21st Parliament · 1st Session
Mr. SPEAKER (Hon. Archie Cameron) took the chair at 3.30 p.m., and rex A prayers.
– I wish to ask the Prime Minister, following upon recent questions put to him by the honorable member for Swan and. the honorable member for Blaxland, whether he can furnish to the House now the case as presented by the Attorney-General on behalf of the Com monwealth in the. margins case before the Commonwealth Court of Conciliation and Arbitration. The case has actually been stated, I believe, in substance.’’ I ask for this information so that the House can be informed more fully than by press reports of the submissions that have been made on behalf of the Commonwealth. Will the right honorable gentleman also provide the House with any factual material that was included with the Commonwealth case?
– If what the right honorable gentleman wants is a copy of the statement made to tho court by counsel for the Commonwealth the other day,.’!’ shall be very happy to provide it.
– I mean also any factual material that was put to the court with the statement’.
– I shall, of course, make available to the House whatever counsel has put to the court.
– Has the Minister for Labour and National Service received any communication requesting that, before -legislation concerning the waterfront- is introduced into this Parliament, a conference be held between all parties?
– I have received such a communication from the president of the Australian Council of Trades Unions, Mr. Monk. I have also received a telegram to the same effect from the general secretary of the “Waterside “Workers’ Federation, Mr. Healy. It is quite clear from the terms of telegrams which are reaching me in great numbers from various branches of the Waterside “Workers’ Federation that the position, as outlined by me last week to Mr. Monk and Mr. Healy, has been communicated in an entirely distorted and unrepresentative way to those who have sent these messages of protest. In fact, I can only regard the telegrams as an organized campaign inspired by Mr. Healy. This Government, from the outset of its term of office has encouraged the process of conferences between management and labour on large matters of policy, and this section of industry has not been an exception. Early in our term of office, in August, 1950, 1 myself convened the most representative conference of waterfront interests ever held in this country, and that was followed subsequently by a series of conferences presided over by the chairman of the. Australian Stevedoring Industry Board. Only when it became quite clear that those conferences were proving completely abortive, because of the lack of any co-operative approach on the part of a number of people participating in them, were they abandoned. Again, in 1952, I arranged for the permanent head of the Department of Labour and National Service to conduct a series of conferences with representatives of all sections of the industry. These also proved abortive, and so, when it came to the drafting of legislation for submission to the Government, I thought the most practical course was to meet the representatives of the various sections of the industry separately, to indicate to them in a broad way the nature of the amending proposals that the Government had in mind - or, to put it more accurately, the proposals that I intended to submit to my colleagues in the cabinet - and to ask for their reactions to those proposals. Thus, we have sought, by what seems to us to be the most practical, way that experience has dictated, to ascertain the views of all sections of the industry and to give due “weight .to them. There has been no suggestion of the presentation of a fait accompli to any section of industry. Actually, we consider with equal care the views of the different sections as they are presented to. us. However, I wish to point out to the trade unionists of Australia that there has been a serious deterioration of the waterfront position, both in working days lost and in tonnages loaded. It is about time the representatives of organized labour in Australia realized that this section of industry is not giving a fair deal to other sections and is imposing upon Australian consumers, who include the great body of Australian trade unionists,’ a hurden that they should not be expected to carry. I hope that a sense of responsibility on the part of the representatives of the trade unions will inspire them to take some active interest in measures designed to achieve a more satisfactory performance on the Australian waterfront.
– Is the Minister for Territories yet in a position to indicate the Government’s decision in relation to adjustments. to the taxation allowances for A, B and C zones in the northern portion of Australia? I remind the Minister again that, following the defeat of the Labour Government, no adjustments have been made since 1947. Adjustments are long overdue and the people are urgently looking for some compensation for the high cost of living in those areas.
– I am not yet in a position to make a statement on -that subject.
– In the absence of the Treasurer, I ask the Prime Minister whether it is a fact that students who reach the leaving certificate standard and who undertake training at teachers’ colleges with a view to joining a State education service are granted scholarships payable while they are being trained. Is it a fact that the moneys received in respect of the scholarships are taxable, and that’ this reduces the value of the assistance afforded and causes great hardship to many students and their parents! If these are facts, will the Prime Minister give early consideration to this problem with a view to having action taken to remove the anomaly?
– I shall secure an answer to the honorable member’s question as soon as possible.
– I address a question to the Minister for Health. Is it a fact that linear accelerators, which are known as electron guns, are being developed in the United States of America for the treatment of cancer ? Are these machines of high’ voltage, and have they several advantages over lower-voltage X-rays in treating deep-seated cancer? Has the Minister any detailed information about this development?
– Super-voltage X-ray machines, which are known as linear accelerators, have been developed in the United Kingdom, the United States of America and Holland. I think that, of all countries, the United Kingdom probably leads the way in this development. The Director of the Commonwealth X-ray and Radium Laboratory, in Melbourne, last year visited England and other countries to examine the position, and he has brought back full technical details of what is being done, especially by the United Kingdom Medical Research Council, with which he worked in England. As a result of his advice, the Cancer Institute in Victoria, the Queensland Radium Institute and the South Australian Anti-Cancer Campaign Committee have placed orders for these machines, which those bodies hope, to obtain during next year. Other types of super-voltage machines have been tried in the United States of America and Switzerland, and in Canada, especially, radio-active cobalt has been used extensively in the treatment of cancer. New South Wales, Western Australia and Tasmania are at present considering the purchase of the alternative types of machines to enable them to continue to develop their cancer treatment work. I might say that the Director of the Commonwealth X-ray and Radium Laboratory has full information about these machines also, and is making it available to interested organizations.
A conference of Australian physicists was convened some time ago to discuss the whole question. In answer to the second question, the value of these supervoltage machines is that they are able to penetrate much more deeply into the tissues, and therefore enable a very much greater and more intense discharge to be delivered to a deep-seated tumor without disturbing conditions at the skin. The matter is still one for intensive research, and it is not possible to form conclusions about it yet.
– Has the attention of the Minister for Immigration been drawn to the number of immigrants who have recently been convicted of crimes of violence, and in particular to the remarks of the Chief Justice of New South Wales to the effect that it was shocking that soon after their arrival in Australia some immigrants bad embarked on careers of crime, and that deportation should be considered to relieve the community of an incubus? Is the Minister also aware that some immigrants have criminal records before they come to Australia, and if so will he take steps to ensure that immigrants are more carefully screened before they are allowed to enter this country?
– My attention has been directed to the remarks of the Chief Justice of New South Wales in the particular matter that the honorable member has referred to. I should say generally that the screening methods adopted by Australia in relation to prospective immigrants are as thorough, and indeed more thorough, than those applied by any other country of which we are aware that is receiving immigrants. The methods that we now apply have been examined from time to time by representative citizens of standing, quite apart from the officers of the Department of Immigration, including representatives of the Returned Servicemen’s League and other organizations, who have endorsed them. However, there is no system which has so far been devised by man which can. determine that a person with an otherwise blameless record will maintain that record when transplanted to another part of the world and a different environment.
Mr. Ward interjecting,
– I would say, even to the honorable member for East Sydney, that we cannot make decisions of this kind in relation to our own citizens, so it is difficult to discover how we could determine in advance how immigrants will turn out. In the case of those immigrants who commit offences in Australia, we are in a very much stronger position than we are in relation to our own citizens who turn out to be criminals by practice or habit, because the commission of an offence punishable by a term of imprisonment of twelve months or mora lays the offender open . to deportation; and that action has been taken in a number of cases. We always weigh very heavily the comments of the trial judge in matters of this kind, and we shall do so in the cases to which the honorable member has referred.
– I preface my question to the Minister for Health by referring to the announcement that the right honorable gentleman made regarding the relaxation of the means test in connexion with allowances paid to sufferers from tuberculosis. Can the Minister inform the House of the date upon which the increased payments to these people will be made available?
– As the Minister for Social Services has already indicated, the work in connexion with making the payments available under the liberalized conditions for pensioners is a very big task, and consequently all the increased payments cannot be made immediately. I understand that the payments mentioned by the honorable member will be made at the same time as the increased payments to pensioners by the Department of Social Services.
– Did the Prime Minister say in his 1949 policy speech that if elected to office he would seek to amend the Commonwealth and State Housing
Agreement in a way that would aid people to secure their own homes? During the 1954 general election campaign did the right honorable gentleman also promise to authorize the States to sell State housing commission homes on a small deposit with an outstanding indebtedness of not more than £2,750 to be repaid over a period of 45 years? If he did make these promises when does he intend to fulfil them ?
– The statement referred to by the honorable member was of course made by me, and is in course of being given effect. The Government discussed this matter with State Premiers at the last Conference of Commonwealth and State Ministers. The honorable member will be glad to know that since then there has been a conference about the same matter by officials, both Commonwealth and State, and from that conference came certain proposals designed to give effectto the scheme, because details had to be worked out. The Cabinet has also discussed the matter, and I myself had a long conference this morning with the relevant Minister and officials about this issue. I anticipate that after the next Cabinet meeting the matter will have been brought to finality from our viewpoint, and I am very confident that, within the next few weeks, the scheme will come into operation by agreement with the States.
– Can the Minister for Social Services inform the House when the amount of £2,000 now provided for as the maximum advance under the War Service Homes Act will be increased to £2,750, in accordance with the promise made by the Treasurer in his last budget speech?
– This matter has been thoroughly considered by the Government, and a draft bill has now been prepared. Due to the fact that certain other amendments have also been agreed to by the Government, and have to be incorporated in a bill, it has not been possible to bring a composite bill before the House up to the present time. I hope that within, say, the course of the next two or three weeks, but certainly before the end of this session, a bill will be brought before the House and passed into law.
– Is the Minister for Labour and National Service aware that over the last twenty years there has been only a slight increase in the man-power that is available in the building and building materials industries? Is he aware that as a result of a shortage of skilled labour and of ordinary labour the housing programme is being seriously hindered, and that the shortage of materials is attributed to the lack of skilled labour and, in turn, the lag in the housing programme is attributed to the lack of building materials? What does the Government propose to do about this situation?
– The man-power available in the building and building materials industries has fluctuated considerably over the years. During the war, there was very little activity and that fact contributed to the shortage that developed during the post-war period. However, the rate of building construction has not only kept pace with the needs of the added population, but has also reduced the lag that previously existed. At the same time, it is a fact that there is a shortage of labour in this section of industry as there is in many other sections of industry. The latest figures reveal that 55,000 vacancies are waiting to be filled at departmental employment offices. Insofar as we have been able to do so through our immigration programme, we have selected skilled tradesmen overseas, but as no country likes to lose any of its skilled labour that process has not supplied us with as many skilled tradesmen as we would desire. We are continuing our activities in that direction.
– Will the Minister for Social Services make a statement to the House in respect of the proposal to subsidize the construction of homes for the aged with particular reference to th, procedure to be followed by intending applicant organizations, and also the conditions applicable to advances, including the amount of rent to be charged, if any, to the eventual occupants ?
– That matter is receiving very close attention by the Government. As the honorable gentleman will understand, a novel matter of this kind cannot be dealt with overnight.
The department has to wait until applications are received before it can determine the details of a legislative measure that may have to be introduced. I have discussed the matter with the Prime Minister and I hope to have a further discussion with him in the near future so that the overall principles can be determined. A final decision on the details of the bill will then be made. I cannot say when it will be practicable to introduce a measure for this purpose. However, I assure the honorable member that the detailed work involved is being carried out and that administrative action will be taken as soon as it is practicable to do so.
– Will the Prime Minister state whether the Government regards the convertibility of sterling as a desirable objective for which this country should strive ? If so, is he able to say whether steps can be taken, and whether any are being taken, by the Australian Government to achieve that objective?
– As the honorable member doubtless knows, convertibility of sterling has been the subject of discussion at three conferences of British Commonwealth finance Ministers. Various plans have been formulated at those conferences, in particular at the conference in London at the end of 1952. That plan was ratified and pursued by the conference of January, 1954, in Sydney. There have been very long negotiations with the administration of the United States of America and with various European countries. My colleague, the Treasurer, has just concluded his attendance at the last of these conferences to which I have referred. There is no doubt that progress is being made, but it is not yet possible to report that convertibility will soon be achieved. From the point of view of domestic policy, Australia’s chief contribution towards convertibility of sterling must be a constant fight against inflation and the pursuance of policies that are designed to maintain stability within our internal economy. That is an essential condition which applies to each of the sterling countries. That condition has received much attention, with some success, and we are anticipating that in due course - we are not die masters of the situation - there will he a final agreement with the other countries that are concerned, and we may be able to move in the desired direction.
– Will the Minister for Social Services state why aborigines on reserves, who pay taxation if they work, are denied the widow, invalid and age pensions when those aborigines who do not live on reserves receive those benefits? Why is there a distinction? Will the Government consider the plight and the just needs of the aborigines, whose standard of living is so often appallingly low ?
– There is a real distinction between aborigines who live on reserves and those who do not. Aborigines who live on reserves are under the protection and supervision of the State governments. They receive housing, clothing, medical attention and benefits of that kind. Aborigines who do not live on reserves do not receive those benefits. As has been stated previously, this is a matter that is absolutely within the jurisdiction of the State governments. The Australian Government has agreed that, in any case where the States issue an exemption order, the Commonwealth will accept responsibility for social services payments. In other words, if a State is prepared to say of a particular person, “ This aborigine can live in accordance with the normal standards of a western European country or the normal standards of the Australian community “, and if it gives an exemption certificate, the Commonwealth will accept responsibility.
– The aborigine may fall just short of that standard.
– This matter has received very careful and detailed attention. At a recent conference of Commonwealth and States Ministers, I asked one of the State Premiers whether he would state the reason why he wanted the Commonwealth to accept responsibility. He said, “Tes. I want the Commonwealth to take over the financial burden that is now the responsibility of the State governments “.
– As the aboriginal station at Wreck Bay, in the Jervis Bay area, is completely within territory controlled by the Australian Government, can the Minister for Social Services say when social services benefits generally will be made available to residents there so that they will no longer be encouraged to evade the law by leaving the settlement for periods of three months in order to become eligible to receive such benefits?
– The honorable member is a little misinformed regarding the position at Wreck Bay to which he has referred. Residents at that settlement, for purposes of social services benefits, come within a special category which is dealt with jointly by the State Government and the Australian Government, and, to a large degree, aborigines at that settlement are in receipt of all such benefits.
– My question is directed to the Minister acting for the Postmaster-General. In view of the adjustments that have been made, or which are contemplated, in relation to the salaries of various personnel in the Commonwealth Public Service, will the Minister furnish information showing whether the allowances that are paid for the conduct of non-official post offices have been increased correspondingly? If they have not been increased, will he state whether it is proposed to improve the rates of pay and conditions under which those offices are being conducted by local residents, often at great inconvenience?
– I shall ascertain the facts and convey the information to the honorable member.
– I . ask the Prime Minister whether, in the event of the Royal Commission on Espionage in Australia issuing an interim report dealing with certain astonishing allegations made before it by accredited legal representatives of the Communist party, and also by other eminent counsel, this House will be given an opportunity to discuss the report so that honorable members may express their views on this important matter fully and freely.
– I should not like to commit myself on the matter of the procedure of the House, to which, I fear, I have not directed my attention, but the normal procedure would be that after the interim report has been received by His Excellency the Governor-General it will come to me from him. It would then become known, and’ I would propose, at the earliest moment thereafter, to table it in the House.
– Will the Minister for the Interior, as the Minister responsible for the taking of the recent census, state whether it is a fact that some hundreds of people who live on what is known as the “ mine site “ of Mount Isa, in Queensland, have not yet received census forms for completion, and that some completed census forms are still held in one of the offices of the mining company? If those are facts, the published population figures for Mount Isa are far from accurate. If the Minister has no information regarding this matter, will he have immediate inquiries made about it, and take steps to have the census at Mount lsa completed?
– As Minister for the Interior I have no knowledge of what has happened in relation to the census, because the Minister for the Interior is not responsible for it. However, I shall refer the matter to the responsible Minister and see whether he can obtain the information that the honorable gentleman requires.
– In view of the proposals now being placed before the United Nations regarding the control of atomic and other weapons, will the Prime Minister consider making time available to the House to discuss this matter under the provisions of Standing Order 107? If the right honorable gentleman is willing to do this, will he consider doing it at an early date, and before the debate on the matter is concluded in the United Nations ?
– I should think it a good idea for the House to have an opportunity to discuss this important matter. I am not clear in my mind about the date on which it will actually come up for discussion before the United Nations, but I am anticipating that my colleague, the Minister for External Affairs, who has attended the United Nations Assembly and who will have a good deal of information on this point, will be back in Australia before the end of the month. I should prefer that, for obvious reasons, the debate on the matter should occur after his return. However, if it turns out that the matter has to be discussed before then, I shall certainly give consideration to the honorable member’s suggestion.
– I ask the Minister acting for the Postmaster-General : In view of the extensive lateral development of the City of Canberra and the need to provide more efficient service for the adjacent rural areas, will he give early consideration to proposals that the unitfee area for telephone charges in this city be extended from the present 5 miles radius to the 10 miles radius that operates generally in capital cities throughout the Commonwealth ?
– I shall give consideration to the matter raised by the honorable member, and inform him of the decision.
– Can the Minister for the Navy inform me whether it is a fact that over two and a half years ago the management of the Cockatoo Island dockyard and the representatives of 24 trade unions reached an agreement upon improved working conditions for the employees? Is it a fact that such an agreement cannot become effective without the approval of this Government, which, up to the present time, has refused to make a decision on the matter ? Is it also a fact that the mangement agrees that, although the work performed at the Garden Island and Williamstown dockyards is substantially the same as that done at the Cockatoo Island dockyard, the pay and conditions of the workmen at Cockatoo are very much inferior? Will the Minister state the reason for the Government’s failure to approve of the agreement, and thus correct an anomalous position which is causing a great deal of unrest among the employees of the Cockatoo Island dockyard, and has .led to a large number of resignations ?
– Some weeks ago, at the request of a number of honorable members on both sides of the House, I met a deputation representing all the unions concerned at the Cockatoo Island dockyard with the problems raised by the honorable gentleman. I have given consideration to the representations, and they are at present being considered by the Board of Business Management.
– The matter has been, under consideration for more than two and a half years.
– I am speaking about the representations that were made to me a few weeks ago.
– Is the Prime Minister aware that various officers of the Public Service are being down-graded? Twelve officers of the Repatriation Department have been notified of their reclassification from the position of clerk to that of clerical assistant, grade 2. All these officers are returned soldiers, and the reclassification means that they will lose £60 per annum. Is it necessary to make this reclassification? Will the Prime Minister ensure that reclassification, if it must be carried out, shall be made in a way that will not adversely affect officers who have given long service, not only in the defence forces, but also in the Repatriation Department ? Some of the men whom I have in mind have up to eight and a half years service. Will the right honorable gentleman see that such men will not be affected by salary reductions due to any re-arrangement in the Public Service?
– Naturally, I am not familiar with the particular cases to which the honorable member for Banks has referred, but I shall at once find out the facts, the reasons and the principle* that are being applied.
– Can the Minister for Territories give any information to the House about the future development of the kenaf fibre industry in New Guinea l.
– The _ position regarding the kenaf industry is that, as the result of investigations carried out over the last three years by the Department of Agriculture of the Territory of Papua and New Guinea, in collaboration with various private interests, the capacity of the Territory to grow kenaf has been proved, and it has now reached the stage where it needs to be tested under commercial conditions.
– My question ia addressed to the Minister for the Interior. Has the information collected by the census this year about Australia’s population, and the distribution of population, yet made it clear whether any State or States will, as the result of the redistribution of electoral boundaries for representation in this chamber, either gain or lose seats? If there is an indication of a gain or loss, can he give the House any information at this stage as to which State, or States, will have its, or their, representation reduced or increased?
– I am sorry that I cannot answer the honorable member’s question because, as yet, I have not received the official figures dealing with the census.
– Some of the figures have been published.
– That is so; but I have not received the final figures in respect of some of the States and, therefore, I cannot act upon them. I expect that those figures will be available within the next fortnight.
– Has the Minister for Health taken any action to make available to mental hospitals in the various States the amount of the age pension in respect of all inmates of such institutions who do not possess any property whatsoever.?
– To the best of my knowledge, the position at present is exactly the same as it was during the eight years when the Labour Government was in office.
– I lay on the table the following paper : -
Commonwealth Grants Commission Act - Commonwealth Grants Commission - Twenty-first Report, 1954.
The recommendations contained in the report will be adopted by the Government, and the enabling legislation will be introduced to-day.
Message recommending appropriation reported.
In committee (Consideration of GovernorGeneral’s message) :
Motion (by Mr. Menzies) agreed to -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the ConsolidatedRevenue Fund sums for the purpose of financial assistance to the States of South Australia, Western Australia, and Tasmania.
Standing Orders suspended; resolution adopted.
That Mr. Menzies and Sir Eric Harrison do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Menzies, and read a first time.
– I move -
That the bill be now read a second time.
The purpose of the bill is to authorize the payment, during the current financial” year, of special grants amounting to £12,300,000 to South Australia, Western Australia and Tasmania. The payment of these grants has been recommended by the Commonwealth Grants Commis sion in its twenty-first report, which I tabled a few minutes ago. In its twentyfirst report, the commission has continued to apply the same general principle of financial need as it adopted in its third report in 1936. The commission has expressed this principle in the following terms : -
Special grants are justified when a State through financial stress from any cause is unable efficiently to discharge its functions as a member of the federation and should be determined by the amount of help found necessary to make it possible for that State by reasonable effort to function at a standard not appreciably below that of the other States.
In applying this principle the commission makes a detailed comparison of the budget results of the claimant States with those of the non-claimant States. When making this comparison the commission takes account of the differences between the claimant and non-claimant States in their levels of expenditure and in their efforts to raise revenue. As in recent years, the commission has adopted a balanced budget standard as the starting point of its investigation.
The detailed methods of the commission include a comparison between the level of social services expenditure in each claimant State and the average level of such expenditure in the non-claimant States. In making this comparison, a proportional allowance is made to each claimant State for greater difficulties in providing social services on account of such factors as sparsity of population, age distribution and overhead costs. For reasons set out in its report, the commission decided this year to increase these allowances from 4 per cent, to 5 per cent, in the case of South Australia, from 10 per cent, to 11 per cent, in the case of Western Australia, and from 6 per cent, to 9 per cent, in the case of Tasmania.
Because of the difficulty of making precise estimates of the needs of a claimant State in the year in which the grants are paid, the special grants recommended each year are divided into two parts. One part represents the commission’s estimate of the State’s financial needs in the current financial year. This part of the grant is treated by the commission as an advance payment, which is subject to adjustment two years later when the commission has examined in detail the audited budget results of the States for that year. The other part of the .grant represents a final adjustment of the special grant paid two years earlier.
The special grants recommended for payment in 1954-55 were, therefore, arrived at by the commission as follows : -
– Does the increase for Tasmania make up for the loss of Tattersalls lottery?
– Do not take me into troubled waters. I merely mention the facts. There are two main reasons for the decrease of £3,850,000 in the special grant recommended for payment to South Australia this financial year. In the first place, the commission has found that the special grant available to South Australia in 1952-53 exceeded by £1,100,000 the amount that was required to balance its budget in that year. This amount of £1,100,000 may be regarded as available to meet the State’s current financial needs and the commission has therefore reduced correspondingly the total grant recommended for payment this financial year. The main reason for the decline in the special grant, however, is the continued improvement in South Australia’s finances. In the financial year just closed, South Australia enjoyed a budget surplus of £1,810,000 after receiving a special grant of £6,100,000. After taking account of the various factors likely to influence South Australia’s budget prospects in 1954-55, including an increase of £683,000 in the tax reimbursement grant, the commission has decided that a substantial reduction in the special grant would be justified.
