21st Parliament · 1st Session
Mr. Speaker (Hon. Archie Cameron) took the chair nt 10.30 a.m., and read prayers.
– I ask the Prime Minister, as representing the Treasurer, whether he will direct the attention of the Government to the advisability of making a special grant to ago, invalid and widow pensionel’s, who are without means other than their pension, in order to provide for them some extra ennor and additional means of meeting the cost of living over the Christmas period.
– Suggestions of this kind hare :been mad.e before. I can only say that following the normal practice, the budget provision in relation to these matters has been established; and I cannot undertake to change’ it.
– Has the Minister for the Interior, made any .arrangements r.o provide funds specifically to speed up the construction of accommodation for aged people in accordance with announcements that the Government has made on many occasions? If arrangements for that specific purpose have been made with the States, will the Minister inform me of them?
– As the question relates to homes for aged people, it should be addressed to the Minister for Suuiu.1 Services.
– I asked the most intelligent Minister.
– In the circumstances I do not mind volunteering to answer this question. It happens that only last evening I had a lengthy discussion on this matter with the Minister for Social Services, who is primarily concerned with it. Wc were able to dispose of the final outstanding points for the draftsman. I expect that a measure will, bc introduced within the next week or so.
– -Recently I asked the Minister for Social Services to recall out of date pension form instructions from post offices in order to revise it to keep pace with the speed at which this Government is liberalizing the means test. Have any steps been taken to simplify and replace the old incredibly difficult application forms, which did not need _ alteration under the last Labour Administration because there was little or no liberalization of the means test at that time?
– I hope the honorable member will forgive me if I do not reply to his second question, which could perhaps be considered as provocative. As to the first question, the thanks of the Department of Social Services are due to him for the suggestions that he made with regard to new social services forms, and. also to the honorable member for Hoddle who gave valuable advice to the department on that matter. New forms hare been drafted, and I believe that honorable members will be pleased to see them because the questions in them have been considerably simplified, and they are on high quality paper. The instructions on them can be easily read. I thank the honorable member for his help, and I thank other honorable members who have also given help in this matter.
– I ask -the Minister for Social Services whether, since he replied to a question on this subject yesterday, he has had an opportunity to ascertain whether, apart from the payment of age pensions to several persons, social services ‘benefits generally are not available to aborigines at the station at, Wreck Bay. Will the Minister arrange for an officer of his department to visit the station to investigate the needs of the residents and to inform them of their entitlements?
–As I stated yesterday, the establishment at Wreck Bay is a very special case which has been dealt with by the New South Wales Government. It is not an aboriginal reserve.
– It is.
– It is not a reserve. It is treated a& a special reservation, but not as a reserve. It was specially classified by the New South Wales Government. The honorable member for Macarthur visited the station for me recently, and I understand that he found conditions there quite satisfactory. Nevertheless, I shall ask the Department of Social Services to have another look at the Wreck Bay establishment to see whether anything can be done to help the people there.
Mi-. HOWSE. - Can the Minister for Immigration say whether it is a fact that in the United States of America two conditions for the naturalization of immigrants are that they should have a knowledge of the American Constitution and be able to speak the English language? If this is so, does he agree that these conditions for naturalization provide a greater opportunity to immigrants to be absorbed in their new home land? Will he consider introducing similar conditions for naturalization in Australia?
– I understand that in the United States of America applicants for naturalization are required to have a knowledge of the English language and also some knowledge of the American Constitution. In Australia, of course, an applicant is required to have a knowledge of the English language and also some knowledge of the responsibilities mid obligations of Australian citizenship. I have some doubt whether an applicant should be required to have a knowledge of the Australian Constitution, because I am afraid that that is a test which even members of the Parliament might have difficulty in complying with from time to time. However, no applicant can be naturalized until he, or she, has resided for a period of five years in this or any other British country. That requirement ensures that such applicants will have some general knowledge of civic conditions in this country, and I believe that it meets our requirements.
– Will the Minister for Immigration inform me whether, in view of the Government’s immigration policy and the probability that family groups will form a large part of the future intake, it is the intention of the Government to re-open the former migrant holding centre at Mildura?
– I shall ascertain the latest developments in relation to thai, particular holding centre, and let the honorable member have the information that he has asked for as soon as I can do so.
– I ask the Minister for the Interior whether departmental officials have made any progress in obtaining suitable office accommodation for the Returning Officer of the Division of Wills.
– Offhand, I am unable to answer the honorable member’s question. I shall obtain the information during the day.
– I am now in a position to answer the honorable member’s question. Approval was given last Tuesday to purchase land in the electorate of Wills on which will be constructed the offices of the Divisional Returning Officer for Wills, and also offices for certain other Commonwealth purposes. Approval has been given lor the purchase of the land, and I hope to be able to go ahead shortly with the construction of the buildings
– Has the attention of the Minister acting for the PostmasterGeneral been drawn to the serious congestion that obtains at the Walcha post office? Is it a fact that, owing to considerable soldier settlement in the district, this congestion has markedly increased over the past few years? Is it also a fact ‘that the honorable member for New England has repeatedly drawn attention to the grave condition of overcrowding under which the staff is working and to the inconvenience that is caused to the general public? Can the Minister inform the House when the long-promised alterations and extensions to this post office are likely to take place?
– The Postal Department is aware of the expansion of business that has taken place at the Walcha post office. It is a fact that the honorable member has drawn attention to this circumstance on a number of occasions. Sketches and plans have been prepared with the idea of expanding accommodation at that post office, and, if the necessary building facilities are available, it is hoped that a building programme will be undertaken there within the next few months.
– I ask the Minister acting for the Postmaster-General whether it is a fact that the new Sydney telephone directory shortly to be issued is an unwieldy volume weighing approximately 4 lb. Will approximately 60 per cent, of this weight be attributable to the normal alphabetical telephone directory, and the remaining 40 per cent, to the “trade directory known as the pink pages, a. section which, incidentally, provides a valuable service to telephone users and is widely appreciated? Is the normal alphabetical directory already printed in the smallest legible type so that, with increasing numbers of subscribers, its weight must still further increase ? Is the number of subscribers continuing to increase rapidly as a reflex of the high level of prosperity in the country, the increase of its population, and the Government’s successful programme of telephone extensions? For future directories, will the Minister consider production ici two parts with the normal directory separate from the pink pages so that, in place of one unwieldy volume, there will be two volumes, each of manageable size?
– It is a fact that the latest issue of the Sydney telephone directory is a very large volume. It is also a fact that the type used in this volume is as small as possible so as to enable the greatest possible number of names to be placed within a limited compass. It is further a fact, as stated by the honorable member, that, owing to the prosperity existing in the country, applications for additional telephone installations are very considerable. I shall give consideration to the honorable member’s suggestion that the directory be published in two parts for the next issue.
– Is the Prime Minister aware that Australia is still exporting considerable quantities of steel and steel products, of which we are very short, and that, although we are exporting these products, we are importing, at almost double the price, quantities of exactly similar products? Will the right honorable gentleman investigate the position and make a statement to the House in relation to this very extraordinary and costly procedure ?
– I have heard suggestions of this kind, and I know that the Minister for National Development has been going very closely into the matter in the last few weeks. I shall ascertain from him whether any statement is available, and, if there is one, I shall be very glad to make it to the House.
– I ask the Minister for Supply whether it is a fact that a radiometric assaying laboratory has been established at Rum Jungle, and, if so, whether it is operated by Territory Enterprises Proprietary Limited? Is a radiometric assaying laboratory, similar to that conducted by the Bureau of Mineral Resources in Melbourne, being constructed also at Darwin?
– My recollection is that a radiometric assaying laboratory functions as part of. the establishment of Territory Enterprises Proprietary Limited. I am not sure whether a similar type of laboratory is ‘being constructed at Darwin, but I shall find out and advise the honorable member.
– I address a question to the Minister for the Interior. Is it a fact that for approximately two years more than 50 prefabricated dwellings at Maitland, some of which are completely erected, and some of which are almost completed, have been allowed to fall into a state of disrepair because the Government cannot make up its mind how to use them? Is it a fact, also, that the buildings mentioned cost more than £3,000 each, and that approximately £200,000 of public money has been wasted in consequence of the Government’s refusal to put those dwellings into use? Is it also true that about £12,000 in rent has been lost to the administration because tenants have not been allowed to occupy the houses, and that considerable expense has been incurred in the payment of a caretaker? If these are facts, can the Minister inform me how much longer these houses will be allowed to remain empty, and will he announce the Government’s intentions in relation to their occupancy or disposal?
– As the Minister in charge of the department that may be termed the machinery department dealing with the homes in question, I cannot give the honorable member a detailed answer off the cuff. As far as I remember, the homes were originally constructed for occupation by miners at the request of my colleague, the Minister for National Development. ‘ Eventually, it was found that they were not required for miners and the project was stopped in midstream, as it were. At the moment, [ am not sure of the situation. I shall inform the honorable member within a few days of how things stand.
– Can the Minister for Social Services indicate whether there is a likelihood of an early start being mad« on war service homes at Bankstown, in order to relieve the housing shortage in that district?
– Last week I visited the Bankstown area to inspect a large area of land that has been taken over by the War Service Homes Division. I believe it is called the Lewis Gordon Estate although I almost said the Charles Morgan Estate. It is contemplated that 400 homes will be built on that land, and I believe that 32 of them are to be commenced this week. I should like the honorable member to inspect those homes, because the subdivision of the land has now been completed and I believe that the land will be made available at less than £140 a block, although I have been reliably informed that on the open market it will be worth £500 a block. I desire to make one suggestion about this matter, and that is that, as the honorable member knows, the land is on a plateau, and the valley below the plateau is a beautiful area which could well be dedicated by the New South Wales Government for recreational purposes. I suggest that the honorable member might, consider that matter, because the valley land might well be saved for that purpose.
