition said that this was a good bill. Yet the honorable member for East Sydney, who was a member, of the same Cabinet as the Leader of the Opposition in the last Labour Government, said that it was n bad bill.
Where does the Labour party stand on policy matters? We know that it has split into factions. One group believes that the policy of the party regarding the socialization of the means of production, distribution and exchange should be carried into effect. Another group apparently wishes to push the socialization policy into the background, while Labour is in the wilderness of opposition, and revive it surreptitiously if the party regains the treasury bench. The honorable member for East Sydney has criticized General Motors-Holden’s Limited, one of Australia’s greatest industries, which gives employment to 11,500 persons and builds one of the finest and cheapest motor cars in the world. That company could not have built a complete motor car without American know-how and capital. Prior to the establishment of General Motors-Holden’s Limited, we had in South Australia a fine industry that built motor bodies, but American skill, knowledge and capital were needed to enable us to develop the enterprise to its present stage. The company is not only supplying a large part of the Australian market for motor cars, but is also exporting a substantial number of vehicles. In the near future, when the requirements of the Australian market are more fully satisfied, the industry will develop a large export trade.
The honorable member for East Sydney criticized this company. He said that the American company had invested only £2,300,000 in Australia. Even so, that is a substantial investment by any company in another country. Quite apart from that aspect, we gain the advantage of the tremendous amount of knowledge and skill that American engineers have acquired over many years in the manufacture of motor cars. A few days ago, the honorable member for Hindmarsh (Mr. Clyde Cameron), in a very honest speech, told us-
– Order 1 The honorable member may not refer to debates of the current session.
– I shall continue to discuss General Motors-Holden’s Limited. The honorable member for East Sydney claimed that the investment of foreign capital in our industries was bad for Australia. He said that we should reduce foreign investment in Australia, and our overseas indebtedness. I remind the House that Australia is a young country, which has vast potentialities for development. A marvellous job has been clone in a little more than 100 years, but it is obvious that if we are to develop this country at the rate at which we wish to develop it, the capital resources required will be far in excess of the savings that our own people are able to make.
Therefore, we shall need to borrow extensively from abroad, and give every possible .encouragement to overseas companies and investors to invest their capital in Australia, so as to enable us to increase the number of our industries, and develop all our water, power and land resources. No country has greater opportunities than Australia to-day, but we must .utilize those opportunities to the maximum degree. In order to do so, we need all the assistance that we can get from companies and investors in Great Britain and the United States of America. The honorable member for East Sydney considers that we should reduce the flow of capital into Australia. That statement clearly reveals the tory outlook of certain members of the Labour party. They wish to turn the clock back 50 years, and adopt a kind of isolationist policy. If that were done, Australia would miss the marvellous opportunities for development that are open to us to-day.
Three important speeches have been made on this bill by prominent members of the Labour party. The Leader of the Opposition says that it is a good bill which will strengthen the friendship between the United States of America and Australia. The honorable “ member for Melbourne Ports (Mr. Crean) believes that the bill is like the curate’s egg - good in parts. He considers that the agreement has many weaknesses, but he has not revealed any of them. The honorable member for East Sydney cannot see any good in the bill. He leads one of the rival factions in the Labour party at the present time. He would like foreign investors to be forced to withdraw their capital from this country by onerous taxation. If he had the opportunity, he would undoubtedly take measures to gain that end. It is evident that if the group led by the honorable member gains control of the Labour party - and that is not beyond the realm of possibility - it may take immediate steps to nationalize General Motors-Holden’s Limited. Of one thing, I am certain. As the result of the nationalization of the industry, its profits would be quickly converted into losses. I believe that the people of Australia would give an emphatic negative if they were asked whether they wished great industries like General MotorsHolden’s Limited to be nationalized, so that the employees would become civil servants, and, instead of having secure employment with a private company as at present, would have doubtful security of employment in a government controlled concern.
This bill will cement the friendship between Australia and the United States of America. The provisions are completely reciprocal. The concessions given by one party are given equally by the other party. The convention follows closely the pattern of the agreement made with the United Kingdom by the preceding Labour Government in 1946. The concessions under the agreement with America are more favorable to Australia than are the concessions under the agreement with the United Kingdom. However, the agreement will confer substantial advantages on both countries, and their residents, and each country still retains the right to take a fair share of the profits made by a company within its boundaries. Let us take, for example, a company such as General Motors-Holden’s Limited. Under this agreement, such a company will pay tax in Australia on its profits at the rate of 7s. in the £1. Therefore, of every £1 of profit which the company earns in this country, we take 7s. “When the company decides to send some of its profits to America, we take another 3s. in the £1. “When those profits reach America they will also be taxed in that country.
If we are to encourage overseas money to come to Australia we must allow the people who put up the money to make some profit. The honorable member for East Sydney apparently believes that no company should be allowed to make a profit. That is in line with his view that there is. something wicked and wrong with profits. “We on this side of the House believe that the people enjoy the highest standard of living when ‘ production is highest and when companies and individuals are able to make profits. After all, it is from the taxation which is levied on profits that social services benefits are paid. If individuals and companies are not permitted to make profits, there can be no taxation of them and no revenue from which to provide such things a3 social services benefits. Therefore, the more successful such companies are, and the greater their profits, the better it is for every Australian. The community, through the medium of taxation, shares in those profits. The Government is the biggest shareholder in companies and business undertakings in this country. The taxes in one form or another which are paid by companies account for far more than 50 per cent, of all profits. If companies were not permitted to make profits, in accordance with the views of the honorable member for East Sydney, where would the money be found for social services?
This bill has everything to commend it. It represents a great step forward in maintenance of friendly relations between the great democracies. It will cement our friendship with the United States of America and will” give encouragement to the citizens and companies of that country to bring industrial development to Australia and thus provide employment, so that we may grow more and more prosperous and more and more dependent upon out’ own industries and their production. The bill proposes the making of an. agreement similar to that which has been made with the United Kingdom. During the life of this Government great friendships have been built up between the democracies. How different is that from the action of the previous Labour Government, which annoyed not only the Dutch Government, hut the Indonesian. Government as well. It fought with the governments of almost every other country. The policy of the Liberal party is to establish friendly relations with other countries of the world. Judged by the attitude of the honorable member for East Sydney, apparently the policy of the Australian Labour party is still to create hate and distrust amongst nations.
Tt was refreshing this afternoon to hear the Leader of the Opposition make a speech in favour of friendship with the [Tailed States of America. However, the good which he was able to do by his speech was undone by the speech of the honorable member for East Sydney, who treated us to half an hour of hate and suspicion, and the typical Communist technique of trying to divide the western democracies. I suggest to honorable mem bers that they should give whole-hearted support to this bill because it is’ ‘designed to promote peace, to build up the resources of the world and to enable us to play our part in world affairs by taking the surplus population of other countries, thus increasing our productivity and enabling us to feed more of the hungry peoples of the world.
– I propose to criticize this bill, because, as a Labour man, I derive no pleasure from the passage , of a measure which, in the main, proposes to make financial hand-outs to organizations and individuals who could well do without them. Among the organizations which will benefit from this legislation are the Vacuum Oil Company Proprietary Limited, a company which is able to take great wealth from this country of ours. Because we have no oil of’ our own, it is able to take a large percentage of our national income. The picture theatre interests will also benefit substantially as a result of the passage of the bill. The Goodyear Tyre and Rubber Company (Australia) Limited, and General Motors-Holden’s Limited, will also benefit substantially. I cannot derive pleasure from the passage of a bill which will continue the practice of handing out to wealthy enterprises large financial concessions, whilst the Government which introduces the legislation professes to be unable to give financial assistance to people who are badly in need Of it.
Let us examine the position of General Motors-Holden’s Limited, not in a carping spirit, but in order to ascertain what that company is getting from Australia. Having gleaned that information, let us consider whether there is any real need to give the company additional assistance. I have in front of me a copy of the annual report of the company for ‘ 1952, which indicates that the paid-up capital is £2,311,600. Since the firm was established, however, it has ploughed back into capital so much profit, that at the present time its total capital is £24,000,000. The paid-up capital is represented by 561,000 preference shares, which carry a 6 per cent, dividend and most of which are held by Australians, and 1,750,000 ordinary shares of £1 each. most of which are held in America. The report pointed out that 10,256 men were employed by the company in Australia and that the total wages bill was £9,265,392 for the year. The gross profit made for the shareholders who originally invested £2,311,600 in the company was equal to the whole wages bill. In other words, it exceeded £9,000,000. Let us consider the net profit of the company before we judge whether the Government proposes to do the right thing by giving further tax concessions to this company, which is typical of many others. The net profit left after taxation had been paid was £3,956.92S. However, the company received a rebate of £S94,S00 from the 10 per cent, reduction of tax on company profits that this Government handed out in this year’s budget.’ Thus, the net profit for the year was increased to £4,S51,72S. The benefit that the company would derive from the application of the proposed agreement, if it transferred that amount to the United States of America, would be 3s. 6d. for every £1, which would amount to £809,000. Of course, the company did not transmit any profits to the United States of America this year for the good reason, which is mentioned in the report, that it did not wish to incur double taxation and preferred to use the money instead to expand its capital in Australia and to extend its operations.
That is the vital point. Obviously this bill will have the effect, not of attracting capital to Australia and, which is more important, keeping it here, but of making it more attractive for American companies to return their Australian profits to the United States of America. That is one of the reasons for my objection to the bill. It will not achieve the result that the Government expects because the amount of capital that will be attracted to Australia will be more than counteracted by the amount of profits that will be sent back to the United States of America. A company that can make such a large profit as I have mentioned is not in need of any further financial assistance. Incidentally, I flatly contradict the assertion that some honorable members have made that General Motors-Holden’s Limited is a good employer. My experience of the company’s treatment of workers in
South Australia is to the contrary. I well recollect the occasion when there was a strike at the company’s works because the management instituted the practice of timing to the split second every action of its employees.
– Why should it not do so ?
– Because in Australia, England and practically every other civilized country, the workers will not tolerate such practices. Russian workers might put up with it, but free workers will not stand for a boss supervising their every movement, timing it with a stop-watch, and calculating to the exact second the time that a man takes to unscrew a nut from a bolt, or to walk from one part of a factory to another, with the object of taking disciplinary action against men who are not able to maintain the highest standard. Nobody who worked for General Motors-Holden’s Limited at the time that I have mentioned, which synchronized with the placing of its factories under American control, will agree that the company is a good employer. Any honorable member on the Government side of the House who thinks he can get away with that statement should ask the men who took part in the biggest strike in the history of the motor car industry in Australia whether they agree with it. They know much more about working conditions in the company’s factories than do we in Canberra, when we try to view the situation from a distance of 900 miles.
I do not believe that Australia is incapable of developing more rapidly than it is without the aid of foreign capital. Australia, has plenty of capital available to finance the development of its resources, provided that we are not shackled by the policies of the big financial institutions. We appear to be suffering from a shortage of capital only because of the activities of those organizations. The shortage is entirely artificial. Proof of that can be found in the fact that Australia has never been short of capital in war-time. We were able to expend hundreds of millions of pounds upon national defence during World War II. If we could do it then, we can do it now. I am sure that nobody who truly represents the interests of the users and the real producers of the Holden motor car will claim that the price charged for Holden vehicles is completely satisfactory or that the employees are well treated by the company. General Motors-Holden’s Limited has vigorously opposed the application for wage increases that its employees have made, through the Vehicle Builders’ Union, to the Commonwealth Arbitration Court. The application has been pending for over three years. The workers know that the company is not all that it is cracked up to be and is anything but a good employer. Why has the company resisted the application for increases, small though they are in some instances, of the marginal rates of pay for its workers? Why has it played a leading part in presenting the case of the employers in favour of a 44-hour working week instead of a 40-hour week? Why was this company one of the leading parties in the applications of the employers to reduce the basic wage from the present rate if it is such a good employer as some honorable members claim it to be? The price of Holden motor cars undoubtedly is not comparable with the price of cars from overseas because the Australian manufacturer does not have to pay the import duty. I do not believe that it is necessary for General Motors-Holden’s Limited to make a profit of approximately £230 on each ear to make ends meet. I do not believe that the people will support any honorable member who tries to justify such a profit and then claims that the company should have special consideration. My district borders upon the works of General Motors-Holden’s Limited. Many employees of the company and many persons who use its products live in my district. I do not believe that there is any popular support for General Motors-Holden’s Limited either from the employees or the buyers of their cars who are compelled to pay more than £1,000 for a car, including a profit of a approximately £230.
.- Honorable member« have listened to extraordinary contributions to the debate from many honorable members on the Opposition side. It may be of some value to honorable members who have not sat in the chamber throughout the debate to review some of the opinions that have been expressed by members of the Opposition. When the Treasurer (Sir Arthur Fadden) was introducing this bill, the honorable member for Watson (Mr. Curtin) interjected that the measure, and the agreement with the United States of America that it embraces, comprised a “sell-out”. It was interesting, therefore, when the Leader of the Opposition ((Dr. Evatt) entered the chamber and showed that he took a broad view of this measure. He referred to the friendship with America that had developed during World War II. The right honorable gentleman made special reference to the President of the United States of America during those years and to the commander of the Allied forces in the South-West Pacific. He said that the friendship had continued since the end of the war and that a close relationship had existed between this Government and the United States Government since that time. He concluded that this was a most desirable measure and said that the Chifley Government would have acted just as this Government has done in that connexion had it remained in office. The Leader of the Opposition also quoted the words of the former Labour Prime Minister, Mr. Chifley. Those words appeared to me to be so important from the point of view of honorable members on the Opposition side that I take this opportunity of repeating them. On the 2nd August, 1946, when he was introducing into this Parliament a bill covering the agreement to avoid double taxation between this country and the United Kingdom, Mr. Chifley stated -
One of the biggest obstacles which has hindered the British industrialist from extending his enterprise to Australia or from expanding his business already established in this country is the heavy weight of the com.bined United Kingdom and Australian taxation on the profits and on dividends paid out of those profits where the Australian business is carried on through the medium of a separate subsidiary company.
Honorable members opposite should take note of those words because if Mr. Chifley had been in the place of the Treasurer when he introduced this bill, he would have said exactly the same words as those he used in 1946.
– Our leader quoted those words this afternoon.
– I have already said that those words were quoted by the Leader of the Opposition this afternoon. The interjection of the honorable member for Wills (Mr. Bryson) indicates clearly that he is not taking notice of the speeches. I believe that it all goes to show that while the Leader of the Opposition gives full support to the agreement and this legislation, many honorable members on the Opposition side do not agree with them. The Leader of the Opposition not only expressed his agreement, but also committed the members of the Australian Labour party. He said that he was certain that all honorable members in the House would support this legislation.
– They will do so, but they are entitled to their own points of view.
– The honorable member for Parkes (Mr. Haylen) has stated that every honorable member will support the measure. That cannot be said to apply to the honorable member for East Sydney (Mr. Ward) or to the honorable member for Hindmarsh (Mr. Clyde Cameron). They have not given any support to the bill, and the fact that they maintain silence when the measure is put to the vote proves the unconvincing nature of the contents of their speeches.
– The fact that they are orderly does not mean that they do not agree with the honorable member.
– No one can understand the legal interpretations of the honorable member for Werriwa (Mr. Whitlam). The Leader of the Opposition was followed in the debate by the honorable member for Melbourne Ports (Mr. Crean) and for the first time a certain amount of doubt then crept into the approach of the Opposition to this measure. The honorable member for Melbourne Ports suggested that the agreement was not necessary to attract capital into Australia. He produced a statement of .schedules covering twenty pages prepared by the Department of National Development and showing that, in point of fact, there was a tremendous investment of American funds already in Australia. He said that a measure of this kind was not required to make the flow of American capital to Australia continue. He also cast a doubt when he referred to the fact that the agreement fell short at one point because many of the companies did not, in fact, transfer their profits or declare a dividend because they knew that this agreement was coming before the Parliament and they wanted to take advantage of the lower taxation that would be available. Obviously, some doubt crept into the matter so far as the honorable member for Melbourne Ports was concerned.
Then the honorable member for Fawkner (Mr. W. M. Bourke) adopted a similar approach to that of the Leader of the Opposition and honorable members on the Government side of the House. He acknowledged the necessity for the development of this country. During his speech he was interrupted by the honorable member for Yarra (Mr. Keon), who obviously was opposed to the point of view that was advanced by the honorable member for Fawkner, who indicated to the Chair at that stage that the interjections of the honorable member for Yarra were so disconcerting to him that he would not be able to continue his speech until silence was maintained. That is another indication of the differences of opinion among honorable members opposite. Finally, the honorable member for Fawkner told the House that he agreed with the principle embodied in this agreement.
The honorable member for Port Adelaide (Mr. Thompson) also supported the bill. He said he would prefer Australian capital to be used for the development of this country, but he realized that we must get capital from outside if the country is to be developed. I ask the House .to compare the remarks of the honorable member for Port Adelaide with those of the honorable member for East Sydney and the honorable member fo.r Hindmarsh. The honorable member for Port Adelaide referred to the new industries established in this country and said that every State government, whether it was a Labour government or a “Liberal government, had, in effect, courted over.seas investors and offered them inducements to establish industries within the borders of the State for which it was responsible. He said that a great deal of credit was due to Mr. Playford, the Liberal Premier of South Australia, for the excellent job he had done in attracting new industries to that State.
I cannot describe the speech of the honorable member for East Sydney ‘ as anything other than a tirade of abuse. It was another example of the Marxist talk that we hear from him in this House week in and week out. I am certain that very few of the members of his party take the slightest notice of him, and that even fewer people outside the House have any time for the opinions that he expresses. His opinions remind me of the views expressed from time to time by an ex-member of the Parliament; - a man who hopes to be re-elected but will be disappointed. I refer to Mr. Dedman. Honorable members will recall that he referred to people who owned their own houses as “ little capitalists “. During a comparatively recent court case, he said something even worse than that. In answer to the judge who was trying the case, he said, on oath, that the inevitable result of socialism was communism. I believe the view expressed by Mr. Dedman on that occasion is the view held by the honorable member for East Sydney.
Sitting suspended from 0.58 to 8 p.m.
– Prior to the suspension of the sitting, I was comparing differing comments made by members of the Opposition in relation to not only this measure but also the consequential bills, namely, the Income Tax and Social Services Contribution Assessment Bill (No. 3), the Estate Duty Convention (United States of America) Bill 1953 and the Gift Duty Convention (United States of America) Bill 1953. Those measures relate to the agreement which this measure seeks to ratify and which was entered into between the Governments of the United States of America and Australia. During the course of the debate the Leader of the Opposition said that he was certain that all honorable members would support this proposal. That view was repeated by several of ‘his colleagues, but, subsequently, the honorable member for East Sydney and the honorable member for Hindmarsh said that they were opposed to the measure. The Leader of the Opposition quoted a statement that was made by Mr. Chifley in 1946 in respect of a similar agreement that was made with the United Kingdom. If Mr. Chifley were presenting this measure he would no doubt use words similar to those that he uttered when he introduced the bill to ratify the agreement on double taxation with the United Kingdom in 1946. Therefore, it is strange that certain members of the Australian Labour party should oppose this proposal although, of course, they may not go so far as to vote against it. The honorable member for East Sydney and the honorable member for Hindmarsh are opposed to the basis of the agreement which this bill seeks to ratify. The honorable member for East Sydney said that he regarded the agreement as being an act of treachery against the interests of Australia, that it gave to American interests an opportunity to exploit the people of this country and that as more overseas capital flowed to this country Australia’s independence would diminish correspondingly. I do not think that it is necessary for me to comment upon any of those points. I believe that’ the great majority of Australians will condemn him for having made statements of that kind in relation to this measure.