The total special grant recommended for payment to Western Australia in 1954-55 is £7,450,000, or £350,000 less than in 1953-54. In making this recommendation, the commission took account of the fact that the tax reimbursement grant to Western Australia will increase by about £525,000 in 1954-55. Last financial year Western Australia had a deficit of £193,000.
Despite a negative adjustment of £600,000 in respect of the advance payment made to Tasmania in 1952-53, the special grant recommended for payment to that State in 1954-55 is £1,100,000 more than the amount paid last year. As the honorable member for Wilmot (Mr. Duthie), with his close knowledge of Tattersalls, was quick to point out, Tasmania’s finances have been affected adversely by the transfer of Tattersalls lottery to Victoria. In 1953-54’ Tasmania enjoyed a budget surplus of £14,000.
On the basis of the preliminary budgetestimates submitted to the commission by the claimant States, the effect of the commission’s recommendations would be to leave each of them with a small deficit in 1954-55. These estimates, however, are tentative only, and in two years’ time the commission will recommend adjusting payments in the light of the actual budget results achieved by the States. The special grants recommended by the Commonwealth Grants Commission have been adopted each year by the government of the day and the present Government considers that the commission’s recommendations should be adopted again this year. I therefore commend the bill to honorable members.
Debate (on motion by Mr. Chambers) adjourned.
Debate resumed from the 12th October (vide page 190S), on motion by Sir Eric Harrison -
That the bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 2nd September (vide page 886), on motion. by Sir Arthur Fadden -
That the bill be now read a second time.
– The Opposition does not wish to place any impediment in the way of the passage of ‘this bill. In the first place it provides that gifts to the Australian Elizabethan Theatre Trust and the Australian Academy of Science shall be deductible as gifts to public funds for income tax purposes. The Opposition has no objection to that proposal. The bill also alters the arrangements in respect of the taxation of mining leases, and here again the Opposition is not opposed to the Government’s proposals. Mining leases are to be placed outside the compass of the lease provisions of the principal act ; in other words, the person who receives a premium for the grant or assignment of a mining lease, shall not be subject to income tax on the amount that he receives. Correspondingly, the purchaser shall not be entitled to deduct the amount that he has paid for his lease. Instead of adopting the new proposal, the parties to these transactions may, if they so choose, continue under the present system. The purpose of the proposal appears reasonable and good. It is to prevent a continuance of the situation in which the taxation of premiums paid for leases might dissuade freeholders and leaseholders from granting or assigning leases to prospective purchasers who might have the necessary capital and be willing to invest large sum.of money in the proper development of the leases. The commendable purpose oi this provision appears to be to give persons who are willing to invest large amounts of money to enable leases to be developed properly, the opportunity to do so for the good of the country. The provision appears to be in line with other proposals that have already been adopted by the Parliament, and the Opposition has no objection to it.
A very interesting provision is made in relation to the purchase of annuities. As honorable members know, taxation on annuities at present takes into account the fact that an annuity is in part a return of capital and in part a receipt of interest on the investment of that capital. The law at present provides for that position by not taxing the amount of the annuity that represents a return of capital. For that purpose, the existing law has regard to the natural expectation of life of the annuitant at the time he purchased his annuity. During the period within that natural expectation of life in which he receives the annuity, the purchaser pays tax on that portion of the annuity which represents interest on the investment, and does not pay tax on that portion of the annuity which represents a return of his capital. An unfortunate provision of the present law, and one which the bill before the House appears to seek to remedy, is that if people, who in their later years have bought annuities, exceed the natural expectation of life, a time arrives when in their old age they suddenly find themselves once again taxed on the whole proceeds of the annuities that they are receiving. The bill will remedy that position by providing for the continuance for the whole lifetime of the annuitant the freedom from taxation of that portion of the annuity which was originally regarded as representing the return of capital.
However, there is one provision about the taxation of annuities which should be mentioned. I do not consider that the provision itself may be subject to criticism so much as the Government may be subject to criticism for failing to take the House fully into its confidence about the proposals that it has now placed before us. The bill provides in effect that annuitants will have excluded from their assessable income that part of the annuity which represents the return of capital, but that that will be done in the future only if the price of the annuity has been paid by the taxpayer himself. In other words, if the annuity has been bought for the taxpayer by somebody else the exclusion will not be applied. . I do not quarrel entirely with the Government’s proposal in that respect, although I believe that a. reasonable case can be made out against it. However, I do quarrel with the Treasurer (Sir Arthur Fadden), because in his explanation of this bill he totally failed, to point out that that very provision which the Government is now seeking to amend is at the moment before the High Court of Australia by way of appeal. The Government is apparently seeking in this bill to provide that the interpretation which has already been given to this matter by the Commissioner of Taxation shall be made the law of the land, irrespective of any decision that may be made by the High Court. The Government may be right or wrong in that respect, but I do suggest that it is seriously wrong, and that its advisers have been seriously at fault, in allowing this measure to be placed before the House together with an explanation which does not give the House any information on that important point. The House was in effect being deceived and it was the duty of the Treasurer and his advisers to give honorable members all the revelant information that they might have about that matter. This amendment has been slipped in, and the House has not been informed that it is being asked to write into the law an interpretation by the Commissioner of Taxation which is at present subject to challenge before the High Court.
– There is nothing unusual about that.
– It may not be unusual for this Government, or for other governments with which the honorable member has been associated, to conceal from the Parliament important information. However, I still suggest that whether it is a practice to which the honorable member is accustomed or not, it is still a bad practice.
– It is a practice of Labour governments elsewhere.
– It may have been a practice of governments elsewhere, but that does not alter the position here. The point is whether it is a good or a bad practice. I suggest that it is a bad practice, and I am sure that upon reflection the honorable member will agree with me. It is the duty of a Minister to give the House a full explanation of whatever is intended by any measure he brings before the House, so that honorable members can deal with it on its merits. That practice has been followed in the past by many Ministers of the present and other governments. With regard to the taxation of annuities, an interesting letter recently appeared in the Sydney Morning Herald, written by a Mr. R. E. O’Neill, who is well known to many honorable members for his knowledge of matters of this kind. He made a case, which I believe is worthy of examination by the Government, against making categoric legal provision that both the income and capital elements of an annuity shall be taxable as income unless the annuity has been purchased by the annuitant himself. He said that no matter who the purchaser of the annuity is there is an element in the annuity which is a return of capital, that it is inequitable and illogical to tax capital as such and that by taxing the return of capital in the form of an annuity the Government is engaging in bad practice. He mentioned the Canadian Royal Commission of 1945. which stated -
There can be no possible doubt or ambiguity about the fact that income tax is here being levied directly upon capital. Such a procedure violates all the conceptions that ordinarily govern in the framing of an income tax statute.
As a result of that examination I understand that the Canadian legislation now provides for the complete exemption of the capital elements of an annuity, whether it has been purchased by the annuitant himself or by somebody else on his behalf. I recognize that there may be difficulties in the way of the adoption of that provision in Australia. It could be that an employer could purchase an annuity, for a valued employee who is close to the retiring age, which could be regarded as a way of avoiding income tax if the possible proceeds of the purchase were disregarded for taxation purposes.
But I believe that an important point is made by Mr. O’Neill, and that it deserves consideration by the Government in any future projected amendment ‘ of the legislation.
The only other provision to which 1 direct the attention of honorable members is the proposal to exempt pensions received from the United Kingdom Government by war widows. The Government, in exempting that incom from taxation in Australia, will bring the United Kingdom war widows into linwith disabled United Kingdom exservicemen in Australia who are already exempted in respect of their pensions. That is a commendable provision, and the Opposition raises no objection to it. However, as the Government recognizes such widows may not receive much benefit from this legislation in some circumstances, because if we cease to levy taxation on that type of income it will become taxable at its source in the United Kingdom. The Opposition raises no objection to the passage of this bill.
– There are one or two matters that I desire to mention in connexion with this measure. As my colleague, the honorable member for Eden-Monaro (Mr. Allan Fraser) has stated, the Treasurer (Sir Arthur Fadden) has left the question of British war widows and the taxation of their incomes somewhat up in the air. Under proposed new paragraphs (le), (baa) and (hah) of section 23 of the Income Tax and Social Services Assessment Act, the dependants of United Kingdom servicemen will be exempted from Australian taxation, but there seems to be some doubt whether they will continue to pay British income tax. Their number Ls small, because in the 1953 report of the Ministry of Pensions and National Insurance in Great Britain, Document 9159, it is pointed out at paragraph 271 that there are 1,613 war widows living in Australia and receiving pensions from the United Kingdom Government. Of that number, 899 are dependants of servicemen in World War II. and 714 are dependants of servicemen in World War I. It would not be a very difficult administrative matter for this Government, which has exempted those pensions from taxation in Australia, to set up the necessary administrative relationships with the Government of Great Britain to perhaps exempt that income from taxation in Great Britain. Not many people are involved in this matter, and apparently the government of Great Britain has the matter well in hand, as is indicated by its annual report in which it published the number of people who received these pensions. I suggest to the Minister who is acting for the Treasurer that the Government should set in motion negotiations for a reciprocal arrangement under which this type of income would be free from taxation in both Australia and Great Britain. It would be a strange sort of justice if Australia were to exempt that income from taxation, but immediately, theoretically, it became subject to taxation in the United Kingdom. If justice is to be administered, I suggest that the Treasury should discuss the matter with the authorities in the United Kingdom.
Other proposed amendments are of a highly technical nature. In the past, when the Treasurer has submitted amendments of this kind, he usually has adopted the practice of submitting an explanatory memorandum. On this occasion, that practice has not been followed and honorable members, in attempting to assess the possible impact of the proposed amendments, are working under difficulties. I do not know why a memorandum has not been presented on this occasion. An important part of the bill is clause 8, which refers, on the one hand, to mining leases and the exemption of certain income that is derived from the assignment of leases, and, on the other hand, the payment of dividends out of certain mining operations. When the Treasurer introduced the bill, he made the following statement: -
It is thought that, at times, the taxation of the premiums has dissuaded freeholders and leaseholders from granting or assigning leases to prospective purchasers who are willing to risk the capital in mining the mineral deposits on the land.
I suggest that any one who reads the Australian newspapers, and who reads news about the flotation of companies for the mining of uranium and oil, will have no doubt that there does not seem to be a dearth of activity in that direction. The Treasurer, when introducing the bill, also made the following veiled statement : -
It is also proposed to extend the list of metals and minerals to which these exemptions will apply.
Section 23 (p) of the principal act specifically exempts gold-mining from taxation, and it prescribes also that, under certain circumstances, any other metal or mineral which is specified in the regulations shall be exempted. In other words, the- Treasurer may prescribe, from time to time, that, provided the necessary regulation is passed, certain metals and minerals shall be exempted from taxation. The Treasurer, on page 3 of his circulated speech, said -
It is also proposed to extend the list of metals and minerals to which these exemptions will apply. The Income Tax regulations will be amended for these purposes in the near future.
I ask the Government to be a little more frank, and to indicate the metals and minerals to which reference is made. I submit that oil could come within the definition of minerals if the Treasurer were so to prescribe. If, at some future date, oil were to be prescribed under section 23 (p) of the principal act, there may be very serious complications in relation to the future of the oil industry in Australia. As I understand the position, if a prospector discovered that, in the area that had been allotted to him, oil or uranium were likely to be found, for quite a large sum he may assign that area to a company to work, but the amount that he would derive from his speculation would not be subject to taxation. If oil or uranium were found, there would be a fairly lucrative source of income that would be lost to revenue. If oil were prescribed by the Treasurer to be a mineral, the dividends that would flow ultimately to the shareholders would be entirely exempt from taxation. If that is the intention of the Treasurer, I suggest that he should be more frank about it. The proposed amendments open the door widely, as it were, to that kind of speculation. I am sure that many oil and uranium undertakings are duds, but the effect of the proposed amendment would be to free from taxation the capital gain in the hands of the original speculator. As I stated, the Treasurer has said rather baldly that it is the intention of the Government to extend the list of metals and minerals. The House should be informed of the metals, and minerals that are envisaged in ‘the proposed amendment, because it could have a considerable effect upon the future of Australia’s development. As has been stated, honorable members are in accord with the general principles that are embodied in the proposed amendments.
I direct the attention of the Government to one other matter. The Government has proposed certain concessions in relation to the contributions that are made to educational institutions. Rut it ought to have been generous, also, in relation to the young people in the community who are trying to equip themselves for the future by attending technical schools or universities and who, very often from small incomes, have to pay substantial fees. No deduction is allowable in relation to those fees. I urge the Government, which claims to have the interests of education and the development of the community at heart, to allow, as deductions for taxation purposes, the fees that are paid by those students. No provision is made for people between the ages of eighteen and 25 years who desire to undertake their own higher education, and who have to pay quite large fees. Recently, the “University of Melbourne raised its fees to approximately 30 guineas a subject. If a person is taking three or four subjects in a year, and if he has to pay fees totalling approximately £100, it would be of considerable advantage to him if some concession were allowed for the ‘ expenses that were incurred. I ask that the Government give very serious consideration to that deserving section of the community.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 7 agreed to.
Clause 8 (Mining leases).
Mr. CREAN (Melbourne Ports) [3.45’J. - The Opposition wishes to obtain from the Minister for Defence (Sir Philip
McBride), who is in charge of the committee, an assurance regarding the connotation to be applied to the word “ mineral “ as it occurs in this clause. Sub-section (7.) of the proposed new section 88b reads as follows: -
In this section - land ‘ means land in Australia or the Territory of New Guinea; mining lease ‘ means a lease of land granted under a law of a State or Territory of the Commonwealth relating to mining; mining operations ‘ includes prospecting for a metal or mineral.”.
I emphasize the words “metal or mineral”, and I direct attention again to the fact that the Treasurer (Sir Arthur Fadden) said in his speech that it was proposed to extend, by regulation, the categories of metals and minerals that come within the scope of section 23 (p) of the act. I ask the Minister for Defence to request the Government to be a little more illuminating about its intention in this matter. The Opposition is entitled to ask for an assurance that it is not intended to describe oil as a mineral, in view of the importance, or possible ramifications, of this amendment to the act in the future. If the Minister is not in a position to give an explanation on this matter I ask him at least to bring it to the notice of the Treasurer.
– I can assure the honorable member, and the committee, that it is not proposed to include oil in any of the regulations that may be promulgated under this measure from time to time.
Clause agreed to.
Remainder of bill - by leave - taken as a whole, and agreed to.
Bill reported without amendment; report adopted.
Bill - by leave - read a third time.
Debate resumed from the 25th August (vide page 605) on motion by Sir Arthur fadden -
That the bill be now read a second time.
.- The Opposition proposes to move an amendment to this bill at the committee stage. The purpose of the proposed amendment will be to exempt from pay-roll tax municipal or other local governing bodies, or any authority established for the purpose of carrying out all, or any, of the functions that are ordinarily carried out by such bodies, otherwise than in the conduct of an enterprise which, in the opinion of the Commissioner of Taxation, is a trading enterprise. The case which the Opposition makes in respect of municipalities is that they perform a very useful service as part of our governmental machinery, and that most of the expenditure that is taxed to produce pay-roll tax revenue comes from rates and nothing else. To the extent that the Commonwealth levies pay-roll tax on the expenditure of municipalities, such local bodies, or combinations of them, are prevented from discharging their proper functions under State legislation. The provision of health facilities, the making of roads, and the lighting and cleansing of streets, are all functions, vitally necessary to the maintenance of a healthy normal social life, that are performed by local governing bodies. If the Government is in a position to remit tax, as it proposes to do, to certain other authorities, mostly private enterprise authorities, which are paying pay-roll tax, we feel that all the burdens of municipalities should also be lifted in this respect. It is perfectly true that larger municipalities may benefit from this legislation. Smaller municipalities have already been exempted by the 1953 act. We feel that the Government is in a position to extend tax benefits to municipalities in order to enable them to carry out their functions as they desire to do. Most municipal and shire councils, and local governing bodies incorporated under State legislation, are bankrupt, or nearly so. Their finances are in a parlous state, and they are continually asking the Government for the provision of more money.
– It is not the Commonwealth’s responsibility to provide them with money.
– These local governing bodies are asking the Commonwealth to provide them with more assistance by giving them a greater share of the proceeds of the petrol tax. They are not merely asking for more money from petrol tax collections; they are also asking that it should he given to them direct, and not through State governments. However, that is another matter. It illustrates how difficult it is for municipalities to carry on to-day. Many honorable members have had experience of local government. I was a member of the Melbourne City Council for six years, and was a commissioner on the Melbourne Metropolitan Board of Works for a similar period. I know the great work that such bodies do. That work is done by people who give their services in an honorary capacity, so no expenditure for salaries is involved in return for such services. I know what the requirements of such bodies are in these days of evergalloping inflation. I shall read to the House the details of the amounts collected by the Government in pay-roll tax in recent years. In the financial year 1953-54 the Government estimated that it would collect £38,400,000 in pay-roll -tax. Actually it collected £40,383,789 or £1,983,789 more than it had estimated. We say that the Government deliberately underestimates its revenues so that it will not have to give from pay-roll tax and other imposts the benefits which it could give. The Government raised £40,000,000 in 1953-54, and proposed to raise £42,750,000 during the current financial year from the pay-roll tax before it provided for this handback of £1,500,000. Even when we allow for the return of £1,500,000 to bodies generally other than, municipalities, we find that the Government still expects to raise £41,242,000 in this financial year.
– Hear, hear! Full employment.
– Full employment, galloping inflation and rising costs. The Treasurer himself has drawn attention from time to time to the dangers of the increasing spiral of inflation. The budget estimate of pay-roll tax was £38,000,000 in 1953-54, and just a year later, it was £41,000,000, despite the fact that approximately £2,000,000 was given back last year, and another £1,500,000 is to be given back this year. Therefore, most fairminded people would say that the Government was taking too much money from the pockets of the taxpayers by way of the pay-roll tax, and that it should be possible to remit tax to those bodies or persons who greatly need that benefit. As honorable members opposite may have doubts about where the municipal associations stand upon this matter, I should like to read a letter from the secretary of the Australian Council of Local Government Associations, Mr. A. Mainerd, of Sydney. The constituent bodies of that association are as follows: - the Local Government Association of New South Wales, the Shires Association of New South Wales, the Municipal Association of Tasmania, the Municipal Association of Victoria, the Local Government Association of Queensland, the Municipal Association of South Australia, the Local Government Association of South Australia, the Country Municipal Councils’ Association of Western Australia, the Local Government Association of Western Australia, and the Road Board Association of Western Australia. I sent to Mr. Mainerd a copy of the amendment which I proposed to move, and I received the following communication in reply: -
We have made the strongest representations to the Federal Treasurer for the exemption of Local Government from the payment of Payroll Tax and, of course, would welcome an amendment to the Bill along the lines contemplated by you.
– Similar representations have been made to every government over the last ten years.
– Mr. Mainerd prefaced that observation with the following complimentary reference : -
I thank you for the advice of the proposed amendment of the Pay-roll Tax Assessment Bill which you were good enough to send to me.
The Minister for Defence, who is sitting at the table, says jocosely that every government over the last ten years has received letters of that sort. That statement may be perfectly true, but there was never a government in a better position than the present Government to grant the request of those people. This Government levies taxation at the rate of about £1,000,000,000 a year. Ten years ago, the amount which the government of the day raised by way of taxation was very much less than the present amount.
I shall now read a letter which I have received from Mr. J. D. Fagan, secretary of the Municipal Association of Victoria. In that State, councils are elected on a strictly restricted franchise - a property franchise. As the archaic provision of plural voting still exists, most of the municipal electors are supporters of tie Liberal party and the Australian Country party. The letter reads as follows: -
I received a copy of the Amendment which it is proposed you will move to the Pay-roll Tax Assessment Bill 1954, and which seeks to exempt municipalities from the incidence of the Pay-roll Tax.
I am sure your Amendment will be supported by all municipalities throughout Victoria and, in fact, throughout Australia. The Annual Conference of this Association has on a number of occasions in recent years made representations to the Commonwealth Government seeking exemption for councils from Pay-roll Tax.
Local Government is in a different position from industry and commerce, which can pass the tax on in the form of an added cost to the article manufactured or sold by the particular organization. Councils are not able to increase their charges to cover Pay-roll Tax except by raising municipal rates. A fundamentalprinciple is, in our opinion, infringed when a higher level of government seeks to tax a lower level of government which is levying rates upon the persons who occupy rateable property.
The incidence of Pay-roll Tax on councils prevents them from utilizing to the maximum their limited funds for the general benefit of the community. The money paid to the Commonwealth could well be spent in furthering municipal social services such as Infant Welfare, Pre-school and Kindergarten work, Health Clinics, and Emergency Housekeeper Services. These social services, although subsidized by the State, have to be augmented from funds derived from a property tax..
I direct the attention of honorable members opposite to the following passage in the letter: -
It is rather ironical that the persons paying a property tax are in most cases contributing to the Commonwealth social services taxation. The Pay Roll Tax is just another levy which makes it more difficult for councils to render the maximum service at the local level with the minimum of funds.
May I also draw attention to the fact that municipalities provide without charge a large and increasing amount of service to Commonwealth property, which, being exempt from rating, makes no contributions towards the municipal funds in respect of these services.
Municipal exemption from Pay Roll Tax could well be regarded as a gesture towards councils in compensation for the losses they sustained through Commonwealth ownership of property, which unfortunately is becoming more extensive as the years go by.
For these reasons I am sure every council in the State would support an Amendment of the Pay Roll Tax legislation along the lines proposed by you to the House of Representatives.
Well, we shall see how many members of the Liberal party and the Australian Country party will support the amendment to exempt municipalities from the pay-roll tax.
– If the honorable member’s amendment were accepted, how much money would be involved?
– About £1,000,000, I am told.
– More than that Mr. CALWELL. - Perhaps more than £1,000,000-
– Does not the honorable member know how much will be involved ?
– I am not in a position to know, because I have not access to the Treasury records. I ask the Treasury for an estimate of the figure, and I was told that it was something over £1,000,000. The Minister for Defence says that the amount would be more than that sum, and I accept his statement. I wish I knew precisely how much was involved. This Government, or an earlier government, saw fit to exempt municipalities from sales tax. For the purpose of the argument, I shall give the present Government the credit for that action. If the municipalities were granted an exemption from sales tax, the Government can have no good reason for not exempting municipalities from pay-roll tax. I direct attention to the following provisions of the Sales Tax (Exemptions and Classifications) Act 1944-1952 : -
and again,in section 78 (i) -
So, as honorable members will see, contractors who do work for shires and municipalities get an exemption from sales tax in addition to the municipalities themselves. That being so, I cannot comprehend how any Government supporter could honestly vote against the amendment that I have forecast, the purpose of which is to exempt municipalities from the payment of pay-roll tax. Those bodies must be exempted from this tax sooner or later. If pay-roll tax is being lifted progressively - this is the second occasion on which the exemption has been liberalized although, of course, it does not yet affect comparatively large organizations - the need of non-profit- making bodies, such as local government authorities that have been set up under State acts, should be given preference. When the principal act was before the House in 1941, the Postmaster-General (Mr. Anthony), who was then an assistant Minister, moved the relevant motion, and in doing so, he said -
It is the foundation of a bill designed to ensure the means of financing the largest part of the cost of the family endowment scheme.
We have departed from that position in recent years. Originally, the pay-roll tax was intended to be the principal fund from which child endowment was to be paid.
– And it still is.