– Is the Minister for theInterior in a position to report to the House on the progress of discussions with the State governments regarding the pro visions of a new Commonwealth and State Housing Agreement? If he is not in a position to do so, will he report to the House at an early date on the Government’s proposals regarding the sale of Housing Commission homes in thu various States?
– This matter really comes within the ambit of the Minister for National Development, to whom I shall refer the honorable member’s question for answer. I am not the Minister in charge of housing.
– Can the Minister for Civil Aviation inform honorable members whether the two major airlines of Australia are proceeding with their plans to establish what they call a coach service between the capital cities, by adding sixteen more seats to Skymaster aircraft? Is it a fact that the total weight of a Skymaster so fitted would be 2,500 lb. to 3,000 lb. more than the weight of such an aircraft not so fitted? How can the Department of Civil Aviation approve of such a scheme when each aircraft must have a certain margin of safety in order to carry extra fuel under certain circumstances, and during bad weather? Are these aircraft to carry less fuel, or is one of their engines to be removed?
– I assure the honorable member that there will be no question of the safety of the DC4’s or any other aircraft to be used on the coach services. It is rather unfortunate that the honorable member should select the DC4 aircraft, ‘because he has selected the one aircraft that it is almost impossible to load to its all-up weight. Considerably more than sixteen extra seats could be placed in that aircraft, and it could carry all the fuel needed to go half way around Australia and still have an adequate margin of safety.
– I ask the Minister for the Army a question in relation to the payment of markers at the Queen’s shoot which is in progress this week at the Anzac rifle range at Liverpool, which is in my electorate. Does the honorable gentleman know that the National Rifle
Association is still paying the markers at that shoot at the rate of £2 8s. a day, despite the hint that he gave in his answer to a question by the honorable member for Adelaide a fortnight ago? On the other hand, does the Department of the Army pay markers at that range at the rate of £3 a day, and do branches of the National Rifle Association in other States pay £3 a day to markers at similar shoots? Does the Minister approve of the action of his department in continuing to make the range, ammunition, targets, range staff, rail warrants, tentage and equipment, and canteen cooking staff freely available to an association which fails to pay the basic wage?
– As promised, I conveyed to the General Officer Commanding, Eastern Command, the answer to the question that I was asked by the honorable member for Adelaide about a week ago. The honorable gentleman himself has made representations to me in relation to this matter on at least three occasions. I have conveyed to the National Rifle Association the representations that he has made. The association pays such fees as it chooser, to the marksmen who mark the targets in this contest. I can take no further action. The matter is one entirely for the association. The Department of the Army does pay £3 a day, but that payment is a week-end payment.
– I draw the attention of the Prime Minister to the tragic coal-mining disaster which occurred last night at Collinsville in Queensland, when seven coal-miners lost their lives. The honorable member for Dawson joins with me in ashing the Prime Minister whether he will convey to the bereaved relatives the deepest sympathy of the Parliament.
– I regret to say that I was unaware of this unhappy event until I heard it mentioned just now. I, of course, shall do what I think the leaders of all other governments have done under similar circumstances.
– I ask the Minister for the Navy a question which arises from the very complete written answers that he gave yesterday to a long series of questions that I asked on notice in relation to national service training in the Navy and naval reserve training generally. Will the Minister give early and serious consideration to the alarming decline in the strengths of the naval reserves in each State during the last year, to the very small number of national service trainees who have volunteered to join the naval reserve after completion of their national sei1 vice training, and to the pathetically small number of those national service trainees who have been selected for training as officers and subsequently appointed? Will the Minister consider these facts against the background that the mobilization strength of the Navy is 7,000 or S,000 men short? Now that the Minister has charge of the Navy again will he reconsider the view that I have frequently expressed in this House, that there is something seriously wrong either with policy or administration in connexion with naval reserve recruitment and training, which should be the subject of an early and searching inquiry ?
– The honorable member will perhaps recollect that during the debate on the Estimates I made it clear that I personally hold the view that something could be done to improve the Royal Australian Naval Reserve. I have already discussed the matter with members of the Naval Board, and I hope to have further discussions with them on Monday in Melbourne.
– I direct to the Prime Minister a question that arises from .1 question asked by the honorable member for Fawkner, which the Prime Minister answered yesterday. Will the right honorable gentleman say whether the parliamentary discussion which he has promised to initiate by tabling, in due course, the interim report of the Royal Commission on Espionage in Australia, will be wide enough to permit an examination of the conflict between the parliamentary statement made by the Prime Minister, and the sworn evidence given before the commission by the Deputy Director of the Security Intelligence
Organization, as well as the failure of the Prime Minister to give any explanation to the commission about it?
– In the first place, 1 did not say anything about the discussion to which the honorable gentleman has referred. I indicated that the report would be tabled. I said, at the same time, that I was not clear about the procedure that would be adopted in the House, and I am still not entirely clear about it. However, I can well suppose that if an interim report of the royal commission is tabled and is, through some suitable procedure, thrown open to discussion, Mr. Speaker would see that the discussion related to the interim report and the matters covered by it, and did not, circumnavigate the globe of irrelevancy.
– Will the Prime Minister say whether it is the intention of the Government to have a parliamentary discussion during the present sittings about the agreement to establish Seato? Will he also give an undertaking that no final commitment of any character will be entered into on behalf of Australia until the agreement has been fully discussed, and approved, by the Parliament?
– I thought I had already indicated that, after the return to Australia of the Minister for External Affairs, which will be towa.rds the end of this month, I propose that there shall be a discussion in the House on Seato, and that the House should have the most ample opportunity of indicating its views on the matter.
– Will the necessary legislation be brought down?
– I am not sure. It very well may. I am. hoping that it will be, but in whatever form the matter may be dealt with, the House will have an ample opportunity of discussing it.
- (Hon. Archie Cameron). I have received from the honorable member for Bass (Mr. Barnard) an intimation that he desires to submit a definite matter of urgent public importance to the House for discussion, namely -
The urgent need of a full public inquiry into the administration of the Aluminium Production Commission’s project at Bell Bay, Tasmania, and into the over-expenditure of public moneys in connexion therewith, particularly from 1049 to 1952.
Is the proposal supported?
Eight honorable members having risen in support of the proposal,
Mr. BARNARD (Bass) [11.1 j. - I have adopted the time-honoured procedure of submitting a definite matter of urgent public importance to the House for discussion in order to direct attention to the position of the Australian Aluminium Production Commission’s project at Bell Bay, in Tasmania, and in doing so, I am acting entirely in the public interest. I do not hesitate to make it clear that I regret that 1 have to adopt this course of fiction. I also make it clear that my remarks are not intended in any way as a personal attack on the Minister for Supply (Mr. Beale), who has been charged with the responsibility of this enterprise. I have no doubt that he was unaware, at least until quite recently, of the nature of the charges which were being levelled at certain aspects of the administration at Bell Bay, but that fact does not absolve him of the responsibility, once he had ascertained the facts, and if he was satisfied that the administration revealed weaknesses of a serious character, to take the necessary steps to ensure that those persons who had been guilty of extravagance, incompetent supervision or even malpractice in respect of public moneys should be dealt with accordingly.
I emphasize that, in taking this course of action, I am acting in the interests of certain executive personnel who are frankly alarmed at the position as well as, quite naturally, their own future in the industrial and engineering life of the community. They argue, with a great deal of logic, that while the aluminium project is regarded with uncertainty ‘throughout the Commonwealth, their future must also be regarded with uncertainty until such time as an inquiry can be held which will exonerate the persons whose only fault has been to engage in an industry which is now becoming the centre of controversy and has finally culminated in a searching inquiry by officers of the Commonwealth Investigation Service. x have no doubt that the reasons which now prompt those people to contact me are largely due to a reply which the Minister has given to questions which the Leader of the Opposition (Dr. Evatt) and I asked in *-his House on the 11th August last. The right honorable gentleman asked the Minister the following question : -
Will the Minister for Supply say whether the investigation into the aluminium plant at Bell Bay is a matter of security or merely a general investigation? I take it to be the latter. Can the Minister indicate broadly the matters being investigated so that honorable members will understand the position?
The Minister gave the following reply : -
The investigation concerns, shall I say, administration or the misconduct of individual persons. I am not prepared at .present to say any more than that about the matter. The opportunity may occur later to say more on the subject, but I think that it would be unfair to everybody concerned if I did so now.
Those people believe, and I concur, that the Minister’s reply has cast a reflection, not on one or two executive officers, but on all of them, and until such time as the Minister is prepared to state who should be held responsible for those matters, everybody must be considered to be the subject of investigation, and, consequently, placed in an unfavorable position in respect to future employment.
The critical period with which I intend to deal is from November, 1949, when the site at Bell Bay was finally determined, until August, 1952. I point out, for the information of honorable members, that work on the actual site commenced in 1950. I have formed the opinion, after a comprehensive study of documentary reports and a general summarization, that there is an over-expenditure of £2,000,000, which is made up as follows: £1,200,000 which cannot be accounted for, and between £800,000 and £900,000 due to extravagance and erroneous designing. I shall deal with this large amount of unallocated expenditure which the commission has not yet apportioned to any particular part of the project. That is due to several factors, the most important of which is that an unsatisfactory system of accountancy prevailed up to August, 1952. when it was brought under critical review. From evidence that has been supplied to me, I have no doubt that during that period certain executive personnel were issued with cheque books and accepted work of contractors who were frequently paid by cash, or bearer cheque. Under that system, there was no possible means of checking payments in accordance with normal business practice.