The honorable member for Hindmarsh said that, at present, there was plenty of capital available in Australia. He should give that information to the State Labour Premiers because for the last five years they have been telling the people .that they want more and more capital to enable them to develop resources in their States, but that adequate capital is not available for that purpose. The honorable member suggested that the present shortage of capital was purely artificial because, he argued, plenty of capital was available during World War II. It is ridiculous for any one to compare the volume of money available during a war with that which may be available in a time of peace. During a war the activities of the community as a whole are geared co the nation’s war effort. The nation’s resources are completely controlled through control of labour, capital and practically every factor in the economic. system. I appreciate the fact that in that process, particularly in relation to consumer goods, black markets and shortages are encouraged. It is ridiculous to suggest that because a great volume of money is available during a war as a result of the gearing of the national economy foi war purposes, similar conditions must necessarily exist during a time of peace. The honorable member for Hindmarsh also said that this agreement will not achieve the results that it is expected to achieve. He said that the profits made by American interests in Australia will be transmitted to the United States of America and that American capital will not flow to this country. I direct the attention of the House to the marked divergence of opinion that exists among members of the Australian Labour party in relation to this measure. Their differences have been in evidence for a considerable period. As a matter of fact, one w onders who the real leader of the Australian Labour party i.s in this Parliament. Sometimes it appears to be the right honorable member for Barton (Dr. Evatt). At other times, the honorable member for Melbourne (Mr. Calwell) assumes the role of leadership, whilst it i.-< suggested elsewhere that ‘ a certain gentleman in another place has chosen the honorable member for Eden-Monaro (Mr. Allan Fraser) as his protege for leadership of the Australian Labour party. Then, some honorable members opposite regard the honorable member for East Sydney as their leader. In this confused state of affairs, it is impossible for members of the Australian Labour party to resolve their differences and to present a united front on any matter of importance that comes before the Parliament.
– What about the honorable member for Grayndler?
– I suggest that the honorable member for Grayndler (Mr. Daly) is too much of a jester to undertake the responsible job of leadership of a party-
Members of the Opposition contend that the agreement contained in this bill is inconsistent with the agreement that was made with the United Kingdom in respect of double taxation. I point out that the latter agreement was signed on behalf Of the Australian Government by no less a person than Mr. J. A. Beasley, who, at that time, was the Australian Resident Minister in London, to which position he had been appointed by the Australian Labour party, of which he was a member. Honorable members opposite are ridiculous when they support the agreement that has been entered into with the United Kingdom and, at the same time, criticize this agreement with the United States of America. I shall deal with a number of aspects of this agreement and the consequential measures that seek to give full effect to it. First, this measure seeks to remove excessive taxes that result from double taxation. That aspect can best be illustrated in relation to the taxation of profits that are earned by an American company in Australia and which, in fact, belong to shareholders in the United States of America. The profits of such a company are taxed in Australia at the ordinary company tax rate, and dividends that when paid. The company pays tax in the United States of America, and dividends are again taxed when received by shareholders in the United States of America, where no rebate is given. Consequently, overall, 76 per cent, of company profits that are earned in Australia are collected in taxes by either the Australian or the American Government. As that inequality will be removed under this measure, the bill should be supported by every honorable member. Dividends themselves, instead of being taxed at a, very high rate in Australia and again in the United .States of America, if they are paid to American shareholders, will not be taxed in Australia in excess of 15 per cent, of the amount of the dividends. That arrangement will apply reciprocally in respect of dividends that are earned in the United States of America and are paid to shareholders in this country. The actual basis on which tax will be determined is set out in clause (1.) of Article III. of the convention, which reads -
An Australian enterprise shall not he subject to United States tax in respect of its industrial or commercial profits unless it is engaged in trade or business in the United States through a permanent establishment in the United States. If it is so engaged. United States tax may be imposed upon the entire income of that enterprise from sources Within the United States.
Then we discover from clause (2.) of Article III. that the reverse position applies in regard to Australian enterprises in the United States. Therefore the agreement is of considerable benefit to companies which operate in both countries. It will also remove the incidence of double taxation in many instances, and in that connexion perhaps I can give the illustration of ships and airlines as mentioned in Article V. At present Australia and America operate taxation systems against the owners of ships or airliners, but under this agreement taxes will be levied only by the country in which the ships or airliners are registered.
There is also a provision in relation to the exemption of income received by visiting business or professional persons, providing that their stay shall not exceed six months and also that they are rendering a service to a resident of the country in which they are temporarily residing. That is an excellent provision, because it will allow the technical experience of people who are nationals of one country to be applied for the assistance of the nationals of the other. Australia can make good use of any advice that can be made available by many technical experts of the United States of America.
Contrary to the view expressed by the honorable member for East Sydney, which has not been supported by other honorable members of the Opposition, I believe that this measure will encourage the investment of capital in Australia. Australia has been developed mainly by British capital. If it had not been for British capital we should have a very small voice in world affairs. However, the circumstances of the last 30 years have made it impossible for British capital to supply our needs, and so it has been necessary for us to turn to the United States of America for help. It is evident that people in the United States of America are interested in investing funds in this country because so many American companies have recently invested here. Australia is a large country with only a small population, and the investment of overseas funds will increase our population and help in our national development. It will also help to increase our secondary industries, which will be of interest to honorable members opposite. American capital will help us to produce more goods, earn more money and provide more capital for subsequent further expansion. In other words, the investment of capital will set forces in motion to increase our population, increase our industries and increase our capital. 1 suggest that the agreement that Australia has entered into with the United States of America is most desirable. The Minister for External Affairs (Mr. Casey) indicated to honorable members to-day that we shall soon be signing another agreement with another country. I hope that we shall enter into similar negotiations wilh many other countries, because it is only by the introduction of such measures to encourage the investment of overseas capital in Australia that we shall have any prospect of developing in the future. I hope that the Labour party will resolve its differences in relation to this matter, and also that the honorable member for East Sydney and the honorable member for Hindmarsh will be induced to see the light, and that they will support the measure as their nominal leader said to-day that he woud support it.
.- The Opposition supports this bill in accordance with the statements made by the Leader of the Opposition (Dr. Evatt) when speaking on the measure to-day. The honorable member for Petrie (Mr. Hulme) appears to be gravely concerned about leaders and potential leaders of the Labour party, which apparently very soon will form a government in this country. He was profoundly concerned because there are a number of people within the ranks of the Opposition who are capable of leading it, and of ultimately leading a government. As a matter of fact, the number of honorable members of the Opposition who arc qualified for leadership throws into relief the dismal failure of the leaders of the present Government. Because those leaders have failed to display outoutstanding qualities, Government supporters are turning to anybody qualified to lead. The honorable member for
Petrie was also concerned because the honorable member for Grayndler (Mr. Daly) is such a happy figure in the Parliament, that he could not possibly lead because he has a jovial temperament. If a sombre mein and a dejected appearance are qualifications for leadership, then the honorable member for Petrie stands out among the members of his party. The lion ora bie member has expressed a keen desire to see British and other capital How into this country. We are also in favour of that, and positive evidence of our desire in that connexion is shown by our performances during the regime of the last Labour Government. However, the present Government recently administered a very severe rebuff to British capitalists wl 10 sought to invest their money in Australian industrial undertakings.
Some time ago a resolution was adopted by the Parliament in protest against the action of a British financial corporation which sought to invest its money here. Because it wanted to invest its money in Australia, the British firm was described as being composed of foreign capitalists who dared to bring their money here and invest it in Australian industry. The motion was moved by the honorable member for Mackellar (Mr. Wentworth), but was supported by the honorable member for Petrie and all other honorable members of the Liberal and Australian Country parties.
Australian Country party members interjecting.
– I would not attribute to the members of the Government the views expressed by the Australian Country party, because the members of that party have been anarchists in politics and anarchists in government since the foundation of’ the party. The motion that was supported by all honorable members on the Government side was: -
That in the opinion of this House it is undesirable that any person not an Australian should lune any substantial measure of ownership or control over any Australian commercial broadcasting station, whether such ownership or control be” exercisable directly or indirectly.
Honorable members opposite apparently find some justification for their action m the fact that the overseas capital to which they objected was to be used to secure control of broadcasting stations. But is was British capital, although on that occasion they chose to describe it as foreign capital. Apparently British capital is all right when it suits their book, but it is not all right when it does not suit their miserable political ends. The advocacy of an increased flow into this country of both British and American capital is nothing new for the Labour party. Indeed, that has been the aim of the Labour party since its foundation. We have always held that Australians should not be the hewers of wood and the drawers of water for the manufacturing nations of the world. We have always expressed our willingness to have the industries of other countries use Australian materials, but we have believed that these materials should be used here. Let overseas manufacturing interests bring their capital to this country, not in the form of dollars or pounds sterling, but in the form of machinery and the advanced industrial techniques of the old world. Let overseas organizations come here, use Australian materials and Australian artisans, and so end the necessity to transport our primary products across 12,000 miles of ocean and then to bring them back at immensely increased cost in the form of manufactured goods. Let us fabricate our own raw materials into finished goods both for Australian consumption and for export. That has been the objective whenever Labour governments have been in power, and it is an objective that has already been achieved to a. substantial degree. Under Labour in the depression years and in the war years that is the policy that was pursued, and that 13 the policy that laid the foundations of Australia’s present industrial capacity.
This bill contains no new principles. It merely follows the pattern of legislation passed by the Chifley Government. In fact it is almost a replica of Labour’s legislation. It is not quite so generous, and that after all is reasonable because Labour’s bill dealt with our nearer kinsfolk of the United Kingdom. Because the bill follows Labour’s policy we naturally support it. It is true that earlier to-day two of my colleagues have expressed the contrary view, hut we of the Australian Labour party are not tied down to any particular views. In spite of all the talk about freedom that one hears from honorable members opposite, they are very chary about expressing their own views when the whips are cracked. They are quick to defend the Government’s policy, which, of course, is originated not by the Government itself but by the vast financial institutions of this country - vested interests in manufacturing and importing which provide the funds for the Liberal party and the Australian Country party.
The honorable member for East Sydney ( Mr. Ward) expressed some views with which I disagree. He was no doubt led to express those views because he believes, as I do, that as all Liberal party and Australian Country party governments are bad for Australian development, and are dangerous because of the manner in which they vacate office whenever war or depression threatens, everything that such a government does must necessarily be bad. His first mistake was his claim that we did not want foreign capital in Australia. We do want overseas capital here. We do not want American capital in the form of dollars, nor do we want English capital in the form of pounds sterling, but we do vi tally need advanced British and American techniques, machinery, and, if necessary, artisans to train Australian workmen in modern methods that have been evolved over the years. I remind tho House that America itself had the advantage of such assistance in its early days. America’s present industrial power would never have been achieved in such a short time had it not been for the now of capital to America.
– From where?
– From Great Britain and the other countries of the Old World. That influx of capital enabled the American people to lead the world in industrial technology. To-day Australia needs overseas capital if its development is to be as rapid as we all hope it will be. This country has made great Strides in the comparatively short time it has been a nation, but its industrial development has not proceeded as rapidly as it should have done. That has been due largely to the fact that governments formed by the political parties now in office have occupied the treasury bench for most of our 53 years of federation. They have permitted the boom and slump industrial cycle to impede development. The consequence is that in the interests of development and defence we must have, relatively quickly, a large amount of capital to improve our industrial techniques, and to relieve us of some of our dependence on supplies from America and other countries. Complete national self-sufficiency is, I believe, neither desirable nor possible. But we must achieve a far greater measure of independence than we have at present. That is a vital necessity if Australia is to be developed and defended, and its population increased.
The second mistake made by the honorable member for East Sydney was his claim that American industrial magnates would seek to impose their own labour and other conditions on Australian workers. The truth is, of course, that some Australian employers are far worse than the general run of employers in the United States of America. I do not suggest that that is true of the vast majority of Australian employers, but although America’s great industrial development has brought with it immense social problems, I have no doubt that some of our own employers are amongst the worst in the world. However, we have parliamentary government and we are able to prescribe whatever conditions of labour, terms of employment, and indeed, social conditions, are necessary to ensure that great industrial empires shall not be established in this land. The third mistake made by my colleague and friend from East Sydney was his statement that at some stage American owners of capital might, by virtue Of their investments in Australia, force us to alter our immigration laws. It is true that to our north are millions of Eastern peoples who are sometimes described as our potential enemies, but whom I should prefer to regard as our potential friends. We have to live with them and to help them in their problems. We have to provide them with the products of Australian primary and secondary industries. More than 100,000,000 people are crowded into lands that are either relatively poor or completely undeveloped. Those people look to Australia, the land with a vast area and a relatively small population. They think that Australia could do more to develop its vast continent. We shall not be able in our lifetime, nor shall our children or our children’s children in their lifetime be able to resist that continuous pressure unless we develop the country, increase its industrial potential and, in turn, supply goods to those countries that lie to the north of Australia. I believe that Australia’s undeveloped state is the gravest danger to its industrial future. Although I think that the honorable member for East Sydney, generally speaking, is right when he states that the measures that are introduced by the Government are wrong or that they are biased in favour of the privileged classes of Australia, he should recognize that this bill follows the pattern that was set by the Australian Labour party when it was in office and that it seeks to achieve the purpose that Australian Labour governments have sought to achieve. In other words, the measure seeks to encourage the use of Australian labour and materials in order to develop the country and to increase its population. The Opposition believes that that goal will be achieved.
Another of my colleagues, the honorable member for Hindmarsh (Mr. Clyde Cameron), either did not read the bill or he misunderstood it altogether. He said that the motion-picture industry will gain tremendously under this measure. The motion-picture industry is excluded altogether from the terms of the double taxation agreement, but it is taxed under the terms of the ordinary assessment act. It seems that, because the honorable gentleman did not fully understand the bill, he fell into the error to which I have referred. The honorable gentleman spoke at length about the activities of General Motors-Holden’s Limited. The Chifley Government, during its difficult term of office, achieved many things of which it was proud. One of the achievements of which the Opposition is proud is the fact that the Australian Labour party was able, by offering substantial inducements, to encourage the General Motors
Corporation to associate itself with an established Australian industry in order to build an almost complete motor car in this country. The Chifley Government deliberately sought to achieve that end and finally it succeeded. It is true that the company’s profits are large, but they are not large when they are considered in relation to the unit cost of a motor vehicle. During last year the company manufactured 31,000 cars. If honorable members will apply the unit number of motor cars to the net profits of the company, they will see that the company could not have reduced the price of the motor car very much. In any case, the car represents relatively good value when it is compared with other cars that are on the market. I think the honorable member for Hindmarsh forgot another point. Because of the scarcity of motor vehicle? in this country, until recently a person could buy a Holden motor car at the prevailing price and he could sell it very soon after at an increased price.
– That could be done with any car.
– I doubt whether one can do that to-day. If a person cannot do so now, I think it is likely that General Motors-Holden’s Limited will make further substantial reductions. We expect General Motors-Holden’s Limited to reduce the cost of vehicles in the course of time. Whether it is General MotorsHolden’s Limited or anybody else, the companies want very large profits to-day. The responsibility is on the Government to fix the price in order to control the profits. York Motors Proprietary Limited, which merely sells the Standard motor ear, has paid a dividend of 60 per cent, over the past three or four years, but the Government has done nothing about it. General Motors-Holden’s Limited has made a very substantial contribution to Australia’s manufacturing capacity. If that company had not established its works in Australia, probably Australia would have found it necessary to import another 31,000 vehicles during last year. Australia would not have collected any taxes on the profits derived from the manufacture of those cars, it would not have collected taxes on the wages of the workers in the industry and there would not have been employment for the thousands of men a nd women who are employed by that company. The Labour Government deliberately sought to achieve that end in order that eventually Australia might become independent of the overseas motor car industry and that the establishment of the industry in Australia would make a very substantial contribution to Australia’s economy and to its defence in time of war. I hope that General Motors-Holden’s Limited will undertake the manufacture of heavy motor vehicles. Because of the actions of the Government, I think my two colleagues have been led to make the mistakes to which I have referred and to which, with some regret, I have found it necessary to reply at length. I think it was necessary to do so in order that i. might place in its true perspective the attitude of the Australian Labour party which was expressed so clearly at the outset by the right honorable member for Barton.
Certain classes of income are not taxed under this agreement. The honorable member for Petrie referred to the fact that the income of a businessman or of the agent of a businessman who was visiting the United States of America was not taxable if the time he spent each year in the United States of America was less than 183 days. Another clause provides that if a professor, lecturer or teacher from Australia visits the United States of America for a period of not more than two years, lie is not subject to Taxation in the United States of America. It was stated earlier that Australia had a complete right to tax the motion picture industry that is controlled from abroad. Insurance or re-insurance with residents of Australia, similarly, is subject to our total taxation law. Cultural undertakings, if they are protected by copyright, arc not subject to taxation in either of the contracting countries. The major provision, to which honorable members have already referred, is in relation to the taxation of dividends that are remitted from a subsidiary, in Australia to a parent body in the United States of America. That provision was inserted in 1946. Until that provision was included in the agreement Australia, instead of collecting taxation at the Tate of 15 per cent, on the dividends transmitted by a subsidiary to a parent body, did not receive any taxation at all. “When a parent corporation in the United States of America now receives the dividend, it receives a dividend less taxation at the rate of 15 per cent. Therefore, the American company is at a substantial disadvantage when it is compared with a British company in similar circumstances. In the United States of America a tax of up to 52 per cent, is levied on the profit. Some companies which fall within the bracket of higher incomes are subject to a super tax on profits as well. Finally, as other honorable members have pointed out, the dividend is subject to taxation in the shareholder’s hand. The Opposition believes that that is reasonable in order to preserve equity. A company operates as a single entity, and it is taxed by the Government. If the amount of tax that is imposed upon the company as a joint stock entity is not sufficient to provide the privileges that it receives in the form of Australian protection services, the Australian Government has to increase the tax upon the profits of that company. That is the manner in which additional revenue should be raised if it is required or desirable or justified. In Australia the dividends are taxed in the shareholder’s hand and they are rightly taxed, because the Government provides the shareholder with services in the form of protection, defence and social services. Australia does not provide any such services for the residents of the United States of America who are the recipients of dividends. Therefore, it is reasonable that those shareholders in the United States of America should not be subjected to a high rate of taxation on dividends that are transmitted to them. Up to date it has been a very good business operation and naturally Australia is eager to retain it as long as it reasonably can. I believe that had the Labour Government been returned to office it would have negotiated an agreement with the United States of America similar to the agreement that we are now considering, which has been negotiated by officers on behalf of - the present Government.
It is true that we need capital in Australia, but we do not need it in the sense of needing money to do things that we can already do with the materials and man-power that are available. I am convinced that a lot of money in this country to-day would be released for that purpose if there was a wise government in control of the treasury bench. The present Government has lost the confidence of the people. As certain equipment and skilled labour is not available to us within Australia, we must look overseas to repair that deficiency. For ordinary purposes, we can use existing resources to produce many things of considerable monetary value that we now import from America, but we do need additional skilled operatives who have perfected their techniques oyer many years in industrial enterprises. We have to look to the investment of overseas capital in this country in order to undertake the production of commodities that we are at present unable to produce. Every country of the world is tending to industrialize. This is evident not only in countries of the old world, where manufacturing industries have existed down the years, but also in the newer countries in the East. Japan is returning to vast industrial activity; China has a vast industrial potential ; and India is moving in the same direction. If we do not develop our industrial strength as soon as possible we shall be destined to remain a primary producing country, and we shall go on providing raw materials not only to Great Britain, the United States of America, and the rest of the old world, but also to the newer countries in the East. We already supply raw materials to Japan. We will probably supply raw materials to China and the fast-developing democracies of India and Pakistan in the future. I hope that the agreement will help Australia to acquire the capital and the skilled artisans that it needs in order to undertake the production of goods that we are at present unable to manufacture. The Labour party supports the bill, the provisions of which are in accordance with Labour’s policy since the birth of the Labour movement in this country. The agreement will encourage the bringing to Australia of machinery and capital to enable us to utilize our raw materials instead of ex- porting them in bulk, to be fabricated abroad and brought back to Australia. I hope that under the leadership of a future wise Labour government we shall develop the manufacturing industries of this country to such a degree that, in addition to being able to supply the requirements of our home market, we shall be able to export secondary products to the markets of both the old world and the new world.
– Before we proceed further, I must point out that although there have been twelve speeches on this bill, so far I have heard very little about the provisions of the measure. I have heard some excellent statements of party policy. I hope that honorable members yet to take part in this debate will direct their remarks to the bill.