– But the pay-roll tax is being progressively eased, and, that being so, non-profit-making bodies set up under State law to provide communal services should be completely exempt from this burden. The reason the original legislation was introduced in 1941 has been explained on previous occasions. But it will bear repetition. At that time, Chief Judge Beeby was about to make an award and the proposal then being canvassed was that the basic wage be increased by 6s. a week. It was intimated to the Menzies Government, which was then in office, that the court would declare a wage based on the needs of a man, his wife and one child, and that it would be cheaper for the Government and for all employers in industry generally if the Government would introduce child endowment and pay an amount of 5s. a week in respect of all children after the first child and raise a fund for that purpose by imposing a tax upon the wages bill. That is how the child endowment scheme came into operation.
There are people engaged in industry who want to take this additional profit, and if they be permitted to do so, it might lead to a further increase in the basic wage. Whether that be so or not, a campaign has been on for quite a long time to relieve all industry of payment of the pay-roll tax. but little has been done, or said, about the wisdom of exempting shires and municipalities from the payment of this tax. Whatever may he done for those bodies in this matter would be no more than is now being done for persons who are in business for the purpose of making a profit. When those persons buy and sell goods they naturally make profits, but they pass on the pay-roll tax to the purchasers of their goods. As Mr. Fagan, the secretary of the Municipal Association of Victoria, has pointed out, shires and municipalities cannot pass on that tax to the rate-payers. Whilst the Opposition is prepared to assent to the second reading of this bill, it will divide the committee on the amendment that I have forecast. As Government supporters are always telling aldermen, shire councillors, shire presidents, and mayors how wonderful they are, how much they themselves will do for them, and how many votes were cast on this or that amendment, the Opposition will line them up-
Government members interjecting ,
– I must be annoying honorable members opposite. I repeat that the Opposition will line them up on this amendment. Then, we shall know just the degree to which they are prepared to back their opinion with their vote. The action that we shall take in this matter will at least stand them up, and they will be counted in division.
– The honorable member for Melbourne (Mr. Calwell) has. forecast, on behalf of the Opposition, an amendment which he will move at the committee stage, to exempt municipalities and shires from the payment of the pay-roll tax. If the Opposition had been returned to office at the recent general election and had formed a government, in which, perhaps, the honorable member for Melbourne hoped to be Treasurer, it would not have agreed to a proposal of this kind. Honorable members opposite support such a proposal now only because it affords an additional promise of the kind that candidates of the Australian Labour party made at the recent general election simply in order to get into power. On this occasion, members of the Opposition are prepared to support a proposal which could, logically, be expected to originate with the Government parties but could not normally be expected to be presented by Labour, because honorable members opposite are only concerned about serving the groups that support them ; and they have never had anything to do with shires and municipalities. This bill will mean much to those bodies. I do not believe that members of the Opposition will be sincere in proposing the amendment that has been forecast, because if Labour were in office it would retain this dreadful and stupid tax. First, the shires and municipalities have to pay this tax out of their own revenue. The cost of the tax to the Penrith-St.Mary’s Council in my electorate amounts to approximately id. in the fi. A staff of clerks is employed to calculate the tax. The cost to the Australian Government of computing and collecting the tax represents 1.35 per cent, of the total amount collected from the tax. Thus, considerable cost is involved in administering this tax.
The shires and municipalities will use the money that will be remitted to them under the exemption proposed in the bill for the construction and repair of roads, bridges and footpaths, for tree planting and garbage disposal and the provision of various services to meet the needs of the various communities in which they operate. The amount that will be so remitted will run into hundreds of pounds in the case of normally sized shires, and into thousands of pounds in the case of the larger shires. Recently, the Government announced that it would make increased funds available to local government authorities under the federal air roads scheme, and 100 per cent, of the money thus made available to those bodies will be used in the construction of roads. The liberalization of the exemption proposed under this measure will enable shires and municipalities to transfer many clerks who are now employed in computing this tax to more essential work. I repeat that the whole of the additional moneys that will be made available to local government authorities will be used on the provision of better roads, bridges and community facilities of all kinds.
The honorable member for Melbourne said that this Government was in a better position to liberalize this exemption than was the Labour Government when it was in office. I leave it to the House to judge whether a Labour administration would have been in a position in which it could have liberalized this exemption. Labour’s policy and record show that it would never be able to strengthen the national finances to a degree that would enable any government to make exemptions of this kind. It would not be able to afford the concession. However, this Government is in a position to grant a reduction because of its prudent management of. the nation’s economy. I believe all honorable members who represent country electorates will agree that this is one of the most helpful actions that the Government has undertaken in the interests of the areas that they represent. “We are prosperous because of the Government’s careful management of our affairs, and that is why we are able to remit pay-roll tax where it will do so much good.
The situation under which municipalities and shires, which are semigovernmental bodies, actually have to raise taxes on property in order to pay the pay-roll tax is ridiculous. It amounts to double-barrelled taxation. There are two lots of tax-gatherers, one in the shire and municipal offices and the other in the offices of the Taxation Branch in Canberra and the State capitals. That is a foolish situation. In fact, such a double-barrelled arrangement, which involves heavy additional administrative costs, is utterly stupid. Tho Government’s move is overdue, but it could not have been undertaken before because of the legacies that were left to us by the former Labour administration. The Labour Government, of course, was responsible for the imposition of pay-roll tax on local government bodies. It is quite wrong and improper to have two sections of the community raising taxes, one to pay the other, and I am delighted that the anomaly is to be abolished. Many aldermen and shire councillors will welcome the bill, the effects of which will mean so much to local government organizations, and I am very glad to give my support to it.
.- I cannot share the sentiments of the honorable member for Macarthur (Mr. Jeff Bate), who praised the Government for the concession to local government for which the bill provides. It is quite apparent that the honorable gentleman’s knowledge of municipal government is exceedingly scant, because the benefits that will accrue to local government bodies under the bill will, in fact, be infinitesimal. The fact that the honorable gentleman talked of hundreds of pounds going back to municipalities - his expression was “normally sized shires “ - showed that he knew nothing of the effects of the bill. I shall refer later in my speech to’ the situation of the municipality which I serve in order to show that the point of view expressed by the honorable member was totally erroneous and betrayed his ignorance. It is time that this Parliament realized its obligations to local government bodies.
During the last twenty years, there has been a complete revolution in the duties expected of such bodies. Prior to World War II., local government was concerned mainly with the construction and maintenance of roads, footpaths, kerbing and guttering, and with recreation. Since that time, demands for numerous services of other kinds have emanated from the public and, because those services are of a local character, the public has expected local government bodies to provide them and finance them. Local government authorities throughout Australia to-day are called upon to provide human as well as merely material services. They are expected to establish and maintain baby health centres, child care centres, rest centres for women, community libraries, youth centres, and cultural centres of all kinds. There are, also, increasing demands on municipalities for services of a national character which must be organized on a local basis. For instance, they are required to take an active part in increasing land productivity, destroying noxious weeds, arresting soil erosion and initiating flood preventive measures.
When the cost of meeting these demands is added to the vastly increased cost of constructing bigger and better roads to carry the enormous volume of traffic in Australia to-day, it becomes obvious that local government bodies are confronted with enormous financial problems with which they cannot hope to cope unaided. All these problems are of a local character, but they are essentially community problems and, therefore, a proportion of community funds should be paid to the local government bodies in order to recompense them for the new duties that have developed upon them. Why should a person, merely because he owns a property, be called upon to finance undertakings which properly are an obligation of the whole community? Why single out one section of the community ?
– That is why this Go- vernment abolished the land tax.
– I hope that the honorable member will show his sincerity in this matter by supporting the foreshadowed amendment, which provides that at least a portion of the responsibility which now falls unjustly upon land-owners shall be placed upon the whole community.
The Government’s proposals in this bill provide a perfect example of the mountain labouring to produce a mouse. The tax reductions . that will be granted to local government bodies, measured in terms of hard cash, will merely bring forth a hearty horse-laugh from anybody who has any knowledge of municipal council activities. The Government’s proposal is that the pay-roll exemption shall be increased from £4,160 to £6,240 a year, or from £80 a week to £120 a week. The effect of this reduction upon the cost problems of municipalities will be infinitesimal. Local government bodies will be required to meet pay-roll tax in respect of wages over £120 a week. What does this mean to the ordinary municipality? The municipality in which I live, an ordinary suburban municipality in the Melbourne area, with 45,000 residents, mainly of the working class, had a wages bill last year which varied between £3,000 and £2,500 a week as the labour force rose or fell. The council paid a total of £3,675 in pay-roll tax for the year. Under this bill, on the same wages bill, it will pay just under £3,400 in pay-roll tax. A couple of hundred pounds is neither here nor there as far as that council is concerned. So the claims made by the honorable member for Macarthur are pure poppycock, even though the “ normally sized shires “ of which he spoke are not so large as city municipalities such as the one I have mentioned. The honorable gentleman’s comments revealed no semblance of intelligent reasoning.
The Government has rightly recognized that non-profit-making private hospitals deserve to be brought in line with public hospitals and exempted from pay-roll tax. I agree that this is a step in the right direction. Unfortunately, it will not go nearly far enough. To my way of thinking, there is no difference, for the purposes of pay-roll tax, between hospitals and municipalities. Each provides a public service. Certainly the public service is of a different kind in each ca?e, bur both hospitals and municipalities are non-profit-making concerns that carry out community obligations along defined lines. The Treasurer (Sir Arthur Fadden) has missed an opportunity to make the budget for 1954-55 a memorable one for thousands of public-spirited citizens, who act as councillors throughout Australia, by exempting local government bodies entirely from the pay-roll tax. Local councils are rightly entitled to the exemption which this bill will accord to private hospitals.
It is high time that this National Parliament acknowledged the value of the services rendered by local government bodies to the community life of the Commonwealth as a whole. The modern concept of local government, as I have said,, envisages the provision of community centres such as were undreamt of a few years ago. I cannot understand why property owners should be called upon to pay the cost of establishing and maintaining such centres. This burden is the rightful responsibility of the whole community. The Australian Parliament is the tax collector of the whole community through the legislation which it enacts for the collection of income tax and other taxes. Therefore, it should make some contribution, either directly or indirectly, to help municipalities to provide the services and discharge the duties that are demanded of them by tho people as a whole. It should hand out money to local government bodies for the purposes I have mentioned. In other words, local councils should receive a share of the common pool of tax revenue, and that is exactly the intention of the foreshadowed amendment of the honorable member for Melbourne (Mr.
Calwell). I am not speaking in any partisan political manner. I have been involved with local government in Victoria for 24 years, and I have discussed this matter with councillors from all parts of that State at conferences of the Municipal Association. Liberal, Australian Country party and Labour councillors alike hold the same view. There are no party political divisions on this issue, I point out for the benefit of members of the Australian Country party on the other side of the House. Member:of local councils all know that the cost of providing the services that the people demand from them is reducing the councils to a state of financial impotency.
– That is the fault of the State governments.
– I shall deal with thai interjection later in my speech?.
Councils to-day are forced to carry an ever-growing burden imposed on them by spiralling costs and wages. This situation is not of their own making. It is not due in any way to their maladministration. They have increased rates to the limit. Most of them have trebled i heir rates, but, even at these high levels, their revenue has not been able to keep pace with increased costs for normal services and the costs of new services. Local government is non-profit making, as it always has been. It is maintained for the purpose of providing common services to groups of people in defined areas. I warn honorable members on the Government side of the House that local government will fall into disrepute unless it can give full service to the people. That would be a national disaster, both economically and politically. The increasing impoverishment of local government bodies is a matter of grave concern to all those who have given detailed thought to the situation. The Government, through this bill, bad a unique opportunity to give a well-merited impetus, on a national scale, to the activities of local government bodies, but it has failed to do so.
The miserable concessions for which the bill provides will be of no practical value. As I have said, the municipal council of which I am a member had a wages bill last year which varied between £2.500 and £3.000 a week. The advan tage that it will gain from remissions of pay-roll tax under the provisions of this bill will probably enable it to provide only 10 or 15 square yards of asphalt for the whole city in one year. Members of this Parliament are aware that, theoretically, the Government has no constitutional responsibility to assist municipal councils to meet their financial obligations. I am the first to concede that. Local government bodies are the creations of State governments, but, in reality, this Government cannot repudiate all responsibility and throw it entirely upon the States, because, since the introduction of the uniform tax system, the Commonwealth Treasurer, for all practical purposes, has determined how much revenue each State shall receive each year. Under this system, the States are the poor financial relations of the Commonwealth, and they have absolutely nothing left over from their revenues to hand out to the local government bodies to. enable them to provide the additional services I have mentioned.
Surely all honorable members will acknowledge that such a grave problem as the solvency of local government bodies and the maintenance of the nation’s arteries of land transport should not be lightly brushed aside by saying that this is not a constitutional concern of the Commonwealth! Morally and ethically, it is a Commonwealth concern that local government should not fall into a state of penury, which inevitably would react most unfavorably to the concept of local government to which all honorable members subscribe. Therefore, I suggest that the Government should give tangible recognition to the importance of the services rendered by local government to the whole community. It can do so in the manner for which the amendment suggested by the honorable member for Melbourne provides. The honorable member pointed out to the House that this was a way in which the Commonwealth could compensate the municipalities for their services to Commonwealth institutions, for which they receive not one penny in rates from this Government.
The only recognition of the just rights of municipalities accorded to them by the Commonwealth is the making of ex gratia payments by the Commonwealth Bank and other Commonwealth instrumentalities of a profit-making character. There are various Commonwealth institutions in the municipality adjacent to where I live, but the local council does not receive one penny in rates from this Government, although it is expected to provide roads and other normal services for the convenience of those institutions. The whole system is basically wrong. If the Government is not prepared to make a direct payment for such services rendered to Commonwealth instrumentalities by local government bodies, at least it should provide help in the indirect fashion that the honorable member for Melbourne has proposed by granting local government bodies a complete exemption from the pay-roll tax. Honorable members should not consider this matter from a party political point of view. There is no party attitude on it in Victoria. We are all as one. Members of the Municipal Association in that State are united in the view that pay-roll tax on local government bodies is an unfair impost which should be removed by the Government at the first opportunity. I very much regret that the Government did not see fit to provide in the bill for this course of action. Therefore, I am compelled, in all justice, to support the foreshadowed amendment of the honorable member for Melbourne.
.- Before T comment on the amendment that has been foreshadowed by the honorable member for Melbourne (Mr. Calwell), T should like’ to recall to the House the provisions of the bill and, at the same time, give an indication of what has been done by this Government in relation to the problem of pay-roll tax, partiicularly in the last two years. The 1953-54 budget increased the exemption limit from only £20 a week, or £1,040 per annum, to £80 a week, or £4,160 per annum. The consequent loss of revenue last financial year amounted to £5,000,000. It i3 now proposed to increase the exemption to £120 a week, or £6,240 per annum. In a little more than twelve months, this Government has increased the exemption limit sixfold from £20 a week to £120 a week. The loss of revenue from the concession now proposed is estimated at approximately £2,000,000 in the current financial year; so that the total loss to revenue over the financial years 1953-54 and 1954-55 will amount to £7,000,000. It is not a matter only of the relief to employers stated in bold figures. The greatest impact is in the reduction of the number of employers who are called upon to pay pay-roll tax. Before the exemption limit was increased last financial year, the number of employers who paid pay-roll tax was approximately 90,000. The increase in the exemption limit last financial year reduced by no fewer than 50,000 the number of employers who paid pay-roll tax. The increase in the exemption limit at present proposed, will reduce the number by an additional 10,500. In future fewer than 30,000 employers will pay this tax. This Government will have reduced the number by two-thirds in a little more than twelve months. The amendments of the taxation law embodied in this measure have taken effect as from the 1st September last; so that the greater part of the current financial year will bo covered by the new rate. The bill also exempts from pay-roll tax wages paid by non-profit-making private hospitals, as from the 1st September last, and I believe that every honorable member will approve the Government’s action in relieving that section of the community of the obligation to pay this tax.
Now I .propose to address myself briefly to the amendment foreshadowed by. the honorable member for Melbourne, which, I think I can say definitely, will not be accepted by the Government.
– Hear, hear!
– I am pleased to have the Minister’s confirmation of my opinion. I believe that I am entitled to point out that child endowment was introduced as from the 1st July, 1941. It was to be paid from the proceeds of the payroll tax, which was levied at the rate of 2-J per cent., or 6d. in the £1, on all wages, bills in excess of £20 a week, or £1,040 per annum. The first Menzies Government was responsible for the payment of child endowment, which originally was paid at the rate of 5s. a week for the second and subsequent children under the age of sixteen years. The present
Government increased the amount to 10s. a week, and introduced the payment of 5s. for the first child.
– Order ! The honorable member’s remarks are getting away from the subject of the pay-roll tax.
– No. There is a definite connexion between the tax and the .purpose for which it is collected. I am sure that you, Mr. Speaker, will recall that Mr. Justice Beeby, of the Commonwealth Court of Conciliation and Arbitration, recommended that child endowment should be paid by the Government instead of as part of the wage awarded by the court. Approximately £40,000,000 a year is at present collected in pay-roll tax. This amount is about £10,000,000 a year less than the amount paid out in child endowment. If I remember correctly, the Labour Government, of which the honorable member for Melbourne, who has foreshadowed an amendment, was a member, took office in 1941 and remained in office for eight years. It i3 strange that the honorable member should intend to move the amendment, which was never contemplated by the Labour Government during its eight years of administration. It makes one believe that the honorable member is now taking up, purely as a political expedient, a catch-cry that has been uttered by municipal councils over a very long period, and that he is hoping that it might in some way help to lift the Australian Labour party out of the political mess in which it at present stands.
If one thinks in terms of local authorities one must go a little further and think also in terms of other instrumentalities that are subject to the payment of pay-roll .tax, and to which no reference was made by the honorable member this afternoon. If one advances an argument that a municipality is a non-profit organization, one might apply the same argument to a State government, because, in the main, . it is not a profit-making instrumentality. The arguments advanced by the honorable member for Melbourne in respect of municipal councils could be applied with equal effect to State governments. Universities are not profit-making instrumentalities, but they pay pay-roll tax on staff wages. Other education institutions, such as schools, also pay the tax. I believe that the honorable member for Melbourne gives definite point to the fact that his move is a purely political one, because he believes that much more kudos will accrue to the Australian Labour party from municipal councils than from the other types of bodies that I have mentioned. What is the situation of municipal councils in the government set-up within Australia? Local authorities are the responsibility of State governments. The honorable member for Batman (Mr. Bird) told us that he believed that the Australian Government, which collects the income tax, should make a direct contribution to municipal councils. I strenuously resist the suggestion. State governments have always accepted as their responsibility the municipalities and. shires within their boundaries, and at all times have vigorously resisted any suggestion that the Australian Government should have direct responsibility for municipal councils. Let us look at the situation in Queensland. If the municipalities of Queensland are in such a bad way, as is suggested by members of the Opposition, by virtue of having to pay pay-roll tax, the Queensland Government should look after them. The Queensland Government last financial year had a real surplus.
– I am speaking not ot the disclosed surplus, but of surplus funds of not less than - £14,000,000. The Queensland Government is well able to look after the municipalities. I know perfectly well that a similar position exists in New South Wales. The honorable member for Batman misled the House when he said that a municipal council paid pay-roll tax of £3,600 per annum, and- endeavoured to imply that that is a fair illustration of the amount generally paid by municipal councils in pay-roll tax. The tax represents 6d. in the £1 of the wages bill in excess of the statutory exemption, and a pay-roll tax payment of £3,600 per annum represents a wages bill of more than £144,000 per annum. Although some metropolitan municipalities might pay £3,600 in pay-roll tax, I believe that very few, especially in the country areas, pay anything like that amount. No member of the Opposition has advanced any valid reason why municipal councils should be relieved of their obligation to collect their own revenues, and why that obligation should be handed over to the Australian Government, which collects most of the revenue for State governments, and, incidentally, for substantial contributions to municipalities throughout Australia.
I do not think that this point has any particular connexion with the amendment, but I believe that the pay-roll tax is fundamentally bad in principle. Any tax that is not directly related to profits is in its very essence bad, and the payroll tax has no relation to profits. However, we must realize that as it has been levied, we cannot remove it without at the same time imposing a considerable additional burden in income tax. We must recognize that one of the greatest problems in Australia is costs and the pay-roll tax is definitely an item of cost of any business. If we want lower-priced goods, it is essential that every section of the community, not only employers, employees, or governments, shall make a contribution towards the reduction of costs. I believe that a distinct contribution to the achievement of this objective can be made by completely abolishing, at Home stage, the pay-roll tax. One could speak for a considerable time upon this subject but, lest you, Mr. Speaker, call me to order for not closely relating my remarks to the bill, I shall not deal with, it at any greater length at present. We must appreciate - and I make this observation with the pay-roll tax as an example of an item of cost - that Australia at present is costing itself out of markets*. We shall reach a really stable economic situation in this country only if we reduce our costs of production and are able to do without a good deal of the tariff protection and other types of protection that we have built up in the community during the last few years. I believe that it is necessary in the interests of al), businesses and industry in Australia that the pay-roll tax should be removed at some stage in the future. I do not predict the time for its removal, but I say quite definitely that
I do not believe that we should approach its complete removal by starting with State governments or municipalities or other similar organizations just to satisfy the party political interests of the members of the Opposition.
I consider that the whole intention of the foreshadowed amendment is to gain some party political advantage for the Opposition. That was shown quite clearly by the honorable member for Melbourne in his concluding remarks. He said, in effect, that the Opposition would press the amendment in the committee stage of the bill, and that the people would then see where the members of the Government stood, and whether they are prepared to stand behind the municipal councils of Australia in this particular matter. Those remarks indicate quite clearly that the amendment has been designed purely for party political purposes, and the Government is not impressed in any way by it. The attitude of the honorable member for Melbourne in this case is similar to his attitude towards legislation on many occasions during the last five years. We saw the same sort of thing a couple of years ago in relation to an income tax measure, and we see it to-day in relation to a pay-roll tax measure. I have no doubt that within the next eight or ten years, when no doubt he will still be a member of the Opposition, we shall see him display the same attitude towards other measures put before the Parliament. The honorable member foi Melbourne has foreshadowed this amendment purely for party political reasons, and I suggest that neither the people nor the Government will be moved by either his actions or his speeches.
– I support the amendment that will be moved by the honorable member for Melbourne (Mr. Calwell) to exempt municipal and local government bodies from the payment of pay-roll tax. The honorable member for Macarthur (Mr. Jeff Bate) indicated in his speech that he was of the opinion that local government authorities would save hundreds of pounds if this amendment were accepted. I cannot quite understand why he should hold that opinion, because all that a concession of the kind contemplated will
Accomplish, “will be to exempt from payroll tax those local authorities whose wages bills are between £4,160 and £6,240 a year. Bodies and individuals whose wages bills are in excess of £6,240 a year will save about £52 a year, and the average wages of their employees may be taken to be about £800 a year, which indicates the employment of about seven or eight persons. All that the amendment will propose to do will be to exempt an additional £2,080 of the pay-rolls of local authorities from tax at the rate of 6d. in the £1. If an employer pays £3,600 a year or only £100 a year more than the exempt limit he can save only about £52.
So far as municipalities and nonprofitmaking undertakings are concerned, it seems that the policy of the Government is one of robbing Peter to pay Paul, because the Government imposes a tax on these bodies on the one hand and then makes grants to them on the other hand. The Government makes grants to local authorities under schemes such as the federal aid roads grants scheme and then takes part of those grants back by way of taxation. That is rather illogical, and it is doubtful whether we can assess the precise impact of these taxes on local authorities. Hearing supporters of the Government talk about the proposed amendment one is led to believe that if a change were made as contemplated by the amendment it would disrupt the whole of the Commonwealth finances. The truth is that the Government collects about £40,000,000 from the pay-roll tax.