In this respect I shall give one example. Whilst, as I have said, I am not concerned about individual instances, I am, nevertheless, bound to amplify the statement which I have just made with relation to the system of payment of contractors. In one instance, the sum of £48,000 was paid for the hire of a bulldozer that was used to clear a site of approximately 40 acres. In another instance, payments up to 1,000 were made in respect of the hire of a bulldozer but no dates or hire rate3 were shown on the accounts which were merely charged as payments by the resident engineer. I could give further instances of irregularities which were apparent .even during that early period and which increased the amount of unallocated expenditure to the sum of £1,123,918. At that particular period, the present manager transferred his headquarters from Melbourne to Bell Bay. That was at the beginning of 1952. At: that time, the commission’s accounts were in a chaotic condition. Stores controls did not exist. There were large discrepancies and local residents have given evidence that wholesale thefts occurred at that period. The accountant was superseded by another officer, who remained in the employ of the commission for a period of seven months. The commission’s trade credit was bad. Many accounts had not been paid after a period of nine months. In September, 1952, a chief accountant was appointed, and he immediately set about restoring soma semblance of order. That task took him approximately twelve months, and by the end of 1953 he had succeeded in accounting for previously unallocated expenditure with the exception of an amount of approximately £1,200,000. He was unable to trace the actual expenditure of that sum. It was then decided to spread that amount over the project as a whole.
I turn now to the methods that were used in apportioning that unallocated expenditure. I have seen a report in which various buildings, plant and services were listed and which showed various amounts, in some instances exceeding thousands of pounds, additional to original estimated costs. I was amazed to note that buildings which had not been commenced but were merely a part of future development, with nothing on the site and no foundations laid, had been charged with a considerable part of unallocated expenditure. The value of buildings, which were still in the course of construction, had been inflated. This position brought an immediate protest from the plant engineer who was responsible for the estimates ; but when he raised the matter, he was told by the chief accountant, in effect, “We do not know where the money’ has gone. You tell us, and we will debit the expenditure accordingly “. However, due to the engineer’s protest, certain adjustments were made, and expenses attributed to particular phases of the work were spread over the project as a whole because the amounts involved were too large to be carried on establishment, as they could not be thus explained. In many instances, the expenditure was so excessive that any competent engineer would immediately pick the discrepancy immediately.
Three official reports have been issued by the commission in respect of its assets and liabilities. Under the heading of capital works, plant and services, the total expenditure at August, 1953, was shown at £700,000. But twelve months later, in August, 1954, the total expenditure under the same heading was shown at £4,200,000. The difficulty in reconciling those two figures is immediately obvious, even if one assumed that it was possible for the commission to expend the difference between those two amounts in so short a period on plant and services. Another phase of the commission’s activities relates to the position at Wessel Island, which is off the coast of the Northern Territory, and which, I understand, has been the scene of extensive activity in the development of bauxite as a source of supplies for the Bell Bay project. As at
April, 1953, the total expenditure that had been incurred at Wessel Island was shown at £128,050, but by August, 1954, this expenditure was shown to have been reduced to an amount of £12,152. No doubt, honorable members will ask for an explanation of that change.
In view of these facts, it is the duty of the Parliament to examine the activities of this administration in its handling of public moneys. Therefore, I shall address a few pertinent questions to the Minister. He may- be able to answer them. The former chairman of the commission, Mr. G. H. Watson, resigned from that position in 1953. The Minister, when he replies, might be prepared to enlarge upon the activities of that gentleman while he was chairman of the commission; and he might also tell the House why Mr. Watson resigned at the particular time that he did. Is it a fact that he accepted appointment as an executive of Australian Civil Engineering Proprietary Limited and that that company took over the search for bauxite on Wessel Island and quoted a price of £50,000 to do that job for thicommission but was subsequently paid a sum of £128,050 for that work? If the answer to that question is in the affirmative, there can be no possible justification for the fact that the chairman of the commission should have been in a position to accept executive office with a company that was a contractor to the commission. I am also informed that Mr. Watson personally acted for ‘the commission as inspector of plant that was made in New South Wales and was paid for that work.
Finally, I shall say something about, the effect which this maladministration could ultimately have on the aluminium industry itself. I have already mentioned a sum of £2,000,000 of over-expenditure. Of that sum an amount of £1,123,918 has not yet been properly allocated. Inflated costs to-day involve unduly heavy charges for interest payments and allowances for depreciation.
– Order! The honorable member’s time has expired.
– I want to say at the outset that I welcome very much the opportunity which has been afforded to me to say something about the Bell Bay aluminium project in this discussion which has been initiated by the honorable member for Bass (Mr. Barnard). But first of all, since the honorable gentleman has seen fit to mention the name of one person, I think I ought to say something about that. He has mentioned the name of Mr. Watson. Mr. Watson was chairman of the Australian Aluminium Production Commission from the time I took over the portfolio of Supply until about the end of 1952. He was appointed by the Chifley Government so that, if there are any reflections on Mr. Watson, the people who must bear some of the responsibility for that surely must be the members of the government which appointed him. Mr. Watson - is connected with a firm called Australasian Civil Engineering Proprietary Limited.
It is a fact that ‘ Australasian Civil Engineering Proprietary Limited was appointed as the contractor to carry out the Wessel Island survey. It was appointed, not by Mr. Watson himself, be it said, but by the unanimous vote of the commission, Mr. Watson abstaining, it having been put to the commission that this company was the only company available at the time to do the survey. I may add to that, however, that I did not know about it at the time and that, when I found out about it a considerable time afterwards, I expressed the view that it was an unforunate selection to make. I took the view that, no matter in what good faith it was done, the chairman of the commission, who was associated with the company, thereby put himself in a position where his duty might conflict with his interests. However, there is this to be said: The ‘Wessel Island survey was done, and it revealed the presence of 9,000,000 tons of high grade bauxite on Wessel Island, which is enough, at our present proposed rate of production, to last Australia for 100 years. As a result of that survey, an asset of inestimable value to this country was discovered.
I have said that I welcome a debate on this matter. So I do, and I do not complain about criticism, but I do say that, when we are dealing with this great national undertaking, the criticism which is offered in this House ought to be restrained and ought to :be factual lest the completion of the project, which is to take place in a couple of months’ time, should be retarded or damaged. All the assertions which have been made have already been investigated by the Com-
Mr. Beale. monwealth Investigation Service, a fact which is well-known to the people who gave the honorable member for Bass the information on which he based his complaints. The dragging of all these things into the field of speculation in this House cannot do any good. It must be remembered, not only that these matters have been investigated by the Commonwealth Investigation Service, but also that we have the Public Accounts Committee, which will most certainly investigate them in due course. Furthermore, we have had a Treasury official upon the Australian Aluminium Production Commission at all times, and we have other public machinery to deal with matters of this sort.
Now the project is about to go into production. I say that that is a miracle, having regard to the initial disadvantages from which it suffered. I shall mention only two or three of them. First, it is common knowledge that, when the project was debated in this House in 1944, in the words of the then Leader of the Opposition who is now the Prime Minister (Mr. Menzies), it was “heavily tainted with politics “. It is well known that the idea of it was conceived in the hank of a motor car on the way to a public- meeting at Hobart Town Hall during the 1943 election campaign in order to save seats for the Labour party in Tasmania. That is common knowledge. The second fact is that the estimated cost of the project in 1944 was £3,000,000, yet it was admitted by the present Leader of the Opposition (Dr. Evatt), who was then the Deputy Prime Minister, that this estimate was based on a. report which was then already three years old. How a government could launch a great national undertaking which would involve millions of pounds of the people’s money on a three-year-old, out-of-date, obsolete report I do not know. The third fact is that the late Mr. J. A. Beasley, who had charge of the bill to authorize the undertaking, admitted that the Government of the day did not know whether the plant was to produce 5,000 or 10,000 tons of ingots a year. That is recorded in Hansard for September, 1944. The Government based its estimates on an expected production of 10,000 tons, but, within three years, it had to revise the whole of its estimates because it was told that nothing less than 13,000 tons of ingots a year would be an economic rate of production. That was the basis upon which the people’s money was to be spent
On this venture !
Fourthly, Mr. Beasley also said, during the discussion in this House in 1944, that electric power was to be purchased from the Tasmanian Hydro-electric Commission at an estimated cost of .Id. per unit. Yet, in 194S, the government of the day authorized the Australian Aluminium Production Commission to sign a contract for the supply of power on a formula which worked out at .5d. per unit - in other words, 500 per cent, more than the estimate announced by Mr. Beasley in 1944. That contract must be re-written, because it is unthinkable to me that this Government should be charged by a partner government a fee very much in excess of the original estimate, and I am in negotiation with the Premier of Tasmania on that matter. May I say that, from the time I took over, the Premier of Tasmania and’ I have worked in harmony and co-operation to get this national venture going. I do not make any reflection on him in this matter. Finally, in 1944, Mr. Beasley also stated in this House that the plant would be in production in about three years. Yet, when I took over in 1950, not a brick had been laid and not a pound of concrete has been poured. Nearly six years after Mr. Beasley’s statement was made, not a brick had been laid on the site! Is it any wonder that we have had trouble with this project, having regard to that background ?
In 1950, we had a. look at the undertaking, and we decided that if it was to go ahead - and substantial sums had already been expended on it - the work of erection must be accelerated. We could not have public money being idle and the incomplete- project eating its head off. Therefore, instructions were given to push it ahead, and, in four years, as compared with the six years in which Labour seemed to accomplish nothing, we have got it virtually into production.