Mr. TURNER (Bradfield) r8.47].The honorable member for Perth (Mr. Tom Burke) devoted about two-thirds of his time to an unsuccessful attempt to conceal the split that has developed in connexion with this measure in the ranks of the Opposition. However, the split cannot be dismissed as lightly as he would make believe. Let us consider the purpose of this legislation. It is to eliminate double taxation of profits made by American companies which are trading in Australia and, of course, Australian companies that are trading in the United States of America. I shall direct my attention to the former, because a number of American companies have invested large amounts of capital in Australia. It would appear the Australian Treasury could lose a. considerable amount of revenue as a result of this agreement. That could be justified only if some other advantage accrued to this country. In that connexion, I hope that the advantage that will flow to Australia will be tha’ additional American companies will invest capital in this country, which will increase our industrial potential and provide additional employment for “our people. There is no doubt that the agreement will cement the friendship that already exists between Australia and the great democracy of the United States of America on the other side of the Pacific, upon which depends our safety in this uncertain world. Let us consider why we need capital in addition to our own resources. It is imperative that we develop our transportation services, our irrigation and water services, and our power resources. There is no need for me to say any more about development, as far as public investment is concerned. Recent developments in the field of pasture improvement necessitate the investment of additional capital in our rural industries. As our -population has grown -as a result of immigration and natural increase, we need to develop our secondary industries. It is obvious that Australia has a tremendous job of work -to do in that field. There is an almost unlimited demand for capital for both public and private investment in this .country. Why cannot we provide that capital from our own resources? Why must we seek to attract it from Britain, the United States of America and other countries? It may be said that this agreement will not help us in regard to capital for public investment in transportation and the like. But it is quite plain that the more capital wc bring in for secondary industries the greater will be the amount of savings available from our own people for public investment. So there is, in effect, one pool of capital for investment, whether for public or private purposes. The more capital we can attract for one purpose the greater will be the amount available for the other purpose. Where does this capital come from? It represents the saving of our own people or of the people of other countries. It represents money left over after the people have used the amount -necessary for consumption purposes. Once they have satisfied the ordinary needs of life, the surplus is available for investment and for building u-p fresh capital equipment, whether of a public or a private nature. After using all we need for consumption purposes, have we a sufficient surplus left over to deal adequately with all the purposes I have indicated?
I have obtained two very interesting sets of figures on that point. Indeed, only because they have not so far been used in debate was I led to participate in it. Honorable members have so far dealt with the subject mainly in generalities. One set of figures was supplied by the economist, Colin Clark, and appeared in the May, 1950, issue of Economic
News, which is published by the Queensland Bureau of Industry. Colin Clark points out that in 1938-39, 15.2 per cent, of the national income was available for and was used for purposes of investment, public and private, that is, for the creation of fresh capital. Ten years later, in 1948-49, the figure was 19.7 per cent. Honorable members will observe that in 1948-49 we saved a higher proportion of our national income than we did in the years before the war. That saving was available for the purpose of both public and private investment.
Mi-. SPEAKER.- Order ! The taking of notes in the gallery is not permitted.
– The other set of figures was prepared by Dr. Coombs and published in the report of the Commonwealth Bank Board for 1951-52. They relate to public investment and contain no ingredient of private investment. They reveal that, in 1938-39. before the outbreak of the war, 9 per cent, of the national income was devoted to public investment - to public works of one kind or another. In 1949-5.0 the figure increased -to 11 per cent.: in 1950-51, to 13 per cent.; and in 1951-52, to 17 per cent. If I may be permitted to interpret these figures, they mean that in 19-38-39 a little more than 15 per cent, of the national income was saved for purposes of investment of all kinds, public and private, including public works and the extension of factories and the like, whereas, in 1951-52, 17 per cent., that is, an even greater amount, was devoted to public investment only. Two facte appear to emerge from these figures. First, a tremendously higher proportion of our national income is now used for investment purposes than was the case before the war. Secondly, private industry has been relatively starved. It was for that reason that Dr. Coombs, in his report, said that the volume of investment that we had provided in 19.51-52 for public purposes was so high that it could, not be sustained without imposing undue strains upon our economy. Even with this greatly increased volume of investment we are .not able to carry out the public and private works that are necessary if Australia is to prosper and develop, and we must turn abroad for fresh capital.
Where is that capital to come from? The traditional source of overseas capital for our purposes is the United Kingdom, but, weakened as it has been by the war that has but recently ended, the United Kingdom is no longer in a position to supply capital in the volume that we require or, indeed, many of the things that we need. So, we must turn to the United States of America. If we adopt the attitude that has been adopted by the honorable member for East Sydney (Mr. Ward) and the honorable member for Hindmarsh (Mr. Clyde Cameron) and empty the vials of our venom upon Americans and everything they stand for, we may well scare American capital away. It is unquestionable that public men who act in that way, either for political purposes or because of their own shortsightedness, do their country a very grave disservice. They are preventing the development of Australia upon which not only our prosperity, but also our safety and security depend. We must continue to bring in immigrants and obtain the capital essential to enable them to be settled here. We must build up Australia as a British outpost which is capable of holding its own against the teeming millions of the north. Opposition members who displayed such bitterness towards the Americans, whose capital and whose friendship and assistance are so indispensable to us, are neglectful of their duty to this country. If a Labour government is returned to office and they form an important element in it, they may well render this bill entirely nugatory. Although the bill will encourage the investment of American capital in Australia, it will not by itself bring American capital to Australia. It is also necessary that the proper climate should be developed to attract American capital. I have already indicated how essential it is that that climate should be developed.
There is another course open to us other than to bring in outside capital, which has many disadvantages. We do not want to have to pay interest for many years to people across the seas and be involved in exchange problems if it can be avoided. However, if we bring in capital from abroad we shall not necessarily have to remain for ever the bondsmen of the people of other countries who privide it. The honorable member for Perth has told ‘ us that the United States of America was very largely developed with capital supplied by the countries of the old world. That country has achieved freedom and a state of economic independence and preeminence probably previously unequalled in the world. There is an alternative to the bringing in of overseas capital, but I suspect that it would not be acceptable to the honorable member for East Sydney and the honorable member for Hindmarsh. We could devote an everincreasing portion of national income to capital investment, but we could do so only if we continued to tighten our belts and reduce consumption, and were prepared to work harder, to increase our hours of labour and to improve our techniques. We must remember that, in the matter of improved techniques, a great deal depends not only on the worker but also upon the tools we put into his hands. In Australia the equivalent in overall fuel consumption of about 3 tons of coal is available for use by each worker every year compared with 8-J tons of coal a year for each worker in the United States of America. In other words, the American worker can afford to work only 40 hours a week because he has better tools behind him and can produce more.
One Opposition member said that if we could produce money for war we could also produce it for development. It is time that this position was fully understood. Of course money can be poured out for the purposes of war, but how is that done? It is done, first of all, by reducing consumption. In war-time we built no houses and people went about in old suits of clothes. Men went without tails on their shirts and Mr. Dedman took the pink icing off cakes. People went without cars or used old ones. If we are prepared to do those things in peace we can find money for developmental purposes. Money was also provided during the war by means of inflation. Money can be provided in Australia instead of bringing it from overseas if we are prepared to do what we did in war-time, but I do not believe that the honorable member for
East Sydney or the honorable member for Hindmarsh would choose that course. Consequently they must agree to induce people abroad to invest their money in Australia. If we neither bring money from abroad nor save it ourselves our policy must be one of drift. We will not be able to develop the country or bring immigrants here, and in due course we must fall a prey to the millions of people who would like to enter this country with its rich potentialities.
J think that I have shown that this hill deserves the support of all honorable members on both sides of the House. I say that in all sincerity, believing that this matter is of immense importance to all people in this country whatever their political belief. I hope that we shall hear little more of the carping criticism that lias been levelled at such organizations as the Holden enterprise. That enterprise has been able to make profits in fair competition with other enterprises. It is not a vast, rich company that is owned by a few millionaires. Only IS per cent, of the shares of the parent company are held by people who hold more than 100 shares.
– What about the widows?
– The dividends that are paid out to thousands of shareholders go to all sorts of people, including widows. They go, for example, to policy-holders in 610 insurance companies which hold shares in the parent company. In that way the widows benefit. The tax gatherer takes 76 per cent, of the company’s .profits. We should discard the idea that a wealthy company is composed of a few wealthy individuals.
– Somebody has been pulling the honorable member’s leg.
– Order ! The honorable member for Hindmarsh has spoken.
– I am speaking factually. The honorable member for Hindmarsh draws his facts from his own imagination. Having formed his theory he makes the facts fit it. I prefer to construct a theory from the facts.
– A great deal of the debate on this subject has related to the raising of loans. Actually, the bill proposes to make a gift to American people who have in vested money in this country. One honorable member opposite said that he hoped that Australia would he able to obtain loans from many other countries. That statement must have given the impression to those who were listening to thi3 debate that Australia was like Lazarus seeking the crumbs from the rich man’s table. Surely we do not want to create that impression in other countries. The Government has proposed to make these concessions to business men in America who have invested their money in Australia despite the fact that they have not sought them. No great press campaign has been conducted in support of these concessions. Yet the Treasurer (Sir Arthur Fadden has decided to help these hard-headed businessmen. I do not blame them for accepting the gift, but they must be chuckling heartily to themselves. I wish that they could hear the passionate pleas made by Government supporters on their behalf. A visitor to this chamber might be excused for thinking that honorable members opposite were making an appeal on behalf of a distressed people. All businessmen are hard. They have to be hard in order to survive. I give American businessmen full credit for knowing how to survive. They can be as hard as anybody else. The Government is putting Australia in the role of a mendicant country which seeks money from any part of the world where it may be available. I emphasize that this is not a loan bill. The purpose of the legislation is to make a gift to people who have invested money in Australia. Actually, those people are doing quite well. I think that they would be prepared to give us an assurance to that effect. They are quite happy with their investments in Australia, and they do not urgently require the concession that has been granted to them by the Government. There was a time when Australians took a different attitude. We manufactured farming machinery, and exported it to America. But all the farming machinery which is now exported by America to Australia originated in this country.
– That is not so.
– Of course, it is! The honorable member for Canning (Mr. Hamilton) evidently does not know that fill farming machinery manufactured in America was made from Australian patents.
– That is a different matter.
– A manufacturer must have the patent before he may begin to make the machine. He does not make machinery from gold and notes. There was also a time when Australia exported bucket dredges to the southern States of America. Those dredges arc well known in many parts of the world, particularly Malaya. Apparently, our pioneers and our political leaders had more grit than many Australians have at the present lime. They certainly were not running round asking for loans. Admittedly, they obtained financial accommodation from Great Britain, but let it-not be forgotten that Great Britain knew that Australia provided a good avenue for investment, because most of our primary products vcre sold to Great Britain in those days.
American people who have invested capital in Australia are not actuated by motives of kindness. They are business people, and they must look at an investment from a business stand-point if they ure to survive. Equally, Australia must consider the matter from a business standpoint if it is to survive. Australian businessmen must adopt the same hardheaded attitude as other businessmen throughout the world.
I shall now mention a few things that we do without the assistance of American capital. During World War II., we built aircraft and tanks. Perhaps the Australian Government provided some financial assistance for that purpose but, at any rate, we did not require American capita] for those projects. At the present time, we are building ships which are as up to date as any vessels constructed elsewhere. The vessels built in Australia arc not big luxury liners, but the brains of certain business people and the energy and initiative of Austraiian workers is making it possible for us to build quite large vessels. That work is being undertaken without the assistance of American capital. I venture to say that all the heavy, intricate machinery for the sugar industry is now made in Australia. Again, the manufacture of that machinery is not supported by American capital. All the machinery for the Mr Isa mine is made in this country. Originally, the machinery required by the mine was imported but the management discovered that locally manufactured machinery was superior to the imported machinery. American capital has not provided the financial sinews for that industry.
I realize that Australia needs to raise loans overseas for certain purposes, but some Government supporters have the idea that this country is almost entirely dependent on the United States of America for the capital that we require and that, therefore, we have to make this gift, in the form of a tax concession, in order to ensure that we shall get the loans. Such an idea is completely erroneous. Loans between countries are’ like everyday business transactions, in which a man who has a farm or a business may require an overdraft or some other form of financial assistance. I visualize the Treasurer (Sir Arthur Fadden) as a little boy who is offering a big toffee apple to his strapping papa. In this instance, the smaller country is offering to the larger country a concession that has not been sought. No businessman and no person with any knowledge of business would contend that it was necessary for Australia to make this advance to American industry.
American financiers do not invest money in Australia out of kindness of heart. Indeed, no business or industry operates from such a sentiment. Why does the Treasurer show such kindness to American industries and investors? T know that they have done a magnificent job. Americans and American capital have certainly assisted Australia to a great degree, and I see no objection toour continuing to borrow money from theUnited States of America, if the loans are required, but I emphasize that thisbill does not deal with loans.
The Americans have built motor carsand have started other industries in Australia which have shown enormous returns. The Holden motor car is a duplicate of the Chevrolet and is built with Chevrolet material which was probably written off by the Chevrolet company a couple of times before it was brought to*
Australia. General Motors-Holden’s Limited lias produced an excellent job. I have used a Holden car and I know that it is good. But let us not forget that the manufacturer is getting a high price for it. There is no doubt about that. The Holden is among the luxury-priced cars. The company does not operate out of kindness of heart. It is carrying on in Australia as a business proposition. If a revision of double taxation was necessary, a little concession could have been granted, but a huge concession should not have been given. A little bit at a time is a good method of doing things. But just to hand out a large concession when Australia, according to Government supporters, is in a pitiful position, is injudicious indeed. First, these people did not ask for such a concession, and secondly, if we thought that it might prepare the ground for future loans it would have been better to grant the concession a little at a time. An honorable member opposite has referred to the capital which the agreement will attract and which can be used to develop industry. Does he not realize that our primary producers are now receiving higher prices for the commodities which are exported, and thai that increased return has added enormously to the capital resources of Australia ? The value of the sugar crop alone’ this year will be approximately £60,000,000. In addition, other products such as wheat and wool are selling at high prices and are bringing a great deal of wealth to this country.
Primary production must also be accompanied by secondary production. It seems to me that a great deal of secondary production is undertaken in Australia, apart altogether from the activities of American companies, which are principally concerned with the production r motor vehicles. Honorable members opposite who speak about the capital which this agreement will attract should appreciate that our national income has increased greatly since the end of World War II. because primary producers are now receiving something like the prices to which they are entitled for their commodities: Because of that fact, the production of those commodities has increased. People interested in invest ing money in this country should be able to see that our wealth is constantly increasing. In my opinion, that fact should be sufficient to induce loans at a lower rate of interest than that which operated in the past. ‘
I do not know why this gift to American industry should be necessary. It has been suggested, of course, that by making this gesture, America will feel more kindly disposed towards us and will lend us money in the future, should it be required. I point out that American investors will not give away two “ bob “ unless they are assured of a return for their money. They are businessmen and will take all that we care to give them. I do not blame them for doing so, of course, but I point out that they are hari headed businessmen and will not give away any more than is necessary. Why the Treasurer did not adopt the same attitude I do not know. If this agreement is to be taken as an indication, it would seem that he is the most kindhearted man in the world. If his generosity were confined to his own money, I would not mind, but when it involves the money of the people of Australia I do not like it at all. The milk of human kindness is a fine thing when it is used in personal relations, but it is inclined to turn sour when an attempt is made to use it in business affairs.
.- The Leader of the Opposition (Dr. Evatt) has said that the Opposition supports the bills. I wish to refer to three facts in connexion with the negotiations that have resulted in the agreement which has been made. The first is that the Australian Labour party commenced the negotiations which resulted in these bills being presented to the Parliament. The second i that it was the Chifley Government which initiated a similar agreement with the United Kingdom Government. The terms of the agreement at present being discussed by the House are not as favorable to America as are those contained in the agreement with the United Kingdom concerning double taxation, which was passed by the Parliament before Easter, 1947. The principle of this bill is the same as that of the United Kingdom bill. The third fact which I wish to mention is that had it not been for the United States of America this country possibly would have been a Japanese possession during the war.
There are two classes of people in Australia who do not . like America or Americans. First, there are the Communists and members of the Communist party, who hate America because it is the bastion of Western democracy. Secondly, there is the ultra-conservative section of the community, which frequents the most conservative clubs in Australia and dislikes America because of the secession of the thirteen States from the Union away back in the eighteenth century.
The honorable member for Sturt interjecting,
– The honorable member for Sturt (Mr. Wilson), who is a member of the Adelaide Club, knows the people to whom I am referring. It is that class whose knowledge of American history has never got beyond 1776. There are also other people in the community who are more or less affected by propaganda
– I thank my leader for the suggested amendment. There are people in the community who are affected and also infected by the propaganda which is disseminated by newspapers in this country against America.
– Does that include the honorable member for East Sydney (Mr. Ward) ?
– Everybody in the community is entitled to his opinion concerning our relations with America, but, for my part, I have never hesitated to say where I stand. I know that possibly u-e would not be an integral part of the British Commonwealth to-day had it not been for American assistance. But, of course, it was not all on the American side. The 1,000,000 or so of our own servicemen who served in one or other of r lie three branches of our services, in cooperation with approximately 250,000 Americans, all of whom served in the South-West Pacific Area, all under the leadership of General MacArthur, made victory certain. All those men, regard less of their national allegiance, put their bodies between us and destruction and made victory secure.
When the war ended, the Chifley Government, having many munition annexes and other installations at its disposal,, sought to use those properties to the great advantage, it was hoped, of the Australian people. That Government encouraged British and American industries to come to this country. We wished touse those annexes in such, a way that they could serve a peace-time need, and, if necessary, be used a second time for the defence of the country should a war again occur. It was hoped that in peace-time they could be used for the development of Australia. 1 think that Ave acted very wisely. We attracted British industries. Because we did so, we concluded an agreement with the United Kingdom Government. Then we said, “We also want to help American companies to invest capital in this country”. I would rather bring British and American industries to Australia than, borrow money from Great Britain and the United States of America. We have had an unfortunate experience with loans over the course of our developmental history. Therefore, the Labour Government concluded - and I agreed with its decision - that we should try to have overseas industries established here. Under the terms of this bill, we shall have to pay tribute to the United States of America because we have American industries in this country. But American and British companies have brought with them an indefinable quality that is called “ knowhow Unless we have know how we cannot do all that we want to do to develop the nation and provide for our future defence; and Heaven only knows that our time is short. We may be attacked again much sooner than we think. Our responsibility before history, our responsibility to our fellow citizens, and our most sacred responsibility to our children is to make the best possible use of our resources and to provide to the limit of our ability for the future defence of the nation. Only 300 miles from our shores there is an Indonesian Republic with a Premier whose cabinet is largely Communist, and if we fail to develop this country while we have the opportunity to do so, our plight will be even worse than it was when “World War II. broke out. It is in this spirit that I support the bill to confirm the agreement that has been made.
I consider that British and American companies in Australia should change their attitude towards the holding of their shares. I think it is foolish for them and bad for Australia that they should have 100 per cent, of their ordinary shares held outside Australia. Agreements are in force between the United States of America and Ireland, and the United States of America and India, under which American companies are obliged to sell 51 per cent, of their shares to the nationals of the country in which they establish themselves. I do not go so far as to advocate the conclusion of a similar agreement on behalf of Australia, but I suggest that Australian citizens should be allowed to buy an equity in companies that operate in this country. The result would be to the mutual advantage of the companies and Australians. The more money we bring into Australia from Great Britain and the United States of America for developmental purposes, the more will those countries become interested- in maintaining the stability of our economy and in defending our shores if war unfortunately should occur again. That may sound as though my motive is commonplace or ignoble, but at least there is nothing intrinsically bad about it. I am sure that the American people who have invested money in General MotorsHolden’s Limited, the International Harvester Company of Australia Proprietary Limited, the Ford Motor Company of Australia Proprietary Limited, oil companies, and picture theatre companies have no reason to regret the treatment that they have received from any Australian government at any time.
I am sure, too, that, an overwhelming majority of members of the Australian Labour party, and, indeed, of the Australian people, favours the investment of capital from other countries in Australia, provided that the investors do not seek to evade our arbitration laws or break down our general conditions of employment. Any association that I have had with foreign companies in
Australia has indicated that they are scrupulously careful to observe. our laws and that, if they consider at times that there is anything wrong with this country, it is due to unfair practices of bad Australian employers who try to break down conditions and thereby force their competitors to object in some way or other to the observance of some of our laws. I have said that the Labour party initiated the negotiations that led to the framing of the agreement. That is true. Had we remained in power after 1949, the chances are that, with our usual celerity, attention to detail and skill as negotiators, we should have had this bill passed by the Parliament, not in 1953. but in 1950 or 1951. At least we lost no time after we started negotiations with the United Kingdom for the conclusion of a similar agreement. That agreement was signed in 1946, and the bill to ratify it was presented to the Parliament before Easter in 1947.