The 1952 report of the Commissioner of Taxation publishes some very useful information about the collection of payroll tax. It shows the number of bodies that pay the tax, classified according to the nature of their undertaking, and indicates that 97S public authorities, including municipalities, State governments, electricity commissions and authorities of that nature, paid pay-roll tax. During the year ended June, 1952, those authorities employed 193,000 males and 45,000 females, and their total wages and salaries bills amounted to £163.000.000. Making rapid calculations similar to those made by the honorable member for Petrie (Mr. Hulme), we find that all the State instrumentalities, including State governments, pay about £4,000,000 pay-roll tax. The Opposition believes that if the Government can make taxation concessions of £40,000,000 or £50,000,000 in the coming financial year, it should have considered making concessions of £4,000,000 to the public authorities that I have mentioned. Pour million pounds is only a small proportion of the budget total of about £960,000,000, but it would mean a lot to municipal undertakings which have no other incomes except from rates. The honorable member for Petrie said that he could not see any difference between a non-profit-making undertaking and a profit-making undertaking. However, there is at least one difference. The taxes paid by a manufacturing company, for example, are allowed as deductions in computing its profits. Therefore, since its taxes are at the rate of 7s. or 8s. in the pound, if it is exempted from pay-roll tax the Government is virtually reimbursed to the extent of about onethird of the pay-roll tax that it used to pay. If the pay-roll tax were abolished completely the Government would not lose the whole £40,000,000; it would lose perhaps only two-thirds of that sum.
Municipalities are non-profit-making organizations, and the pay-roll tax is merely another charge on them. If they have to pay £2,000,000 or £3,000,000 in taxes, that means that the people of the Commonwealth are deprived of £2,000,000 or £3,000,000 worth of municipal services. Perhaps the municipalities are unable to expand their library services, or they have to reduce the number of their garbage collections from two a week to perhaps one a week. Because of inflation, and their reliance upon rates as their only source of income, in order to fulfil their pay-roll tax obligations, they have either to reduce their services or take the unpopular course of increasing rates. The Opposition does not suggest that the pay-roll tax should be completely abolished, but I suggest that perhaps this amending bill could have gone further and covered State governments. But at least we ask the Government to go part of the way, because we can see the real difficulties facing the important public authorities in Australia. The Government has not put forward any objection to the foreshadowed amendment on the ground of the cost of the remissions, because if it were accepted it would probably mean a reduction of only about £2,000,000 in the federal revenue. Therefore, we urge that the Government should not adopt the view that it will not accept our proposal merely because the Labour party has put it forward, and that it therefore has some party political flavour.
T have no doubt that honorable members on the Government side have received communications from local government authorities, similar to those that we on this side have received, asking them to bring this matter to the attention of the Government. However, steam-rollered by the parties to which they belong, they are strangely silent about the merits of the matter and content themselves with sneering at the members of the Opposition who have attempted to bring, through their legally elected representatives on local government bodies, the views of the people to the attention of the Parliament. This proposal is based on the real economic need of municipalities, and on logic and justice, and the Government should view it in that light rather than consider it a method of obtaining a mean party political advantage. Of course the Government itself has never sought mean party political advantage, it has always been actuated by the highest motives ! We urge the Government to be more practical, and to take its light out from under the bushel and be more liberal so far as our poor neighbours - the local government bodies - are concerned.
.- I desire to refer to the amendment that the Opposition intends to move in the committee stage of this measure, and which has been discussed in connexion with this debate. The honorable member for Melbourne (Mr. Calwell) has indicated that he writes to the taxpayers to ask them whether they approve of reductions in the rates of taxation. I suggest that if he wrote to any taxpayer in Australia and asked him whether he wanted taxes reduced, the answer would be in the affirmative. He must be hard put to find some popularity in the country during these turbulent times when he has to write such letters to taxpayers. The honorable member for Batman (Mr. Bird) indicated that the pay-roll tax is a property tax. It is certainly not a property tax. In order to show his lack of inconsistency, I refer honorable members to the way in which he voted when the bill to abolish the land tax was before the Parliament. The honorable member for Batman now seeks to abolish what he calls a property tax, but at that time he sought to oppose the abolition of a property tax. The Government is certainly not imposing additional taxes on land-owners by giving them greater concessions in the matter of pay-roll tax. Indeed, the honorable member for Batman approached this matter in a far from logical fashion.
This Government is not forcing local authorities to increase their rates because it proposes to raise the level of exemption. The suggestion might be construed into meaning that the honorable member for Batman wants to give local authorities a greater concession. The Government is meeting their needs in another way - in a liberal way - as was indicated in’ the Treasurer’s budget speech. No one decries the good work that is done by local authorities. No one knows more than I know about the services they give to the country. No one knows more than I know about the moneys that are made available by the Australian Government to local authorities in Queensland through the State Government. Last year, the Queensland Government received approximately £3,000,000 from the Commonwealth, but approximately £1,400,000 is still in the Queensland Treasury. The Commonwealth proposes to increase the amount of exemption by 50 per cent., so it cannot be stated that it is forcing councils to increase their rates. The Government is meeting the needs of local authorities by making liberal concessions in other ways, and I am not afraid to face the local authorities in my electorate on the stand that I have taken. It is far better to reduce pay-roll tax progressively and to abolish it eventually, which undoubtedly the Government will do in future years, than to deprive local authorities of other moneys which they will receive if other proposed legislation is agreed to.
The Government is making the right approach to the subject of pay-roll tax. I agree with the statement of the honorable member for Petrie (Mr. Hulme) that pay-roll tax is not a correct form of taxation, because it is not related to profit. Pay-roll tax was a legacy that was handed down to this Government, but, having regard to the easement of taxation in all fields, the Government is abolishing it progressively. If the bill is agreed to, which undoubtedly will be the case, the Government will have been successful in increasing the exemption from the original £20 to £120.
I refer now to the exemption of nonprofit private hospitals from the payment of pay-roll tax, of which I have been an advocate. There are one or two sue a hospitals in my electorate which do excellent work. They are giving a straight service to the community, a service which cannot be provided successfully by public hospitals because of the sparsely settled nature of the areas that are served. Those private hospitals have been required to pay pay-roll tax, and will be obliged to pay it until the proposed legislation becomes law. Honorable members on this side of the House have been successful in persuading the Government to include the proposed exemption in the bill, and for that reason I have pleasure in supporting it.
.- I rise to support the amendment that has been foreshadowed by the honorable member for Melbourne (Mr. Calwell). It is astonishing to see Government supporters, many of whom belong to the Government’s local government committee, and who have this priceless opportunity of proving to the various State local government associations and to the champions of local government throughout Australia that they support the cause of local government, retreat immediately when a proposal is launched which, if accepted, would give to local authorities relief from a tax that has been described by the honorable member for Petrie (Mr. Hulme) and the honorable member for Fisher (Mr. Adermann) as being iniquitous, and which should be repealed at the earliest opportunity. One would think that, in view of the small sum of money that is raised by this form of taxation, Government supporters would be very pleased to embrace the proposed amendment. Honorable members opposite have paid lip service to local government bodies, but Opposition members feel that more than words are required; they feel that positive action in this House is required. The Opposition invites Government supporters to agree to the proposed amendment so that relief may be afforded to local authorities.
I ask honorable members opposite to consider the wide range of services that are being rendered to the community by local authorities, which, in their bulletins, have sought from the Australian Government relief from the payment of payroll tax. It has been proved that local government authorities, in the provision of health and immunization services, playgrounds, parks, swimming pools and libraries, have taken upon themselves the provision of services that were not provided in former years. Because of that increased burden, surely the Commonwealth should avail itself of this opportunity of saying to the local authorities, “ We regret very much that, because of the incidence of our harsh taxation measures, you are unable to collect all the taxes that you desire. Because of that, we will waive the payment of payroll tax by all local governing bodies and non-profit organizations.” If the Commonwealth were to do that, it would assist local authorities to meet the challenge of expanded services.
It is not too late for at least one Government supporter to rally to the cause of local government. The honorable member for Petrie stated that th? amendment foreshadowed by the Opposition would afford relief only to a number of metropolitan councils. I challenge that assertion, because it is known thai many of the major municipalities and county councils would come within the ambit of the proposal that has been submitted by the Australian Labour party. Whether or not relief would be given merely to metropolitan councils is beside the point. Metropolitan councils are none the less forms of local government, and for that reason they should be considered in the same manner as any other local governing body would be considered. The honorable member for Petrie referred to the question of costs. We are all concerned about the question of costs, but the Government now has an excellent opportunity o relieving local authorities of an unfair burden upon their administration. To waive the payment of payroll tax would certainly help local governing bodies. Costs would be reduced, and local authorities would be given an opportunity of rendering greater service to the community at lower cost. I think the Government has adopted a very niggardly attitude in relation to this matter, and the alibis that have been offered by Government supporters hardly do them justice. If honorable members opposite were courageous, they would go beyond the provisions of the bill and would remove from local governing bodies the obligation to pay this unfair and discriminating form of taxation. I leave the matter with the hope that perhaps one supporter of the Government will stand up and support the cause of local government. I sincerely hope that those honorable members who belong to th’ Government’s local government committee will show where they stand, and that they will indicate to the various local government associations that they are working actively in this chamber to give local authorities a fair deal and a new charter to serve the people of Australia.
.- I very heartily support the bill. I believe that the proposed legislation would give relief to many employers. I must repeat some of the statements that have already been made to lay a foundation for what I propose to say. Honorable members know that in 1953 the level of exemption was raised from £20 to £80. It is now proposed to raise it to £120. That is a great relief. I realize that, throughout my electorate, many dried-fruit-growers and other primary producers, and people who are engaged in small industries will be relieved of the obligation to pay this tax. Altogether, approximately 10,500 employers will be relieved of this responsibility. That is quite a large number o” people. Like other honorable members on both sides of the House, I favour the abolition of this form of taxation, because I believe that any one who sets up a business, who is a primary producer, or who is a manufacturer, should not be taxed according to the number of people he employs. Australia benefits from the employment, by large companies, of a greater number of men. Under the system that is now in operation, an employer is required to pay a greater amount of tax when he employs more persons. I believe that the system operates to our disadvantage.
Opposition Members. - Yes.
– Perhaps Opposition members do not agree with that statement, although some of them, in particular the honorable member for Macquarie (Mr. Luchetti), said, “Yes”. Perhaps they would not agree to giving relief to some of the companies, because they continuously point the finger of scorn at such companies as the Broken Hill Proprietary Company Limited and General Motors-Holden’s Limited. They say that those companies should not obtain relief, but I believe that they should obtain relief and that pay-roll tax is one of the forms of taxation that could well be abolished. I may not have the correct wording, but I think honorable members will agree that I am right on the mark when I say that, when this Government assumed office, it stated that taxation would be progressively reduced, as the economy was stabilized. I think the actual statement included the words “ as production is increased “, but it really meant that, as the economy was stabilized, taxation would be progressively reduced. The Government has carried out that promise to the letter. We know that taxation was increased for a time, but that was only to ensure the stability of thi? economy, and every one knows how successful that measure was.
The honorable member for Macquarie stated that the Government should not miss this priceless opportunity of impressing local government authorities. I can assure him that the honorable member for Melbourne (Mr. Calwell), knowing that his proposal would not be accepted and that, during the 53 years since federation, very few amendments have been accepted in this House, has not missed this priceless opportunity of foreshadowing an amendment. I have been a member of the Parliament for nearly nine years. For approximately half of that time the Australian Labour party was in office, and for the remainder of the time a nonLabour government has been in office. The only amendments that have been accepted in that time have been amendments of a machinery nature or to correct typographical errors; no amendments in relation to money matters have been accepted. It is just window dressing for the honorable member for Melbourne to submit a proposal of this kind. The honorable member for Macquarie, who has not long been a member of the Parliament, often speaks about local government matters. He, and the honorable member for Melbourne Ports have made statements to which I do not pay much attention as they were not members of this House when Labour occupied the Government benches. But an honorable member who has been here for as long as the honorable member for Melbourne should blush at his own action in proposing to move such an amendment. He has said that all the municipalities want the amendment to be adopted. Of course they do! All the municipalities in my electorate would support it. But we must look at the overall position, and not merely at one aspect of it. I know that I am not permitted to deal in extenso with the subject of petrol tax in this debate, because that is to be the subject of another bill to be introduced later, but I should like to say that the Government will give the States approximately, an additional £8,000,000 this year for. road construction and maintenance under the legislation that is to be brought down shortly. When it is realized that the Government is also granting big reductions of pay-roll tax, it is easy to see that taxation is being reduced progressively.
The honorable member for Macquarie pointed out that the municipalities were saying that, owing to the Federal Government’s harsh income tax, they had not been able to collect all the rates that they would desire. The fact is that people are paying their tax liabilities more promptly than ever before. Here is a man who claims to know something about municipal affairs, who is suggesting in this chamber things that are utterly ridiculous. In a classical statement, which I took down in writing, he invited the honorable members opposite to come over and join with the Opposition.
I think that members of the Opposition are already having enough trouble without inviting us to come over and join them. Although the honorable member may have intended his invitation to be a compliment, we refuse, at this stage, the great luxury that he has offered. The honorable member for Macquarie also said that he hoped the Government would go further and grant relief to municipal bodies in excess of that proposed in the amendment.
I do not think that this is a matter of courage. Sometimes courage is merely foolhardiness in disguise. I am referring to a certain kind of courage, and not to real valour. I believe that this is a matter of common sense. It is a matter of the Government keeping its promise to reduce taxes progressively. I am hopeful that, in the near future, since conditions aro improving so tremendously under the Government, and as people have been made able to achieve not only increased productivity, but also many other things the Labour party never even thought of, this tax will be abolished. ‘ In the meantime, I am sure that shire councillors throughout the country will see the projected amendment for what it is. It is nothing else than an attempt by the honorable member for Melbourne to play on the minds of local-governing bodies. I interjected when the honorable member for Batman (Mr. Bird) was speaking, and asked -
What about the States? Have they not something to do with local government bodies?
He admitted that they have, but he said that the Federal Government could grant some practical relief.
Mr. Bird interjecting,
– I am only repeating the honorable gentleman’s own words. He said the Commonwealth could give some practical relief to local government bodies in the States. We must remember that State governments have the responsibility to give extra assistance, if necessary, to local government bodies. It is also well to remember that the Victorian Government ended the financial year with a surplus of £1,000,000. It has been pointed out, I think by the honorable member for Wide Bay (Mr. Brand) that the Queensland Government had a surplus of £14,000,000. Surely these surpluses can be used to help local government bodies. As a matter of fact, if State governments would only do as much for local governing bodies as the Commonwealth has done for the States, then these bodies would be in a far better financial position than they are in now. If the State governments would only play their part, as the Australian Government proposes to play its part, by giving the States a greater allocation of money based on petrol sales, under a bill to be brought down shortly, they would be helping local government bodies considerably. The Commonwealth is also helping local government bodies in another way. By progressively reducing taxes on individuals, it, generally speaking, makes more money available. I believe that we should look at the position overall, and not narrowly. I support the bill, and I shall definitely oppose the amendment in committee.
.- I am appalled at the attitude adopted by members of the Australian Country party for purely political motives. The amendment projected by the honorable member for Melbourne (Mr. Calwell) has a very laudable purpose. It aims to give increased assistance to local authorities. I think it is generally admitted, by people who take any interest in local government, that local government authorities in Australia to-day are in a pitiable position. The inflationary spiral seems to have gripped local government authorities which have no way of avoiding the increasing costs that are associated with every one of their activities. The honorable member for Mallee (Mr. Turnbull) can see no good in the amendment projected by the honorable member for Melbourne. I believe that the opposition of honorable members opposite to the projected amendment is based on purely political grounds. Local authorities in Queensland, apart from the Brisbane City Council and the municipal councils of the principal provincial towns, are, in the main, administered by people who have the same political leanings as the honorable member for Mallee. I am certain that those people would be horrified by the points that he has made in bis speech to-night. If the honorable member were to become a member of a local governing body in Queensland he would completely reverse his attitude to the proposed amendment.
– He would hang hia head in shame.
– I hope so. The point made by the honorable member for Batman (Mr. Bird) that the pay-roll tax, insofar as it affects local authorities, is a tax on land, is valid, because local authorities in Queensland levy their rates entirely on the unimproved capital value of land. They have no other means of raising revenue. The cost of construction and maintenance of roads, drains and all those ordinary bread and butter things that come within the functions of local government authorities, is increased as a result of the imposition of pay-roll +ax, and the increased cost must be met by increased rates on the unimproved capital value of land. Consequently, the pay-roll tax is, in effect, a tax on land. It is the policy of the Labour party to assist people who desire to acquire their own homes, and it is obvious that this tax is hitting that very section of the community. It is true that the Government proposes to remit part of the petrol tax to the States. Honorable members opposite are seizing on that proposal as an excuse for opposing the projected amendment. The portion of the petrol tax that is to be remitted, will be remitted to the State governments. My knowledge of State governments leads me to believe that that money will not he paid to local authorities principally, but will be paid to the main roads authorities that function in the various States. The Main Roads Commission in Queensland functions to only a small degree in the principal cities of that State. For instance, in the City of Brisbane, which has an area of 375 square miles, there would be very few principal roads that were constructed by the Main Roads Commission. The proceeds of the proposed petrol tax will therefore go, in the main, to the Main Roads Commission. The Queensland Government is generous to local authorities which are encouraged, by enormous subsidies, to engage in constructional work. There are many authorities, particularly in the country areas, which refuse to spend any appreciable sums of money on worthwhile local government works. That is the charge of the Queensland Government against local authorities. If there is a surplus in the Queensland Treasury - I dispute the figures mentioned by the honorable member for Petrie (Mr. Hulme)-
– The honorable member does not appear to know the facts.
– I do know the facts. I also know that the honorable member for Petrie has attempted to mislead the House into believing that there is a surplus of £14,000,00(5 in the Queensland Treasury, when he is really referring to loan funds and consolidated revenue added together. I think it is shocking for a man of the standing of the honorable member for Petrie to make such an attempt. The opposition evinced by honorable members opposite to the amendment foreshadowed by the honorable member for Melbourne is purely political, as I have said. Local government bodies need some relief from rising costs, and it is within the ability of the Commonwealth, as the main taxing authority in this country, to provide such additional relief. I know that there is no constitutional provision under which the Commonwealth can make grants direct to local government authorities. These authorities receive their charters from die States, and responsibility in relation to them devolves entirely on the States. But here is a golden opportunity for the Commonwealth to assist local authorities by remitting some of the taxation that local authorities are called upon to pay. T consider that any money that is remitted to local authorities by way of pay-roll tax exemption will be expended to the best advantage by those authorities in the provision of amenities that are necessary, and which the people appreciate. I refer to such amenities as good roads, good drainage systems, and better street lighting. Those amenities improve the standard of living of the people who reside in the municipalities.
I commend the amendment foreshadowed by the honorable member for Melbourne, because it has much merit. If the amendment is accepted by the Government, it will do a good deal to assist those local authorities which are gradually being starved, principally as th« result of the policy of this Government. That policy, apparently, is based upon inflationary conditions, and everincreasing costs. Those conditions are gradually choking local government, and reducing it to impotence.
.- This bill has my whole-hearted support, because it proposes to provide a measure of genuine relief to a deserving section of the community. A real benefit will be conferred upon that section which has been required to pay the pay-roll tax in the past. That is to say, wages paid by nonprofit making hospitals are to be exempt from pay-roll tax on and from the 1st September last. However, the principal purpose of this bill is to make a further increase in the general exemption for pay-roll tax from the present level of £80 a week to £120 a week. This extension of the exemption really takes into consideration what the Opposition repeatedly calls the altered value of the £1. This can be claimed to be a genuine reduction of taxation, and it will be of great assistance to the recipients of the benefit. It is a progressive move towards the vital objective which the present Prime Minister (Mr. Menzies) announced in his policy speech in the general election campaign in 1949, when he said that the goal of a Liberal party-Australian Country party government would be progressively to relieve taxpayers of the terrific burden that had been imposed upon them by the Labour Government.
The honorable member for Melbourne (Mr. Calwell) has foreshadowed an amendment, the purpose of which is to exempt local authorities from the obligation to pay pay-roll tax, on the ground that the members of that group are performing semi-governmental functions. The majority of local authorities in my district are small bodies, and they are very close to the people. “When all is said and done, the best form of government is that which is able to give effect to the wishes of the people in a sound, economic way. The small local authorities in my district are already exempt from the pay-roll tax, because their work is undertaken on a contract basis. I am wondering whether the honorable member intends the scope of his amendment to include contract work for local authorities. If he does, the contractors would also be exempt from the obligation to pay pay-roll tax. At the present time, a contractor must take pay-roll tax into account when he calculates his tender price for work to be done for a local authority. Does the honorable member for Melbourne intend his foreshadowed amendment to exempt contractors for local authorities from pay-roll tax? I do not know.
If it is not intended to extend the provisions of the amendment to contracts carried out for or on behalf of local authorities, then I consider that the amendment is not even a pious wish. I believe that it is a political move, because the amendment, even if it were accepted, would not give any advantage to many local authorities. If the amendment is intended to apply to contracts carried out for local authorities, then I believe that it goes far beyond even the best intention to provide a measure of relief to local governing bodies.
– The scope of the amendment is very wide.
– That is so. A vital principle is involved in this matter. I remind the House that local government authorities as well as State governments pay other taxes to the National Government. For instance, State governments and local authorities are not exempt from customs and primage duties. Those imposts are also a burden upon local authorities. Is it suggested that the principle^ of the exemption of local authorities from pay-roll tax should he extended to include exemption from customs and primage duties? It is reasonable to assume that the honorable member has that in mind, because the Opposition has appealed to the Government to accept the foreshadowed amend ment on the ground that local authorities are non-profit organizations. If local authorities are to be exempt from other charges, direct and indirect, including customs, excise, let the honorable member for Melbourne say so. Let him reveal his real attitude on this matter. He says, in effect, “While we are in Opposition, let us be irresponsible. It is not our pigeon. It is the responsibility of the Government”. But the tune changes quickly when Labour is in office.
In my opinion, the honorable member for Melbourne has behaved in an irresponsible manner in this matter. He has not taken all the related factors into consideration. There is, first, the extent to which local authorities would be affected, but more important still is the matter of principle. Why has he selected this particular charge on local authorities, and asked that it be waived? The pay-roll tax is one of the smallest charges that they have to meet in the conduct of their activities. It is interesting to take this matter a little further, and contend that the principle, if it is to apply to local authorities, should apply also to State governments and state instrumentalities. I cannot see that any good purpose would be served hy supporting the foreshadowed amendment unless we intended to apply this principle to other charges upon local authorities and State governments. That would be just too silly.
I am getting fed up with the constant references by the Opposition to the control of the purse-strings by the Federal Government, and the constant “ attempts to deceive the public about this matter. This Government has no control over the purse-strings of the nation. The Government is responsible for the collection of income tax and the social services contribution in accordance with an agreement made with the States. If the State governments are dissatisfied with their reimbursements, they should say that the payments should be increased by the collection of a greater amount of tax. In other words, let the State governments say to this Government, “We believe that you should increase income tax rates so that we shall get more money”. The State governments have agreed upon the formula under which reimbursements are made to them, but still they are not satisfied. Are they prepared to resume their taxing powers? Are they prepared to assume responsibility for the social services for which the Commonwealth now collects money, and for which the Commonwealth now pays ?