– We had a war on our hands.
– Well, why did Mr. Beasley say he was going to get it ready in about three years? This Government moved the administration. which was sitting up in Sydney, to Melbourne and to Bell Bay, and it appointed a general manager. There was immediately a great increase of activitiy in the project, and this is revealed by the figures that I gave to the honorable member for Bass some time ago. They show that the expenditure on the project was £23,000 in 1945 and £59,000 in 1946 and £348,000 in 1950; but that it rose to £2,700,000 in 1951, £2,400,000 in 1952, and £2,400,000 in 1953. They show that at least we got on with the job.
– The Government just threw the money away.
– But as a result a weakness was revealed. Unfortunately, the commission of the day - entirely appointed by Mr. Chifley’s Government by the way -had not made provision for an adequate system of control of finance and stores, with the result that a vast quantity of stores, plant and material came on to the site, particularly in 1951 and 1952, and the organization got into confusion. There is no doubt that it got into great confusion. The two critical years were 1951 and 1952. However, these matters will -be dealt with. They are being dealt with already by the AuditorGeneral, and they will be dealt- with, at my request if not otherwise, by the Public Accounts Committee in due course.
That situation has been the cause of most of our troubles. In 1951, the commission asked me for an additional £4,500,000, and, in- the course of an investigation of its affairs, -I became unhappy about some of these matters of organization and requested that changes be made. I appointed the secretary of the Department of Supply as a deputy member of the commission in the middle of 1952 so as to get more direct knowledge of what was going on, and, at the end of 1952, very substantial changes were made in the personnel of the commission. We now have a virtually new commission. I want to say that all these troubles relate to the activities of the old commission and that, since the new commission came into operation at the end of 1952, there have been no difficulties at all and many of the old ones have been removed. Certainly, the new commission has done remarkably well in trying to bring this plant into production.
But all of the difficulties to which I have referred gave rise to rumours of wrong-doing, to some of which the honorable member for Bass has referred. At my request, an investigation was made, first, by the commission, and then, as the rumours persisted, and again at my request, by the Commonwealth Investigation Service. It was asked to investigate the matter, and it did so. Officers of the service spent six months making inquiries, and they finally produced a most detailed and voluminous report, which is now before me: If, as a result of the examination of the report by the Government and the Crown law authorities, wrong doing is proved or provable, the most drastic action will undoubtedly he taken.
– “Will- the Minister table the report?
– Most certainly not. It is a document submitted by the Commonwealth Investigation Service to myself as Minister for Supply, administering the Bell Bay aluminium works. The tabling of the report in this House would be likely to do injury to innocent persons. It is not the practice to table such reports, and I most certainly shall not table this one. But I assure the House that the most drastic action will be taken against any one who can be proved to have acted wrongly.
Let us get the project in perspective. Its estimated cost is £10,000,000 and it is. the second largest civil project undertaken by the Australian Government. Its complexity is beyond my powers of description. The Government had to import and install chemical and electrical machinery brought from all over the world. That machinery was very difficult to obtain. The Government’s advisers for the project were the British Aluminium Company Limited, a worldwide organization of great experience. Representatives of that company have told me that the Bell Bay plant is modern, efficient and well constructed, and that the Commonwealth has received value for its money. We have had virtually to build a village with all amenities. We have had to reticulate great quantities of water and power supplies. We have had to obtain from all over the world raw materials such as petroleum, coke, soda ash, and cryolite, which was obtained from Greenland. The acquisition of supplies of those materials involved a considerable amount of negotiation and caused constant anxiety, because those materials are difficult to obtain. The bauxite survey that was made proved to be much more expensive than it was originally expected to be, but it has yielded a most valuable asset to the Australian people, and it is certainly amply justified for that reason. We had to obtain electric power sufficient to generate 45,000 horse-power. The supply of this power was delayed. The aluminium plant could have been in production long since had the Trevallyn tunnel not given the Tasmanian Government trouble and caused delay. The plant will begin to produce alumina in January of next year, and on the 1st June next it will pour the first aluminium ingot produced in Australia. In four years from the time the project began, this Government will have, got the plant into production. It has been .constructed during times of great shortage of materials, low man-hour output, and the like, as compared with the time when a Labour government was in office and did virtually nothing. The Bell Bay aluminium plant will make a great strategic industry available to Australia, and it will save us millions of dollars by making Australia independent of the rest of the world for aluminium supplies. This plant is another milestone on our road to prosperity, power and security.
.- Never have I witnessed a better performance on a skating rink than the Minister has given this morning. He skated completely around the charges made by the honorable member for Bass (Mr. Barnard). I agree with most of the Minister’s remarks. No Opposition member would argue with him on those . points, but we on this sideof. the House do expect a relevant reply to serious charges that have been made by the honorable member for Bass. You say that the Commonwealth Investigation Service investigated the Bell Bay aluminium plant, but you have not answered the charges made by the honorable member for Bass. We shall not have the advantage even of seeing the report that has been made by the investigation service. You say you will punish the guilty people.
– Order ! The honorable member will address the Chair.
– I am glad to know that you, Mr. Speaker, are interested in this matter.
-Order ! If the honorable member is reflecting on the Chair he will find himself outside the chamber.
– I was not reflecting on the Chair,
– Why are you, Mr. Speaker, unjustly interrupting the honorable member for Wilmot?
-Order! The honorable member for Lalor is distinctly out of order. The Standing Orders provide that honorable members shall address only the Chair. The honorable member for Wilmot (Mr. Duthie) was addressing the Minister for Supply (Mr. Beale).
– I am sorry, Mr. Speaker. I shall address the Minister through you. The Minister said that the guilty people will be punished, but no one will know who are the guilty people, because if anything is done, it will be done in secret. In contrast, an aboriginal girl who recently stole 13s. has been committed to custody for a period of one or two years. But the persons who are responsible for the great discrepancies at Bell Bay may or may not be punished, and no one will know. The Public Accounts Committee should long ago have investigated the Bell Bay aluminium project. That committee already has done a vast amount of work in investigating public departments, many of which did not require investigation nearly so- urgently as does the Bell Bay project. I cannot understand why the Minister has kept the Public Accounts Committee away from Bell Bay.
– I have not kept it away from the Bell Bay project.
-Order! The Minister has had his say.
– The Minister said that this Government constructed a village and reticulated water and hydroelectric power to it. This Government has done nothing of the sort. The Tasmanian Government undertook that work. The reticulation of water and hydroelectric power sufficient for the generation of 43,000 horse-power was a Tasmanian State enterprise.
– It was done under the supervision of the Department of Supply.
– Admittedly it was done under the overall direction of the Minister. Tasmanian workers built the village, and, in the early stages, Tasmanian money helped to finance the work. This Government cannot take credit for the work that has been done by the Tasmanian Government.
All Opposition members want the Bell Bay aluminium project to succeed, but they are appalled at the mismanagement and maladministration that has occurred, especially in the years referred to by the honorable member for Bass. I should like to mention several matters that the honorable member did not refer to. Unallocated expenditure is one matter. I have before me three reports on the Bell Bay project. The first, which is dated February, 1953, shows unallocated expenditure to the amount of £3,900,000 out of a total sum of £5,300,000. In the next report, which is dated April, 1954, no reference is made to unallocated expenditure. Obviously the money was expended on buildings, plant and services, as well as on the expenses of establishment. I have the whole story in black and white if the Minister wants to see it. The third report, which is dated August of this year, shows that establishment expenses were reduced in some fantastic manner from £1,123,918 to £27S,951. “These figures indicate an amazing amount of financial juggling at Bell Bay in an attempt to put large sums of “ hot “ money somewhere.
I should like to mention also Mr. G. H. Watson, who established a company known as Australasian Civil Engineering Proprietary Limited. A vessel named Illawarra, which was owned by Mr. Watson, was sold to the Australian Aluminium Production Commission at a price £17,000 above its value. The company that repaired the vessel also was owned by Mr. Watson. I understand that a mobile crane in New South Wales was sold to the commission, and that Mr. Watson was paid £1,000 for inspecting the crane. It was a very bad buy, because it was found, on delivery of the crane at Bell Bay, that it was completely worn out. The secretary of the commission, Mr. H. A. Dodd, who questioned the transaction, was told that Mr. Watson was the chairman of Australasian Civil Engineering Proprietary Limited and that his charges could not be questioned. Mr. Dodd has since resigned and joined Mr. Watson’s staff.
One of the serious effects of these happenings is that the cost of production of aluminium ingots in Australia will be so high that the Australian market will probably not be able to afford to buy them. The plant is designed to produce 13,000 tons of aluminium a year, but because of inflated costs, in order to work on an economical basis the plant must produce 36,000 tons a year. At present, aluminium ingot is selling in Australia at £220 a ton, but because of over capitalization and the cost of chemicals and raw materials, the selling price of the Bell Bay aluminium will be £279 a ton. Therefore, immediately production starts, our local undertaking at Bell Bay will need to be protected by a tariff of about £36 a ton in order that we shall be able to sell our aluminium in Australia at the same price as overseas companies sell their products here. That is the position that we have now arrived at through maladministration and over-expenditure, as well as through the loss of money that cannot be accounted for.