The White Australia policy has been mentioned in this debate. It has nothing to do with these discussions. I do not think the American people want to use cheap labour here or anywhere else. They have a very high standard of living, and I hope that Australian workers some day will achieve the same high standard. I sincerely trust that American investments in this country will be used in such a way that we’ shall obtain the advantage of American managerial and technical know-how with which to develop our industries. Whatever is . wrong with industrial production in Australia, it is probably due to the fact that we are sticking to a lot of out-of-date machinery. The establishment of American industries has certainly had a beneficial effect upon a number of Australian manufacturers who sheltered previously under the tariff wall and did not make their industries as efficient as they should have been. I do not agree that the White Australia policy is of economic origin. In fact, I do not like to use the term “ White Australia “ because it is offensive to our Asian friends. Our immigration restriction laws are not based upon economic grounds. They are based on our natural desire to preserve the homogeneity of our race, which is the right of every people, Asian and
European alike. We consider that it is proper and natural for a nation to avoid the strains and stresses that arise in- any country where there is a mixture of peoples of different histories, ethnic origins- aud cultures.
The .amount of money that will go to America under the terms of the agreement will be about £1,250,000 annually. Australia will benefit in return by about £.100,000’ from the Australian industries established in the United States of America. I wish more Australian industries were established in the United States of America, but we are still primarily a pioneering people. We still have frontiers to cross, and we have 3,000,000 square miles of territory that is an integral part of the British Commonwealth of Nations and is held by a population that would comfortably fit into New York or London. Therefore, a great deal of work must still be done to develop our resources. I do not want to sell our uranium at bargain prices. I believe that Australia is’ entitled to a just price for its uranium or for anything else that it sells on the world markets.
– We are getting it.
– The Minister for’ Supply (Mr. Beale) assures me that we are getting a fair price for our uranium.
– I do assure the honorable member .
– I wish the Minister would tell me how much we are getting for it so that we could lay the spectres that are haunting the country in connexion with that matter. The American people have not pressed this measure upon us unduly. They have suggested that it is a good thing. They have negotiated similar treaties with other countries and we would be very foolish if we did not pass this bill. I believe that most Australians are not antiAmerican, nor are they anti-British. I believe that every healthy-minded Australian must realize two facts. First w* must remain an independent nation within the British Commonwealth of Nations. That is one of the essentials of our survival as a free people in a part of the earth that geographically belongs to Asia. Secondly, we must maintain the closest friendly relations with the United States of America. We cannot afford to be against anybody who is likely to be our friend in time of adversity. That was the essence of the speech that was delivered by the Leader of the Opposition to-day.
The great majority of Australians d¬ want to indulge in a hate campaign . against the United States of America.. We are most grateful to that country and we know that it has cemented with blood and treasure the friendship that it ha? for this great Australia of ours.
– There were no- antiAmerican speeches on the Government side of the House.
– But there were antiAmerican speeches when Mr. Curtin, who was the Prime Minister of Australia at the time, made his appeal in 1942 to theUnited States of America. Without inhibitions, he appealed over the headsof all governments, and asked theAmerican people to come to our aid. Anti- American speeches were delivered in this Parliament then and I would not even exclude the Vice-President of theExecutive Council (Mr. Eric J. Harrison).
– There have been someconversions to-night.
– We welcome conversions. There have been a number of Tarsene conversions throughout history and We are glad to find members of the Government side accepting, belatedly but I hope sincerely, the view that the Australian Labour party took in 19’42. There’ was no better Australian in that crisis than the present Leader of the Opposition.
Some people are talking about theprofits of General Motors-Holden’s Limited. I disagree with all those criticisms because there would not be a1 General Motors-Holden’s Limited of themagnitude of the present industry i;i Australia to-day had it not been for theactions of the Chifley Government inassisting General. Motors-Holden’s Limited to make the Australian motor car., The fact that 31,000 motor cars a year ure being, placed on Australian roads by that organization is entirely due to die assistance that the Chifley Government gave to it. I know that General Motors-Holden’s Limited is making big profits. If its profits are’ exorbitant and it is charging too much for its motor cars, those are surely matters for the Commissioner of Taxation and the Prices Commissioners in the various States, but it is good to have the industry in this country. Before World War II. we did not have any knowledge of how to make a motor car or anything else of that nature. The Vice-President of the Executive Council, who was Minister for Trade and Customs in the first war-time Cabinet in World War LT., knows how bankrupt we were of all knowledge and skill’ in that direction. We did not even have the tools with which to make anything for the defence of Australia. Ultimately we obtained blueprints from Great Britain and the United’ States of America, and to the credit of our tradesmen, technicians, management and everybody concerned, we were able ultimately to manufacture a Beaufort bomber as good as anything in the world. Our war effort was a triumph of improvisation.
Mi’. Eric J. Harrison. - That was due to the planning of the Menzies Government.
-Order! Time is passing and the honorable member for Melbourne (Mr. Calwell) should confine his remarks to the bill.
– I submit, with respect) that I am speaking to the measure. Now that we have General Motors-Holden’s Limited in Australia and know how to make motor cars, we are in a better position to defend Australia in the event of a crisis* We finished World War II. able to make not only aeroplanes and motor cars, but also Merlin Rolls-Royce engines. Wo should establish more such industries. We do not want non-essential industries. We want to know how to make essential consumer goods and capital goods. The American people will give us assistance. Even if we get no more American capital under the provisions of this bill, it is a gesture of appreciation to the government and people of the United States of America, and I do not believe that it will be’ misplaced.
Some persons believe that if we invite British or American capital into Australia, we also invite economic domination. That depends upon the extent to which we admit capital from outside. All that we see in this agreement is provision that if capital does come into Australia and is allowed to make profits, it shall be treated in a certain way. It does not mean that money will come into Australia for all kinds of unessential and unnecessary goods. Therefore as the Leader Of the Opposition has said, the bill should be supported. The Australian Labour party can claim credit in connexion with this measure for having commenced the negotiations for the agreement. We can claim credit for all that we did in connexion with the British agreement. We can claim credit for what we did, and much that this present Government has done, in connexion with plans for the progressive development of secondary industry in Australia. We have nothing to say by way of criticism of the terms of this agreement because it seems to be a reasonable one in all the circumstances. The overwhelming majority of the Australian people and of the Federal Parliamentary Labour party will support all that is being done in this measure. We hope that the Government, however, will take notice of the fact that there is a body of Australian opinion to the effect that Australian investors should be given an opportunity to obtain some equity in British banks and insurance companies and American companies generally. They are making profits in Australia, using Australian workers and selling their goods or services to Australians.
Question resolved in the affirmative.
Bill read a second time, and committed pro forma j progress reported.
Message recommending appropriation reported.
In committee (Consideration of Governor-General’s message) :
Motion (by Sir Arthur Fadden) agreed to -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to give the force of law to certain conventions and agreements with respect to taxes on income, and for purposes incidental thereto.
Resolution reported and adopted.
In committee: Consideration resumed.
Bill - by leave - taken as a whole and agreed to.
Bill reported without amendment; report adopted.
Bill - by leave - read a third time.
Debate resumed from the 19th November (vide page 275), on motion by Sir Arthur Fadden -
That the bill be now read a second time.
.- This bill is ancilliary to the Income Tax (International Agreements) Bill that has just been passed. We support the measure, and do not intend to discuss it. I say for the information of the House that the Opposition also supports the other related measures and does not propose to discuss them.
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.
Debate resumed from the 19th November (vide page 276), on motion by Sir Arthur Fadden -
That the bill be now read a second time.
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.
Debate resumed from the 19th November (vide page 276), on motion by Sir Arthur Fadden -
That the bill be now read a second time.
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.
Consideration resumed from the 24th
November (vide page 423), on motion by Mr. Eric J. Harrison -
That the schedule to the Customs Tariff 1933-1952 be amended . . . (vide page 412).
Items 3, 6, 11 12, 13, 14, 15 and 16 - by leave - considered together.
.- The Vice-President of the Executive Council (Mr. Eric J. Harrison), in explaining these tariff proposals, which are associated with excise proposals, gave the reasons why the Government decided to reduce the duty on spirits by 21s. a gallon. The spirits involved are brandy, whisky, rum, gin, and other spirits of a similar nature. The Vice-President of the Executive Council, in an explanatory statement that has been circulated among honorable members, frankly stated that the decline in production of spirits as a result of the increase of duty on spirits by 31s. a proof gallon that was imposed in 1951 reacted to the detriment of the distilling industry. He said -
Grape-growers have been affected by lack of demand for grapes for use in the production of brandy.
The right honorable gentleman then said that he felt sure that honorable members would agree that some action must be taken in order to safeguard that industry aud allied industries. He added -
By reducing the duties, increased consumption of Australian spirits should take place.
Oi other words, the Government is now setting out to encourage the consumption of spirits by the Australian people. The Vice-President of the Executive Council continued -
To the extent that revenue had been lost by thu increase, that was made in 1051, the revenue loss should be self-compensated.
What a nice state of affairs ! I make bold to say that a Labour government would have been severely criticized if it introduced proposals of this nature and stated, with the brutal frankness that characterized the Minister’s remarks in this instance, that it hoped that by reducing these duties increased consumption of Australian spirits would take place i. am aware that the object of these proposals is to implement certain proposals that were announced in the budget. But the Government frankly admits that ir, wants the Australian people to drink more whisky, brandy, rum and other spirits. Those beverages, when taken in moderation, probably have a soothing and beneficial effect in certain circumstances, but when, they are consumed in ever-increasing quantities their effect is most dangerous and often fatal. I should imagine that the Government would have considered that the present rate of consumption of spirits in this country was adequate. It is also strange that only n few leaders of the temperance movement in this country have criticized the Government for reducing these duties. I! have not the slightest doubt that if a Labour government had made these proposals innumerable critics would have been heard to allege that Labour was in the bag of the distillers and was deliberately encouraging the Australian people to consume greater quantities of these beverages.
– Members of the Labour party have only themselves to blame in that respect.
– The honorable member for Evans (Mr. Osborne) must face the facts. He is a supporter of a government which has frankly informed the Parliament that its purpose in reduc ing the duty on spirits is to encourage the people to drink greater quantities of Australian and imported spirits. It is just about time that members of the Government parties played the game and dropped their allegations and innuendoes that the Australian Labour party is a tool of the brewers and distillers.
– What about the Labour Government in Victoria?
– In that State, a terrific hullaballoo has arisen because the State Government is endeavouring to effect reforms in the liquor trade. But this Government deliberately tells the Australian people that its purpose in reducing rates of duty on spirits is to encourage them to consume greater quantities of these very fiery beverages. Yet, we have not heard one word of protest from Government supporters, barely a word of protest from the press and protests from, only a few clergymen who are very articulate whenever a Labour government, without evil intent but with a real desire to encourage temperate drinking habits on the part of the people, endeavours to reform the liquor trade. To some degree these proposed reductions of duty can be justified, but they cannot be justified when they are proposed with a view to increasing the consumption of such beverages.
– That is only the view of the honorable member.
– I have no strong views about any proposal to reduce duties in order to do justice to industries that produce beverages which people consume, wisely in some instances and unwisely in other instances. However, I protest against such a proposal when it is made in’ order to encourage the consumption of spirituous liquors. On the former ground the Opposition will support . these proposals. I do not intend to deal with each of these items individually, or to discuss the variations, amounting in some instances to a few pence, between the duty imposed on one class of spirits and that imposed on another class on the basis of their respective merits as beverages.’ I cannot over-emphasize the fact that the Government, unhesitatingly, has said that, it desires to encourage the Australian people to increase their consumption of spirits. I am intrigued by that statement in view of the fact that since the outbreak of World War II. the duty on beer, which is the poor man’s drink, has been substantially increased. After all, the worker cannot afford to drink whisky, brandy, rum and other expensive spirits. Therefore, I am surprised at the failure of the Government ito advance any proposal in its budget to lower the cost of beer. Many persons believe that beer is a desirable beverage; and the great majority of those who drink beer do so in moderation. I have long held the view that if any assurance Gould be obtained for those engaged’ in the liquor traffic that they will expend any money that they are enabled to save as a result of reductions of duties on alcoholic beverages for the purpose of improving their premises and rendering a better service to the public, particularly the travelling public, the Parliament should reduce such duties to the greatest possible degree. If the Government takes that action, it is possible that hotel-keepers may improve their services. Moreover, the desirable end may be achieved of reducing drinking and increasing the comforts of residents in hotels and travellers who make use of such establishments. Proposals have been incorporated in the tariff proposals, as announced by the VicePresident of the Executive Council, to give effect to Tariff Board recommendations.
l~10.ll]. - Before this debate gets out of hand, perhaps I could give some information to the honorable member for Lalor (Mr. Pollard), who waxed so eloquent in putting forward the erroneous conclusion that this Government intended to reduce duties on whisky, and thus encourage the destruction of the moral fibre of the community. He conveniently forgot that when the last Labour Government was in office, the duty on whisky was 68s. 6d. a gallon. In 1952, this Government increased the duty by 31s. a gallon, and we now aim to reduce the total duty by 21s. a gallon. After this proposed reduction, the. duty on whisky will be 10s. a gallon more than it was when the last Labour Government was in office. Consequently, it is quite clear that even after the proposed reduction pf duty this Government will have increased the duty on whisky by 10s. a gallon. In other words, the duty on whisky at present is 10s. a gallon more than it was when the honorable member for Lalor was acting for the Minister for Trade and Customs in a Labour Government. At that time, according to his own argument, he w,a8 encouraging the consumption of whisky by the imposition of a relatively low tariff. This Government, is attempting to discourage the drinking of whisky by imposing a tariff that is 10s. a gallon more than the tariff- imposed by the government of which the honor.orable gentleman was a member. The figures in this connexion speak for themselves, and indicate that the tirade of nonsense of the honorable member foi Lalor is based upon a false assumption. Why does not the honorable member get. down to facts and figures, and realize that the proposed new duty on whisky will bo much more than the duty imposed by Labour governments. Now let me give some correct information to the committee.
– That will be a real change.
– Any information that I am likely to give the honorable member for Grayndler .(Mr. Daly) will not be understood by him and I suggest that it would be a greater change if he could register some understanding pf what I am saying. The effect pf the amendment is to reduce by 21s. a proof gallon the rates of duty ph imported potable spirits. The reduction corresponds to an equal reduction proposed in the rates of duty on similar excisable spirits, and the reductions form part of the budget of 1953-54. In the 1951-52 budget the duties on spirits, both customs and excise, were increased by 31s. a proof gallon. The increase of the retail price of spirits consequent upon that increase of duty caused a considerable dimunition of the sales of spirits from the level of sales during the regime of the Last Labour Government. The total clearances of imported potable spirits declined from 5.04,000 proof gallons in 1950- 51 to -447,000 proof gallons in 1951- 52 and 36.3,000 proof gallons in 1952-53. I suggest that that is a considerable’ decline in consumption. The relative decline in consumption of different types of imported spirits is shown in Schedule A, which honorable members can inspect by looking through the schedules. The present action to reduce the duties on imported potable spirits is complementary to the action being taken on excisable spirits, and is in accordance with Australia’s international commitments. Imported spirits constitute only about one-sixth of the total consumption of spirits in Australia. The main reason for the reduction of the customs duty proposed in this amendment, arose from the effect that the additional duty of 31s. a proof gallon has had on spirits since it commenced in 1951.
The total clearances of potable excisable spirits declined from 2,605,000 proof gallons in 1950-51 to 2,178,000 proof gallons in 1951-52, and to 1,386,000 proof gallons in 1952-53. The relative decline in the consumption of different types of spirits is remarkable, as honorable members must realize. The decline in the consumption of spirits naturally affected industries supplying the distillers. In particular, the lack, of demand by distillers for grapes to be. used in the manufacture of brandy reacted against grape-growers.
– What is wrong with dried fruits?
– If the honorable member for Lalor could assure the Government of a market for our dried fruits at a reasonable price, I have no doubt that we would accept it with alacrity.
– The distillers use only sub-standard fruit.
– I understand that firstgrade fruit has been used.
– There has been a lack of demand by distillers for grapes for brandy, and I should think that the honorable member for Lalor, who is an ex-serviceman himself, would show some consideration for his ex-servicemen colleagues who are producing fruits. The Government considered that the only effective method of revitalizing the distilling industry was to lower the excise duty on spirits so that the retail prices could be reduced to such a level as to enable the public to make normal purchases of spirits. It was estimated that an all-round reduction of 21s. a proof gallon would achieve that. Upon the operation of the reduced duties on spirits, the trade reduced retail prices by 2d. a nip on Australian spirits and by Id. a nip on imported spirits. Prices of standard 26-oz. bottles were reduced by amounts ranging from 2s. to as much as 5s. 3d. a bottle, the greatest reductions being on locally produced spirits. As I have pointed out already, the reduction of the tariff by 21s. a proof gallon still leaves the duty on spirits at 10s. a proof gallon more than it was when the last Labour Government relinquished office. Therefore, the whole of the arguments of the honorable member for Lalor collapse, and reveal themselves in all their stark nakedness as merely an attempt to obtain some party political advantage.
.- While there is something in what the Vice President of the Executive Council (Mr. Eric J. Harrison) has said about the necessity to encourage grape-growers, I believe that the mass of figures that he has set before the- committee is merely designed to confuse the issue and to provide an escape from, the need to face the obvious fact that this is but another in the long line of heavy tax impositions that the Government has levied. When the Government’s action in this regard is contrasted with its numerous promises to reduce taxation, both direct and indirect, it is quite apparent that this Government has failed to face up to the needs of Australia. The fact is that the Vice-President of the Executive Council has tried to cloak the weakness, of the Government’s- position with a torrent of words and a mass of figures, because his arguments are impotent. I support the arguments of the honorable member for Lalor (Mr. Pollard), who said that while provision is being made for a reduction of the excise duty on whisky, no reduction of duty on ale is contemplated. Working men constitute the great bulk of the liquor-consuming public in this country, and generally speaking, working men prefer ale.. The consumption of ale far exceeds the consumption of whisky and other spirits. These proposals therefore perpetuate an injustice inflicted on the ale-consuming community by a previous budget. They do nothing to relieve the burden that is borne by working men who regard a glass of ale after a day’s toil as a necessity. Honorable members opposite have burked the issue and endeavoured to gloss over the facts. The truth is that another heavy levy is being imposed on working people in the main because, as I have said, working people generally are not whisky drinkers. For every shilling that a working man spends on ale, the Government takes 6d. in excise duty.
The CHAIRMAN (Mr. Adermann).Order! The’ committee is not dealing with excise proposals, but with the customs tariff.
– Impositions such as this serve only to contribute to the present already high volume of taxes, both direct and indirect. The Government does not intend to reduce the levy. Because of the hypocritical attitude of this Government-
– Order !
– I withdraw the word “ hypocritical “. Because of the Government’s attitude towards matters such as this, it is branded as a Government of privilege. It has made no attempt to reduce the excessive impositions that are levied on practically everything that the working man requires. Amongst those commodities is, of course, ale. As honorable members are well aware, I could hardly be described as an excessive drinker. The great bulk of working people like ale in moderation. The brewers throughout the Commonwealth are in effect tax collectors for the Government. Last year the Carlton and United Breweries Proprietary Limited, contributed the sum of £15,050,000 to revenue. The Ballarat Brewing Company Limited, another prosperous Victorian brewery, paid £1,500,000 last year by means of this indirect form of taxation and similar contributions were made by other breweries throughout the Commonwealth. Everybody agrees that viticulture should be encouraged, but surely some consideration must also be given to people who cannot afford the more expensive beverages and are therefore ale drinkers.
One can tell by the hollow looks of some honorable members how these impositions affect them. The remarks of the VicePresident of the Executive Council are further evidence of the Government’s attitude towards excessive taxation levies. Even if nobody else is willing to protest the Labour partw will protest against levies that place an unduly heavy burden on working-class people. For a 9-gallon keg of ale, a brewery gets £4 4s., but out of that £4 4s. it pays £3 4s. 6d. to the Australian Government. So it is throughout the entire gamut of the liquor trade from producer to consumer. I support the protest that has been made by the honorable member for Lalor in his able contribution to this discussion and” I sincerely suggest to the Government that it should have more consideration for the working man instead of devoting all its attention to the privileged classes which undoubtedly it represents. Honorable members opposite might also cast their minds back to the 1949 promise to reduce taxes of all kinds. If these proposals represent the best that the Government can do in this direction, they are merely further ‘evidence that the Government does not intend to keep that promise.