Some State Governments also suggest that the Commonwealth has control of loan raisings. That suggestion has been repeatedly denied in this House and elsewhere. The Commonwealth merely coordinates the loan demands of the States, and operates the machinery to raise loan money. The States can command a majorty of votes at meetings of the Australian Loan Council to decide how much money shall be raised on the loan market.
– Order! I think that the honorable member should return to the subject of pay-roll tax.
– I shall do so. I have merely been pointing out that the subject of pay-roll tax is related to the suggestion that the Commonwealth has control of the purse-strings of the nation, and that, because of that fact, State governments and local authorities are denied the moneys that they require for the fulfilment of their functions.
I am not at all happy with the case submitted by the honorable member for Melbourne. I do not think for one moment that he is sincere in this matter. He has canvassed his idea throughout the Commonwealth. I do not think that any person who was asked, “ Do you think that you should be relieved of atax?” would fail to give an affirmative answer. The honorable member for Melbourne, on his own confession, canvassed this foreshadowed amendment everywhere, and naturally he received the reply that he hoped to receive. Obviously, the purpose of the whole story that he has told in this debate has been to make party political capital. The honorable gentleman has occupied a responsible ministerial position in this National Parliament, and I believe that his political move on this occasion deserves the cry of “Shame!” that I heard a Government supporter utter a few moments ago. This amendment has been foreshadowed in a spirit of complete irresponsibility, without any regard to the real issues involved. I cannot support it.
– I desire to inform the Government that I appreciate one provision in this bill. I believe in giving the Government credit when I consider that it proposes to do something that will be beneficial to the people. I refer to the proposed amendment of section 15 of the principal act, under which exemption from pay-roll tax will be granted to a hospital which is carried on by a society or association otherwise than for the purpose of profit or gain to the individual members of it. The Treasurer (Sir Arthur Fadden) introduced this bill on the 25th August last, and almost immediately afterwards, I received a letter about the matter from an official of a big community hospital in my electorate. The letter expressed appreciation of the proposal to exempt wages payable by non-profit hospitals from pay-roll tax. This concession will be of great benefit to such organizations.
That leads me to another matter. We a3 a parliament– the Government and the Opposition - are appreciating more and more the fact that, wherever possible, we should ease the tax obligations of bodies that are conducted, not for profit, but to meet the needs of the people. Relief in respect of income tax has been given to so-called mutual hospitals in recent times, and they have benefited greatly from that concession. The officials of the community hospital to which I referred a few moments ago desire me to say how much the income tax relief means to them in the conduct of that institution. All parties agree that such organizations should be exempt from the payment of pay-roll tax. The amendment which the honorable member for Melbourne (Mr. Calwell) has foreshadowed seeks, similarly, to exempt shires and municipalities. I emphasize that the Opposition proposes that this exemption shall apply only to nonprofitmaking activities that are carried on by these bodies, such as the provision of and upkeep of roads, parks and gardens, and local health activities. It is not suggested that electricity undertakings that are conducted by local government authorities should he- exempt. The greaterproportion of the expenditure of shires and municipalities is incurred in the maintenance of roads and footpaths, which benefit not only residents of the area in which they exist but also the community at large, because the roads are used by through traffic.
In some States members of local government authorities receive no remuneration for the services that they render in that capacity. The Government could provide valuable assistance to such bodies by exempting them from the payment of pay-roll tax in the terms of the amendment that has been foreshadowed. The honorable member for Mallee (Mr. Turnbull) said that they would receive substantial additional monetary assistance by increased payments from the petrol tax. Whilst that may be true of country shires, in which the bulk of petrol tax payments for expenditure on roads is incurred, local government authorities whose areas consist for the most part of residential and business districts will not benefit from that source. Community organizations, such as hospitals, which work not for profit but for the good of the people as a whole, have been progressively exempted from taxes of all kinds. The Government should treat local government authorities in the same way. It may be argued that if shires and municipalities are exempt from the payment of pay-roll tax, the Government will be obliged to exempt certain State government departments which provide similar services. On that point, I repeat that the amendment that has been foreshadowed by the Opposition does not seek to exempt from this tax any trading unit pf a local government authority. If the Government cannot see its way clear to accept the amendment at this stage, I urge it to give further consideration to the claims that have been made on behalf of local government authorities.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 3 agreed to.
Clause 4 (Exemption from tax).
.- I move -
That, at the end of the clause, the following new paragraph be added: - “ ‘ ( 66 ) by a municipal or other local, governing body, or an authority established for the purpose of carrying out all or any of the functions ordinarily carried out by such a. body, otherwise than in the conduct of an enterprise which, in the opinion of the Commissioner, is a trading enterprise;’.”.
I do not desire to add anything to what I said on this matter during the course of the second-reading debate.
– In the course of the review of taxation for the purposes of the budget, consideration was given by the Government to requests which had been made by the Local Government Association of New South Wales, and the Municipal Association of Victoria, and certain persons, for exemption from pay-roll tax in respect of wages paid by local governing bodies. It was not found possible to accede to these requests. The pay-roll tax differs from other taxes in that the revenue derived from it is applied to one purpose only, that is, to meet a substantial part of the cost of child endowment. Child endowment has been designed as a supplement to the wages of employees, varying in individual cases according to the number of children maintained. Therefore, a tax to meet substantially the costs of child endowment is regarded as a logical adjunct to the pay-rolls of employers. It takes the place of higher wages which, otherwise, it would be desirable to pay to employees with family responsibilities.
For this reason, the scope of exemptions from pay-roll tax has been kept to a minimum. The tax is, in fact, payable in respect of wages paid by State government departments, and by numerous other organizations which render valuable community service. Exemption from the tax could hardly be granted- to local governing bodies without equal consideration being given to such departments and organizations. Exemption of all these bodies would involve a very heavy lose to revenue. For these reasons, the Government is unable to accept the amendment.
– When I was speaking during the second-reading debate, I was under the impression that this amendment, which had been forecast at that stage, was to be sponsored by the Government. While I agree with the purpose of the amendment, I do not propose to vote in favour of it because thebill seeks to implement the policy that the Government enunciated in the budget. I support that policy. The Vice-President of the Executive Council (Sir Eric Harrison) has said that the Government, for reasons that he has stated, cannot accept the amendment, I should not he justified in voting for the amendment because if I did so I should be supporting only a part of the Government’s policy. At the same time, many honorable members like myselfwould like to see shires and municipalities exempt from the payment of pay-roll tax. This impost represents a relatively heavy burden on those bodies. For instance, last financial year, the Shoalhaven Shire Council paid £2,867 in pay-roll tax and that sum is equal to half of the amount of the additional refund which that council will receive under the federal aid roads scheme. Last year, the Wollondilly Shire Council paid in pay-roll tax the sum of £1,253, of which £668 was debited to general fund, £558 to electricity services and £27 to water services. During the same period, the Bowral Municipal Council paid in pay-roll tax £1,061 of which £426 was debited to general fund, £17 to the municipal library, £29 to parks and gardens section, £69 to water services, £209 to sewerage services, £174 to gas services and £238 to electricity services. I have no doubt that in consequence of wage increases that have occurred since the 30th June, 1953, those shires are now making greater payments of pay-roll tax. I urge the Government to give further consideration to this matter with a view to exempting these bodies from the pay-roll tax when it introduces its next budget.
Question put -
That the paragraph proposed to be added (Mr. Calwell’s amendment) be so added.
The committee divided. (The Chairman - Mr. C. F. Aderm an n.) .
Majority . . . . 10
Question so resolved in the negative.
Clause agreed to.
Remainder ofbill - by leave - taken as a whole, and agreed to.
Bill reported without amendment; report adopted.
Bill - by leave - read a third time.
Sitting suspended from 6.3 to 8 p.m.
Debate resumed from the 25th August (vide page 606), on motion by Sir Arthur Fadden -
That the bill be now read a second time.
.- The bill provides that £42,000,000 shall be appropriated from the Consolidated Revenue Fund for the payment of war’ pensions. At the outset, I ask the Minister for the Army (Mr. Francis) whether, in addition to the cost of pensions, it covers expenditure on the administrative side of repatriation. If so, it will be possible for me to make some general comments on the department as well as on the specific subject of pensions. It has not been customary for this House to have a full second-reading debate on an appropriation bill of this kind after it has previously debated a measure such as the Repatriation Bill. However, in this instance, because of the cavalier treatment accorded to the Opposition’s proposals when the Repatriation Bill was before the House, we consider that we should take advantage of the opportunity to discuss one or two important matters.
– This bill applies only to the actual pension payments.
– The amount of £42,000,000 will not provide what the Opposition considers to be satisfactory rates of pension, at least for totally and permanently incapacitated ex-servicemen. That sum may appear to be large, even in a budget of £1,000,000,000, but, when measured against the needs of the unfortunate ex-servicemen to whom I have referred, it is sadly inadequate. The demand from this source, unfortunately, will be temporary because totally and permanently incapacitated ex-servicemen are dying at the rate of five a day. In the circumstances, I maintain that, at this late stage, or perhaps even later in the current sessional period, the Government should give further consideration to the needs of these men. On an earlier occasion, I requested that provision be made for partially blinded men.
– Order! The honorable member may not go back over the provisions of the Repatriation Bill, which has been passed by the House during the current session. Decisions have been made on the matters that he is discussing, and they cannot be canvassed again during this debate.
– Will you, Mr. Speaker, tell me how far I may go in referring to these matters?
Mi-. SPEAKER. - The honorable member is called upon to decide whether he is prepared to vote for the appropriation of £42,000,000 in order to carry out decisions that have already been made by the House.
– You certainly circumscribe me, Mr. Speaker, if I may say so. I shall do my best to discuss the subject within those limits. I still maintain that £42,000,000 is not enough to provide adequate repatriation benefits, for the men who have suffered in two world wars. If I may not mention rates and conditions, all I can do is to reiterate the Opposition’s contention that the Government has not been sufficiently generous in certain directions. I submit to its wishes under protest. We want the new rates of pension to he paid forthwith, and we only wish that totally and permanently incapacitated men, and partially blinded ex-servicemen, could receive more liberal treatment. The Government should have heeded our requests, because they were not so much our requests as the consolidated requests of the ex-servicemen of this country, who made representations to honorable members on both sides of the House. I hope the Government will reconsider these repatriation benefits again in due course. Since the Standing Orders will not permit me to talk of pensions, administration, or the general conditions of repatriation, I say at once, on behalf of the Opposition, that we are pleased to support this bill to provide £42,000,000 for repatriation pensions. However, I remind the Minister for the Army in conclusion that we are not satisfied that this sum is adequate to meet the needs of those men of whose circumstances I have spoken recently in this House.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 25th August (vide page 607), on motion by Sir Arthur Fadden -
That the hill be now read a second time.
.- The purpose of the bill is to authorize the reimbursement to the States of a special additional sum under the uniform tax plan. The uniform tax system was Drought into operation during the regime of the former Labour Administration. That was not the first occasion, of course, on which uniform tax had been actively canvassed in Australia. The previous Menzies-Fadden Administration had tried desperately to secure some measure of uniformity in Australia’s taxation laws, but it failed for a number of reasons. It could not achieve agreement between the various States, or between the States as a whole and itself. As a result of the diversity of taxation laws that operated when it was in office, that Government brought down, through its Treasurer, the ill-fated post-war credit scheme. The budget that embodied the provision for that scheme was, of course, the rock upon which that Government foundered.
The succeeding Labour Government introduced a uniform tax system which” was applauded by most members of the Parliament. Hansard reports of debates of that period show that even leading figures in the Opposition of the day, who are members of the present Government, considered the scheme to be desirable. They were in favour of the idea that there should be one tax system throughout Australia, with uniform rates and uniform concessions for all taxpayers, whether they lived in Western Australia or in the far northern part of Queensland.” Although, subsequently, considerable agitation occurred from time to time in favour of a return to the former system, I do not think the State governments at any time “really wanted to abandon the uniform system. Certainly no responsible member of this Parliament would suggest now that we should have six separate. State taxation laws and a seventh enacted by this Parliament to cover the whole of Australia.
The former Labour Administration found the uniform tax system to be so satisfactory, and received such indications of approval from taxpayers in all States, that it decided, under the leadership of Mr. Chifley, to make the system permanent. It introduced a formula for the calculation of reimbursement payments to the States under changing conditions. That formula had the approval of the several States and of the Commonwealth. It is undeniable that various State governments have considered, from time to time, that their share of the money available from tax revenue has been insufficient for their needs. They also consider that the system imposes some limitation upon their sovereignty. That, of course, is true. However, in any federal system, there must be some such limitation upon the powers of State governments. The present arrangement is not only desirable, but also essential if we are to regard ourselves as a nation and not as a loose collection of peoples grouped in different States. It offers us the only method by which we can achieve real nationhood and assure an equitable distribution of the financial burden imposed upon us by the necessity for developing the continent and providing the various services that are needed in a well-governed country.
The formula that was laid down when the Chifley Government was in office provided for the distribution of tax revenue to the States in variable proportions according to the changing population and average wage levels in the different States. Had conditions remained normal, with the national economy under proper control, it is reasonable to assume that the formula, flexible as it was, would have provided for the reimbursement of tax moneys to the States on a satisfactory basis. However, conditions did not continue to he normal. Special financial measures, such as the bill now before the House, had to be passed so that the States might receive sums additional to those payable under the terms of the formula. This was due to the fact that the present Government failed in its duty to the people, to the State governments and to the nation as a whole. Larger special grants have had to be made to the States every year, and these, according to the State governments, have not been sufficient to enable them to provide the services that they wish to provide and to finance the development that they wish to undertake. That complaint, I believe, is strictly true. This Government, if it cares to take positive action, can substantially improve the position.
The simple fact is that the States cannot manage their affairs on the amounts made available to them while prices are allowed to rise unchecked. Because prices have been allowed to rise, State governments have been forced, year, after year, to struggle to obtain sufficient funds to enable them to meet their diverse needs.
– Why have several States had surpluses?
– States had surpluses in the war years and in the prewar years, and there is a good reason why there should be surpluses now. I think the honorable member for Franklin (Mr. Falkinder) will agree with me that the States would expend a great deal more money on social services of various kinds if they had security of income and, therefore, some certainty of a sound financial position in the future.
This bill will provide £19,500,000 for the States over and above the grants payable under the formula. In 1953-54, a special financial assistance grant of £21,915,000 was added to the formula grant of £120,507,000 for that year. The Treasurer (Sir Arthur Fadden) has pointed out in his second-reading speech that the precise amount payable for 1954-55 under the tax reimbursement formula will not be known until the Commonwealth Statistician completes his calculations later in the year. However, it is estimated that the formula grant for this year will be £130,500,000. As I have said, special grants are necessary because the formula, which was designed to cope with normal conditions, and which had the approval of the various State governments, is not able to cope with the extraordinary conditions that we face at present, that we have encountered in recent years, and that we shall continue to meet, apparently, while this Govern- ment remains in office. The States are entitled to demand that this Government, as the central Government, shall take reasonable economic measures, either on its own initiative or in co-operation with them, to hold prices down so that the formula grant will be sufficient for their needs. The only alternative to such a course of action is for the Government to provide sufficient extra money to enable the States to carry on their services efficiently. The present situation is unsatisfactory.
I look forward, frankly, to the time when we shall have one government for the whole of Australia. Of course, that does not mean that there will be no decentralization. It postulates, instead, a greater degree of decentralization. The Federal Government is responsible for all the large measures for defence and other national purposes, but other matters are left to the State governments. That causes a great, deal of overlapping, which has been the subject of innumerable conferences between Commonwealth and State Ministers throughout the years since federation. Endeavours have been made to avoid the overlapping and duplication of administration and the cost that it entails. In my view, there is a still greater reason why, as the years go on, we in Australia must have a unified system of government. Our present federal system, which has worked more harshly since this Government came into office than ever before, provides scope for the evasion of responsibility by any government that seeks to evade its responsibility. I believe that no administration in Australian federal history has been more willing than the present Government has been to shelter behind the limitations of the Constitution. We face great problems in matters ranging from State development programmes to housing, education and railway systems. This Government says, in effect, “ We have the money, but those problems are not our responsibility “. It tries to put the full responsibility for them on the State governments, which, in the main, are unable to shoulder the responsibility and the financial burden that is entailed. The evasion of responsibility in my opinion, is the worst single effect of the present division of government on the Australian continent.
I welcomed the recent suggestion that both Government and Opposition members of the Parliament should constitute a committee to discuss the Australian Constitution. It is proposed at present to deal with the narrow issues of parliamentary government as reflected in the Commonwealth Parliament in the Senate and the House of Representatives and their respective powers. The Government will be completely unrealistic in its approach to this problem if it does not constitute the proposed committee for review of the Constitution on a much wider basis so that.it may deal with the greater problems of the Australian constitutional position generally, its limitations and the measures that must be taken to overcome those limitations and the worst of the ill-effects that flow from them.
I have no doubt that Government supporters will attack my view, which, I know, is shared by all members of the Opposition, that we must seek ultimately to achieve a unitary form of government that will decentralize not only State legislative authority, but also local government. We seek that objective because we believe that it will result not in less decentralization but in a far greater measure of decentralization. We seek it because it will bring governments closer to the people of Australia than the present system can bring them. It will make local forms of government more responsible to the people and more responsive to their wishes. In advance of any attack that might be made on my suggestion, which, as I say, I know is supported by all members of the Opposition, I point out to the House that, when the original uniform taxation legislation was introduced, a number of honorable members who support the present Government expressed the view that the unification of the Australian parliaments into one national parliament offered the only final solution of Australia’s problems of government and the only effective method of making a real attack upon development problems. The honorable gentleman who “was most forthright in his statements to that effect was the present Vice-President of the Executive Council (Sir Eric Harrison), who pointed out, I think truly, that those who opposed the uniform taxation legis- lation took their stand only because they saw in it a further step towards, to use the right honorable gentleman’s own words, the inevitable unification of Australia. His view was shared, and forthrightly supported, by the present Australian Minister to the United States of America, Sir Percy Spender. That view was shared in greater or less degree by most members of the Liberal party at the time. I do not know exactly what views members of the Australian Country party expressed on the matter.
– They did not have any.
– I should not be surprised if they did not have any views on it. My purpose in directing attention to the benefits that can flow from uniform government and in pointing out the difficulties under which a. federal system labours, is to demonstrate to the Government that unless it is willing to take action such as I propose it will not be trying to make the federal system of government work.
From time to time Commonwealth and State Ministers and Treasurers meet at Canberra in the National Parliament building. So far as one can learn from newspaper reports, these meetings are the most unedifying spectacles to be witnessed in Australia and perhaps in the world. Regularly, there is bargaining and arguing, out of which finally emerges a statement from the Federal Treasurer or the Prime Minister that so much money will be made available to the States. The States may fight the Commonwealth on its offer and may vote for an alteration of the States grants formula, if they so desire, but they have no influence strong enough to force the federal administration to go beyond the limits that it Bets itself. While the federal system remains - and I assume that it will remain for a considerable time - we have to seek to end that unedifying struggle that takes place so regularly and the bickering and dissatisfaction that engenders hostility between the Australian and the State governments. It is fair to point out that this is not the result only of the opposing views of Treasurers in Liberal and Labour governments. The views of
Labour Premiers and Treasurers on these matters are shared usually by the Liberal Premier and Treasurer of South Australia.
As we cannot amend the measure before the House, we must support it, but I appeal to the Government to make a more realistic approach to the problems that I have mentioned. It must give to the State administrations, not only once a year, but also regularly, the benefit of consultation and constant association. It must learn the needs of the States, and their problems, and then prepare the ground fully and well until, finally, it is seised not only of the problems of the Federal Government, of which, of course, it must always be profoundly conscious, but also of the problems of all the State governments. Some such measure of cooperation is clearly possible. We may oven get to the stage at which some officers of the Commonwealth Public Service might work in conjunction with officers of the State governments to learn the needs of the States, their problems, and their monetary requirements for a maximum contribution to Australia’s national wealth, prosperity and development.
I agree that the States also have an important part to play. I presume, from reports that I have read in the newspapers, that whenever their representatives come to conferences of Commonwealth and State Ministers or meetings of the Australian Loan Council, from which the financial agreements to which f have referred emerge, they seek something more than they are willing eventually to accept. They ask the Federal Government to advance the maximum that they can reasonably request, in the expectation that whatever they ask for they will get less, whether it be slightly in excess of their requirements or what they regard as a reasonable amount to carry them through the financial year. The Federal Government, on its part, suggests the minimum amount that it thinks it can get away with. Out of the conflict of the two opposing sides, I presume after heated discussion and displays of ill feeling that, in public life, continue throughout the years, a compromise finally emerges. Federal and State treasury officers should b°- in constant association, regular consultation between the Ministers of the respective governments should take place, and the Federal Treasurer should from time to time visit the States for consultation so that he might be seised more clearly of the problems of the States and perhaps be induced to be more sympathetic and more generous in dealing with the claims of the States for financial assistance. At I have said, the States have an important part to play. I believe that they will play it, conscious of their responsibilities as leaders in Australia’s public and national life.
My suggestions are eminently practicable. The bill is designed to obtain Parliament’s approval of an agreement that has already been made. It provides for the maximum grants to the States that the Australian Government is willing to make. I repeat the two points that 1 have made. First, the grants will increase year by year unless this Government i.= willing, instead of helping to engender continuing price rises, to take a firm grip of the economic problems of which it seems scarcely conscious at present. It must grapple firmly with the situation. Secondly, it must make itself aware of the problems, difficulties and possibilities for development of the State governments, which can play a large part in Australia’s affairs. The Australian Government must also seek, by all the means in its power, to obtain the full co-operation of the State administrations. If it doe.= that, while the present federal system lasts, the Commonwealth Constitution will be much more workable, the Australian people will be much more contented, an.-I there will be much less of the bitterness and disharmony that now characterize? the relations between the Federal and State governments.
.- The honorable member for Perth (Mr. Tom Burke) made a very confused statement about many matters. The only thing about which he was clear was that the Australian Labour party completely supported unification. Unification has been the long-standing policy of the Australian Labour party, and it is quite proper for the honorable member for Perth to stand by that principle in thi;
House. But the people should know that that is Labour’s policy because it is the only system of government by -which that party can give effect to its long-standing pel icy of the complete socialization of the means of production, distribution and exchange. Despite the recent denial of that fact, it is still the policy of Labour. I shall not attempt to follow the honorable member for Perth through his rambling arguments in support of cooperation between the State governments and the Federal Administration. I shall have something to say about that subject later.
The bill, as has been said, provides for the granting to the States of the sum of £19.500,000 over and above the amount that the States are entitled to under the States grants formula that was agreed upon some years ago. The formula provides for grants totalling £130,500,000. The total sum to be granted to the States from moneys derived from taxation in Australia during the current financial year, therefore, amounts to £150,000,000. “ E consider that this bill is drafted in a most extraordinary fashion, perhaps because I am not familiar with parliamentary draftsmanship. Clause 4 reads -
The amount payable to a State under this Act is the amount by which the amount calculated in respect of that State under sections six and seven of the States Grants (Tax Reimbursement) Act 1946-1948 in respect of the year which commenced on the first day of July, One thousand nine hundred and fiftyfour, is less than the amount that would be payable to that State if the aggregate grant to be divided amongst the States in accordance with section seven of that Act in respect of that year were One hundred and fifty million pounds.