I point out to honorable members that £1,200,000 cannot be accounted for, and that has been added to the capital and production costs of this industry. Because of new methods of production overseas, and consequent increased production of aluminium outside Australia, it is possible that within a year or two Ave shall be able to buy aluminium in Australia at £180 a. ton. How are we going to sell our Bell Bay aluminium at that price, in view of the over-capitalization of the project and our terrific expenditure on getting the plant into operation? Honorable members will see quite clearly that the imposition of a protective tariff on aluminium coming to Australia is the only way in which we shall be able to keep our aluminium industry alive. There is a long and very sad story of bad administration in the matter of the Bell Bay aluminium project, and I hope that the people who are guilty of that maladministration will be prosecuted as they deserve to be.
I am now wondering whether there is anything behind the way in which this plant has been administered. Why has the estimated cost of production of our aluminium been built up so greatly? Is it so that we shall be priced out of the Australian market in order that that field will be left clear for the monopoly cartel of the aluminium industry freely to supply the Australian market and later to buy our project and close it down? Honorable members will perceive that the maladministration of this project could all be part of a plan. But let us consider what the Minister for Supply has said in this House about the Bell Bay aluminium project. In vol. 217 of Hansard, at page 503, he is reported to have said -
The Government believes that the only business-like thing to do is to finish the scheme and make it work. Once we have made the project pay we can consider its future. Some honorable members on the Government fide of the House have referred to the Bell Bay scheme as a socialist enterprise. When it is a working proposition we oan consider whether private industry would be interested in it and whether the public of Austra’ia would be propared to make a contribution to a great public venture .of this type. I think that that would be a very good move. I am not in favour of exclusive, government direction of this great enterprise. If public investors are in it and if experienced businessmen, chemists and engineers and others have a personal interest in it. that will be a guarantee that it vill be efficiently run.
I draw the attention of honorable members to his statement that the Government might be prepared to sell this aluminium industry to private enterprise after it has been established.
– Order ! The honorable member’s time has expired.
– I congratulate the honorable member for Bass (Mr.
Barnard) and the honorable member for Wilmot (Mr. Duthie) on bringing this very serious matter concerning the Bell Bay aluminium project to the attention of the House. It has been shown by the honorable members that £1,200,000, allegedly spent on the project, remains unaccounted for, and is apparently unable to be accounted for. This is really a most serious matter. The quotation from Hansard read by the honorable member for Wilmot indeed suggests a very serious picture. The views of the Minister for Supply (Mr. Beale), apparently endorsed by other honorable members on the Government side, are that it is quite satisfactory to spend millions and millions of pounds of public money in building up a national project in which the Tasmanian Government and the Australian Government are partners, and that after the money has been poured into the project the time will be ripe for its sale to private enterprise. That, of course, fits in with the pattern of the sale of other public concerns by this Government. The pattern is quite plain, and has been seen over and over again. Perhaps if an inquiry were held by the Public Accounts Committee into the Bell Bay project, the true explanation of this extraordinarily scandalous state of affairs would be revealed.
The honorable members who have brought this matter forward have the full support of the Opposition in all that they have said, and in their request for a public inquiry into the matter. Of what use is it to refer the matter to the Commonwealth Investigation Service? The Government already has a report from that organization, which the Minister will not table in this House. Of course, it is perfectly correct that on a preliminary investigation into breaches of the law all evidence should not be put forward, but I suggest that the matter has gone further than a preliminary investigation. Millions of pounds of public money have been poured into the Bell Bay project. The Opposition wants the aluminium industry to’ be a success in Australia. Indeed, I suggest that all honorable members want it to be a success; but the Minister did not answer a single point raised by the Opposition and contented himself merely with saying what Mr. Beasley had said about the project. The Minister for Supply threw a document across the table to me, and that document shows that for five years of Labour administration in this country, from 1944 to 1949, the total expenditure on this project was only £600,000. That was due, no doubt, to the difficulty that confronted the Labour government during the war and post-war periods. Nevertheless, it does not indicate any extravagance on the part of the last Labour Government, and, indeed, there is no suggestion by the Minister to that effect. But in the four years that the Minister has administered the Bell Bay project more than £S,000,000 has been expended on it. That expenditure of public money is the serious matter in this case, not only because it indicates waste and extravagant administration, but also because, as the honorable member for Wilmot pointed out, such enormous expenditure on the plant will make the cost of the aluminium that is ultimately produced so high that it will be difficult to sell it and consequently almost impossible to run the plant at all.
Behind the scenes, as those who are acquainted with the life of Andrew Mellon and others associated with the aluminium combine will recollect, we may find the fierce determination of the aluminium cartel that projects like the Bell Bay aluminium plant shall come under control of private interests.
– And private interests would buy out the Bell Bay plant if they could.
– Yes, and they will too, if this Government does with the aluminium plant what it did with Commonwealth Oil Refineries Limited. Moreover, it will sell out at a gross undervaluation which will amount to a fraud on the people. This is not a matter, as the honorable member for Bass pointed out, of any wrong intent on the part of the Minister. I have visited the project together with my colleagues of the Opposition in this House, and with Senator O’Byrne and Senator Aylett, and I have seen there the possibilities of building up a great enterprise. However, I felt when I saw the place that everything was at a standstill. No one seemed to know the policy of the Government or how long it intended to continue the production of aluminium ingots. It is quite obvious that we should give the Bell Bay’ aluminium authority the power and capacity to fabricate aluminium in this country.
– The last Labour Government, of which the Leader of the Opposition was a member, expressly excluded that power in its bill to set up the industry.
– That has nothing to do with the matter. The expenditure of £8,000,000 is involved. It seems to me that, after this enormous expenditure has been incurred and large sums of money have not been accounted for, it is the intention of the Government to say that it will abandon the enterprise and help the purchaser, the international cartel, in one way or another to acquire it. I understand that that organization has been advising the Government in relation to the operation.
– The same people that the Labour Government chose.
– Certainly, in the beginning.
-Order! I .ask the Minister not to interject. ‘
– The Minister’s anxiety and constant interjections, and his attacks upon the Labour Government and Mr. Beasley, whose administrative ability was a dozen times better than that of the Minister, show that he will not face up to this matter. What is the remedy? The Opposition wants to know the facts, which are of public concern. They cannot be obtained through the secret report of the investigation service, except as a preliminary to prosecution. The Public Accounts Committee is the appropriate body to investigate this matter. That committee sits in public, and it would find out the truth about this project. In that way we would be able to get to the root of the expenditure, including, to the degree that the Public Accounts Committee thought them relevant, the transactions to which reference was made in relation to an officer of the Department of Supply.
On behalf of the Opposition, I ask that the Public Accounts Committee be called together immediately to investigate the matter. I do not suppose any honorable member would deny the seriousness of the statements that have been made and the care with which the case has been presented by the Labour members from Tasmania. The Opposition endorses the case that has been presented, and states that there is a prima facie case of maladministration which ought to he investigated by an independent committee such as the Public Accounts Committee, which is representative of both sides of the House.
– Amongst a lot of other things that the Leader of the Opposition (Dr. Evatt) failed to mention was the fact that, if there is to be any criticism and condemnation of the Australian Aluminium Production Commission, that criticism and condemnation must be shared equally by the Commonwealth and the Labour Government of Tasmania. It is quite amazing that Federal Labour members should come into the House and attack an administration which is shared equally by the Commonwealth and the Labour Government of that State. The Opposition has not established a case. All it has done - and those honorable members who live in Tasmania know the truth of this statement - has been to repeat a lot of idle chatter that passes over the back fences down Bell Bay way and which is repeated by a few old women of both sexes.
Opposition members intersecting,
– Order! The honorable members for Lalor and Wilmot must not interject.
– The truth about the Bell Bay project is that, if ever order was brought out of chaos, if ever a wreck was salvaged, and if ever a monument was raised on a ruin, it was the result of the work that has been done by the Government through the administration of the Minister for Supply (Mr. Beale). The industry supports hundreds of workers and their families and both they and the people of Tasmania should be eternally grateful to the Menzies Government, and particularly to the Minister of Supply, because of the millions of pounds that have been poured into Tasmania through the Bell Bay project. This Government has established an industry which is the greatest project that the Commonwealth has ever attempted in Tasmania. It has been only since this Government assumed office and the present Minister commenced to administer the relevant department that, in co-operation with the Tasmanian Government, dramatic progress and remarkable achievement have been apparent. That partnership with the Tasmanian Government has been conducted with complete harmony. It is no wonder that progress has been achieved. “When the honorable member for Bass (Mr. Barnard), who raised this subject as a matter of urgency, spoke during the debate on the Address-in-Reply on the 7th
September, he stated-
– Order ! The honorable gentleman may not refer to debates of the present session.
– His statement was very complimentary of the Minister. Perhaps I shall be in order if I quote the recent broadcast statements of the Labour Premier of Tasmania in relation to the Bell Bay aluminium works. He stated -
There has been some talk in a section of the press about unhappiness at the construction site but my observations and inquiries did not disclose any. There is a calm but purposeful atmosphere at the works which speaks well for the direction of the executives and the co-operation of the men.
– Who made that statement ?
– The Labour Premier of Tasmania. He continued -
Two-thirds of the men engaged on construction work want permanent jobs when the plant begins production.
He made further statements in the same tone. He also observed -
Here I would like to pay a tribute to the builders of Bell Bay. The Commission has been fortunate in finding a man of the calibre of the General Manager and he is getting the best out of his talented staff. Together they are working as a team. The men on the joh (irc hard-working and happy.