.- The honorable member for Hoddle (Mr. Cremean) has said that he supports the protest made by the honorable member for Lalor (Mr. Pollard). I feel sure that later the honorable member for Hoddle, together with the honorable member for Lalor, will support this measure. Therefore he does not seem to be very consistent. As the Vice-President of the Executive Council (Mr. Eric J. Harrison) has pointed out, the duty now levied upon spirits is higher than that levied by the Labour Government, of which the honorable member for Lalor was a member. Therefore the protest made by the honorable member for Lalor and supported by the honorable member for Hoddle is without foundation, and as that protest had been shown by the Vice-President of the Executive Council to be without foundation before the honorable member for Hoddle spoke in this debate, his remarks can only be re garded as most illogical. Let us examine the remarks of the honorable member for Lalor. He claimed that this reduction of tariff, which was only the removal of part of the great increase made previously, would encourage the drinking of spirits.
– I did not say that. I said that the Vice-President of the Executive Council had said it.
– The honorable member waxed very eloquent and selfrighteous in his protest against anything that would encourage the drinking of more spirits in Australia. Whether he was right or wrong, I shall not argue because I am not very much in favour of people drinking spirits as honorable members on this side of the chamber well know; but the amazing thing is that the honorable member for Hoddle rose and pursued a directly opposite course. He made a plea for cheaper beer. He said that the breweries were paying high taxes and that workers should get some relief in the form of lower beer prices. Logically the honorable member’s statement was tantamount to saying that the drinking of beer should be encouraged. If honorable members adopted a logical point of view, they would know that the cheaper beer is the more beer will be consumed. The remarks of the honorable member for Hoddle were tantamount to saying that the drinking of beer in this country should be encouraged, and nobody with a logical mind, can deny that.
– What is wrong with that?
– - The honorable member for Grayndler (Mr. Daly) asks, “What is wrong with that?” I am not going to answer that interjection.
– Order ! The honorable member for Grayndler is interjecting too much.
– I was not endeavouring to indicate what was wrong or what was right about it. I was merely pointing out the difference of opinion between two honorable members opposite.
– The honorable member for Lalor said that I had stated that honorable members opposite are regimented. Of course, I have stated that and they always are when it comes to the vote.
– Order 1 The honorable member for Mallee will deal with the item under discussion.
– The VicePresident of the Executive Council said that many ex-servicemen were growing grapes that are used for this special purpose.
– They could be used for something else.
– The honorable member for East Sydney shows his ignorance in relation to this matter when he says that they could be used for some other purpose. Every one knows that the wineries in certain areas that are represented by the honorable member for Angas (Mr. Downer) and myself–
– Order! The committee is not discussing wine.
– It is discussing spirits.
– I thought the honorable member for Mallee used the word “ wine “.
– I am discussing fortifying spirit. A sub-standard fruit is used in that connexion. Several attempts were made to obtain a subsidy for the growers of dried fruits. The attempts to obtain a subsidy from the Australian Government were unsuccessful, but it seems that the use of this substandard fruit in the manufacture of fortifying spirit did much to alleviate the financial difficulty that these exservicemen were .experiencing. I was referring to the difference of opinion that existed between honorable members opposite and the lack of logic in the argument of the Opposition. It is apparent that the honorable member for Hoddle, who was formerly a member of the Victorian Parliament, would be quite at home if he were back in Victoria dealing with that State’s legislation in relation to the liquor laws.
– Order ! I remind the honorable member that, by agreement, the committee is now discussing “Division 1 - Ale, Spirits and Beverages “.
– The committee is discussing Item No. 3, which covers whisky and spirits.
– The Opposition has agreed to discuss all items down to Item No. 16 which covers wine.
– The honorable member for Lalor has agreed that the committee shall deal with all the items that are set out on pages 1, 2, 3 and on the top of page 4 of the schedule.
- Mr. Chairman, am I in order in proceeding?
– The honorable member for Mallee is in order.
– There has been some doubt about it.
– We are trying to help the honorable member.
– My remarks seem to annoy the honorable member for Hoddle, because he rose in his seat to protest, I suppose in his usual manner. He does look furious.
– Order ! The honorable member for Mallee will cease indulging in personalities. He will speak to the items under discussion.
– I shall get onto the item. I believe that the honorable member for Hoddle, who was a member of the Victorian Parliament, would be quite at home if he were there to deal with the liquor legislation that that Parliament has been considering.
– I rise to make a personal explanation. I claim that I have been misrepresented by the honorable member for Mallee.
Mr. Daly interjecting.
-Order ! If the honorable member for Grayndler continues to interject when another honorable member is speaking, -I shall deal with him. He has adopted a real larrikin attitude, and I intend to see that if ceases.
– The honorable member for Mallee said definitely and positively that I said that people should drink more beer.
– I did not.
– The honorable member did. He said that my remarks were, in effect, in advocacy of drinking morebeer. That is a deliberate lie.
– The honorablemember for Hoddle will withdraw that remark.
– Am I to be misrepresented ?
– The honorablemember for Hoddle is entitled to show the manner in which he says that he was misrepresented. I shall give him an opportunity to do so, but he must withdraw the word “lie”.
– I withdraw the word “ lie “.
– I desire to make apersonal explanation. I have been misrepresented by the honorable member for Hoddle. A perusal of Hansard will prove that the honorable member for Hoddle said that he wanted people todrink more beer. I said that any logical mind would come to the conclusion that the honorable member for Hoddle, in his remarks in relation to the taxation of breweries, expressed the wish that something should be done that would encourage the drinking of more beer.
– I rise to make afurther personal explanation. The honorable member for Mallee endeavoured totrim what he undoubtedly did say. Even the construction that he places on my remarks now is still offensive to me and’ I ask that it be withdrawn.
– Order ! The remarks of the honorable member for Mallee are not unparliamentary. It is only a matter of opinion, after all.
– You, Mr. Chairman,, are not the one about whom it has been said. I am the person concerned.
– Is the honorable member for Hoddle casting a reflection on the Chair? If he intended to cast a reflection on the Chair, I ask him towithdraw the statement.
– I would not dream of reflecting on the Chair. It is quiteunnecessary.
– I call the honorable member for Fawkner.
– -I rise to a point of order. Have you ruled, Mr. Chairman, that the honorable member for Hoddle has no right to ask for a withdrawal of a statement or ask for an apology when he considers that that statement is offensive to him. Have you the right to sit there and say that a remark which the honorable member .for Hoddle considers to be highly offensive to him is not offensive to him?
– ‘Order ! The Chair determines whether or not the matter is offensive. I have ruled that the remark is not unparliamentary. I call the honorable member for Fawkner.
– Serve the drinks and we will get on with the matter.
– The honorable member for East Sydney will remain quiet.
Dr. Evatt interjecting,
– Order! The right honorable gentleman also will remain silent.
– May I suggest that this unfortunate incident between the honorable member for Mallee (Mr. Turnbull) and the honorable member for Hoddle (Mr. Cremean) might be concluded if they both left the chamber and had a drink of beer ?
Honorable members interjecting,
– Order! The honorable member for Fawkner is standing in his place, but he is not speaking. I shall put the question if the honorable member refuses to continue his speech.
– The honorable member for Mallee referred to the absence of logic in the arguments of the honorable member for Lalor (Mr. Pollard) and the honorable member for Hoddle. I should like to refer to the remarks of the Vice-President of the Executive Council (Mr. Eric J. Harrison). Obviously he was very ill at ease after he heard the remarks of the honorable member for Lalor. Of course, the main task of the Vice-President of the Executive Council is the moving of the application of the “gag”.
– Order! That matter has nothing to do with the items under discussion.
– That is all the right honorable gentleman is capable of doing.
– It is very effective.
– When the right honorable gentleman introduced this measure, he claimed that there was great virtue in the fact that it was proposed to reduce the duty on brandy, whisky, rum and gin by 21s. a proof gallon. He gave the Government the credit for that reduction. After the honorable member for Lalor pointed out that the reduction was made for the express purpose of increasing the consumption of those spirits and also for the purpose of increasing revenue, the VicePresident of the Executive Council became rather embarrassed. He then adopted a remarkable attitude by saying that although this Government has reduced the duty by 21s. a gallon, the duty is still 10s. higher than it was when Labour Was in office.
– I pointed out that this Government’s encouragement was somewhat less than the Labour Government’s encouragement.
– When the Vice-President of the Executive Council was embarrassed by the honorable member for Lalor he tried to dodge the issue by saying that the figures spoke for themselves. I suggest that his words spoke for themselves. The words that he used are worth quoting, because they show that the statement of the honorable member for Lalor- the accu-racy of which the Minister denied - was quite correct. The Minister said, when introducing this measure -
In proposing the reduction of 21s. per proof gallon, the Government has been influenced by the substantial decline of production of locally distilled spirits that has taken place. By reducing the duties, increased consumption of Australian spirit should take place, and to that extent the effect on the revenue will be selfcompensating.
That was a remarkable statement. The Treasurer (Sir Arthur Fadden) stated in his 1951 budget speech that the Government hoped by increasing these duties and a lot of other taxes and impositions, to cut down on luxury industries. The distilling industry is a luxury industry, The Government apparently hoped that the capital involved in this luxury industries would be diverted to some more useful channels. Now we see a complete somersault by the Government. What it hoped to achieve in 1951-52 has been completely thrown aside, and the Government has deliberately reduced these duties for the express purpose of increasing the consumption of spirits in this country. I put this direct question to the VicePresident of the Executive Council : Why has the Government set about increasing the consumption of spirits in this country? Has it done so in order to benefit the health of the Australian people? I consider that there would not he any great detriment to the Australian economy if the distilleries closed down altogether and their resources were utilized in some other direction. Why has the Government given this great benefit to the distillers? As the Vice-President of the Executive Council has said, it has done so in order to confer a benefit on the wealthy distilling industry. It seems clear that the reason why that has been done is that those industries have made substantial contributions to the funds of the Government parties.
– The Labour Government must have got a lot when the duty was higher.
– It would not be a bad thing for Australia if the consumption of spirits did fall, and no Australian government should have taken action to arrest that state of affairs. It should have left the position as it was. But the profits of the Australian distilleries declined. The Government then decreased the duties for the express purpose of restoring the- profit rate of the distillers. I have no doubt that the slush funds of the Government parties benefited by contributions amounting to thousands of pounds. Clearly, the Government has a duty to furnish to the people of Australia an explanation of its disgraceful action. It can be explained only by the equally disgraceful state of affairs that money has been paid into the slush funds of the Government parties by the distilleries.
– The Opposition objects to the distinction that has been drawn between persons who drink spirits and those who drink beer. Generally speaking, the spirits drinkers are persons who are in receipt of high incomes, and the beer drinkers are those on low incomes. I consider that the interpretation by the honorable member for Mallee (Mr. Turnbull) of the remark that was made by the honorable member for Hoddle (Mr. Cremean) that there should be a reduction of duty on beer meant that men would drink more beer, was rather far-fetched. Whether the excise on beer be 2d. or 2s. a glass, a drinker derives the same benefit or pleasure from it. I consider that, by reducing the duty on spirits by 21s. a proof gallon, and not reducing the excise on beer, the Government has extended a preference to one section of the community. If it is good enough for the Government to reduce the duty on spirits, it should be good enough for it to reduce the excise on beer. The Government should have reduced duty on spirits by a lesser amount, in order to be able to show some consideration for beer drinkers. We on this side of the chamber frequently emphasize that we stand for the working men. In this instance the Government has shown quite clearly that it favours those in the community who are in receipt of high incomes.
I am amazed that no previous speaker has directed any remarks to the lot of the persons who grow grapes for the wine industry. I know that we are not considering excise at the moment. However, as honorable members know, brandy is distilled from grapes. The honorable member for Mollee stated that poor quality grapes are utilized for this purpose. This is at variance with an objection that was raised in. South Australia about a year ago to the use of good quality grapes for the distillation of spirit instead of their being made available for the dried fruits industry. The distillers, instead of distilling inferior quality grapes for brandy, had, it was stated, used good quality grapes in order to derive additional profit. I do not consider that it was necessary to reduce the duty on spirits. Although I do not know much about either spirits or beer, from the point of view of consumption, many people like to have a drink on their way home from work. Many workers habitually call at an hotel because they consider that they are entitled to a glass of beer after doing their day’s work. Many bicycles and other means of conveyance are to be seen outside hotels between 5 p.m. and 6 p.m. on working days. Although I question the wisdom of such people partaking of alcoholic beverages, 1 concede that they are as much entitled to their opinion on the subject as I am to mine. When the Government reduced the duty on spirits by 21s. a gallon and failed to make an appropriate reduction of the excise on ale and beer, it did not: play fair with the working man who normally drinks the lighter beverage, if only because he is unable to afford to pay for the more potent forms of alcoholic liquor. I trust that the Government will give further consideration to this matter and extend the same consideration to the beer drinker as it has extended to the drinker of whisky.
.- The argument advanced by honorable members opposite in support of the new duties on whisky are even more astounding than was the action of the Government in reducing them. I have often heard the honorable member for Mallee (Mr. Turnbull) refer to the so-called divided opinion among Labour members on this subject. There seems to be utter confusion among honorable members opposite in regard to it. I have a very clear recollection of a statement that was made not long ago by the Minister for Socal Services (Mr. Townley) which bears out my contention. It is astounding that the Government should adopt as one of the major items of its policy the view that people should drink more whisky so that it may be able to balance its budget. Has a more ridiculous proposition ever been presented to the Parliament by any government? When the Minister for Social Services was interviewed by the members of a deputation representative of invalid and old-age pensioners, who sought an improvement of pension rates and conditions, the honorable gentleman, instead of holding out some hope of relief, gave them a lecture. He said, “ If only these dreadful Australians would drink less and gamble less, money would be available to enable us to remove the means test to increase the rates of pensions and to improve social services benefits in many respects “. The Vice-President of the Executive Council (Mr. Eric J. Harrison) has taken the opposite view. He has said that the salvation of the pensioners and the Government would bc achieved if whisky drinkers could be persuaded to consume more whisky.
– And more gin !
– That is so. The members of this Government have amazingly conflicting ideas. In the early days of the war when Senator Foll was Minister for the Interior and a member of the War Cabinet, workers on the south coast of New South Wales blackballed hotels as a protest against the high price of beer. They placed pickets at the hotels who prevented workers from patronizing them until the price had been reduced. Senator Foll accused the workers of engaging in subversive activities. He said to them, “ If you do not drink more beer, no matter how high its price may be, we shall not have the money with which to wage the war. You are assisting the enemy”. That view was expressed by one of the great national leaders of a former anti-Labour government. I am sure that you, Mr. Chairman, will agree that it is utterly ridiculous for the Government to submit a proposition such as that now before us. Year after year this Parliament is asked to appropriate large sums of money for the national fitness campaign. What relation is there between the drinking of more whisky and national fitness? The Government spends a great deal of money in putting young men into camps, and training them in order to improve their physical fitness. Is it merely training them to become healthy and lusty whisky drinkers? There is nothing to justify these new duties.
.- I do not propose to prolong the discussion unduly. I rise only because seldom, during the four years in which I have been a member of this chamber, have I heard such hypocrisy uttered in a debate as has been uttered by Opposition members to-night. Listening to their pleas one would think that they do not like whisky, and that they regard it as a terrible potion which they avoid with horror. We all know that, to the great majority of the honorable members, these reductions of duty will be as welcome as they are to the community at large. Let us hear no more of these ridiculous sentiments. As to the honorable member for East Sydney (Mr. Ward), let us be thankful that for once he has entertained this chamber. I say to him that we should all find him a more likeable person if he would change his habits and have a drink or two of whisky. I am sure that if he did so, he would be much easier to live with.
The only other matter to which I wish to allude is a statement that was made by the honorable member for Fawkner (Mr. W. M. Bourke) a few minutes ago. The honorable member startled the committee - it is unlike his nature to do so - when he said that the Government’s action in reducing import duties resulted from the fairly large contributions to its party funds which it receives from the interests concerned. That is a scandalous allegation of which the honorable member has absolutely no proof. He does himself very great damage indeed by solemnly making such a statement about a government which he knows to be composed of men who are the. soul of honour and probity.
.- In a few words I shall explain to the honorable member for Mallee (Mr. Turnbull) that the proposed new excise rates for wine will not give any substantial assistance to the grape-growers and that it is not necessary to encourage the consumption of wines in order to benefit the growers of grapes which are more suitable for drying than for the production of wines and beverages. In my opinion, and it is backed by some experience, if seasonal conditions in the dried fruits areas are such that a certain proportion of the grapes will be unsuitable for drying, there will be sufficient outlet for the sale of the grapes without encouraging distillers to buy first quality fruits for fortification purposes, as they did during the wai”, despite my appeals and the appeals of the Labour Government of the day that they should not do so. At that time we told the distillers that the grapes were of first-class quality and could have been profitably processed by the growers and shipped abroad to succour the hardpressed people of the United Kingdom. The statement that the new rates of excise have been imposed in the interests of the dried fruits growers should be taken with a grain of salt. It is true that inferior dried fruits are bought by distillers in large quantities.
.- I certainly should not have risen again in this debate but for the misrepresentation of my remarks by the honorable member for Lalor (Mr. Pollard). Members of the committee know that I did not indicate on this occasion, nor have I done so on any other occasion, that the distillers were the main outlet for dried fruits. I did not say that they were the main. outlet. The honorable member for Lalor knows that. If he is as manly as I believe him to be he will admit that fact. It annoys me when a person deliberately misrepresents statements in this chamber. That is a despicable thing to do. I corrected the honorable member for East Sydney (Mr. Ward) by saying that on certain occasions when there was a fair amount of sub-standard fruit the distillers had provided an outlet which, although not always satisfactory, had alleviated to some extent the financial position of the. people who were unfortunate enough to have that fruit. I have a fairly high regard for the honorable member for Lalor and I want to be fair to him. I regard him as a personal friend and I hope that I have his friendship, too. If I have, I think that he should explain his remarks.
.- If I incorrectly interpreted *the statement of the honorable member for Mallee (Mr. Turnbull) I regret that I did so. I understood that he was apologizing for the fact that the Government was encouraging the increased consumption of spirituous liquors in this country.
Items 3, 6, 11, 1?, 13, 14, 15 and 16 agreed to.
Division IV. - Agricultural Products and Groceries.
.- The explanatory schedule that has been circulated indicates that item 56 relates to green ginger, ground ginger, preserved ginger and ginger in brine or syrup in vessels exceeding 10 gallons.
Conversation being audible,
– Order ! If honorable members do not intend to be silent we shall not be able to carry on with these items.
– The duty on ginger has been increased. I think that I express the opinion of the Opposition when I say that we are gratified that this increased protection has been given to the Australian ginger industry. I understand that ginger is the product of a comparatively new Queensland industry. Not long ago I had the opportunity of sampling the product of the ginger industry of Queensland. It is a first-class product which is comparable in quality with the product of any other country. The Opposition hoped that the Government would give this industry sufficient protection to enable it to prosper and ultimately to supply all the requirements of the Australian people.
Item agreed to. Division V. - Textiles, Felts and Furs,
AND MaNUUFACTURES Thereof, AND
Items 105, 106, 118, 122, 123, and 130 - by leave - considered together.
.- Division V. relates to textiles, felts and furs, and manufactures thereof, and attire. We will not have a textile industry in Australia at all very soon unless the Government is prepared to impose higher import duties on material that is imported from overseas. The position in regard to this and other industries in Australia was well indicated by the President of the Australian Associated Chamber of Manufactures in Adelaide at a conference that was held early this month. The president of that body, Mr. ParryOkeden, made the following statement:-
The high cost situation throws into very strong relief the unpalatable fact that our economy is balanced on a knife edge. A bad season or two, a major advance in the sciences of synthetic fibres or a fall in world wool prices, would plunge us all - wool-growers, manufacturers and traders alike - into an abyss from which we could only emerge after such a struggle as could beggar us all. In such a case, the economy of Australia, deprived of its overseas markets would be forced to fall back on the market of its own resources, and who is to say that under existing conditions we could successfully meet such a challenge.
That statement applies to textiles as well as to all other secondary industries in this country. Mr. Parry-Okeden continued -
The short-term outlook is reasonably bright, though we still have to face the yet unknown effect of a recent relaxation of import licensing. But behind this perhaps brief period of sunshine lies a very black cloud. No one can regard the future with real confidence until this cloud has been dispelled.