I am afraid that I am not able to understand how the legal fraternity can get any sense out of that clause. However, after two or three hours deep study I arrived at the conclusion that it means that the total amount that will be allowed to ‘the States is £150,000?000. This measure will give the States £19,500,000 more than they would have been given under the formula that was agreed upon some time ago. There is no legal obligation on the Commonwealth to pay the States an additional £19,500,000, and as a matter of fact, for some years, particularly during the life of the last Labour Government, no amount additional to the amount that would be allowable under the formula was granted to the States by the Australian Government. The formula to be applied was worked out and agreed upon by the States themselves when the uniform taxation scheme was introduced. Therefore, any amount supplementary to the grant under the formula is an amount that is given by this Government out of its own generosity.
We all know that each year there are two very important meetings held in this country. This year they were held on the 29th and the 30th June. One of those meetings is of the Australian Loan Council which deals with loan raisings, and the other is the conference of Commonwealth and State Ministers. At the latter meeting the matter of tax reimbursement and the amount to be made available to’ the States under the formula is discussed. In recent years the conference of Commonwealth and State Ministers has been used as an opportunity by the States, particularly by New South Wales which seems to take the lead in matters of this kind, to pour out propaganda against the Australian Government and its administration of the affairs of the nation. Every year the State Premiers make public announcements that they are not given sufficient money by the Commonwealth to carry out all sorts of schemes for the benefit of the people of their States. During the conference the States repeatedly say that the Commonwealth will not supply them with sufficient money for education, and for this, that and the other public works, and they try to use the occasion to impress upon the people that the Australian Government is being mean with the States in regard to the provision of money for their purposes, and that therefore the State governments cannot be expected to carry out the works and services that the people of their States need. It is shocking that the States should adopt that attitude in view of the facts of this matter, and in view of the generosity of the Commonwealth. Indeed, that they should adopt such an attitude is an indictment of the Premiers concerned, particularly the Premier of New South Wales, Mr. Cahill, and his predecessor. Mr. McGirr, who is now the admiral-in-charge of the New South Wales Maritime Services Board.
During every conference of Commonwealth and State Ministers most of the State Premiers ask for more and more money, and do not face up to the fact that this Government has done more than any other Australian government to supply them with money, and that any lack of efficiency in their own administrations is due purely to their own lack of ability. On the 30th June this year Mr. Cahill wanted the £150,000,000 offered by the Commonwealth to the States to be increased to £163,000,000. In other words, he wanted an amount of £32,500.000 to be allotted to the States ;is supplementary grants instead of ±’10,500,000. When his request was refused, he charged the Prime Minister (Mr. Menzies) with being as hard as nails with the States. It was reported that the words I have just used were the actual words used by Mr. Cahill on that: occasion. Such an attitude on the part of a State Premier is quite wrong, and it is shocking that a responsible Premier should say such a thing at an important meeting such as a conference of Commonwealth and State Ministers.
Let us now see how hard this Government has been towards the States by considering statistics relating to the money supplied by the Commonwealth to the State?. This year New South Wales will receive from the Commonwealth by way of tax reimbursements under theformula, plus supplementary grants, the amount of £59,066,000. Last year New South Wales received £56,285,000, therefore that State will receive a considerable increase this year. Victoria will receive £37,123,000 this year as against £33.000,000 last year. Queensland will receive ‘£23,871.000 this year, and last year it received £22,71 6,000. South Australia, will receive £12,924,000 this year; Inst year that State received £12,240,000. Western Australia will receive £]1,S72,000 this year; last year it received £11,347,000. Tasmania will receive £5,144,000 this year whereas last year that State got £4,831,000. Therefore every State of the Commonwealth will receive more money this financial year than it received last financial year, and figures of similar proportions could be quoted for the other years of this Government’s regime. It is interesting to look back over the period when the last Labour Government was in office under the leadership of the late Mr. Chifley. In the financial year 1946-1947 under the Chifley Government, the total amount given to the States under the formula for tax reimbursement was £40,000,000, and no supplementary grants at. all were made to the States. In 1947- 1948, £45,000,000 was given to the States under the formula, with no supplementary grants. In 1948-1949 £53,744,000 was given to the States under the formula, and again no supplementary allowances were granted. In 1949-1950, the last year of office of the Chifley Government, the States received £62,537,000 under the formula, together with supplementary amounts totalling £8,000,000. Therefore in the last four years of the Chifley Government’s administration the States were given £201,281,000, and the supplementary grants totalled £8,000,000.
Let us contrast that record with the record of the Menzies Government in the four years following its election to office. In that period the States were granted £446,187,000 under the formula,’ and £102,132,000 by way of supplementary grants. Those figures are damning evidence that the statements of the State.? that this Government is not generous towards them are made merely for propaganda purposes. Any fair-minded man or woman in Australia, including fair-minded men among the Opposition, will admit that the figures prove quire conclusively that this Government has adopted a most generous approach to the needs of the States. The Government has. provided the States with all the money they need, and, in fact, if they had been given more money they would not have been able to use it. That was recently proved in New South Wales. There is not sufficient material or manpower available in this country to allow the States to spend more money even if it were given to them by the Commonwealth. That, of course, proves that the Commonwealth has been 100 per cent, generous in its dealings with the States. Therefore, all the propaganda that has been put out to the people to the effect that this Government is not providing sufficient money for the States has proved to be nothing but nonsense. The people fully realize that this Government’s dealings with the States have been most generous, and they will not be upset by the nasty insinuations and propaganda dished out by some of the Premiers of the States of this country.
The conference of Commonwealth and State Ministers is a most important function, and the Premiers of the States, particularly the Premier of New South Wales, should approach the work of that conference in a proper national spirit. They should frankly discuss our developmental needs and endeavour to do the best that they can for Australia rather than assault the Australian Government with cheap propaganda. After all, the Premiers, and other Ministers at the conference, represent the people of Australia, and it is their duty to do the best they can to develop our nation. The conference should be an occasion for a proper economic survey of the whole of the affairs of the nation and a place to make important decisions for the nation’s welfare. Surely the Ministers at that conference could discuss together and decide upon the most important priorities for public works in the country. If that were done we should not waste our money the way it is being wasted atpresent, and we would bring great benefit to Australia by speeding up its development. We have no chance of developing the country as we should develop it under the present system of constant attacks by the States on the Commonwealth, and it is only when we adopt a national viewpoint that we shall really get anything worthwhile accomplished.
As the honorable member for Perth (Mr. Tom Burke) pointed out, Australia is a federation of States. The Australian Government has become the government of the Commonwealth because it has had powers delegated to it by theStates under the Constitution. However, the honorable member for Perth said that the Australian Government should be predominant in the Commonwealth, but I believe that there is a place for all the governmental authorities in Australia and each should have its independence preserved.
The nation cannot work as a whole if its various parts are pulling in opposite directions. All the States of the Commonwealth should work together with the Federal Government in a proper spirit of goodwill and co-operation for the welfare of Australia. To use an Australian colloquialism, let us be fair dinkum about this matter instead of approaching it in the manner in which it has been approached. The Australian Government has played, and will play, its part. I think I have cited suffcient figures to prove that, in the interests of Australia, the Government is prepared to play the game with the States.
One of the factors that is associated with this state of affairs is the system of uniform taxation. Many people in Australia favour uniform taxation. We know that the average citizen prefers to submit one taxation return and to receive one assessment. But the uniform system has its drawbacks. In the first place, it is undoubtedly a very powerful instrument in the hands of a central government. Its worst feature is that it leads to a condition of irresponsibility in the States. The States feel that they may pass over their proper responsibilities to the Commonwealth. As a result of that attitude, there is a great deal of overlapping and economic waste. I believe that the planned progress of Australia has been greatly retarded because of the attitude of the States. I stated in the House recently - and I repeat the statement - that there is an urgent need for constitutional reform. Only last week, the Prime Minister (Mr. Menzies) referred to that subject. It is left to the Opposition to indicate whether it will join wholeheartedly with the Government in reviewing the Constitution, with a view to placing it on a proper footing and to removing the difficulties that are retarding the proper growth of the country. A review of the Constitution is vital to the interests of Australia and of every man and woman in Australia. Perhaps it is more vital than anything else. I plead with the Australian Labour party - and I believe the people of Australia will join with me - in view of the fact that the Prime Minister hasoffered to it that privilege, to co-operate with the Government in reviewing the Constitution.
One of the big problems, as I have already stated, is the attitude of some of the States. Unfortunately, the most troublesome State is the State from which I come - New South Wales. It is the most upsetting influence upon the economy of Australia. In spite of the degree to which the Australian Government has tried to do the right thing, it has discovered that it is almost impossible to prevent the upsets that are caused by activities within certain States. We all know some of the things that have happened recently in New South Wales. This Government is constantly struggling against difficulties that are created, and deliberately created, particularly by New South Wales. Of course, the Government of New South Wales is comprised of outandout socialists. If they are faced with the necessity of deciding whether to achieve their socialist objectives or to do something that is in the interests of Australia, they do not care one whit about the nation. There have been many instances of grave waste in that State. I have cited figures which show that New South Wales will receive more than £59,000,000 from taxation collected by this Government as well as a similar amount from loan funds in addition to which it will receive revenue from its own sources. The losses on the railways and other transport systems of New South Wales over the last seven or eight years amount to more than £30,000,000, simply because that State has not managed its affairs in a businesslike way.
– The unions have a lot to do with it.
– There is no doubt about that. Notwithstanding the fact that New South Wales was a partner with the Australian Government in the formation of the Joint Coal Board, it set up another authority to which it appointed the late Mr. Baddeley. I do not wish to say anything that is derogatory of a man who is- dead, but we never heard about him after his appointment. I do not think anybody will ever know what that State has done with the millions of pounds it has spent. As the honorable member for Macarthur (Mr. Jeff Bate) stated on one occasion, some extraordinary things have happened. I hope he has something to say about their, to-night. Millions of pounds have been spent wastefully in that direction alone.
I refer now to the generation of power in New South Wales. The State Government set about achieving its objective of a super-socialist structure for the handling of electricity. We know that local governing bodies were doing certain work, and that they were doing it very well, bur. the New South Wales Government established an electricity advisory committee which is empowered to spend, and which has spent, millions of pounds. As a re suit of the operations of that authority, the increase in the cost of electricity has cost the manufacturers of Australia hundreds of millions of pounds. In addition, it superimposed another authority, the Electricity Commission of New South Wales. The Government spent several millions of pounds overseas - some of it hard-earned dollars - for the purchase of package power plants which, in a moment of panic, it considered to be necessary to overcome a situation which could have been overcome very easily by other means. Those package plants were not installed and were not producing electricity until the Pyrmont power station had almost overcome blackouts. The blackouts were overcome by the Pyrmont power station and not as. the result of the spending of millions of pounds on inefficient package plant. Why was it necessary to purchase or confiscate the perfectly sound private organization, the Balmain Electric Light Company?
– The State Government socialized it.
– The Government socialized that undertaking, because its objective is socialism. It has not even paid for it yet, but it will do so this year. The poor shareholder is sitting down waiting for his dividends, yet the Government intends to spend several millions of pounds, quite unnecessarily, in confiscating a private undertaking that was doing a magnificent job. Wherein lies the necessity for such action? One can go to the Sydney city railway system and see the cobwebs, and he can see the mice and the rats having a great time in those works which are lying idle. The Government of New South Wales starts off with great guns and blazons forth in the press what it intends to do for the people, just as it did in relation to the 90,000 houses a year that Mr. McGirr promised to provide, and in relation to the eastern suburbs railway. Those, schemes start off with a great nourish, but then they stop. New South Wales is a graveyard of incomplete works which are deteriorating, and in relation to which millions of pounds are being wasted. The Government did not need 50,000 blocks of land, but it resumed or bought 50,000 blocks of land for the New South Wales Housing Commission. Moreover, it selected valuable sites, in spite of the fact that it was intended to use the facilities of that organization to provide homes for indigent people. That is the kind of waste in which it indulges because of the political patronage that it hands out to the people.
I hope that the financial methods that are envisaged in this bill- will soon cease, because I think they are bad in principle. They give rise to a bad psychological relationship between the Commonwealth and the States. As I stated previously, each form of government should be independent. Within its own sphere, it should realize what are its functions and responsibilities, and it should accept responsibility for the money that it collects. I hope we have seen the last of a measure of this kind and that, as a result of the investigation in which the Prime Minister has invited the Opposition to join, there will be an amended constitution, which will give to the various forms of government their rightful place, which will preserve the sovereignty of each of the States and of the Australian Government, and which does not overlook tho important part that is being played by local authorities.
– I was very interested in the dissertation of the honorable member for Bennelong (Mr. Cramer)-
– You are the only honorable member who was interested.
– I was interested particularly when he condemned New South Wales and spoke about the socialist
Government of that State and its desire to socialize the supply of electric power. I remind the honorable member that there is a Liberal government in South Australia, and that it socialized every means of producing power. The Government of South Australia took over the whole electric power supply. Thclegislation was passed by a Liberal government which had a majority in both Houses. In the upper house, there are fifteen Liberal members and five Labour members. The honorable member turnabout a socialist government be in a responsible for the socialization of theelectricity industry ! He . referred also to the loss on the New South Wales railways, and he attributed that to the kind of government that was in office. If thihonorable member went to South Australia, he would discover that, proportionately, the South Australian railway.experienced the same loss.
– A lien vie. loss.
– A heavier loss, perhaps. The Government of South Australia has appointed a special commission to take over from the Municipal Tramways Trust a very great loss. When the honorable member blames socialism for this kind of thing, he is on the wrong track. He must realize that there arcforces other than socialism or liberalism which are responsible for the losses that are sustained by State governments. The honorable member referred to clause 4 of the bill. I read the bill before the honorable member spoke, and I agree with him that it is very difficult for any one to understand the meaning of that clause. If honorable members want to hear a good debate, I suggest that they should take this clause to a debating society and ask its members to debate it. I shall read it again, and then comment on it. It states -
The amount payable to a State under this Act is the amount by which the amount calculated in respect of that State under sections six and seven of the States Grants (Tax Reimbursement) Act 1946-194.8 in respect of the year which commenced on the first day of July, One thousand nine hundred and fifty-four is less than the amount that would be payable to that State if the aggregate grant to be divided amongst the States in accordance with section seven of that Act in respect of that year were One hundred and fifty million pounds.
When I read the clause my mind went back a few years to the time when you, Mr. Speaker, were an honorable member in the body of the chamber. You were addressing the House on a bill similar to the present measure, and you read a clause as abstruse as this one is, and asked what it would mean to the ordinary individual. I agree with the honorable member for Bennelong that it requires study to understand this clause. The honorable member said that it took him two or three hours to discover its exact meaning. I admit that it took me three minutes to do so. The fact remains that a clause worded in this way is difficult for ordinary people to understand. The clause will authorize the payment to the States in 1954-55 of a special financial assistance grant to supplement the amount payable under the formula contained in the States Grants (Tax Reimbursement) Act 1946-4S. The clause does not specify the actual amount, but it is £19,500,000. We had a similar bill before us some years ago. Honorable members opposite said on that occasion that the Government intended to abolish the system of uniform taxation, and that the States would have to agree to collect their own taxes and bear all the odium connected with tax collection. I recollect saying then that, despite the protestations of honorable members opposite, we would have a similar bill in the following year, and another in the year after that. I recall how bitter honorable members opposite were about uniform taxation. They said in very strong terms that the Commonwealth did not intend to continue to take the responsibility and the odium of collecting taxes on behalf of the States. The honorable member for Bennelong made a fleeting reference to that matter to-night, but it was very fleeting indeed, because honorable members opposite are keeping very quiet about their former protestations about uniform taxation. Several of the States, including States with Labour governments, ostensibly supported the abolition of the uniform tax system some years ago, but we hear very little about that from them now. Honorable members opposite, and the States concerned, are content that this
Parliament should ratify the decisions made by the Australian Loan Council, which consists of the Treasurer and the Premiers and Treasurers of the various States.
I remind honorable members of the division of opinion on uniform taxation when the system was introduced. I was not at that time a member of this House. I was a member of the South Australian Parliament when it dealt with the subject of uniform taxation. One argument advanced in that Parliament was the same argument as the honorable member for Bennelong has advanced to-night, to the effect that the uniform tax system is the method by which the Labour party intends to achieve the socialization of production, distribution and exchange. I remind honorable members that no Labour government has given effect, in the way that honorable members opposite allege, to that plank, which was put into the Labour party’s platform about 30 years ago. The Labour party wants Australia to be one great country, and not a mere collection of States, with one person on one side of a State border paying taxes under one system, and another person on the other side of the border paying taxes under another system. We want to feel that we are one people, and are attempting to make ourselves a great nation. Anybody who doubts that Australia has grown up in recent years has only to read international newspapers and the accounts in our own press of international conferences, to discover what a large place Australia occupies in the world to-day. That is because we are growing up as a nation, and not remaining merely a conglomeration of States that work under different tax systems and have different economies. I am pleased that the talk of a few years ago about compelling the States to collect their own taxes has died down, and I hope that it will not recur.
I agree with the honorable member for Perth (Mr. Tom Burke) that we have to evolve a better system of sharing the tax pool between the Commonwealth and the States. We can evolve an improved system if the representatives of the Commonwealth and the States are prepared to meet as Australians, purely and simply. They will not get very far if one side pulls one way, and another side pulls the other way. The honorable member for Bennelong to-night belittled his own State merely because it has a Labour government. There is an old saying about persons fouling their own nests. The honorable member for Bennelong did that very thing to-night by decrying New South “Wales. “We repeatedly hear honorable members from Queensland decrying their State. If we want to have such a constitutional convention as was men’tioned by the honorable member for Bennelong, at which we can evolve improvements to the Constitution that will enable Australia to grapple more effectively with the problems that face it, we must abandon the attitude evinced by some honorable members, who revile their own States because they are under governments that have a different political colour from that of the parties that these honorable members support. I am pleased to say that members of tho Labour party who represent South Aus. tralian electorates have not indulged in such behaviour, although we have a Liberal government in that State. Wo from South Australia realize the difficulties and the needs of our State, and we therefore avoid causing friction and disunity between the Commonwealth and South Australia.
– But South Australia has a good government.
– We have a good government in South Australia because the Labour party in that State is able to give the State Government sufficient votes to enable it to. defeat its own dissident supporters when such a bill as the bill to socialize the electricity authority comes before the South Australian Parliament. The bill under which electricity power plants in South Australia, and the Adelaide Electricity Supply Company, were nationalized, went through the lower house of the South Australian Parliament easily, with Labour party assistance. The only members of that House who opposed it were a few Government supporters. The only members of the Legislative Council who opposed it were also Government supporters. When honorable members opposite speak about our good government in South Australia let them remember that, had it not been for Labour votes, the Premier of South Australia would not have been able to have his legislation passed. I repeat that the South Australian Government is ,a good government because, by working with the Labour party, it has been able tq give effect to some of the planks of tha Labour party platform in that State. The honorable member for Bennelong, who spoke about power houses and State coal-mines, should come to Port Augusta and see the great power house that has just been completed there. He should also have a look at the Leigh Creek coalmine in South Australia, which is owned by the South Australian Government and of which the Liberal Premier of South Australia is justly proud and boastful. It is expected that in the near future that mine will produce 1,000,000 tons of coal a year. The South Australian Premier has been able to prevail on this Govern-^ ment to widen the gauge from Port Augusta to Leigh Creek from 3 ft. 6 in. to the standard gauge of 4 ft. 8£ in., so that that coal may be brought to Port Augusta, not from a private coal-mine, but from a State coal-mine. When honorable members say that socialism and socialistic governments are respon=sible for actions, which, they claim, are the’ ruination of the States, let them remember that in South Australia it is a Liberal government that is doing these very things. That Government is nationalizing everything it can in the interests of the State. It is carrying out the Labour party’s policy that huge projects of a national character should be run by the nation, and not by private enterprise. The Premier of South Australia has been able to proceed with his policy because he has had the help of the Labour Opposition to defeat his opponents in his own party.
– What about the nationalization of banks?
-Order! I do not intend to permit a debate on bank nationalization.
– I shall not attempt to debate that issue. I merely say that the banks cannot be nationalized because the Privy Council has decided that nationalization of banking in this country is ultra vires- the Constitution. The Labour party is prepared to abide by that decision.
Last year South Australia received a special grant of £12,241,000, and this year will receive a total amount of £12,924,000. I admit that provision is made in other legislation for other special grants to the small States. That matter will be debated in connexion with another measure. The honorable member for Bennelong has said that if the Commonwealth increased the grant to New South Wales that State would not be able to expend the increased revenue. I do not know whether the honorable member has had any communication from the Teachers Federation of New South Wales, or from other bodies interested in education, which are appealing to the Commonwealth to come to the rescue of the States and enable them to improve their education systems.
– Then why does not New South Wales allocate more money to education, instead of wasting it ?
– I do not know whether the money was wasted. But any statement by the honorable member that New South Wales could not use more money differs radically from statements made by public bodies in New South Wales, which contend that more money should be made available to the State by the Commonwealth for education. As I said earlier, this bill is designed to give effect to the provisions of the uniform tax legislation, and to make more money available to the States. The honorable member for Bennelong said that the States would have received from the Chifley Government under the tax reimbursement formula approximately £220,000,000, and that the present Government had given them about £440,000,000. I do not doubt the accuracy of those figures, but I point out that tax collections by the Chifley Government were only one-half of the tax collections by the present Government. Therefore, if the Commonwealth collects twice as much tax now as it collected a few years ago, it is only right that the States should receive twice the reimbursement that they would otherwise be given under the formula. I believe that, as time passes, we shall have to recognize that principle, and give effect to it.
Some honorable members have spoken about the financial demands and expenditures of the States in recent years. They should examine the position in Canberra. The Minister for the Interior (Mr. Kent Hughes) has announced that between 5,000 and 7,000 public servants will be transferred here when the new administrative building is completed, and he has pointed out that additional schools, churches, houses and business premises will have to be built to serve the increased population. State governments have similar tasks and obligations. The census figures that have just been released reveal that the populations of South Australia and Western Australia have increased substantially. New suburbs, some of them almost cities, cannot be provided without incurring tremendous expenditures on new facilities. I have already referred to the cost of education in New South Wales. In the Woodville Gardens section in my electorate, many hundreds of houses have been built in comparatively recent times and three new schools have been erected in the last three or four years. A few miles away, in another suburb, two more big schools have been provided. Almost across the road, in the electorate of Sturt, a high school and another school have been built. Why? Simply because of the increase of population and the increased needs of the people. When we realize the great development that is taking place in many parts of Australia, we understand why representatives of the States must ask the Commonwealth each year for a larger reimbursement than they received in the previous year. The honorable member for Bennelong said that, under the tax reimbursement formula, the payment to New South Wales will be increased from £56,000,000 to £59,000,000, and the payment to South Australia will be increased from £12,200,000 to £12,900,000 this year. The total reimbursements to the States will be increased from £142,000,000 to £150,000,000 in this financial year. When we consider the increase of population in the last twelve months, and the resulting increased needs of the people, we must agree that the additional reimbursement of approximately £7,500,000 is not very great.
There are other matters also to be taken into consideration. The Government boasts of a condition of full employment, of the rising wages bill, and the amount that would have been collected by way of income tax had the rates not been reduced this year. When we take all those matters into consideration, we can easily see that the States require additional money to meet their just and necessary needs. I trust that we shall be big enough to realize that the States need more money. I agree that, in some matters, the States appear to waste money, but I should say, from my observations of expenditure on buildings and various projects, that no State is more prodigal than is the Commonwealth. It is easy to point the finger of scorn at somebody else, and to indicate that he is paying too much for. what is being done, but we should always be prepared to examine our own position and ask ourselves whether we are managing any better, I cannot see, from my observations of Commonwealth and State buildings in the capital cities, and the erection of houses in the Australian Capital Territory and in the States, that the Commonwealth is in a position to point the finger of scorn, as the honorable member for Bennelong has done, at the New South. Wales Government. I hope that, when we discuss State grants in future, we shall deal with the facts, and the real needs of the States, and judge their demands on that basis.