It will be seen that the statements of the Labour Premier of Tasmania conflict with the statements made in this House by Labour members from Tasmania to-day. The Minister for Supply traced the development of the Bell Bay project after he became .responsible for the department about four years ago. I do not think any fair-minded person would fail to recognize that, under his guidance, tremendous progress has taken place. It is only when we examine the utter confusion that existed in the early days of the project under a Labour administration, and as a result of thar administration, that we observe what progress has been made. Such an examination highlights and emphasizes the fact that all the Labour Government did was to develop the greatest mess and the greatest muddle of all time. The Minister for Supply, in a statement that he made in Canberra on the 30th September, summarized the position in these words -
The project was conceived in a political atmosphere, and in hurried circumstances which were much criticised during the debate on the original Bill.
You, Mr. Speaker, will remember the criticism that was offered at that time when you were a private member. I think that you rather powerfully and eloquently supported a move for the appointment of a royal commission to inquire into the matter. The Minister further stated -
It was based on estimates of COSt, which were inadequate. The output originally decided upon was also soon found to be too low and had to be increased . . . The Commission, which comprises businessmen and Government officials, were given very wide powers. It was a part time body which in view of the magnitude and complicated nature of the venture was not a suitable form of control. Organization was inadequate, there was no General. Manager, and between 1044 and 1950 progress was slow.
No wonder! The more one investigates the early history of the Bell Bay project, the more one is amazed at the complete incompetence, the complete irresponsibility and the complete and utter lack of even the most rudimentary business principles. Under the Labour Government, nothing was achieved in seven years. When this Government took over the project in . 1950 - the Leader of the Opposition lightly spoke about the £600,000 that had been spent up to that time - not one brick had been laid, and not one pound of concrete had been poured. Nothing had been attempted and, of course, nothing had been done. That was the mess that this Government inherited from the Labour Government in 1950. It was nothing but a faint, smudged and half-baked blueprint.
The Government was faced with the necessity of deciding whether to cut its losses and get out or to attempt to clean up the mess and find the millions of pounds that obviously were necessary to save the industry for Tasmania. It decided to follow the latter course. It did clean up the mess, and it did find the millions of pounds that were needed to continue the project. It turned arrant failure into obvious success. Within a month or two, more aluminium oxide will be coming from this plant. A few months later, we shall be pouring the first of the aluminium ingots. Thirteen thousand tons of aluminium, which will he sufficient for Australia’s requirements, will come from that plant every year. 1 suggest to Labour members from Tasmania that, on the next occasion on which they fly to Canberra, they would do well, when flying over the Tamar valley, to have a look at the thriving, prosperous town at Bell Bay, and then to cast back their minds a few years to the time when there was nothing there but paddocks, bush and a few wooded hills. Then they would recall that it was this Government which developed the Bell Bay project.
The first estimate of cost was £3,000,000. It was not an estimate; it was a guess. The Minister who introduced the hill in September, 1944, stated that it was based on the best available information. On the 28th November, according to Hansard, the then AttorneyGeneral, who is the present Leader of the Opposition (Dr. Evatt), said that the best information was then three years old. The second thing was that the Minister said in his second-reading speech that the cost of a unit of electricity would lie O.ld. Yet, when another Minister of that Labour Government later took over the administration of the project he signed a contract with the Tasmanian Hydro-electric Commission, not for O.ld. a unit, but for 0.5d. a unit, which was 50 per cent, more than the rate that private industry was paying for bulk power at that time. If anything concern- ing the- commission and its dealings requires searching examination, that contract, whereby the Commonwealth agreed to pay 500 per cent, more for electricity than the original estimate, requires it.
– What is the Government paying now?
– We were committed by the Labour Government.
– Order ! The honorable member for Lalor must not interject.
– The Minister who introduced the bill in 1944 said that the project would be completed in two or three years. Pour and a half years later nothing had been done. Not one brick had been laid or one pound of concrete poured. One would think that a government that was embarking on a project of this magnitude would have taken expert advice, which, in this case, could have been given by the Tariff Board. Yet there is no record of the government of the day having approached the Tariff Board to ask for guidance in the matter.
Motion (by Sir Eric Harrison) proposed -
That the business of the day be called on.
Honorable members interjecting,
– Order ! I must ask the House to come to order.
– The Government cannot stand an investigation.
– The honorable gentleman should talk.
– Order ! The debate across the table between the honorable member for East Sydney and the Minister for Supply is out of order. There is a microphone in the centre of the table, and honorable gentlemen may be unintentionally engaging in a broadcast.
Question put. The House divided. (Me. Speaker - Hon. Archie Cameron.)
Majority . . . . 7
Question so resolved in the affirmative.
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 he made for the purposes of abill for an act to grant and apply nut of the Consolidated Revenue Fund sums for the purpose of financial assistance to the States to he applied in the construction, reconstruction, maintenance and repair of roads and works connected with transport, and for other purposes.
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 road a second time.
The purpose of this bill is to repeal the Commonwealth AidRoads Act 1950, and to replace it by new legislation to govern Commonwealth payments for roads purposes during the next five years. The Commonwealth AidRoads Act 1950 was enacted to operate for five years, and would normally expire on the 30th June of next year. It had become evident, however, that unless some action were taken, the increase in the local refining of petrol would adversely affect the road grants to the States in the current financial year. This would be so, because an increased proportion of the petrol consumed in Australia would become subject to excise duty, of which 31/2d. a gallon is allocated for roads, rather than customs duty, of which 6d. a gallon is allocated for roads. As honorable members will see, the greater the swing in the direction of locallyrefined petrol, the smaller would be the return from that financial arrangement. Therefore, the Government has taken this opportunity to make a complete review of the legislation, and has decided to introduce new legislation which will not only solve the problem created by increased local refining of petrol but also ensure a further substantial increase in the Commonwealth aid roads payments.
I shall summarize the main proposals of the bill in the first place, and elaborate one or two of them a little later in the course of my speech. The main proposals in this bill are as follows : -
If I may put that in a more general way, the allocation is 7d. a gallon on petrol consumed, the convenient way of determining how much is consumed being to discover how much is entered for consumption under either of those heads -
That has been a provision now of some long standing -
Constitutionally, as all honorable mem bers know, roads are the responsibility of the States and the local authorities set up by the States, but ever since 1923,. successive governments of all parties in this Parliament have made grants to assist the States to construct and maintain Australia’s roads. The Commonwealth has made these grants in recognition of the national importance of roads for both defence and the development of the continent.
The remarkable growth that has occurred in the size of the roads grants since 1923 is illustrated in some figures which I should like to put before the House. The figures show the average annual grants to the States under each of the various acts governing road grants since that time. Honorable members will appreciate that these figures are the average figures for the duration of each particular piece of legislation. The average annual payments to the States under the Main Roads Development Act 1923-25 was £500,000 ; under the Federal Aid Roads Act 1926, £2,000,000; under the Federal Aid Roads Act 1931, £2,400,000; and under the Federal Aid’ Roads Act 1937, £3,200,000. All those, as honorable members will see, are prewar years. The average annual payment to the States under the Commonwealth Aid Roads and Works Act 1947 rose to £7,300,000 as against £3,200,000 in the period just before the war. Under the Commonwealth. Aid Roads Act 1950, passed during the terms of office of this Government the average rose to £14,800,000.
It will be noted that those grants have risen very remarkably, and we take some satisfaction in that, but we also feel glad that this has been possible, because of the gravity and the growing nature of the problem with which these grants are expected, in part at any rate, to deal. In total, the road grants paid to the States during the past four years have amounted to approximately £60,00,000. That is gratifying, but we propose to liberalize still further the basis of road grants to the States. As I have already indicated in the summary, it is proposed that the allocations for road purposes shall increase to a flat rate of 7d. a gallon on all petrol other than aviation spirit which is entered for consumption and in respect of which customs or excise duties are payable. Honorable members will see, in the schedule to the bill, the details of the allocations. I have indicated, and, therefore, I do not need to repeat it, that the proposal does not only represent an increase in the allocation, if you put it in that way, from both customs and excise duties, but what is much more to the point, it means that the grants, so far from falling away as local refining develops, will, in fact, increase with the consumption of petrol. It is estimated that the total allocations in 1954-55 will, on the basis I have indicated, be of the order of £24,000,000, or nearly £7,000,000 more than last year. If, as is expected, petrol consumption continues to rise, further increases in Commonwealth roads payments may be expected in subsequent years. The claim is repeatedly made that petrol tax receipts ought to be devoted exclusively to road work. One argument that is frequently advanced in support of that contention is that the petrol tax was imposed in the first place to raise money for roads. That argument will not stand examination. The petrol tax was first imposed in 1902, because petrol tax, although we have come to regard it as a roads tax, has, from the very beginning, been a duty of customs or excise.
– Was it imposed at the request of the States ?
– No. It was imposed originally for revenue purposes. The point I make is that it was imposed in 1902 before any one ever thought of attaching it to road purposes.
– There were no motor cars in those days.
– There were very few. I seem to remember a motor buggy ambling into a village in which I lived at that time. It was not until 1923 that the first road grants were made to the States, and not until 1926 that road grants were first associated with petrol tax collections. Since 1926, the petrol tax has remained to some degree a general revenue tax and, indeed, a number of increases has been made in petrol tax rates since 1926, specifically for general revenue purposes. -I emphasize that from the very beginning some proportion of the petrol tax has been regarded as being for general revenue purposes.