In view of the inflation that the Government has created, it should say what it intends to do to protect the textile industry from unfair overseas competition. Those who are employed in the textile industry in Australia work a 40- hour week. The basic wage in Australia is as high as that in any other country except America. Our competitors in the future will be Japanese manufacturers, whose employees work for more than 40 hours a week. I doubt whether they have even a 48-hour week and they have not the same sick leave provisions as our workers nor the same holidays. Their basic wage is considerably lower than ours. The Government, by relaxing its import restrictions in respect of goods, both of European and Japanese origin, is endangering the textile industry. A 12½ per cent. British preference tariff, a 30 per cent. intermediate tariff, and a 40 per cent. general tariff in respect of piece goods consisting wholly of cotton and items under class 3b of section 105 may not be sufficient to enable textiles to continue to be made in Australia. The Government should indicate its policy towards the textile industry, because that industry, like every other industry, is, in the words of Mr. Parry-Okeden, balanced on a knife edge. Anything can happen. The situation which exists because of the high cost structure is the Government’s own creation. The Government caused the inflationary conditions which could destroy us, and it may well be that the tariff schedules which we are considering to-night may not provide sufficient protection for Australian industry. We must follow one or two courses. We must have a higher tariff wall to protect our industries, including textiles, or we must devalue our currency. Nobody wants to devalue the currency. It behoves the Government to announce its policy on this matter.
– What about reducing costs ?
– Certainly, let us reduce cost3. Let us have much more productivity - a word coined in Prance in 1949, which has been misused ever since. Nobody in Australia who has a healthy approach to these matters desires underproduction. We all want greater production, but greater production does not imply harder work by the workers only. It involves higher efficiency on the part of manufacturers. Let us get greater production if we possibly can, but the effort must not be one-sided. If we get greater production, the workers who have helped to produce the goods, and the community generally, should share in the benefit. Do not let the benefit be appropriated solely by those who, for the time being, happen to own the means of production, distribution and exchange.
, - The honorable member for Melbourne (Mr. Calwell) has given a genera] talk on textiles, but he has not dealt with the specific items under consideration. They deal with piece goods of the type used for furnishing and upholstery, floor covering wholly of cotton, carpet, carpeting, carpet rugs and the like, and canvas piece goods of flax, or in which flax predominates. The general observations of the honorable member for Mel bourne are in conformity, in the main, with the views of honorable members on this side of the chamber. However, I warn him that the use of import licensing as a form of protection, would strike at the tariff system as a whole which has been endorsed by the Labour party for many years. Import restrictions were imposed for that purpose of conserving our overseas funds, but the Government did not intend to use them as a form of protection. An industry which considers that it requires additional protection against imported goods may make an application, through the Department of Trade and Customs, for its claim to be heard by the Tariff Board. That procedure has been followed by a number of industries. In relation to the items I have cited, the proposed duties are based on the recommendations of the Tariff Board, and in no instance are the proposed rates of duty lower than those recommended by that authority. Actually, the British preferential tariff rates in respect of furnishing fabrics are somewhat higher than the board’s recommended rates, and have been imposed in order to comply with our international commitments.
Increased protection has been sought for a number of textile items, and the applications are now the subject of inquiry and report by the Tariff Board. These items are as follows: - Cotton sheeting 37 inches and over in width; sheets and pillow cases; cotton canvas and duck piece goods ; rayon fabric of the type ordinarily used in the manufacture of rubber tyres; and cotton cord fabric and cotton tyre fabric. Those items, together with two others which are at present under consideration, are the only textile items in respect of which any representations have been received from the Australian manufacturers for increased tariff protection over the last eighteen months, or even longer. Those matters are already being investigated.
– There is a long delay.
– A bill will be introduced shortly to make provision for an increase of the number of members of the Tariff Board with the object of expediting hearings. I now direct the attention of the committee to the protection afforded to the Australian produced locally are, broadly speaking, textile industry. The principal textiles protected against imports, as follows: -
If the honorable member for Lalor considers that -those rates do not provide sufficient protection for the industry, I should like,to know his definition of sufficient protection.
– It is not sufficient protection, in view of our high cost structure.
– It is sufficient protection. Does the honorable member contend that protection at the rate of 2s. a yard plus a 45 per cent, ad valorem duty is not sufficient ?
– It was sufficient before the Government allowed the price structure to increase so considerably.
– The fact that the industry has not made an application for increased protection is sufficient proof that the protection is adequate. The protection afforded to other principal textiles produced locally is as follows : -
Those rates afford extraordinarily effective protection. I know that the whole committee is in accord with the granting of decent protection to our Australian industries. The result of it is obvious. I have shown that the general position of the Australian textile industry does not appear to be unhealthy by any means. Some criticism has been voiced of certain aspects, but the facts are that substantial developments are continuing to take place. I particularly have in mind the Courtauld project which involved an investment of many millions of pounds. I am aware, in addition, that many other established manufacturers are extending their plants. Employment statistics show that the number of em ployees in the larger clothing and textile factories in New South Wales and Victoria was 61,607 in October, 1952. The number had increased to 71,334 in October, 1953, which was an increase of approximately 16 per cent. The output of woven woollen cloth for June, 1952 was 1,710,000 square yards compared with an output of 2,S70,000 square yards in June, 1953. The output of pure rayon fabrics for the same periods were 761,000 square yards and 1,578,000 square yards respectively, or an increase of more than 100 per cent.
Therefore, honorable members will see that the protection which has been afforded to the textile industry by successive Australian governments has resulted in a great expansion of employment and production. Indeed, why should it not be so, when we produce the raw material for woollen goods? “Why should we export our wool, and purchase it later in the form Of the manufactured article? “We are in a position to manufacture the local materials to meet the requirements of the local market for textiles. “We are developing our industries with that object in view. Therefore, I say to the honorable member for Melbourne, when he asks for additional protection, that the industries which require protection should make application for it. The fact is that they have not made an application. The inference is that the duties are acceptable and satisfactory, and the Government proposes to leave the matter there.
.- I support the remarks of the honorable member for Melbourne (Mr. Calwell) concerning the textile industry. As the representative” of perhaps the biggest textile manufacturing electorate in the Commonwealth, I express concern at any breaking-down of the protection afforded to this major Australian industry. I listened very carefully to the comments of the Vice-President of the Executive Council (Mr. Eric J. Harrison) a few moments ago, and my mind went back to the time when import restrictions were imposed and certain other measures were taken by this Government in connexion with imports and tariffs generally. I remembered, too, that the Minister for Supply (Mr. Beale), speaking in this Parliament, dismissed the textile industry in a few words. He said, in effect, that it did not matter at all. It was just another industry as far as they were concerned. The figures which have been cited to the committee to-night, concerning employment in the industry, indicate clearly that it is one of the major industries of Australia. Many thousands of Australians are employed in it. There is an urgent need for this Government to appreciate that the industry is entitled to all the protection that can be given to it, in the interests of our economy and of the employment of thousands df people.
Although the prospects of the industry appear to be bright at the present time, those who control it are gravely concerned because of statements made by members of this Government which have deprecated the part that the industry plays in our economic life. They fear that Australian markets will again be swamped with overseas goods, particularly from countries such as Japan which are able to manufacture at a much cheaper rate than is Australia. If we wish to build up great industries and provide conditions of employment in accordance with modern standards, we must be prepared to ensure that full protection is given to such industries and that they are properly maintained and permitted to develop. As I have said, Australian textile manufacturers are greatly concerned because of the possible flooding of our markets by goods from overseas countries, particularly Japan and Ohina, to the detriment of Australian industries. The Australian Labour party greatly improved the position of our secondary industries by the protective tariffs which it introduced in the 1930’s. This Government consistently has attempted to break down that protection. That attempt has been particularly apparent in relation to the textile industry.
The Vice-President of the Executive Council referred particularly to Courtaulds (Australia) Limited. This Government need claim no great credit for the establishment of that company in Australia. That was an achievement of the New South “Wales Government, which was then led by Mr. McGirr. Tha subsequent development is a tribute to the efforts of Labour governments to ensure that the textile industry is helped towards prosperity. The great textile organization of Yarra Falls Limited owes much of its success to Labour governments because of the protection afforded to it in the early years of its development. As the honorable member for Melbourne has said, we must view with alarm any indication that full and adequate protection is not being given to such an important industry as the textile industry. It is all very well to point to the prosperous state of affairs Of the industry at the present time. I know that textile manufacturers in my electorate fear that should the Government decide to “ knock “ certain industries, as it did some months ago, it may again treat the textile industry badly. Whether the measure before the committee will have a beneficial effect on the textile industry only time will tell. I ask the Government to review its attitude towards the industry, to provide it with adequate protection, and to allow it to continue as it is to-day, a really great section of Australian industry and a fine national asset. The Government should also take effective steps to protect secondary industries generally, instead of allowing the cheap labour countries of the East and other parts of the globe to force Australians out of employment by dumping cheap goods on the Australian market.
Dr. DONALD CAMERON (Oxley) 1 11. 20]. - The honorable member for Grayndler (Mr. Daly) stated, in effect, that the Government has not the interests of the textile industry at heart. The truth is that, had it not been for action taken by this Government, that industry would be experiencing a depression at the present time. Indeed, it was the policy of import licensing, which was introduced by this Government and strongly opposed by the Opposition, which rescued the industry from tho doldrums into which it was slipping and placed it firmly hack on its feet. I think that every manufacturer of textiles and every one engaged in the industry appreciate that the present prosperity of the industry is due entirely to the actions of this Government.
.- The Vice-President of the Executive Council (Mr. Eric J. Harrison) made a statement concerning cotton sheeting, pillow cases and other textiles.
– Those matters are being considered by the Tariff Board at the present time.
– Does that mean that an alteration . of the rate of duty, if found to be desirable, will not come before the Parliament until several months have passed?
Mr. ERIC J. HARRISON (Wentworth - Vice-President of the Executive. Council and Minister for Defence Production) makes its report available, I shall suggest to the Minister for Trade and Customs (Senator O’sullivan) that he give urgent consideration to it so that the matter may be placed before the House as soon as possible.
Sitting suspended from 1139 p.m. to IS midnight.
– This is an appropriate occasion to direct attention to the fact that the Government has done absolutely nothing to ensure, that imported textiles shall be labelled so as to indicate to purchasers the fibres from which they have been manufactured.
– Why did not the Labour Government, of which the honorable gentleman was a member, do something about this?
– The fact is that I, as Minister for Commerce and Agriculture, was very active in this matter and actually had gazetted a regulation, which the present Government refused to put into effect. It is alleged that the regulation would have been ineffective because it could not be policed efficiently, and that, therefore, no good purpose would have been served by endeavouring to police it. That does not excuse the failure of the Government to frame a new regulation that would have been effective. After all, a period of four years has elapsed since the Chifley Government went out of office. The people of Australia, and the wool-growers in particular, are threatened by a situation in which Australia imports textiles which have all the appearance of pure wool products but which, in fact, have been manufactured substantially from reworked wool, all sorts of other fibres,, and, worst of all, old rags and bags that are known as “shoddy”. During one period, Australia exported to Japan millions of pounds of shoddy which, in due course, was teazed into fibres, mixed with virgin Australian wool, returned toAustralia, and sold as the pure product of the Australian sheep. The Australian Wool Board has directed attention to this nefarious practice for many years past. The Japanese are not the only offenders.
Similar methods of manufacture are practised at Bradford, in the United Kingdom. As soon as the Chifley Labour Government drafted the regulation to require overseas manufacturers to affix to their goods labels indicating the proportions of virgin wool, re-worked wool, processed wool and other fibres used in their manufacture, the Bradford woollen interests protested and brought all sorts of pressure to bear in an attempt to prevent the promulgation of the regulation. The regulation was gazetted, but the Chifley Government went out of office and it was never enforced. The excuse given for this Government’s failure to apply the regulation is that it would be impossible, by chemical analysis or otherwise, to determine the exact percentages of various fibres in any manufactured textile. My reply to that is that the regulation is practically on all fours with a law that operates successfully in the United States of America. In any case, even if the excuse were %’alid, surely the Government could have tried some alternative method. For instance, it could have required the textile manufacturers of Japan, the United Kingdom and other countries to attach to each roll of cloth sent to Australia a copy of the instruction card issued to the operator of the loom or machine on which the cloth was woven. I understand that the procedure in textile mills is to issue operators with cards which specify the proportions of virgin wool, processed wool and other fibres, such as rayon and cotton, to be incorporated in the material. If that method were adopted, and if the Department of Trade and Customs had reason to suspect that misleading information was being attached to imported materials, it would be an easy matter for it to inform the manufacturer concerned that Australian importers would not be permitted to import any of the products of his factory until it was convinced that he. could be trusted. Government supporters have said that it would be useless to label large rolls of textiles at the Australian port of entry because the labels would be lost in the process of manufacture and distribution through wholesalers and retailers. But the Commonwealth could enter into a special arrangement with the States to provide for the labelling of materials in the hands of traders. Such an arrangement works satisfactorily in the United States of America. At any rate, the Government should have done its best to overcome all the difficulties. The Australian Wool Board has commented caustically in its annual reports upon the Government’s neglect in this matter. This is a scandalous state of affairs, even admitting that there may have been technical difficulties in adminstering the Labour Government’s regulations. This Government has not made any attempt to enforce the requirements of the regulations. If it has done anything, its efforts have been ineffective, with adverse results for the Australian wool industry.
– The comments that have been made by the honorable member for Lalor (Mr. Pollard) are interesting although they have nothing to do with the item that is being considered by the committee. His statements could form the basis for an interesting debate. The honorable member stated that this Government had taken no action regarding the labelling of goods. I hasten to inform him that the regulations that were in force, when the Government that he supported was in power are still in existence and are operative, under this Government. I refer to the regulations in connexion with the branding of imported goods of certain kinds with the name of the country of origin and the mixtures that are contained in the fabric.
– That is not so.
– The regulations are not new. They have been in force for some years. The honorable member stated that when he sat on the Government side of the chamber there was a regulation that required percentages of re-worked wool, shoddy or other materials to be shown upon the labels. He stated that this Government had suspended that regulation. I have made inquiries from officers of the Department of Trade and Customs who are now in the chamber. They do not know of such a regulation or of the suspension of a regulation of that nature, but they have pointed out to me that it is possible such a regulation could have existed. They cannot give me any definite information on that point. I accept the statements of the honorable member for Lalor as factual. I shall have inquiries made and advise him of the circumstances.
– The Minister for Commerce and Agriculture (Mr. McEwen) has offered excuses. Why does he not implement the regulations?
– HARRISON. - That is a different matter. As to the labelling of goods manufactured in Australia, the honorable member for Lalor knows the difficulties that confront this Government in getting the State governments to agree to the labelling of those goods.
– I agree.
– There has been no dilatoriness upon the part of the Government in its endeavours to have the goods labelled, but an instruction is necessary from the State governments. If the State governments would get together and devise a common form of undertaking, which might be done very easily, the consumers could be protected. I repeat that we insist upon the labelling of imported goods with the country of origin and an indication of the mixtures of fibres in the goods.
– But the labels do not show the proportion of different fibres.
– I do not know about that. The honorable member for Lalor has stated that a. regulation was in existence requiring the label to show the percentages of fibres contained in the fabrics. I know nothing about that regulation. I accept the statement of tb/3 honorable member for Lalor and I shall have inquiries made. If the regulation has been suspended, I will advise him of the reason. I am in complete accord with the observations that he has made.
– Why has not the Government devised a regulation itself?
– I am not the Minister for Trade and Customs. I have held that portfolio and assure the honorable member that we do not differ in our ideas in that respect. I should have thought that if the regulation was in existence, it would have been enforced.
If it was promulgated and has not been enforced, I shall want to know why.
– Tell us about the banning of the book entitled Ulysses.
– I might give a short dissertation upon that matter. I am sure that it would be of interest to the committee, but I fear that I must contain myself and discuss it with the honorable member for Parkes (Mr. Haylen) later. As I have said, dicussions of the nature initiated by the honorable member for Lalor are valuable although they are not strictly relevant to the item under discussion, because they serve to direct attention to matters that cannot be debated under other circumstances.
– I direct the attention of the committee to item 130 (b) which includes canvas and duck piece goods made of flax or containing a mixture of fibres in which flax predominates. Australia produces substantial quantities of flax. A valuable flax industry was expanded greatly during World War II. to such an extent that Australia supplied the United Kingdom with flax fibres and other flax products. Mills were established in areas suitable for flax-growing. Recently legislation was introduced into this Parliament setting up an authority to continue the growing of flax and giving that authority extensive powers. I am in favour of the protection of this industry both from the point of view of the grower and the manufacturer and because flax is important to national defence. I should like to know, however, if the proposed heavy increase in the protective rates on flax products is due to the increase of costs that has developed since the Labour Government vacated office in 1949. If that is so, it is regrettable because there has been ample demonstration that Australia is equally as suitable as other countries for the growing of flax. Had it not been for high costs, Australia would have been able to compete with importations of flax from Northern Ireland, where a comparatively small quantity is grown, or with the product from the Baltic countries, Belgium and other producers.
If high costs are the reason for the proposed new rates of duty Australia will be placed in an unfortunate position. The demand for canvas and duck for use in many commodities, including fire hoses and thread, is heavy. It will be a regrettable development if high costs force a substantial increase in prices upon Australian consumers. I should like to know the reason for the increase in the tariff rates on canvas and duck piece goods.
, - The honorable member for Lalor (Mr. Pollard) hopes or fears that the proposed increase of duties might be the result of increased costs of manufacture that have occurred over the period of inflation. No doubt if he is satisfied in his own mind that the increase is due to higher costs, he will endeavour to prove that this Government is responsible. Let me dispose of the honorable member’s wishful thinking by reminding him that on the 24th November, 1949, the Tariff Board, in its report No. 1.094, recommended that the woven flax industry be assisted by means of bounty designed to reduce to the spinners and weavers the price of their raw material, which is called scutched fibre, by an amount equal to £60 a ton for C grade tank-retted flax. The bounty was recommended as a means of keeping our flax industry in existence, because it is very important to us, especially in time of war. The Government adopted the recommendation and, for two years, from the 37th July, 1950, provided for the payment of a bounty equivalent to that recommended by the Tariff Board.
In anticipation of the expiry of the bounty, and in view of the fact that the Tariff Board regarded the provision of a bounty as a stop-gap method of protecting the local industry until the prices of raw material of both Australian and overseas origin became more stabilized, the matter was again referred to the board. . The board decided that a duty of 27£ per cent, under the British preferential tariff would be justified by the differences between the conditions under which the industry was operating in Australia and the conditions that obtained in the United Kingdom. It considered that such a duty would effectively protect the Australian flax canvas weaving industry if the production of both the yarns and the canvas were carried on with a reasonable degree of efficiency and economy. In the absence of any evidence that would enable rates other than British preferential tariff rates to be determined, those rates were fixed in accordance with Australia’s international commitments.
I point out to the honorable member for Lalor that since these rates of duty have been in operation, there has been a substantial drop in the world price of flax fibre, and it has been decided that the Tariff Board shall examine the question whether assistance should be given to producers of flax fibre in Australia and, if so, the manner and extent of such assistance. The honorable member will see that the Government is fully aware of the importance of this industry, and is determined that it will not be forced out of existence because of a drop in the price of flax fibre overseas. The Tariff Board has already taken action to protect the flax industry in the weaving field, and is considering whether protection can be given in the flax fibre production field.
– I wish to refer to item 118, the effect of which would be to increase the rates of duty on imported carpets, carpeting, carpet mats, carpet rugs and other things specified in the item. I say at once that I regret the action of the Government in proposing these increases of duty. It is true that, in doing so, the Government is acting on a recommendation of the Tariff Board. Perhaps it ill becomes us to criticize a recommendation made by the board after a thorough investigation, but, although the board considered this question fairly exhaustively, as honorable members will see if they read the report that was circulated last May, the effect of implementing the recommendation would be to increase still further the price of carpets in Australia. No one can contemplate that with equanimity. Before the last war, relatively good carpets could be purchased for about 16s. a yard, but to-day the price of carpet of the same quality is £2 10s. or £2 15s. a yard. Carpet of slightly superior quality could be bought for about £1 a yard in 1939, but now the unfortunate purchaser is asked to pay £3 or £3 10s. a yard for it.