The honorable member for Bennelong has referred to the sovereign rights and responsibilities of the States, and to constitutional reform. I recognize that an alteration of the_ Constitution is necessary. We cannot go on, with divided control, as we have in the past. When I make that statement, I do not mean for one moment that we have to centralize everything in Canberra. I cannot see any prospect of unification, but I realize that even with unification of taxation and other powers of government, some authorities would still be required to deal with local matters. State parliaments, as we know them now, would disappear, but, as in England county councils or similar bodies would have to be established to attend to local affairs. I do not think that we can introduce a system that will completely abolish the States and provide for complete administration from Canberra. We cannot do so even now. The large State of New South Wales has to make provision for the conduct of affairs on a scale that is not attempted in South Australia. We in South Australia do the great bulk of administration under the State system, but in New South Wales those matters are attended to under a local government system. The bigger a place grows, the greater the population and the greater the diversity of industries, the greater is the need to have local bodies to do the local work. By that means, we get away from real centralization.
According to the honorable member for Bennelong, the people of New South Wales get a rough deal. He condemned that socialist State for wasteful government, and for holding everything up. 1 recall that a request has been made by the Playford Liberal Government to the Broken Hill Proprietary Company Limited to erect a steelworks at Whyalla in South Australia. The Premier of that State is to meet the management of the Broken Hill Proprietary Company Limited shortly, and will attempt to persuade it to build a steelworks in South Australia. However, the organization proposes to construct big additional steelworks at Port Kembla and Newcastle, in New South Wales, although the honorable member for Bennelong has described it as a socialist State. The honorable member is the advocate of private enterprise. He is always urging us to leave matters to private enterprise. He says that private enterprise can get jobs done more quickly than can governments. He complains that the so-called socialist Government of New South Wales will take charge of matters, and will nationalize industries in that State. He has pointed out that the New South Wales Labour Government took control of the power house at Bunnerong. I wonder that the honorable member is not afraid that the New South Wales Government will not take over the steelworks owned by the Broken Hill Proprietary Company Limited.
– It will.
– The management of the Broken Hill Proprietary Company Limited is quite happy to continue to expend millions of pounds on its business in New South “Wales, and to build another huge steelworks in that State. About a year ago, the English firm of Courtaulds Limited announced its intention to establish a works in Australia. The South Australian Government endeavoured to persuade the firm to build the factory in South Australia, and the Victorian Government endeavoured to persuade the firm to build the factory in Victoria, but all to no avail. I think that nearly every State made a bid to get those works, yet Courtaulds Limited decided to establish its factory in that terrible State of New South Wales, which is ruled by a socialist government. That is to say, private enterprise resolved to make a big investment in the heart of a State where, according to the honorable member for Bennelong, socialism is rife. I inform the honorable gentleman that big businessmen who know their onions, as the saying goes, will not establish works in places where they have no chance of success. I urge the honorable member, before he begins to belittle his own State again, to think about the matters that I have mentioned and he should then realize that, after all, New South Wales cannot be such a bad place, because big business is keen to establish itself there.
– Order ! The honorable member’s time has expired.
.- Both the honorable member for Port Adelaide (Mr. Thompson) and the honorable member for Perth (Mr. Tom Burke), who preceded him from the Opposition benches, have given their benediction to the uniform tax system, although they also realize that it is not working quite satisfactorily. I propose to stick fairly closely to the subject before the House, and I shall not pursue the honorable member for Port Adelaide to Wollongong, beyond observing that the reason why the Broken Hill Proprietary Company Limited is extending its works at that place is that it has suitable coking coal there, and not because a socialist government is in charge of the affairs of New
South Wales. Beyond that observation, I do not propose to traverse the fields in which the honorable member for PortAdelaide has wandered.
The honorable member for Perth, while giving his blessing to the uniform tax system, apparently simply because it was introduced during the regime of the Curtin Labour Government, nevertheless recognizes that it is not working well. He suggests that perhaps the principal reason is the fact that the cost structure in Australia has not remained stable. He has overlooked the fact that the tax reimbursement formula makes provision for increases of costs and wages. Furthermore, rather ironically, he points the finger of condemnation at the inflation which has incurred in recent years, although the Labour party, of which he is a member, has advocated every kind of policy which would result in much greater inflation than has, in fact, occurred. His only suggestion to remedy the position and to overcome the weaknesses of uniform tax system has been that there should be more frequent consultation between the representatives of the Commonwealth and the States. I suggest that if consultation once a year results merely in rather undignified discussions that lead to nothing but disputes, more consultation would lead to more disputes and less dignity, and so I dismiss his suggestion as one that is riot very practical.
What is the position? The States receive revenue not only by levying taxes in certain fields but also in the form of reimbursements provided for under the States Grants (Tax Reimbursement) Act and also from ad hoc measures, such as this one, which was brought down each year and which provide an amount in addition to that for which provision i? made under the States Grants (Tax Reimbursement) Act. The fact that this measure has to be introduced to make available to the States for this year the sum of £19,500,000, in addition to the £120,500.000 which they will receive under the States Grants (Tax Reimbursement) Act, is, in itself, an indication thai the system is not working satisfactorily. If the formula were satisfactory, it would not be necessary to make these supplementary grants each year, and there would be no necessity for the annual disputes that occur between the Australian Government and the States. The mere fact that this bill has been introduced indicates that the system is not working satisfactorily. The States Grants (Tax Reimbursement) Act was introduced originally in 1942 as a war-time measure and it was supposed that it would be allowed to lapse after the end of the war. However, in 1946 it was recast and its basis was altered in order to take into account not only increases but also density of population, the number of children of school age within the States and - this fact answers the question raised by the honorable member for Perth (Mr. Tom Burke) - increases of costs, particularly increases brought .about by rising inflation. [Quorum formed.] So one would suppose that if the formula, which takes into account all those factors, were properly devised it would be unnecessary to make available the additional grants such as that which is being provided under this bill and that it would be possible to avoid the annual disputes to which I have referred.
The formula has not been adhered to. Supplementary grants have had to be made over a number of years. During the regime of the Chifley Government, from 1946-47 to 1949-50, no supplementary grants were made. The States merely received the moneys to which they were entitled under the formula; but during the last five years this Government has made available grants in addition to those provided for under the formula, as follows : £20,000,000 in 1950-51, £33,577,000 in 1951-52, £27,100,000 in 1952-53 and £22,000,000 in 1953-54, whilst a supplementary grant of £19,500,000 is being provided under this bill for the current financial year. Those amounts exceed, in the aggregate, £100,000,000. Even if the formula is approximately right and even if it takes into account the most important factors, it cannot be said that this Government has not been extremely generous, perhaps too generous, to the States.
I turn now to the principal complaint that has been made by those honorable members who have criticized the amounts of the tax reimbursement grants to the States for the- current financial year on the ground that adequate funds have not been made available to the States to enable them to carry out their obligations. In this instance, I shall deal with the position of New South “Wales. In the first place, in making a comparison between the position that existed in the pre-war years and the present position, one has to take into account the fact that the States, since the pre-war period, have been relieved of substantial obligations in respect of social services. Back in 1940-41, which was the last year in which the States levied income tax, New South Wales expended £7,065,000 on social amelioration of one kind and another, including unemployment relief, child endowment, widows’ pensions and other welfare payments. In 1952-53, that State expended only £2,839,000 on social amelioration. In 1940-41, the total ordinary departmental expenditure in New South Wales was £23,869,000 whereas, in 1952-53, expenditure under that heading in the same State was £81,801,000; and, whereas the sum of £5,537,000 was expended on education in 1940-41, expenditure under that heading in 1952-53 amounted to £25,096,000. If, in each instance, the amount expended on social amelioration is subtracted from the total ordinary departmental expenditure, we find that, in 1940-41, 33 per cent, of the State’s total budget was devoted to education, whereas, in 1952-53, the proportion of the total budget devoted to that purpose was only 31 per cent. I have in my hand a table which sets out details in this respect for the period from 1929 to 1954. I shall not weary the House by citing all these figures. I simply point out that in 1952-53. the expenditure of 31 per cent, of the State budget of New South Wales on education was the lowest proportion -of the budget to have been expended for that purpose since 1929 with the exceptions of the years 1934 the war years 1942-1946, and the years 1948 and 1952.
That fact disposes of the argument that New South Wales - I take that State’s position as being typical of the States as a whole - has not received sufficient moneys from the Australian Government for education. If a State has not, in fact, sufficient for that purpose, the reason is that it has devoted its resources to other things. That is a matter of its own preference and has not in any way been forced upon it by the Australian Government which has made generous tax reimbursement grants to the States, which it has supplemented in each financial year. Without going into all the details which the honorable member for Bennelong (Mr. Cramer) traversed, I should like to point to at least one way in which the New South Wales Government has expended money which it should have devoted to normal governmental purposes, including education. I refer to that government’s expenditure on transport deficits. I have in my hand a table which I shall summarize briefly. In 1952-53, the combined deficits of transport undertakings in New South Wales amounted to £5,046,916 ; and for the five years since 1948-49 those combined deficits totalled £24,324,032. It is obvious that if a State government prefers to expend nearly £25,000,000, in the course of a period of five years, on transport deficits, such money is not available for purposes such as education, which I cite merely as an example. Even last year, the expenditure on transport deficits exceeded £5,000,000. Whilst it is true that transport deficits have been a feature of governmental finance throughout Australia, I believe that New South Wales holds the record in that respect, and I suggest that that has been due almost wholly to bad administration. I do not think that outside New South Wales people are obliged to travel under more congested conditions, that fares and freights are higher or, in fact, any aspect of transport is in a more chaotic condition.
So, I come to the conclusion, first, that the States have been treated more than generously by this Government during the five years that it has been in office ; secondly, that the tax reimbursement formula is unsatisfactory because it i3 still necessary to provide supplementary grants each year to the States; and, thirdly, that the present system cannot be allowed to continue. As the honorable member for Bennelong has pointed out, the State governments are continually taking all the credit for the expenditure of moneys that have been provided by the Australian Government but, at the same time, they blame this Government for not making available to them sufficient money to carry out works and enterprises which they put forward fraudulently as the objectives of their policies. The States place the whole of the odium upon this Government because, as they claim, they have not sufficientfunds to carry out such objectives. Obviously, the only sound principle in this respect is that the Government that incurs expenditure must also incur the odium of raising that -money by taxation. Until appropriate fields of taxation are delineated as between the Australian Government and the States to enable them to carry out their respective functions, we shall continue to witness the purveying of fraudulent statements, blackmail and dishonesty in politics. The people will continue to be deceived by politicians who will know that they are npt putting forward the truth and are not making honest and straightforward claims. I say that this system is debasing politics in Australia, that it is debauching the States, and that it ought not to be allowed to continue.
The Government should regard it as a matter of prime importance to examine the formula as it at present exists, and try to bring it up to date and make it work so that we shall not have to pass these supplementary bills each year. This should be done first of all as an interim measure. Meanwhile, the Government should work out a method whereby the fields of taxation can be allocated between the two authorities according to their needs, so that each may raise its own taxation, incur the odium for so doing, spend the proceeds, and no doubt derive satisfaction from the plaudits of the people among whom that money is spent. It is proper, when a bill like this is before the House, that the House should give some attention to the ways in which the money is being spent, and for that reason I have given some attention to tie transport situation in New South Wales and to the declining amounts that the Government of that State has spent on education, as a result of its own maladministration, out of the funds that have been made available to it. I think that the bill should be agreed to, but that the Government should be asked to give consideration to a means of avoiding these annual supplementary disbursements .
.- The House is considering, for the fifth time during the life of the present Government, a hill to make supplementary grants to the States in addition to the grants which the States receive under the uniform tax formula. And, for the third time under the present Government, the amount of these supplementary grants has decreased. The Treasurer (Sir Arthur Fadden) in his second reading speech, made no explanation for that decrease. The honorable member for Bradfield (Mr. Turner) quoted the figures of that progressive decrease, and I shall repeat them. In the first year of office of the present Government, £20,000,000 was made available to the States in supplementary grants. The next year, the amount was £33,577,000. In the following year, it was £27,140,000. Last year, it was £21,915,000. This year it is to be £19,500,000. There has been no explanation for the decrease in those supplementary grants. It is true that the total grants to the States have increased. They must increase under the law of the land as it stands, apart from this bill.
The uniform taxation legislation in 1946, and again as it was amended in 1947 and 1948, provided that the States should receive an increased grant if the average wage increased and if the population increased. Since the population of the country has increased very considerably in recent years - by about 1,000,000 persons under the present Government - and since the average wage has also increased very considerably because of the decline in the purchasing value of the £1, particularly under the present Government, it is only natural that under (he uniform taxation formula, the amount of grants to the States should increase. But the grants supplementary to those uniform .tax reimbursements have decreased, and there is no explanation for that.
Now I pay serious attention - and I say this seriously - to any . matters which come from the lips of the honorable member for Bradfield, but there is one inaccuracy which he stated. He said that, in the financial years from 1946-1947 until 1949-1950, there were no supplementary grants. I think that is inaccurate. It is inaccurate for two reasons. One is that the basis of the reimbursements was altered in that time, and, quite apart from that, supplementary grants were, in fact, made. To be precise - because the honorable member was precise and I am differing from him, I think he deserves a precise reply - the uniform taxation formula was laid down in an act passed when the Chifley Government was in office in 1946. In 1947-48, a supplementary grant of £5,000,000 was made. In 194)8, the basis of the formula was altered, and considerable changes were made in it. First, the basic grant laid down, in 1946 was increased from £40,000,000 to £45,000,000. Secondly, the grant was to be varied by a percentage equal to the full percentage instead of half the percentage increase in average wages. Thirdly, the increase in average wages was to be based on the year 1945-46 instead of the year 1946-47.
With much else that the honorable member for Bradfield said I completely agree. This uniform taxation system does, as he said, debase politics. It does, as he said, debauch the States. And it does lead to the enunciation of the perfectly reasonable theory that those who spend the money should bear the odium of raising it. But the solution lies, not in abandoning the uniform taxation system, as he suggested, but in taking over those functions of the States which the States at present administer but for which the Commonwealth foots the bill. We on this side of the House certainly believe that those who spend the money should have the odium of raising it, and the corollary is that those who wish to get the credit for spending money should be those who raise it. In this country, under the present system, the buck can be passed by the States to the Commonwealth and by the Commonwealth to the States. The solution lies in the Commonwealth taking over those functions of the States which it at present pays for. There can be no question of the amount of those functions which it pays for. Two-third? of the income of every one of the Australian States comes, by way of taxation reimbursements and supplementary grants, from this Parliament.
Much abuse is heaped on the uniform taxation system by honorable members on the Government side of the House, but we have to be clear about that system. This Government could put an end to the uniform taxation system at any time. It could have done so during this budgetsession. It could have done so during any of the four previous budget sessions in its term of office. The uniform taxation system is not something which the Constitution imposes on this Parliament. It is something which the Constitution enables this Parliament to impose on the States, if it wishes to do so. If it is a burden that we do not like, we can rid ourselves of it by a simple act, of Parliament. In five years, the present Government has frequently expressed the wish to be rid of the burden but has never taken any steps to rid itself of it. In fact, last year, when this Parliament rid itself of the burden of uniform entertainments tax and many States re-entered that field, which the Commonwealth had deprived them of during the early days of the war, a hue and cry was raised by members on the Government side of the House about the injustice of the States imposing a tax which the Commonwealth had taken off, but which the States had themselves levied for fifteen years before the Commonwealth first levied it.
– Does the honorable member agree that the States should have re-imposed entertainments tax?
– What a hue and cry would be raised, not least by the honorable member for Bennelong (Mr. Cramer), if New South Wales, for instance, were to impose the land tax which this Parliament did away with last year.
The honorable member for Bennelong professed himself to be confused by the bill which is before the House. The clause he read* is a simple one really. It boils down to the position that the States will receive the difference between the formula sum and £150,000,000. That clause could never be as confused as it sounded when the honorable member read it, although I well believe that he found it confusing. There were many things in his speech which, for sheer diversion, one must debunk. He seems to be one of those who confuse loan moneys with income tax. He referred to the repeated wish of the Prime Minister (Mr. Menzies) that the States would agree to a priority for public works. This bill has nothing to do with public works. You know full well, Mr. Speaker, that the States spend on public works the moneys which are given to them by the Treasurer acting as the agent for the Australian Loan Council. The Financial Agreement precludes the States from raising any loans for public works other than in that fashion, and it has precluded them from doing so for the last quarter of a century. The States receive by way of uniform taxation reimbursements and supplementary grants too little money to enable them to spend any of it on capital works. The honorable memoer for Bennelong, therefore, was referring to a completely different subject. He is confused not only about the bill, but also about the whole basis of finance in this, country, and his history in local government in New South Wales would leave no one surprised at his confusion.
The honorable gentleman also referred to the transport system in New South Wales, as did the honorable member for Bradfield. It is a singular feature of the transport system in New South Wales that the railways there are the only railways in this country that pay. The railways which are conducted by the other five States, and those which are conducted by the Commonwealth itself, do not make a profit and have not made a profit for very many years. In New South Wales, the Labour Government, or the socialist Government - a title which would probably frighten that Government as much as it frightens the members of this Government - has, in fact, during a period of unprecedented inflation, corrected the finances of its railways to a very great degree.
– With loan money.
– I thought the burden of the complaint made by the honorable member for Bradfield was that taxation money was used for the purpose. If the honorable member for Gippsland (Mr. Bowden) will listen, he will learn that money from taxes and from loans is not being used on the New South Wales government railways now. In fact, the New South Wale3 government railways are contributing to the revenue of that State and lightening the burden on taxpayers in this country. New South Wales, of course, is helping to pay for the railways in the State which the honorable member represents.
In 1951-52, the deficit on the New South Wales railways was £2,452,087. In 1952-53, it was £1,449,839. Last year, there was a surplus of £154,234. This year, in the budget introduced by the Premier three weeks ago, once again it is anticipated that there will be a surplus of revenue in the New South Wales railways. If supporters of the Government must seek to criticize business undertakings conducted by the State governments, at least they should criticize those which make a loss, not those which, in fact, make a profit, and it might not be ungenerous to ask them to remove the beams from their own eyes before they refer to the motes in the eyes of the States.
I mention another irrelevance on the part of the honorable member for Bennelong. He referred to the socialization, or acquisition by the public, of the Balmain Electric Light and Power Supply Corporation Limited. He said that the shareholders in that company had not yet received the compensation to which they were entitled for their shares. The fault lies, not with the New South Wales Government, but with the New South Wales courts. The New South Wales Parliament, in 1950, passed legislation under which the assets of the company were taken over and in which provision was made that the shareholders were to be paid compensation assessed by the New South Wales Land and Valuation Court. The court began hearing the matter only a couple of weeks ago. It would havebegun the hearing earlier if the Commonwealth had been more generous to the States and had provided the capital funds needed by New South Wales for the erection of new court houses and the additional taxation reimbursements required for the payment of more judges. Any one who is acquainted with the administration of justice in Australia must be aware of the appalling delays that are suffered by litigants in having their claims tried. Law and order, the provision of courts, and the payment of judges and judicial staffs in general, are administered entirely by the State governments and financed by this Government.
The last complaint of the honorable member for Bennelong was that the States could not expend the money that was advanced to them. I have never before heard any one say that the States have been unable to expend the funds advanced to them by way of taxation reimbursements and supplementary grants. The complaint has been made, but has never been substantiated, that they cannot spend the money made available to them by way of loan funds. There again, the honorable member for Bennelong was confusing loan and taxation moneys, and capital and current expenses. I agree with the honorable member for Bradfield that the uniform taxation formula should be revised. If this Government will not take over from the States the social services that they at present administer, it should at least discharge its responsibility to ensure that the States shall have enough money to make adequate provision for those- social services. The Chifley Government acknowledged that necessity. In both 1947 and 1948, it altered the formula that was originally laid down in 1946, and in 1949-50 it allowed a supplementary grant of £8,000,000. The supplementary grant was increased by this Government in its first and second years of office, but in each of the last three years it has reduced it.
I shall refer in particular to some features of that situation as they affect the social services that are provided by the States. Whereas’ the Commonwealth directly provides the social services benefits that are given in cash payments, such as pensions, allowances and the like, the States still meet those services that are provided in the form of amenities, such as education, health, hospitals and charities, law and order, and public safety. In the last three years the States have greatly increased expenditure on those social services. In 1951-52 they spent on those three categories of social services the sum of £108,000,000 ; in 1952-53, £127,000,000; and in the last financial year, £137,000,000. The consequence of the reduction in the supplementary grants made by this Government in the last three financial years has been a reduction of the amount of money that the six Australian States received from the Commonwealth, after providing for those social services, from £11,500,000 in 1951-52, to £9,000,000 in 1952-53, and to £5,500,000 last financial year. It is apparent that in the current financial year the amount left to the States after providing for those three categories pf social services will be virtually nothing.
The real solution is to take over from the States the provision of those social services. The Australian Labour party can see no benefit in having separate conditions as between the six States for education, health, or law and order. At present, we have the extraordinary position that the ages at which children are required to attend school, and the education facilities and the types of education available to pupils, vary among the six States. The present taxation reimbursements formula makes no provision for variation, except in relation to changes in average wages and population. It makes no provision for. an increase of reimbursements to any State in which the school age is increased. Again, in hospital and health services in general, the extent of the facilities available to the public and the types of hospital wards vary in all the States. In respect of law and order, we in this country are still six distinct States. In fact, if the Australian Capital Territory and the Northern Territory are included, for the purposes of law and order the Australian continent is composed of eight distinct countries. Never, in the history of man have so few been governed by so many. It is completely unnecessary to have six State parliaments and two federal Ministers administering eight distinct areas in the one continent, with a total population of only 9,000,000 persons. To take the case of law and order, the police in one State have virtually to take extradition proceedings to obtain custody of a fugitive in another State. A private citizen has to go to almost as much trouble to have a writ issued in another State as he would be put to if he wanted it issued in another continent.
– The situation enables people to evade the law.
– Yes. It is evident that it is high time that the Commonwealth, which foots the bill for those social services in the fields of health, education, and law and order, that are provided by the States, in fact administered those social services. The Commonwealth bears the odium of raising the taxation out of which it reimburses the States for the conduct of those services, but it does not receive the credit for the expenditure that is made on them. In that way, we debauch the States and debase politics, to use the phrase of the honorable member for Bradfield. It is time that we ended uniform taxation. But, after five years of office, it is plain that the present Government will not do so. It is also time that we gave the States, by right instead of by the existing annual ad hoc appropriations, adequate funds for the State conduct of those functions, or, best of all, that the Commonwealth itself administered the social services that the States still provide, for which they get the credit and for which we get the odium of raising the necessary funds.
.- I did not intend to participate in this debate, but I consider it necessary to correct some of the misconceptions contained in the remarks of the honorable member for Werriwa (Mr. Whitlam), who accused the honorable member for Bennelong (Mr. Cramer) of confusing the issue. The honorable member for Werriwa was more confused than he alleged the honorable member for Bennelong to be, because fie talked about uniform taxation, though this measure concerns an entirely different subject. It has nothing to do with uniform taxation, but the honorable member for Werriwa dragged in that subject as a red herring, in an endeavour to give credence to some of his ideas about unification and the organization of government. The honorable member trod in fields of which he should be wary, when he referred to the administration of the Commonwealth of Australia. He suggested, for example, that the ideal solution to the present difficulties that the
Commonwealth and the States are suffering from, would be found if the Commonwealth took over the services conducted by the States, for the cost of which it contributes under the uniform taxation arrangements. If the honorable member for Werriwa were sincere in saying that never were so few governed by so many, he would not have contradicted that statement by suggesting that the Commonwealth should take over the whole of the activities in social services for which it contributes funds to the States, and he mentioned specifically education. If one wants to increase the burden of government, the number of administrators and the measure of dissension in education and other fields, one can best do so by adopting the suggestion of the honorable member for Werriwa and concentrating all administrative power in Canberra. That action would at once completely break down the entire system of government.