Another argument sometimes put forward is that since petrol tax is paid by road users it should be used exclusively for their benefit. Apart from the fact that there has never been any suggestion that taxes on other commodities should 6e used exclusively for the benefit of those who pay them, this argument overlooks the point, which I emphasize, that most of the petrol tax is paid by persons who use roads for commercial purposes and who pass on the tax to the public in costs of transportation. On the basis used in this argument, it would be .only equitable that some part of petrol tax collections should, therefore, be expended on the general public which, as I have indicated in the case of commercial vehicles, has carried the burden of the tax. By that, I mean that some portion of the tax goes to the general public when a portion of the tax itself is used for general revenue purposes. The fact is, however, that all such arguments which seek to use the level of petrol tax collections aa the sole criterion for determining the extent of Commonwealth assistance for roads, are largely academic. In practice, the extent to which the Australian Government should assist the States by way of roads grants must be determined from time to time having regard not only to the level of petrol tax collections but also to such factors as the nature of the road problems existing at the time, the resources available to State governments to deal with those problems and the nature and extent of other commitments with which the Australian Government may be confronted. . In short, it is not entirely inconceivable that the amount paid by the Australian Government might, in fact, exceed the revenue received from the petrol tax. The point I make is that the two things are not necessarily associated.
After considering all those factors, the present Government, in 1950, introduced legislation which caused the road grants to reach record levels. The further increase to be provided under this .bill will be a further indication of the importance that we attach to a problem which, so far from disappearing, is a growing problem all over Australia.
In the 1947 roads legislation a specific part of the roads grant was earmarked each year for rural roads. The Government saw how beneficial that provision had been for primary producing areas and how it had assisted local government authorities in those areas. Therefore, in 1950, we increased the amount so available to 35 per cent, of the total annual collection to roads, and the provision was widened to cover all roads in rural areas other than main roads, trunk roads and highways. This provision has proved so beneficial that the Government proposes to increase it again. That is why, as I have indicated, we propose by clause 9 of the bill to increase the 35 per cent, to 40 per cent. ; and, as honorable members will see if they look at clause 11, there is a provision that the State will make an accounting of how the money has been expended, and that acounting is to be certified by the Auditor-General of the State.
There is another problem of local authority participation in road grants which is not unrelated to rural development. Local authorities in Victoria, and throughout the Commonwealth, are responsible for a high proportion of roads other than main roads. The Government is anxious that they should participate in the increased road grants to the greatest possible extent. At the same time, the Government recognizes that, as the State governments are responsible for local authority affairs, it is for each State government to determine the extent to which local authorities should share in these grants. In the present bill, as in the 1950 act, it is provided that any part of the Commonwealth roads grants may be made ‘available by the States to their local authorities.
Under the 1950 legislation, an amount of £600,000 was set aside for Commonwealth purposes, including strategic roads and roads for access to Commonwealth property. Having regard to -the greatly increased size of the grants now being made available; we have thought it proper that that amount should be increased as I have indicated. It still remains a very modest proportion of the total sum. It becomes £900,000 instead of £600,000 ; but of the £900,000 the sum of £100,000 is to be set aside for the promotion of road safety purposes.
The 1950 legislation provided that, if the States so desired, up to one-sixth of the general roads grant to any State in any year could be expended on works, other than road works, connected with transport by road or water. Various examples in that respect in relation to water will occur to honorable members. This provision was designed primarily to assist those persons who use petrol and pay tax on it but who do not use the roads in their ordinary business and, therefore, get no direct benefit from the road grants. If continued in its present form in the new legislation, this provision would involve a sum of nearly £3,000,000 in 1954-55 ; but as the new legislation is designed’ primarily to increase the funds available for roads purposes, a provision of this magnitude for other than roads would be excessive. The amount which may be expended on works other than road works is, therefore, limited in the bill to £1,000,000.
Under the 1950 legislation 5 per cent, of the annual road grant was allocated to Tasmania and the remaining 95 per cent, was shared among the five other States on the well-known formula. That formula has been in use since 1937. It was incorporated in the 1950 legislation after a majority of the Premiers indicated at a conference of Commonwealth and State Ministers, held in September, 1950, that they desired no change. This question was raised again at a conference of Commonwealth and State Ministers in June of this year when the Premier of Victoria, in which State there has been a good deal of criticism of this basis, raised the matter. But, once again, a majority of the Premiers indicated that they were perfectly satisfied with this method of distribution. The only Premier who voiced opposition to it was the Premier of Victoria, although I must say that he recognized, without abandoning his general argument, that this method takes account of the special needs of the large, sparsely populated States, such as Western Australia and Queensland. Indeed, I should prefer to put it in another way. We may look at this problem too much as if we were dealing with six separate communities in six States. The real purpose of the formula is that these moneys should be distributed throughout Australia so that those parts which are the least able out of their own resources to provide and repair roads should be placed in a position to get on with the job. The Government proposes, therefore, to use the same method of distribution in the new legislation. If, at some future conference of Commonwealth and State Ministers, the Premiers exhibit some change of mind in this matter, we shall be willing to give attention to their representations. But if we were to sit in arbitration between the special view of my own State - I remind honorable members that I am a species of expatriated Victorian-
– The right honorable gentleman would not be parochial.
– Not at all. I have always believed the formula to be just. We propose to adhere to that formula which, for seventeen years, has done a great deal to develop the road system in the more remote parts of Australia.
We propose that the new legislation shall operate for a period of five years as from the 1st July, 1954. I have heard it said that, perhaps, the period should be longer. Such a substantial period will give to the authorities responsible for roads a pretty good opportunity to plan road works on a long-range basis. As I am not suggesting for one moment that the system of road grants will terminate at the end of five years, I might have thought, if. I were in the position of the States, that I could have a longer period. However, circumstances change materially, and a periodical review is essential. The best evidence of that is that normally this matter would not be brought before the Parliament for another twelve months, because the current legislation is not due to lapse until 1955. But, having regard to the prospective development of refining in Australia, circumstances have so changed that it would not have been just to keep to the letter of our bargain and let the period run out. The period of five years is long enough to be extremely useful in planning ahead and, at the same time, brief enough to enable us to retain some control of this problem in changing circumstances in the future.
The bill will not come into operation until the day on which it receives the Royal assent, but I point out that the various provisions governing the increased payments will take effect as from the 1st July last. It has been necessary to include in the bill certain provisions to ensure that the payments that have already been made in the early months of the financial year conform to the provisions, of the new legislation. They are necessary machinery provisions. Clause 5 provides that any payments made under the 1950 act in respect of 1954-55 will be deemed to have been made under the new legislation. To avoid duplication of payments, such payments under the 1950 act will be deducted from the payments authorized by the other provisions of the bill. That is, perhaps, a rather complicated explanation of what honorable members will recognize at once as a necessary change-over provision. In point of fact, pending the passage of this legislation - we have a feeling that it will be passed by. the House - payments to the States in the early months of thi1- financial year have been increased to the level provided by the new legislation.
We have done this by drawing on the sum of £5,000,000 which, as honorable members will recall, the Treasurer (Sir Arthur Fadden) prudently set aside during 1953-54 in the Commonwealth Aid Roads (Supplementary) Trust Account. That was the purpose of the trust account, and it has been used for that purpose. As the increased payments provided for in the bill will be effective from the 1st July, 1954, clause 8 provides that the payments to the States under the new legislation will be reduced by the amount of the payments made in the early months of 1954-55 from, the supplementary trust account. All these accountancy provisions are merely designed to avoid duplication of payments and to ensure that the full amount provided for under the new legislation will be received in the course of the current year, and, indeed, during the currency of the act.
– What about moneys not used by the States?
– In past years? This bill docs not purport to deal with that matter. Clause 8 provides that, after the commencement of the new legislation, payments may be made to the States out of the supplementary trust account, and that the payments into and out of the trust account may be reduced accordingly.
Finally, I emphasize that the aim of the .Government in introducing this new legislation is to help to provide Australia with better roads. To do this, we propose to pay these higher grants to the States for roads - higher than’ they have ever received before. However, I should like, to make it quite clear that the purpose of the additional grants is to facilitate the improvement of Australia’s roads, not to relieve the States of the need to make the. maximum contribution to roads out of their own resources. In other words, the bill is designed to increase the amountspent on roads, not merely to re-distribute the cost of roads between the Commonwealth .and the States. I am sure that honorable members generally will welcome the bill. Some of them might like it to go further, but I offer the view on my own behalf that it represents a very handsome and . liberal approach to this matter - an even better one than we have been able to make in the last few years.
Debate (on motion by Mr. Ward adjourned.
– I move -
That the bill be now read a second time.
This bill has been transmitted from the Senate. Its object is to provide for an adequate and effective system of law in the Australian Antarctic Territory. The Australian Antarctic Territory forms part of the Antarctic continent and covers an area of between 2,000,000 and 2,500,000 square miles. It comprises all that area of the Antarctic continent which is immediately south of Australia, except for the small strip known as Adelie Land, which is French territory. The Australian Territory was accepted as a territory under the authority of the
Commonwealth by the Australian Antarctic Territory Acceptance Act of 1933.
At the present time, it is difficult to state with precision the laws which are in force in the Territory. Honorable members may think that is a masterpiece of understatement, because it is very difficult to state with precision the laws that operate in Australia. However, the problem of determining what body of law does operate - whether the Queen’s writ runs - in this Antarctic Territory, is one that has to be dealt with. It may not at present affect very many people, but it clearly ought not to be left at large. Last summer, as honorable members know, a base was established at Mawson, in the Territory, and the present prospect is that this base will be maintained as a permanent station. A more readily ascertainable system of law is required in the Territory, not only to govern the general relationships between the members of the base parties, but also to provide machinery for such matters as, for example, the registration of any deaths that may occur in the Territory, the appointment of a coroner, the registration of medical practitioners appointed to attend the persons stationed in the Territory, the preservation of wild life, and the control of mineral resources.