This is a matter that affects almost every householder and married couple in this country. If local carpet manufacturers are unable to compete with man.facturers overseas, there is no reason why consumers in Australia should be penalized. The evidence collated by the Tariff Board shows that relatively few people are employed in the Australian carpet industry. I think I am right in saying that the number that has been given is 489, which includes some juniors. It was pointed out in the evidence given before the Board that local manufacturers had been supplying only about onethird of the total number of carpets used in Australia, and it was claimed that if the additional duty were granted they would be able to increase their share of the Australian market to about 50 per cent. But, as I have said, the inevitable result of an increase of the duty would be a further increase of the price of carpets, which is already exorbitant. Many people, especially those in the lower income groups would be forced to go without carpets and resort to much inferior floor coverings. I suggest to honorable members that it is about time we gave a little more consideration to the needs of consumers, especially when relatively few people are employed in the industry concerned. If the ‘ recommendation of the Tariff Board were ignored and the increase of duties refused, hardship would be inflicted only on a small number of people. I regret that the Government has proposed these increases, and I hope it will reconsider the matter. Items 105, 106, 118, 122, 123, and 130 agreed to.
Division VI. - Metals and Machinery.
Items 167, 171, 174, 176, 178, 194, 208, and 219 - by leave - considered together.
– I refer to item 178 (i), which relates to internal combustion engines of various types up to and including 40 horse-power and exceeding 40 horse-power. The- remarks that I have to make affect an important Australian industry and a number of factories in New South “Wales and Victoria. They are based on my observations of a company known as Ronaldson Brothers and Tippett Limited, a well-known Ballarat firm that has been established for over 50 years. Probably no firm is better known in the Australian internal combustion engine industry. The report of.the Tariff Board on which item 178 (i) is based is dated the 28th October, 1952. The history of this item shows that the policy of the Government in connexion with tariffs is to subordinate the products of Australian industries to imported articles. No honorable member should remain silent while that is being done. The Minister referred this matter to the Tariff Board on the 28t,h November, 1951, and the board held a public inquiry on the 11th March, 1952. but it was not. until the 27th October, seven and a half months later, that it produced its report. Nearly twelve months elapsed before the board reported on the company’s application. I do not make any complaint against the board itself. Every honorable member recognizes that it is doing its job thoroughly under the conditions in which it is obliged to operate. Delay in dealing with applications by the board is entirely the fault of the Government. I do not know whether the Government has been deliberately remiss in that respect, but such delays are reprehensible. If industrial conditions were fairly stable, no company would complain about a limited delay in the hearing of its applications to the hoard; but in view of the violent fluctuations of wage levels, the board should be enabled to complete its inquiries as rapidly as possible. For instance, the section of the board’s report dealing with wages is dated February, 1952, but by the time the board completed its report eight months later the wages figures that it cited in its report were out of date. Local manufacturing companies are still working under the relief that was granted on the basis of wage levels that pertained in February, 1952. In that respect alone, manufacturers of internal combustion engines have suffered tremendous loss.
When economic conditions generally are likely to fluctuate to a serious degree, as they have fluctuated during the last two years, the Government should take action to speed up the completion of
Tariff Board inquiries. The Government, by failing to do so, has done a grave disservice to Australian manufacturers. It may cite its import .restrictions in its defence. But when those restrictions were imposed in March, 1952, they were practically ineffective, because at that date internal combustion engines had flooded the country with the result that the sales of Australian manufacturers, had already dropped. Part of the board’s report deals with the establishment of this industry. As yet, it has not been fully established, although it has done a tremendous, job for Australia since ibo outbreak of World War II. The board on page. 4’ of this report, states - There is a great deal of development yet to he done in the production of engines of high horse-power; a considerable portion of l he finance for this development must come from the profits obtained from the manufacture nf smaller engines. As the whole industry develops and produces a more complete range of engines, the cost of production of all types and sizes will become lower through greater output. It is contended, therefore, that thu engine industry should he regarded as a single indivisible entity so far as the United Kingdom and Australia Trade Agreement is ‘unearned.
During the war years 1939 to 1944 production and development of internal combustion engines was limited to those typos which were required for defence, purposes, fu addition, engine manufacturers were called upon vo produce many other items of war equipment which normally did not e,m m with in their scope and of which they hari had no previous. experience. This hampered, the industry’s “.,r”mi development.
At the conclusion of the war, the industry was faced with the problem of changing prodilution from war-time requirements; to the manufacture, of its normal, products, lt was. then faced with a. severe shortage of both materials and man-power and with the difficulty of obtaining replacements of machinery worn out through use on war production. Capital equipment was difficult to obtain from.any sources and development, which might have been expected through the introduction of more modern plant and equipment, was considerably hampered. The overall result has- linen that the industry has not been able to develop to the extent that it would had conditions been : more normal.
The board made that report, twelve months ago. The company has been handicapped during the last two years, owing principally to conditions that have boon brought about as a result of the Government’s economic policy. It has not been able to make satisfactory pro-
J/r. Joshua.. gross in changing over to peace-time production by reducing its costs by theinstallation of capital equipment. It has on hand all the material necessary for the erection of a large building, but it would be foolish for it to proceed with that work until it knows exactly where it is heading. The Government has procrastinated in this matter. Despite thoseconditions, the company has managed to maintain with difficulty, its moderaterate of dividend. I do not want to hear any Government supporter reply that a Labour government would nationalize the industry. Labour did not nationalize it during World War IX, and it never will do so. This industry is shouldering a heavy impost in its wages bill, because it is still operating under a Tariff Board report that was out of d’ate even when it was published. For instance, since February, 1952, when the board’s report was furnished, the basic wage has increased from 216s. to 236s. a week. Recently, Ronaldson Brothers and Tippett Limited was obliged to put off 50 of its skilled employees. It took that action with the greatest reluctance because of the serious degree of unemployment that exists in Ballarat. The Minister for Labour and National Service (Mr. Holt) is well aware of the fact that the percentage of unemployed persons in Ballarat is the highest for any provincial city in Australia. Many of those 50 artisans have been sent to. other towns in order to obtain employment ; yet, they could have retained their employment at Ballarat where capital has been invested in the necessaryplant and equipment. An important aspect of this matter is that light, industries, including the textile industry, depend to a great degree upon the prosperity of heavy industries of this kind. For instance, the members of the families of men who are employed in heavy industries in Ballarat provide the work force for the textile industry. If full employment, is not maintained in the heavy industries the light industries will not be able to. obtain adequate labour.
The Government has been remiss, in failing to appoint more members to the Tariff Board. Only now- it is proposing to increase the membership of the board from four to seven, but I doubt whether that increase will be sufficient. Shoud it be necessary to appoint even twelve more members to the board in order to enable it to conduct its inquiries expeditiously, the Government should not hesitate to make such appointments. The Government should get on with the job immediately; it is useless for it to delay. Government supporters appear to regard opportunities to take trips overseas as being more important than fostering local industry. The Government continues to make hand-outs to importing interests. This industry proved of tremendous value to the nation during World War II. when it constructed engines for naval vessels. Instead of fostering local industries, the Government prefers to seek kudos by patronizing dollar countries. It has given hand-outs in the form of tax reductions to companies in those countries. Recently, it raised a loan in Switzerland. Labour is the only true friend of Australian industries, and it always will be. Indeed, assistance to local industry is a Labour tradition because the Australian Labour party recognizes that the welfare of the worker depends primarily upon the well-being of local industries. The Tariff Board has -ft huge backlag of applications, and the Opposition desires to know why the Government is not making some immediate attempt to reduce the backlag. To-night, I was in communication with Mr. Ronaldson by telephone, and I asked him whether he had an application before the board. He said “ We know there is a tremendous backlag, and I do not know when the matter will be heard; but we are preparing one and will put it in “. We want this matter to be heard now, and not in some months’ time. The company in Ballarat is typical of other concerns all over Australia which manufacture similar goods. ‘The principals of the firm are at present experiencing a very hopeless feeling because they believe that their application for further protection will take many months to bo dealt with. I believe that the VicePresident of the Executive Council has a case to answer in this connexion, not only with regard to internal combustion engines but also in regard .to many other industries. It is shameful that our Australian industries should be treated in the way that they are being treated by this Government, and I can see no reason for it except a desire on the part of the Government to help some importing interests which are friendly toward it.
– I can understand the
Honorable member for Ballarat (Mi. Joshua) attacking the Government, because it is part of his stock-in-trade to do so, but I cannot understand his making a base attack on the Tariff Board. He has attacked the Tariff Board in a way that has seldom been attempted by an honorable member of this chamber. He has accused it of procrastination, and of taking up to eighteen months to deal with applications. In fact, he has attacked men who cannot defend themselves in this chamber, and I am astonished that he should do so. He has sought to gain some party political advantage by attempting to intimidate them, and by trying to force them to give preferential treatment to the industry that he has championed. When the members of the Tariff Board read the reports of this debate- in Hansard, they will discover that the honorable member for Ballarat ‘has been attempting to intimidate them by attacking them in the Parliament in order to try to gain some advantage for himself. “The honorable member has no need to attack the hoard, because I shall bring him up to date with regard to tariff matters and show him just exactly where the histrionics that he has indulged in will lead him. In no case did the Tariff Board, during the period in which a Labour government was on the treasury bench, conduct an inquiry in a shorter time than it is occupying to-day.
– Oh, yes it did.
– No, it did mot. Under the Ottawa Agreement we .are required to give three months’ notice to British manufacturers before the Tariff Board can even deal with a matter,. Then more time must elapse before the matter can be .submitted to the Parliament. Our procedure, in length of time, compares favorably with that of other countries because other countries alter their tariff rate once every twelve months whereas we do it quite often during each year. Therefore, of what use is it for the honorable memiber to talk nonsense such as we have heard from him to-night, unless it is with the object of whispering in the ears of manufacturers in Ballarat and attempting to get concessions for certain people in his electorate? No doubt he will send many copies of the speech that he made tonight to manufacturers in Ballarat in order to show them how he has wielded the big stick over the Government and the Tariff Board.
– Why don’t you grow up?
– I suggest that the honorable member for Wilmot (Mr. Duthie) should stop snickering. Perhaps I shall have to ask the Chairman to protect me against the’ honorable member’s fierce attacks. I notice that he is now sitting alongside the honorable member for Ballarat, who sought to intimidate the Tariff Board, and no doubt he is seeking to imitate him by attempting to intimidate me. How ever, I do not intend to be intimidated by the honorable member for Wilmot. Of course, three months must elapse under the Ottawa Agreement before any action can be taken; then the inquiry of the Tariff Board takes some months, and after that it is necessary to get the new schedule printed, sent to the Department of Trade and Customs and then put before the Parliament. The Government is at present attempting to shorten the time between application and determination by doubling the number of members on the Tariff Board. If that increase of membership does not reduce the time, then the Government will add further members to the Tariff Board because we realize that as our economy is rapidly changing, it, is necessary that secondary industries that are entirely dependent on tariff protection should not be subject to possible dumping of overseas goods in the period between application and determination. We say that at present the Tariff Board is taking no longer to determine matters than it took during the period of office of the last Labour Government, but we arc attempting to shorten that time.
– Unlike the Vice-President of the Executive Council (Mr. Eric J. Harrison) I commend the honorable member for Ballarat (Mr. Joshua) on the diligence with which he has pursued this matter on behalf of his constituents. I represent a large manufacturing industry that is concerned with internal combustion engines, and I know of the good work that is being done by the honorable member for Ballarat in attempting to help Australian industries that need tariff protection. The criticism by the Vice-President of the Executive Council of the honorable member for Ballarat does not answer the questions asked by the honorable member. To say that the delays in determining applications before the Tariff Board are no greater now than they were during the time of the last Labour Government, is no excuse. The Minister said that the Government intends to double the membership of the Tariff Board. I should like to know who will be appointed to the board. Sir Claude Plowman-
– Order! The honorable member is introducing a matter that is not before the committee.
– That matter was brought up merely in passing. I hope that the overseas representative of British concerns making internal combustion engines will not be appointed to the Tariff Board to the detriment of Australian manufacturers. The original requests made by the manufacturer of these engines are mentioned on page 4 of the Tariff Board’s report of the 27th October, 1952. The requests read -
Those requests were not granted completely, but 25 per cent. protection duty was granted on some items, and, broadly speaking, a protection was given which did not wholly meet the “wishes of the Australian industry. Submissions were made by Australian manufacturers in regard to comparisons between wages, working conditions and amenities of Australian workers and those of British workers. Indeed, a first-class case was made out in support of full protection for this industry. The evidence before the Tariff Board included a letter signed by Mr. H. E. Arkinstall, a director of the Cooper Engineering Company Proprietary Limited of Mascot, New South Wales, stating that in 1951 the company had planned to increase by 100 per cent. its production of 1 horse-power and 11/3 horse-power air cooled engines, but when the duty was reduced, the plan was shelved. That shows clearly how the employment potential of this Australian industry has been reduced by the Government’s failure to provide adequate protection for local manufacturers. I am informed that the price of the imported British product is £5 or £6 less than the price of the local product. That may not sound very much, but when engines are bought in large quantities the total runs into some thousands of pounds. It is obvious that this industry will have to be given full protection if Australian made engines are to compete against imported ones on the local market. The Australian engines compare favorably with the British engines in capacity and performance, and will do the same work. The engineering company in my electorate which manufactures these engines is a most efficient industry. Unfortunately production costs in this country are higher than they are in Great Britain, but the fact that Australian workers enjoy good conditions and a 40-hour week should not be permitted to retard Australian industries. Adequate protection should be provided to enable Australian manufacturers to compete with British manufacturers.
I notice in the Tariff Board’s report that the opponents of increased duty included representatives of British industries. I am not opposed to British industries or to American industries, but I should prefer them to undertake manufacture in this country and so give employment to Australian workers. The report lists the following opponents of increased duty: -
Samuel Fergus Ferguson, director, the Australian Association of British
Manufacturers, 84 William-street, Melbourne.
Oliver Royle Scott, tariff officer, the Australian Association of British Manufacturers, S4 William-street, Melbourne.
Malcolm Robert Blaikie, secretary, the Graziers Federal Council of Australia, 56 Young-street, Sydney.
Brent Haviland Evans, on behalf of the Joint Committee for Tariff Revision, 36 Grosvenor-street, Sydney.
Ernest Sharpe Taylor, representative for British Oil Engines (Australasia) Pty. Ltd., 66 Clarencestreet, Sydney, and 363-374 Collinsstreet, Melbourne.
It will be seen from that list that the case against an increase of duty was supported by organizations not concerned with Australian manufacturing industries. The Government must face up to its responsibility to Australian industries by giving them full protection provided they are efficient. The honorable member for Lalor pointed out that the Government had caused discontent amongst Australian manufacturers by its failure to adopt a firm policy in relation to Australian secondary industries. Australian manufacturers whom I know in this industry are gravely concerned. It is true that a 25 per cent. protective tariff has been granted, but I remind the House that under a certain customs bylaw, the Minister may at any time, if he believes that the home market is not being fully catered for, or perhaps that engines of a special type are required from overseas, admit an almost unlimited quantity of internal combustion engines from overseas, regardless of the recommendations of the Tariff Board and regardless of the need to protect Australian manufacturers. In effect, that by-law could be used to defeat the intentions of the Tariff Board so far as the protection of Australian industries is concerned.
– Has that ever been done?
– It could be done at any time. Whilst the firm on behalf of which I made representations to the Minister was pleased although not completely satisfied, with the Government’s decision, it had some fears when informed in a letter from the Minister for Trade and Customs (Senator O’Sullivan) that he had power to admit goods under by-law and could exercise it at any time. It is worth remembering that whilst some protection has been given, items of this kind should be under constant review and that the Government should state clearly its attitude to Australian secondary industries.
I know from the Tariff Board’s report that it went exhaustively into the application for increased protection for Australian manufacturers of internal combustion engines. I do not criticize the diligence with which the board tackled that problem, nor do I criticize the delay that occurred because, as the VicePresident of the Executive Council has said, the board was probably cluttered up with a great number of inquiries. Nevertheless it would be idle to suggest that the long and tedious delays in the hearing of applications for protection for Australian industries are not resented. While those delays are occurring, overseas manufacturers are making inroads on the Australian market to the detriment of local manufacturers. Therefore, I support the representations that have been made by the honorable member for Ballarat. His attitude, far from being intimidatory to the Tariff Board, was constructive. He sought the protection of Australian manufacturers, not only in. his own electorate, but also in other electorates in order that the industry may be stabilized and may expand. The Tariff Board’s report indicates that the undertaking in my electorate closed down its engine manufacturing establishments when the Tariff Board abolished the protective tariff on a previous occasion. The industry was not revived until protection was restored. If this Government wants to foster full employment and the expansion of Australian industries, and if it wants to see Australian workers enjoying good working conditions, it cannot continue to give preference to overseas manufacturers at the expense of well-established and efficient Australian industries. I support the representations that have been made from this side of the chamber in relation to internal combustion engines, and I hope that the Tariff Board will deal speedily with other applications that have been made so that, the Australian market may be reserved for efficient Australian industries and not thrown open to unfair competition from overseas manufacturers, who are not obliged to provide for their employees the high standard of working conditions that Australian workmen enjoy. I hope also that the delays in Tariff Board hearings will be overcome when the board has been doubled. Such delays are of no use to the country or to the employees; they are detrimental to the growth of the industry. I hope that the Government will take notice of the general criticism that has been offered by the Opposition in relation to the question of internal combustion engines, and that, in the near future, it will state its policy.
– I do not know the reason for this midnight attack by two honorable members opposite in relation to this particular item.
– The honorable gentleman is pretty dumb.
– I was so dumb that I ascertained at what figure the shares of Ronaldson Brothers and Tippett Limited stood. I ascertained that those £1 shares stood at 25s., so that firm is not in a very bad position.
– They can slide back very rapidly.
– Of course they can. The honorable member for Ballarat (Mr. Joshua) said that they had been sliding back over the past twelve months, and I thought that the company had gone into the doldrums. I do not know whether the socialist party wants £1 shares to stand at £3 or at 25s. Anyhow, those £1 shares still stand at 25s. What is the honorable member for Ballarat complaining about? Is he complaining about the fact that this Government accepted the decision of the Tariff Board ? Does the policy, of the Australian Labour party .provide that under no circumstances shall it accept the decision of the umpire ? Honorable members opposite do not accept the decisions of the umpire when the Commonwealth Court of ‘Conciliation and Arbitration gives its decisions. Now they say that they do not accept the decision of the Tariff Board. Do they want the Government to abolish the Tariff Board?
– We are not bound by the Tariff Board or by the court.
– Why does the Opposition not say, “ Abolish the court and abolish the Tariff Board “ ? Any government may either reduce or increase the amount of protection that is recommended by the Tariff Board, but the general policy of the Chifley Government and of this Government has been to accept the. decisions of the Tariff Board unless there were very good reasons for varying them. When the Tariff Board, after full investigation, recommended a 25 per cent, duty instead of the 27* per cent, for which the industry asked, it cannot be said that there is a good reason for varying the board’s decision. The power that is vested in the Minister for Trade and Customs (Senator O’Sullivan), and to which the honorable member for Grayndler (Mr. Daly) referred, was vested also in the honorable gentleman who held that portfolio in the previous Government. Does the honorable member for Grayndler suggest that the Minister has used that power iti a wrong manner? As far as I know, the Minister for Trade and Customs has not domso and I do not think that the honorable member for Grayndler really suggests that the Minister has abused that power. Does the honorable member suggest that that power should now be removed? He did not make that suggestion when his party was in office. What is th* reason for this attack by honorable members opposite? This Government is the first government that has decided to double the personnel of the Tariff Board in order to speed up consideration of the various proposals that are placed before it. Are honorable members opposite objecting to, the fact that the Government is- appointing to the boa.rd sufficient in c tubers to speed up the consideration of applications that are placed before it? Are they objecting to the _ fact that restrictions, were placed on imports as an added protection to Australian industry as well as a means of improving Australia’s overseas balances? What is the matter to which the Australian Labour party is objecting? Honorablemembers opposite are objecting to something that is nonexistent in order to support a suggestion that the Government has not been protecting secondary industries in a proper manner. All that the Opposition did was to criticize the decisions of the Tariff Board. In this instance the board recommended a 25 per cent, duty instead of the 27£ per cent, for which the industry asked. The honorable member for Grayndler and the honorable member for Ballarat endeavoured to work the old parish pump as hard as they could.
.The Minister for the Interior (Mr. Kent Hughes) has not spent very much time in this chamber during the discussion of the tariff proposals. I doubt whether the honorable gentleman was here when the honorable member for Ballarat (Mr. Joshua) made his speech.
– I was.