The honorable member advanced as a panacea a proposal that the States should get rid of the present arrangement if they could do so. That may be so, but since this is not a question of what the States should rid themselves of in relation to uniform taxation, his entire proposals are haywire. The Prime Minister (Mr. Menzies), in his second-reading speech this morning, told the House specifically the purposes of this measure. It is designed to put the States of Western Australia, Tasmania and South Australia into something like an equal position with the three main eastern States. In other words, it is a question of being able to remedy some of the defects of the financial arrangements adopted under federation. It is generally conceded that federation bore heavily upon Western Australia and Tasmania from the outset, and later upon South Australia. This bill constitutes a method of giving the States of Western Australia and Tasmania, which are adversely affected by the federal financial arrangements, the opportunity to provide services similar to those that are provided by the three main eastern States.
In explaining the fallacies in the arguments of the honorable member for Werriwa, I want to direct attention to his idea that we can achieve progress by concentrating all authority in Canberra and obtaining uniformity in the administration of the various organizational activities of government. Any one who studies the problems of society and of government knows that the ideal is not uniformity. If one seeks debasement of personality, but not necessarily of politics, one can best achieve it by eliminating all the divergencies in our social system. If one wants to make progress one emphasizes the differences in society, in human nature and in human institutions. That fact has been entirely overlooked by the honorable member for Werriwa. It is easy for one to make facile suggestions about the things that should or should not be done, and about the manner in which affairs should be organized. The whole system of government can be brought to a standstill by concentrating more functions, as we are doing, in Canberra.
Question resolved in the affirmative.
Bill read a second time, and passed through its -remaining stages without amendment or debate.
Debate resumed from the 18th August (vide page 358), on motion by Mr. McEwen -
That the hill be now read a second time.
.- This bill seeks to authorize the Australian Wine Board to expend part of its funds on advertising Australian wines. Curiously, it is called the Wine Overseas Marketing Bill, but although it will authorize the expenditure of money to advertise Australian wine overseas it will also enable the Australian Wine Board to promote the sale of wine in Australia. At present the wine industry and th<? fruit industry are facing difficult times in Australia, and anything that this Government can do to help those industries should be done. Our economy is balanced on a perilous razor edge because
Ave are dependent upon one or two primary industries for our welfare. Therefore, it is most important for us to do all in our power to encourage and develop other industries both for the benefit of our own people in Australia and for the maintenance of our export trade.
There is much interest throughout the country, particularly in my home State of New South Wales, in the development of the wine industry and in the promotion of the consumption of wine as a beverage. At present some of the finest table wines in the world carry the distasteful common names of “ plonk “ and “ bombo “.’No doubt we have applied those names out of some sort of inferiority complex. Again, the only thing that keeps Australian wines off the best tables overseas is a kind of snobbery on the part of Europeans. At one time I travelled by ship, through the courtesy of an Australian government, to the United States of America. I spoke to an American businessman on the vessel who told me that if he could sell Australian wines as high-class wines on the Pacific coast of America on a commission basis he would be able to buy his yacht in twelve months. Australian wines are much better than many Californian and European wines, and yet their sale has been restricted by an inferiority complex on the part of Australians and by wine snobbery on the part of Europeans.
I suggest that our wines first suffered a blow when they were called by European names. If we had developed our own distinctive wines we might have had a much better chance of capturing overseas markets with them. As it wa3, we immediately entered into competition with European wines, and those people in Europe who were used to wines of a certain taste under the European names considered that our wines were inferior when they did not taste exactly the same as the European products. If our wines had been called by other names they might have been appreciated before the European wines. Moreover, certain trade practices of a very sharp nature have been engaged in against Australian wines. For example they have been blended with inferior wines and our exporters have not always sold our be3t grades abroad. However, thanks to the good, work of both Federal and State governments our wines are beginning to enjoy a much better reputation both inside and outside Australia than they have hitherto enjoyed.
If this bill is designed to institute a good advertising campaign I wholeheartedly agree with it, but I warn the Government that it is of no use merely to spend money. It must be spent in the proper way. There is something of our glorious Australian sunshine in the wines of this country, which people will begin to appreciate if the wines are properly marketed. I have inspected vineyards in South Australia and I know that the wine industry is capable of great expansion. Moreover, the development of the wine industry, the fruit industry and other industries will enable us to put our eggs in more than one basket so that we shall not be depending so greatly on our wool industry. If the Australian Wine Board can adopt modern methods of advertising and exploitation we shall certainly find bigger markets for our Australian wines. I suggest that when money is provided for wine publicity we should not advertise in the glossy magazines as we did when publicizing our wool, but we should reach out for a wider public. We should use mass-produced magazines and multiple propaganda mediums when we are spending money to popularize our wine in England and other European countries where there is a market opening for us. Because of our high standard of living in Australia there is a great deal of discrimination among people when dining out, and our wines are getting out of the “ plonk “ class. Every time people exercise their discretion and choose Australian wines they are delighted to disco ve] the first-class beverages that we produce in the port, sherry and other light wine classes. In Europe a great deal of work is done by organizations, as well as by head waiters, to sell inferior wines to tourists and the tourists, believing the propaganda that is aimed at them, come to consider Australian wines inferior to the European products. We must counter that sort of propaganda, and show that so far from being inferior our wines are superior to overseas wines. Taste is the best judge of wine and if we can get people to taste our wines half our battle will be won.
I shall not deal with the sale of wine in cafes, and the time at which it may be sold, because that is not appropriate to a debate of this nature. I shall content myself by saying, that we must judiciously expend all the money that we vote to the wine industry in order to get the result that we are aiming at. I suggest that there are markets for our wines in the United States, and a growing market in the United Kingdom, and we must fearlessly compare our wines with the best that can be found overseas. Of course I know that during the last war some awful wine was sent overseas, and bottled and left lying around for years. That wine did our industry a lot of harm and from now on we should send only the best to overseas markets. To-d.ay our bottling methods are excellent, and we should continually strive to improve our methods of presentation as well as of manufacture in order to compete with overseas products.
There is something romantic about a country like Australia that produces such a wide variety of excellent primary pro: ducts from Cape York to Adelaide. I believe that some of the best port wine in the world is produced in the Hunter Valley and some of the best light wines in South Australia, If this bill is designed to find the money to advertise our wines properly and to find the men to sell our wines, and if it succeeds in those objectives, then it will be well worthwhile. The honorable member for Angas (Mr. Downer), who is to follow me in this debate, will be able to speak as a representative of growers, whereas I speak as a representative of the consumers; but I believe that both consumers and growers in Australia will benefit from an expansion of the wine industry. If more money is needed to help the wine industry than is contemplated under this measure, then it should be found. Of course it is not sufficient to vote money. The Government should follow up the vote of money and make sure that the Australian Wine Board develops a good campaign to sell our wine. The wine industry in Australia has, by diligence and research, produced a good product, and the Government should help the industry to market it. I believe that our wine-growing areas are quite as good as the wine-growing area3 in the south of France, and I support the measure.
-I was glad to hear the honorable member for Parkes (Mr. Haylen), speaking on behalf of the Opposition, give this, measure the blessing of the Labour party. As the honorable member said, there are no party politics, in the sense that we know, them here, in this measure. I am sure that the many wine-growers that I represent will be glad to know that the honorable member for Parkes, 4n4 I hope many of his colleagues, are consumers of wine, because that is one of the problems affecting the wine industry at the moment, and it is the aim of all engaged in the wine trade to stimulate a much greater consumption of wine in Australia. The honorable member for Parkes touched upon a pertinent point when he referred to a degree of wine snobbery, not so much in this country, but most assuredly overseas.
If the House will forgive me relating a personal experience when I was in England last year, I should like to say that at a banquet which I attended there were some very fine wines served which, until halfway through the meal, were most favorably commented upon by the company. Subsequently it became known that those wines were not, as many of the distinguished guests thought, continental wines, but none other than Australian wines. Immediately from where I was sitting I heard sniffs, suspicions, and criticisms, and the beginning of derogatory remarks. I know of no case so much in point to support what my friend the honorable member for Parkes said as this particular incident, and it is well for us to realize not only in this House, but also in the country, that that degree of wine snobbery is one of the greatest obstacles - just as great as the United Kingdom tariffs which I shall speak about later - that the wine producers have to break down in seeking further expansion t/f their markets abroad.
It is probably well known, but if not I hope honorable members will soon realize, that the wine industry in Australia is in undoubted difficulties to-day. We have seen, on the one hand a period of most remarkable - I would go further and say unexpected - expansion of the industry between 1939 and 1952. For example, production in 1939-40 was approximately 16,200,000 gallons, but production for the years between 1949-50 and 1953-54 averaged between 31,000,000 and 36,000,000 gallons. Unfortunately, that great period pf expansion has been followed by an equally remarkable contraction in 1953 and 1954. If, for a moment, honorable members will consider the figures for withdrawals from bond, they will notice that for the year 1951-52 withdrawals totalled 13,400,000 gallons, whereas for the last financial year they fell to 9,500,000 gallons. All of the storage facilities in the wine-producing States - and I refer principally to South Australia and New South Wales - are full. Even worse, we are faced with the fact thai the 1955 vintage is only six months away.
The same story can be told about the very marked decline in the sales of brandy since 1952. We must be honest in these matters and admit that one of the causes of this decline was the very high rate of excise that the Treasurer (Sir Arthur Fadden), in view pf the serious economic contingencies with which we were confronted in the last two years, thought it was necessary to impose. These excise figures have jumped up and down to an unprecedented degree. For example, a few years ago, the excise on brandy was 53s. 6d. a proof gallon. Then it became necessary to raise that figure to 84s. 6d. Last year, the Treasurer reduced the figure by £1 ls. to 63s. 6d. This year, I am very glad to say - and I know the wine industry is delighted to acknowledge the fact - the Treasurer has reduced excise by the most dramatic sweep that any Australian Treasurer has made to 33s. 6d.
– The right honorable gentleman did not ‘ do anything about Queensland rum.
– That is right. If [ heard the honorable member for Petrie (Mr. Hulme) correctly, he stated that the Treasurer did nothing about Queensland rum. . That is a problem for the Queensland members. I sympathize with the honorable member, because on a cold night in Canberra - not at this season of the year, but in the winter - rum is an exceedingly good drink. For the sake of my honorable friend from Queensland, I hope that in the next budget, in which, if all goes well, the Treasurer will grant further tax remissions, the excise on rum will be reduced and that the honorable member will enjoy benefits similar to those which have been extended to consumers of brandy.
I do not wish to weary the House by harping on the state of the wine industry, but I remind honorable members of the parlous position of wine exports. It can be summarized by stating that to-day our exports of wines are equal to approximately one-third of those in the year preceding World War II. In 1938-39, Australia’s wine exports totalled 3,700,000 gallons; in 1945-46, they had fallen to 1,800,000 gallons; in 1951-52, they were 1,200,000 gallons; in 1952-53, they were still at that very low figure; and in the year 1953-54, I am glad to say, there has been an improvement, though the rise has been only a slight one, to 1,300,000 gallons. The position is one which no honorable member who has the welfare of the wine industry at heart can view with any degree of equanimity.
This bill is one of several measures which I hope the Government is contemplating, for the purpose of rectifying the difficulties with which the wine industry and the vignerons are confronted at the present time. Its object, as is clearly stated, is to promote more advertising. I do not think any of us can be satisfied with the efforts of the industry in this respect. I think all of us who have the interests of Australian wines at heart will agree that our advertising could be much more widespread, and that it could show a much higher flight of imagination, especially in the country which hitherto has been regarded as our principal market - the United Kingdom. I have frequently been disturbed when comparing the degree of advertising of Australian wines with that of some of our principal competitors. For the sake of this argument, however, I refer more particularly to wines from South Africa. I invite any honorable member who is interested to go to the library and pick up any of the illustrated English weeklies in which wines are advertised from time to time, to compare with our advertising the degree of advertising in which the South African wine industry indulges. I think that every one would come to the conclusion that we have much further to go before we can equate our own efforts to those of some of our principal rivals.
Other remedies may need to be applied in the future. I think the Minister for Commerce and Agriculture (Mr. McEwen), who is in London on another mission, is well aware that the grapegrowers of Australia are asking for a renewal of the subsidy on Australian wines that was removed by the Labour Government in 1947. I know that this Government is not subsidy minded, and I say with respect that I think that, in its approach to the basic economics of subsidizing industries, it is correct. However, I hope that, if the position of the wine industry deteriorates, the ministry will consider very seriously giving to the wine industry some temporary relief, if such relief can be substantiated, rather than let -those excellent people languish. I am quite sure that, while the Minister for Commerce and Agriculture is in London, he will continue to use the persuasion that this Government has used very severely upon three successive British Chancellors of the Exchequer for a remission of the import duties on Empire wines. I am well aware that this complex and ticklish problem is bound up with the whole question of a revision of the General Agreement on Tariffs and Trade. It is not too much to hope that, while the Minister is in London, he may be able, at long last, to persuade the Chancellor of the Exchequer to adopt a more sympathetic view towards a matter which affects this industry so vitally and, indirectly, a.11 of us.
I have called attention to some of the supplementary measures that the Government should contemplate consequent upon the passing of the proposed legislation. I cannot let the occasion pass without making an appeal to the State governments to co-operate with the Commonwealth in finding a solution to this problem. Discussion is now taking place in New South “Wales and South Australia in relation to an alteration of the closing hour for hotel lounges and dining-rooms. Strong pressure is being brought to bear upon those States to follow what I regard, and what the wine industry most certainly regards, to be the very wholesome example of Victoria in granting an extension to ten o’clock in the evening of the time for the consumption of wines and alcohol generally in hotel dining-rooms and lounges. There is also a move of which you, Mr. Speaker, may be aware, to license grocers to sell single bottles of wine in their shops. I know that this matter is not within the direct purview of the Parliament, but, nevertheless, it is something of which we must take cognizance when directing our attention to the manner in which we may help thi? most estimable industry.
– It. would be a good idea.
– It certainly would be a good idea, but I am sorry that I have to tell the honorable member for Wide Bay (Mr. Brand) that the move is meeting with what, to my mind, is unexpected opposition from people who apparently do not take the same sympathetic and tolerant view of the wine industry as he does. I appeal to people who feel strongly on this issue, and who regard the consumption of wine as something that is, shall I say, sinful or at least a moral lapse, to think again and shed their prejudices. May I remind all of those people, and also the House, that it cannot be emphasized too much or too often that the wine industry is one which essentially is comprised of thousands of small landholders. Many of them, whom I have the honour to represent, are ex-servicemen who have served this country and the British Commonwealth in both world wars. The wine industry is not a great monopolistic combine. On the contrary, it is very properly considered to be a primary producing industry. Moreover, it is one of the oldest primary producing industries in Australia. It more exposed than most of our other industries to changes in the economic climate. I think it is correct to regard is as being more in the nature of a semi-luxury industry than anything else. No other occupation of which I have personal knowledge is conducted by more industrious and more honorable people, or by people with a stronger community sense. The qualities of Australian wines, as the honorable member for Parkes (Mr. Haylen) stated, have improved very noticeably, particularly since 1945. It would be a tragedy if so much progress were to be stultified by insufficient support from the Australian and State governments.
.- The bill that is before the House has been introduced for the purpose of amending the Wine Overseas Marketing Act 1929- 1953. Under the present act, the Australian Wine Marketing Board is empowered to advertise our wines in overseas markets only and to control distribution of such wines on- the overseas markets. It is strange that the Government, whose supporters accuse the Labour party of being socialistic in its outlook, should produce to this’ Parliament amending legislation that is designed to enable the Commonwealth to collect money in respect of grapes delivered to wineries for processing, and to arrange for its distribution for the purpose of an advertising campaign to increase the consumption of alcoholic liquors in Australia. One would have thought that a Government that claims to be so strongly opposed to socialism would tell the wine-growing industry that it could raise money itself for advertising its wares. Instead, this great anti-socialistic Government has told the wineries that it will have legislation passed through this Parliament to enable the wineries to pay money to the Australian Wine Board, and enable that board to embark on a vast advertising campaign within Australia to encourage people to consume greater quantities of alcoholic liquor.
– What is wrong with that?
– The honorable member for Dawson (Mr. Davidson), who represents a rum-producing area, asks “ What is wrong with that ? “ Obviously he is in favour of socialistic legislation to empower some authority to embark on a campaign to increase the consumption of rum. If he is not in favour of that, let him say so. Apparently he is in favour of it. It is strange to see the parties opposite supporting so strongly such a measure as this. However, it appears that the great majority of the Australian people are in favour of the consumption of alcoholic liquors. That being the case, it is the duty of the Parliament, and indeed of the wine industry itself, to ensure that, as far as is practicable, alcoholic liquors are used in their right and proper way and with due regard to their undoubted potency. I have heard references in this Parliament and elsewhere to “ plonk “. I do not really believe thai any such thing as “plonk” is manufactured, in Australia to-day. I believe that the poorest quality of wine produced in Australia is in all probability a good wine. Some wines, however, are called “ plonk “, not because they have the qualities that are commonly attributed to “ plonk “, but because they are heavily fortified wines, which are not meant to be consumed in great quantities by individuals. The result of excess consumption by some people of such heavily fortified wines is the application to them of the appellation “ plonk “, although they are good quality wines.
I agree with the honorable member for Angas (Mr. Downer) that the Australian wine industry is very old. It is almost as old as the colonization of Australia, and in my opinion it is a very efficient industry in, all its sections. I believe that, in present circumstances, the industry should be given some protection. It should be accorded encouragement, and should have certain rights. I also believe, however, that those who oppose socialism should be the very last people who should support Commonwealth assistance, by act of parliament, in an advertising campaign designed to increase the consumption of alcoholic liquors. Last year the Vice-President of the Executive Council (Sir Eric Harrison) introduced a bill to reduce the excise on whisky, and said frankly in his second-reading speech that it was hoped that the measure would encourage the consumption of greater quantities of whisky in Australia. Honorable members opposite, and their supporters outside this Parliament, have for long included in their propaganda campaigns allegations that the Labour movement has some nefarious association with breweries, wineries and other drinkpurveying organizations. It is time that those people woke up to the fact that they themselves are now being guilty, if it i3 an evil thing, of allying themselves with instrumentalities in this country which produce alcoholic liquors. I remind them that they have actually expressed the opinion, and the hope, that measures such as the present bill will lead to an increased consumption of alcohol.
The Labour party accepts the situation that, so long as the Australian people enjoy the consumption of alcoholic liquors, they are entitled to have them. They are also entitled to advice from the instrumentalities that produce these liquors about the dangers that surround excessive consumption of them. Similarly, they are entitled to have alcoholic liquors conveyed to them in the safest and best manner, and provided to them in the best possible surroundings. I object very much, however, to people who harp about socialism, making themselves the collection’ medium for an advertising campaign for the wine industry. We support the bill, because the Opposition has no objection to a socialistic activity that will assist a great industry in the collection of revenue required to enable it to advertise its own wares. We also support the measure for another reason. After both world wars many ex-servicemen were settled in wine-growing areas on the Murray River. These men have a right, after having been settled on the land, to have their industry protected and assisted. For that reason, among others, we support, the measure. ‘ *
I point out, as did also the honorable member for Angas, that at the moment the wine industry faces some very grave difficulties. The honorable member quoted some figures which, I think, he took from a review issued by the National Bank of Australasia, regarding the decrease of export demand and recent substantial falls in local consumption. He pointed out that in these circumstances the industry was facing difficult times. If amendment of the principal act will enable the industry to embark, with its own funds, raised from an excise charge by the Government’ on grapes, on an efficient advertising campaign, then this Parliament should pass such an amendment into law. I wish to point out to my anti-socialistic friends opposite, however, that this may be a precedent. Other industries may request that similar legislative provision be made for them. They may say to us that the wine industry has a very efficient method of collecting funds from grape-growers - for that is what the legislation means, although the money is collected at the wineries - that the industry is aided by the Government to do so, and that the same consideration should be extended to them. The result may be a vast extension, of the principle that is being endorsed in this measure. In fact, it is reasonable to imagine that at some time brewers may ask the. Government to impose a charge on all barley delivered at malt houses, and on all hops and sugar delivered at breweries, in order to provide a vast sum that could be spent by a board, representative of the brewing industry, in order to encourage increased consumption of beer. I admit that beer is a delightful drink for those who enjoy it, but I stress that the same principle could be extended to a vast range of industries.
Mr. Hamilton interjecting.
– The honorable member for Canning (Mr. Hamilton) need not get excited about this. I am merely pointing out that this principle could easily be extended to a vast range of Australian industries. If it were, all the old inefficient advertising methods now available to private enterprise would” go by the board, and we should get a bureaucracy, representative of the various industries, empowered to expend moneys to increase consumption of their products. I am conscious of the fact that these moneys are to be handed over to a very efficient board which consists of people who are very representative of the wine industry. It is representative of the cooperative wineries and the proprietary wineries, .and it even includes representatives of the Commonwealth and the grapegrowers. That board has done a. magnificent job for the industry and is trustworthy. I believe that it can well bc entrusted with the additional power that the Government so kindly proposes to vest in it. For that reason, I am prepared to support the measure.
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 18th August (vide page 359), on motion by Mr. McEwen -
That the bill be now read a second time.
.- This measure is a natural corrollary to the Wine Overseas Marketing Bill, which the House has just passed. It is a simple machinery measure to authorize the collection of an increased charge on grapes delivered to wineries. An increased charge is necessary because money nowadays has not the same value as it had during the period when I was a Minister in the Chifley Government up to 1949. There has been a galloping inflation since then and an amount that was adequate in 1949 for the purpose of advertising wine and encouraging greater consumption of it, is now only half as adequate, due to the negligence of the Government. In these circumstances, the Parliament has no alternative but to empower the Government to collect the extra money and to hand it over to the Australian Wine Board for use in an advertising campaign. We support the measure, and shall let it go through without further embarrassment to the Government.
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.
Motion (by Sir Eric Harrison) pro posed -
That the House do now adjourn.
.- Mr. Speaker-
Motion (by Sir Eric Harrison) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. Archie Cameron.)
Majority . . 15
Question so resolved in the affirmative.
Original question resolved in the affirmative.
The following papers were presented : -
Commonwealth Grants Commission Act - Commonwealth Grants Commision - Twenty-first Report, 1954.
Egg Export Control Act - Australian Egg Board - Seventh Annual Report, foryear 1953-54.
Public Service Act - Appointment - Repatriation Department - H. B. Ryan.
House adjourned at 11.8 p.m.
The following answers to questions were circulated: -
e asked the Minister for the Navy, upon notice -
Mr.Francis.- The answers to the honorable member’s questions are as follows : -
e asked the Minister acting for the Postmaster-General, upon notice -
– The answers to the honorable member’s questions are as follows : -
e asked the Minister for Supply, upon notice -
– The answers to the honorable member’s questions are as follows : -
Cite as: Australia, House of Representatives, Debates, 13 October 1954, viewed 22 October 2017, <http://historichansard.net/hofreps/1954/19541013_reps_21_hor5/>.