– I doubt if the honorable gentleman understood the remarks of the honorable member for Ballarat. As is frequently the case with the VicePresident of the Executive Council (Mr. Eric J. Harrison), surely the honorable gentleman was not. serious when he replied to the honorable member for Ballarat, when he deliberately baited the honorable member and when he accused him of some ulterior motive which certainly never entered his mind. The right honorable gentleman knows full well that the honorable member for Ballarat assiduously attends to the welfare of his constituents. The honorable member for Ballarat knows that within his own electorate there is probably the best and certainly one of the oldest established internal combustion engine manufacturing plants in Australia. The Minister for the Interior probably is not aware of the fact that the principals of that firm are never likely to cast a vote for the Australian Labour party. Nevertheless, as the elected member for the division of Ballarat, the honorable member has a duty to see that justice is’ done to those people. The: Minister apparently is’ also unaware of. the. fact that the honorable member for Ballarat did not criticize the
Tariff Board, but he did criticize the Government for the long delay in dealing with its reports. The Minister for the Interior should recognize those facts. For the honorable gentleman to come into this chamber and accuse the honorable member for Ballarat of working the parish pump is sheer nonsense, humbug and hypocrisy. The fact is that the Minister is suffering from a bad liver because honorable members on this side of the chamber are attending to their work and are indulging in constructive, and in some cases destructive, criticism of the Government.
Mr. Kent Hughes inter jecting,
– The Minister is interjecting. Apparently he believes that the Tariff Board is an authority that should be above criticism. He seems to have the idea “ that its determinations should be accepted without question. He seems to think that its recommendations should always be implemented by the Parliament. I do not think that the Minister believes in his own heart that that is a true conception of the attitude of a government towards the Tariff Board and towards the functions of this or any other parliament. I think the honorable gentleman believes in responsible government and that he believes in the value of boards that are established in order to make enquiries and advise parliament. If the Minister for the Interior suggests that this Government or any other government should relinquish its rights when it thinks that the Tariff Board is wrong in its determination, he is not the man that I always thought he was. The honorable gentleman may answer that statement if he likes. I say, from my observations, that Australia is particularly fortunate in having the present personnel of the Tariff Board and it is fortunate, generally speaking, in relation to the soundness of its recommendations. The Minister for the Interior, in getting up and. going on with a lot of humbug in order to intimidate the honorable member for Ballarat in the performance of his duty to his constituents, has gone to the extreme.
– Order ! The honorable member should confine his remarks to the matter under discussion.
– The Minister attacked my colleague, instead of calmly directing his attention to the proposals.
– Mr. Chairman, I direct your attention to the fact that two Government members have been reading newspapers while the honorable member for Lalor delivered his speech.
– I should like to make it clear to the Minister for the Interior (Mr. Kent. Hughes) that I did not attack the members of the Tariff Board, and I have no intention of doing so. I said distinctly that they were doing a good job under difficult conditions. It is not their fault that this matter has taken so long to come before the Parliament.
– Do not square off to them.
– The Minister stated that the company to which I referred was not going broke, and that its shares stood at 25s. on the stock exchange. I point out to the Minister that if any company that has been in existence for 50 years has not a better asset backing than £1 per £1 share, it is not much of a company. The extra 5s. a share asset backing of this company was largely accumulated during the period that the previous Labour Government was in office - the most prosperous period in the history of the company. I protest most emphatically against the Government’s policy of permitting lengthy delays in connexion with Tariff Board matters. That delays of many months have been permitted, is indicative of the Government’s attitude. It had to look after its friends, the’ importers, who made large contributions to the funds of the Government parties.
The honorable member for Werriwa interjecting,
– Order! The honorable member for Werriwa (Mr. Whitlam) has been leading a lot of rowdyism on the. Opposition side of the chamber. I shall name him unless he desists.
– This Government has no faith in Australian industries. Considerable humming and ha-ing goes on when applications are made to the Government by Australian manufacturers.
I know of an old-established manufacturing concern which applied for permission to increase its capital by £50,000 in order to extend its business. It has received no satisfaction from this Government. But any application by an American or an English manufacturing concern would receive prompt consideration. That is a reprehensible state of affairs. I am convinced that this Government will be thrown out of office at the next general election. The manufacturers of this country are not fools ; they know what is going on. They know that the restriction of imports will not save them. The Government never intended that it would. Supporters of the Government should not deceive themselves in this matter. The Minister stated that the previous Labour Government did not brighten up the decisions of the Tariff Board; I remind the committee that conditions were comparatively stable when Labour was in office, because prices were controlled. It is true that a decision on an application that was submitted to the Tariff Board by a manufacturer of internal combustion engines was delayed, for a long time. Because conditions in this country were so much better than, those in other countries, and wages here were so much lower than elsewhere, the Tariff Board ultimately reduced the protection. Those conditions went sky high as soon as the present Government came to- office. Wages are now higher than they have ever been previously and the Australian manufacturers’ are- confronted with very serious di Afoul ties: The Government has’ d one nothing to’ remedy the’ present state of affairs’.
‘.The Minister foi- the Interior (Mr. Kent Hughes) was half asleep when he wandered into the chamber. He then proceeded .to criticize members of the Opposition, whose speeches he had not heard.
– Order ! The honorable member should address himself to the items under consideration.
– The Minister purported to reply to a matter concerning internal combustion engines> to which the honorable member for Ballarat (Mr. Joshua.) and I had referred in our speeches. I hear a loud guffaw by the honorable member for Bass (Mr. Kekwick). He should avail himself of every opportunity to guffaw, because I do not think that he will be a member of this Parliament after the next general election. The present Government has not supported or protected Australian industries, particularly the one that we are discussing. Indeed, by legislation that it introduced several months ago, the Government endeavoured to close down certain Australian industries and to force their employees into- rural pursuits. The honorable member , for Ballarat was viciously assailed by two members of the Government because he had dared to speak up for Australian industries in connexion with which representations had been made to him by his electors. That is indicative of the contemptuous manner in which this Government deals with those who sponsor the cause of the Australian industries. The Minister stated that the by-law to which I referred was not misused during the regime of the former Labour Government. I accept that statement, and I do not think that the present Minister for Trade anc! Customs (Senator O’sullivan) would misuse the by-law. However, I emphasize that while the by-law remains in existence it can be used to defeat the intention of tariff legislation. It is this Government’s policy to destroy Australian industries: While I am prepared to trust a Minister of a Labour Government to administer the by-law impartially, I am not at all confident in the administration of this Government in relation to Australian industries. In view of the Minister’s’ comments, I have taken the’ opportunity to place on record my clear belief that the present Government would allow Australian manufacturers’ t”o> go- to the wall, and would buiN up overseas industries at their expense. L do not think that this Government has any intention, of protecting’ the Australian manufacturers,, or that it is concerned about the welfare of their employees; [Quorum formed’.]
Mr. ERIC J. HARRISON (Wentworth - Vice-President of the Executive Council and Minister for Defence Production) [1.22 a.m. 1 - Par too much nonsense is being talked by Opposition members about the so-called destruction of secondary industries by the Government. I have already pointed out to the honorable member for Ballarat (Mr. Joshua) that the firm on behalf bf which he spoke asked for a protective duty of 27$ per cent, and that the Tariff Board recommended that it be granted one of 25 per cent. If that is not sufficient 1 should like to know what constitutes reasonable tariff protection. The honorable member was quite fairly accused of working the parish pump in connexion with this matter. He has said that great delay took place in the hearing of the application.
– That is so.
– Yet, the honorable member had the temerity to sa.y that although the firm was dissatisfied with the protection accorded, it had not yet made a further application to the hoard.
– That is coming.
– Although the firm is alleged to have complained about undue delay, it has already wasted months in which it could have made a fresh application. Under the Ottawa Agreement three months’ notice must be given to the relevant British manufacturers before the Tariff Board can proceed with an inquiry. After the expiry of the appropriate time, the inquiry is commenced. A further period of time elapses before the report of the Tariff Board can be presented to the Parliament. “When it is so presented the Parliament deals with it. In contradistinction to the practice followed in other countries which consider alterations of their tariffs only once a year, we deal with alterations of the tariff schedules many times each year.
When honorable members talk’ about political party funds in this connexion I remind them that an article that was published in the issue of the Sydney Sim of the 17th November, in describing certain matters that occurred at a meeting of the Opposition party, stated that the slush fund was dragged in and that Dr. Evatt said-
– Order ! The. right honorable member may not proceed along those lines. I have already pre vented other honorable members from mentioning that matter.
– Unfortunately, the honorable member for Ballarat and the honorable member for Grayndler (Mr. Daly) were able to deal with it. I realize, Mr. Chairman, that that was through no fault of the Chair. The point is that, whereas they were able to get away with it, when I attempt to point out that challenges were levelled at a meeting of the Opposition party in relation to the slush fund-
– Order! The Minister must not proceed along those lines.
– I merely intended to make passing reference to the matter, Mr. Chairman. I do not object to being called to order. The purpose of the Opposition’s slush fund has now been made known.
– Order !
– The delay that has occurred in the hearing of applications for tariff protection under the administration of this Government has been no greater than it was during the term of office of the Labour Government.
– The Labour Government had much more work to do than has this Government.
– The honorable member for Lalor (Mr. Pollard) has said that the Labour Government had more work to do than has this Government, yet, in the next breath, he claims that this Government is destroying industries and that applications for import permits are piling up because of the imposition of import restrictions. He cannot have it both ways. We realize that delays are taking place, and, in order to avoid them, we propose to constitute a second Tariff Board. The Labour Government did nothing to obviate the delays that occurred during its period of office. We are endeavouring to protect the secondary industries of Australia. We do not pay merely lip service to that idea, rr- do the honorable member for Ballarat, the honorable member for Grayndler and other Opposition members. The £1 shares of the firm on behalf of which the honorable member for Ballarat spoke, are quoted on the Stock Exchange at 25s. The Tariff Board acted very fairly in recommending that the firm be granted a tariff protection of 25 per cent. The honorable member for Ballarat, in endeavouring to placate the shareholders of this concern in his own electorate, has made a bitter attack upon the Government. I leave it to the decency of the shareholders to judge whether or not that attack is warranted. I am perfectly certain that they realize that the Tariff Board treated their application fairly. The honorable member will certainly fall in their esteem by giving the matter unnecessary publicity during this debate.
.- [ am interested in items 208 (q), “Tips, tool, cemented carbide “, and item 219 (e), “ Piles (including rasps) “, and proposed new sub-item (k), “ Micrometers, being hand-tools “. Substantial increases of tariff protection have been accorded in respect of these items. I have been a supporter of Australian industries all my life, but I am not unaware of the fact that, under the system of tariff protection, carelessness may occur in Australian industries, resulting in bad workmanship through faulty supervision and inadequate managerial control. Australian workers, scientists and others associated with the manufacture of certain products are capable of turning out work of a quality equal to that attained in any part of the world. During and immediately after the war, a substantial quantity of Australian tools appeared on the Australian market that had never hitherto been manufactured in this country. They were good in most respects but in many cases they had been carelessly manufactured. The manufacture of such tools could result in the loss of markets to Australian industries and in view of that fact this Parliament could, in some cases, accord increased tariff protection to an industry that does not deserve it.
In view of the fact that the Government proposes to increase the personnel of the Tariff Board and, no doubt, to amend the act in respect of some of the powers and duties of the Board, the Government might give serious considera tion to the necessity of making available to the Tariff Board somebody with a scientific training, who would be authorized to visit manufacturing concerns and inform them in what respect their product was not of the standard that it should be. Such an officer could endeavour to ensure that the standard of excellence of the Australian product was kept high. Item 219 refers to files and rasps. In the course of my lifetime I have used a lot of mill-saw files which are very useful. On farms they can be used for sharpening circular saws and in engineering shops they are an essential requirement for a fitter.
– What about bastard files?
– The honorable member for Henty (Mr. ‘ Gullett) would know more about bastard files than I would because I have invariably used a mill saw file, which is a more refined type of file. It has more teeth to each inch and it is specifically turned out for refined purposes in contrast to the file to which the honorable member has referred, which is a rough sort of diamond. The English files that were on the market before the war were comparatively good files, but a Swedish product appeared on the market which would outlast the best English file. Protection is now given to an Australian file that has been manufactured in this country for some years. In my opinion it is not comparable either in the work that it will do or in lasting quality with the English file or the Swedish file, l t is said that the quality of steel manufactured in this country is equal to the quality of any other steel in the world. lt is said that the Broken Hill Proprietary Company Limited is capable of supplying special steels for specific purposes. If that is true why has not the Broken Hill Proprietary Company Limited supplied steel that would enable Australian manufacturers .to produce mill saw files that are comparable in quality with the English and Swedish files? The Australian product is not comparable ‘ with the imported product : yet it is to be given increased protection without the users of this- tool being given any assurance that anything will be done to improve the quality of the product.
What I have said about files applies to a lot of other commodities that are manufactured in this country. It is necessary for some authority to be vested with the duty of examining these products. If their quality is not defective, very often their finish is not good. Some years ago, I saw some carpenters’ planes that were being used to do work in the parliamentary dining-rooms. One was an English plane. After it ‘ had been used the underside of that plane had a perfectly straight finish. The underside of the Australian product, after having been used, was corrugated and polished in strips across its underside which showed that it had not been finished off properly. The work done by that plane would not necessarily be inferior to the work done by the British plane, but the evidence that I have mentioned does indicate that the Australian plane had not been finished as well as the English product. It is essentialto pay attention to thesematters if this country is to hold its place in the supply of tools and machinery to the local market and to the markets of the near east and the far east. Without forcing any action on the manufacturer, we must have the means of advising him of the error of his ways.
– Several files, including the mill tooth file, are admitted under by-law. If the complaint of the honorable member for Lalor (Mr. Pollard) is that the Australian product is inferior to the imported product then the answer to his complaint is that those files which obviously are not being made by Australian manufacturers can be admitted under by-law.
Items 167, 171, 174, 176, 178, 194, 208, and. 219 agreed to.
Division VII. - Oils.. Paints, and Varnishes. litems225, 229 and 244, agreed to.
Division IX. - Drugs and Chemicals. Item 280 agreed to.
Division XI. - Jewellery and Fancy Goods.
Item 321 agreed to.
Division XII. - Hides, Leather and Rubber.
Item 331 agreed to.
Division XVI. - Miscellaneous.
Items 369, 374, 376, 395, 418 and 449, agreed to.
Preliminary paragraphs agreed to.
Standing Orders suspended; resolution adopted.
That Mr. Eric J. Harrison and Mr. Beale do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Eric J. Harrison, and passed through all stages without amendment or debate.
Consideration resumed from the 24th November (vide page 423), on motion by Mr. Eric J. Harrison -
That the Schedule to the Excise Tariff 1921- 1952, be amended . . .(vide page 420).
Question resolved in the affirmative.
Standing Orders suspended; resolution adopted.
That Mr. Eric J. Harrison and Sir Philip McBride do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Eric J. Harrison., and passed through all stages without amendment or debate.
Consideration resumed from the : 24th November (vide page 423),on motion by Mr. Eric J. Harrison -
Question, resolved in the affirmative.
Standing Orders suspended; resolution adopted.
That Mr. Eric J. Harrison and Mr. Townley do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. ERIC J. Harrison, and passed through all stages without amendment or debate.
Motion (By Mr. Eric J. Harrison) proposed -
That the House do now adjourn.
.I wish to direct attention to another sorry ac tin the campaign of suppression by the New South Wales Government of charges of corruption in the Sydney City Council. Yesterday this House devoted a certain amount of time to discussion of a bill which is designed to force the publication of sources of allegations of corruption in New South Wales. On the same day as the bill was introduced into the New South Wales House of Parliament a company director was charged at the Sydney Central Police Court with offering a bribe of £50 to an alderman of the Sydney City Council. Seen against the background of intimidation which has been carried on by the New South Wales Government that matter is of the very greatest importance. The significant fact is that, although the giver of the bribe has been summoned, the acceptor of the bribe, who is said to be an alderman of the Sydney City Council, goes uncharged and unpunished. The Attorney-General of New South Wales has stated cynically that if and when evidence is available, an information will be laid against the second person named in the file.
– I rise to a point of order. As this matter is at present before the courts in New South Wales, I submit that it is sub judice and should not be discussed in the House to-night.
– In answer to the point of order raised by the honorable member for Grayndler (Mr. Daly) I point out that the prosecution of the alderman who accepted the bribe is not before the court. That is what I am complaining about.
– I also rise to order. As this matter was discussed at length last night, it seems to me that the honorable member for Evans (Mr. Osborne) will be guilty of tedious repetition if he continues to discuss it. If it is allowed to take the form of a serial, discussion of it can go on for hours.
– No point of order is involved. The honorable member for Evans may continue.
– I propose to introduce entirely new material. My complaint is that the acceptor of the bribe has not been charged. This matter is connected with a clear warning which was issued by the Premier of New South Wales, Mr. Cahill, the other day to the effect that people who came forward with stories of having given bribes were equally guilty with the acceptors of the bribes and would be punished. Who is the more guilty in such matters - the giver of the bribe or the acceptor?
– Let the judge decide.
– By all means let the judge decide, but first it is necessary to bring in the acceptor.
– Who was the acceptor ? He has never been named.
– He has been named, in that the man who was charged was charged with giving a bribe to a member of the Sydney City Council, so that the acceptor of the bribe is a member of a group of no more than 30 persons. Is the man in a position of trust as an alderman of the Sydney City Council, who accepts a bribe for carrying out a duty or function which he has an obligation to perform, and who has it within his power to perform or to refrain from performing such a service, more guilty than the unfortunate person who is held to ransom hy a corrupt council which sells its services? Justice has never been maladministered more cynically than by the New South Wales Government in this connexion.
– Mr. Speaker, I draw your attention to the state of the House.
Mr. Speaker having counted the House,
– A quorum is not present. In accordance with my custom, I adjourn the House until 10 a.m. this day.
The following papers were presented : -
Dried Fruits Export Control Act - Twentyninth Annual Report of the Commonwealth Dried Fruits Control Board, for “ year 1952-53, together with Statement by Minister regarding the operation of the Act.
Wine Overseas Marketing Act - Twenty-fifth Annual Report of the Australian Wine Board, for year 1952-53, together with Statement by Minister regarding the operation of the Act.
House adjourned at 1.57 a.m. (Friday).
The following answers to questions were circulated: -
n asked the Minister for Social Services, upon notice -
– The answers to the honorable member’s questions are as follows : - 1. (a) The War Service Homes Division does not employ legal officers who are qualified as barristers or solicitors, although some of its officers/employees are so qualified. Persons engaged in the legal settlements of applications for assistance under the War Service Homes Act are required to have knowledge and experience of the conveyancing and real property acts of the State in which they are employed. (6) In Western Australia, the State Housing
Commission, which acts as agent for the Director of War Service Homes, employs its own staff, particulars of which are not held by the division.
In each State, excluding Tasmania, where the important legal work of the division is performed by the representatives of the Crown Solicitor, the Legal Section, is controlled by tin? Senior Conveyancer, who is responsible for the efficient functioning of the staff under his control.
e asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are a.’ follows : -
n asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows : -
Concessional deductions are not expenses incurred in deriving income and accordingly, as stated in reply to (1),are not deductible in arriving at the net income of an aged person. In section 6 (1.) of the Income Tax and Social Services Contribution Assessment Act 1930-1953, “taxable income” is defined to mean “ the amount remaining after deducting from the assessable income all allowable deductions”. In ascertaining the taxable income of an aged person, as in the case of any other individual taxpayer, concessional deductions are allowed. commonwealth handling equipment Pool.
e. - On the 12th ‘November, the honorable member for KingsfordSmith (Mr. Gordon Anderson) asked a question concerning the Commonwealth handling equipment pool. The Minister for Shipping and Transport has supplied the following information: -
It is not the intention of the Government to dispose of the assets of the Commonwealth handling equipment pool by sale in small lots or as individual machines. The Commonwealth Government has approached State Ministers asking if their local harbour authorities would be interested in the purchase of the Commonwealth handling equipment plant now employed on the waterfront on the basis of an independent valuation. In ports where government instrumentalities have intimated that they are not interested, stevedoring companies have been approached on the basis that the equipment will be retained on the waterfront. In this event, the equipment will be available in a periodofnationalemergency.
Cite as: Australia, House of Representatives, Debates, 26 November 1953, viewed 22 October 2017, <http://historichansard.net/hofreps/1953/19531126_reps_20_hor2/>.