In the first place, the bill provides for the repeal of the act of 1933. That act has only two operative sections. The first of these -defines the area of the Territory and declares it to be accepted by the Commonwealth as a territory under the authority of the Commonwealth. The provisions of this section have, of course, been completely carried into effect. The second operative section of the 1933 act enabled the making of ordinances having the force of law in the Territory. Therefore, there is already on the statute-book machinery to enable the introduction of laws into the Territory, and honorable members may wonder why the present bill is necessary. The reason for its introduction is that, since the 1933 act was passed, the Parliament has enacted the Heard Island and MacDonald Islands Act 1953, which provided for the establishment of a system of law in those sub-Antarctic islands in a different way. It is considered desirable that the systems of law in the Australian Antarctic Territory and the sub-Antarctic Territory should, as far as possible, be similar, but there are doubts whether provisions similar to those of the Heard Island and MacDonald Islands Act can be applied to the Australian Antarctic Territory” by the. machinery provided in the 1933 act. These are doubts which, being legal doubts, we must treat with profound respect. To put the question beyond doubt, an amendment of the 1933 act is considered necessary, but as that act contains only two substantive sections, one of which has already, as I have indicated, run its course, the most satisfactory procedure is to repeal the whole of the act and confine the proposed new act solely to the establishment of a system of law in the Territory. I mention that in order to indicate that the repeal of the original act will in no way affect Australia’s title in the Territory.
The short effect of the bill is to provide for the application within the Territory of laws from time to time in force in the Australian Capital Territory, except Commonwealth acts. There is provision also for the making of ordinances in relation to the Territory. Generally speaking, the bill will enable the administration of the Territory, to function through existing officers and instrumentalities, so that, for example, should it become necessary to register a death, this could be done with the Registrar for the Australian Capital Territory in the ordinary manner.
There is however, one general exception to the principle that laws of the Australian Capital Territory will apply to the Australian Antarctic Territory. As honorable members will see from the provisions of clauses 6 (2.) and 8 of the bill, acts of this Parliament will not, unless expressly stated to extend to the Territory, apply of their own force or as part of the law of the Australian Capital Territory. The reason for these provisions is that it is considered desirable to make a selection of Commonwealth acts which shall apply to the Antarctic Territory rather than to apply all of them indiscriminately. This is consistent with normal practice whereby Commonwealth acts do not apply to external territories of the Commonwealth unless expressly so provided. Much of the volume of Commonwealth legislation would, in any event, be of no practical application in the Antarctic Territory and might conceivably lead to anomalies and difficulties.
The remaining clauses of the bill make provision for a general power to amend or repeal adopted laws by ordinance and for the jurisdiction of the Supreme Court of the Australian Capital Territory to be exercised in respect of the Antarctic Territory. The clause relating to the court is necessary because of the otherwise general provision that Commonwealth acts shall not, of their own force, apply in the Territory. The bill is a small one and it deals with a limited number of people, but it is undoubtedly essential and I commend it to the House as containing sensible provisions.
Debate (on motion by Mr. Ward) adjourned.
Sitting suspended from 12.43 to 2.15 p.m.
That the bill be now read a second time.
The Sugar Agreement between the Australian and Queensland Governments, which was signed in 1951, has been amended twice, by exchange of letters between the two Governments. The purpose of this bill is to obtain parliamentary approval of the two amendments of the agreement. As honorable members are aware, the 1951-56 agreement is one of a series of sugar agreements entered into between the Australian and Queensland Governments. Since 1923, sugar agreements have been presented to Parliament for ratification. The various agreements have all followed similar lines, slight variations and modifications being made from time to time only as conditions necessitated alterations.
The main features of the 1951-56 agreement may be summarized as follows : - The Australian Government has agreed to place an embargo on the importation of sugar, and the Queensland Government has given certain undertakings, the principal ones being to acquire all raw sugar produced in Queensland and New South Wales; to make sugar and sugar products available to purchasers in Australia at certain fixed prices ; to control the production of cane sugar in Queensland; to accept responsibility for losses arising from the export of surplus sugar ; to contribute funds to the Fruit Industry Sugar Concession Committee for the assistance of the Australian manufactured fruits industry ; and to pay rebates on the sugar content of manufactured goods exported from Australia when the Australian net home consumption price of sugar is higher than the Australian equivalent of the world parity price of such sugar content. In February, 1952, the Queensland Government, on behalf of the Australian sugar industry, sought a variation of the agreement to provide for an increase in the wholesale price of sugar and for the setting up of a special tribunal to review from time to time costs and other circumstances affecting the industry. The Australian Government, after considering the request, decided, with the concurrence of the Queensland Government, to appoint a sugar inquiry committee to examine the necessity for a price increase and for any other variations of the provisions of the agreement. The Australian Government considered that the industry had presented a prima facie case for an immediate increase in the price of sugar and it therefore agreed, pending the receipt of the report of the Sugar Inquiry Committee, to an interim increase in the wholesale price of sugar equivalent to an increase of l1/1d. per lb. in the retail price. This increase, which was agreed to by an exchange of letters between the two Governments, operated on and from the 24th March, 1952.
The Sugar Inquiry Committee conducted public hearings in the States ot Queensland, New South Wales and Victoria during the period from the17th April to the 2’7th August, 1952, and an opportunity to tender evidence was given to all interested persons. Evidence, which extended to 1,146 pages of transcript, was presented to the committee by the growing, milling and refining sections of the industry, as well as by fruit-growers, fruit processors, manufacturers and other users of sugar. In addition, the committee received hundreds of exhibits, which were either confidential or such as not to warrant inclusion in the evidence. The committee presented its report on the 11th September, 1952. The report was tabled in the Parliament on the 15th October, 1952. The committee unanimously recommended an increase in the price of sugar additional to the interim increase of l1/2d. per lb. granted in March, 1952. Members of the committee, however, differed in their opinions as to the extent of the increase that should be granted, separate recommendations of id., 3/4d. and1d. per lb. being made. The report also included recommendations that amendments be made to other provisions of the Sugar Agreement 1951-56. It would be mere repetition for me to elaborate, upon the various factors that influenced members of the committee in reaching their recommendations. These are all set forth at pages 53 and 54 of the report of the committee, which has now been in the hands of honorable members since October, 1952. The Australian Government, after considering the report, decided to permit an increase in the wholesale price of sugar equivalent to 1d. per lb. in the retail price. This increase, with the concurrence of the Queensland Government, operated on and from the 13th October, 1952.
By arrangement between the two governments, other amendments of the agreement were made as an outcome of the committee’s report and recommendations. These were -
As I mentioned earlier, these amendments were effected by an exchange of letters between the two Governments, it being agreed that the preparation of a formal agreement be deferred until a later date. When the amendments were announced, the Australian Government undertook to present the formal agreement to the Australian Parliament for approval. A formal supplementary agreement, incorporating the foregoing amendments, including the increase equivalent to lid. per lb. in the retail price of sugar which operated on and from the 24th March, 1952, has now been signed on behalf of the Australian and Queensland Governments. This bill seeks approval for that agreement.
I would mention that the Australian Government, in agreeing, in October, 1952, to a price increase equivalent to1d. per lb. of sugar, which was the maximum increase recommended by the Sugar Inquiry Committee, took into account probable cost rises in the immediate future and other prevailing circumstances affecting the sugar industry. One recommendation of the Sugar Inquiry Committee, which so far has not been adopted, relates to the appointment of a tribunal to examine and report upon costs and associated elements in the sugarindustry. This matter has been discussed by the Australian and Queensland Governments, but finality has not yet been reached. Accordingly it has been decided to defer a decision on this question.
The series of sugar agreements between the Australian and Queensland Governments has undoubtedly contributed a great deal to the present stabilization and efficiency of the Australiansugar industry. The Australian industry is recognized throughout the world for its efficiency and is constantly endeavouring to improve all aspects of growing, milling and refining, by financing and assisting technical and agricultural research. When sugar has been scarce throughout the world, for example, during World War II., the Australian public has been able to obtain supplies of sugar at prices much lower than it would otherwise have paid. The fruit industry has, in the last 22 years, received nearly £5,000,000 of financial assistance from the sugar industry, by way of domestic and export rebates, special export assistance, and grants for such purposes as research and advertising. This assistance has been administered by the Fruit Industry Sugar Concession Committee. In addition, exporters of most manufactured products receive the export sugar rebate. These facts indicate that the measure of economic security accorded to the sugar industry by means of this and previous sugar agreements has been fully justified.
Debate (on motion by Mr. Pollard) adjourned.
Message recommending appropriation reported.
In committee (Consideration of GovernorGeneral’s message) :
Motion (by Mr. Kent Hughes) agreed to -
That it is expedient that an appropriation of moneys be made for the purposes of a bill for an act to authorize the raising of moneys to be advanced to certain States for the purposes of housing.
Standing Orders suspended; resolution adopted.
That Mr. Kent Hughes and Sir Eric Harrison do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Kent Hughes, and read a first time.
.- I move -
That the bill be- now read a second time.
The purpose of this bill is to authorize the raising of loan moneys totalling £32,000,000 to finance advances to New South Wales, Victoria, Queensland, South Australia and Western Australia under the Commonwealth and State . Housing Agreement Act 1945. Tasmania withdrew from the agreement in 1950, and consequently no provision is made for advances to that State. The borrowing programmes for Australian and State governments approved by the Australian Loan Council for the current financial year total £200,000,000, which is equivalent to the amount actually borrowed for the year 1953-54. For housing, under the Commonwealth and State Housing Agreement Act, the approved borrowing programmes for 1954-55 include an ‘ amount of £32,000,000. That was the amount nominated by the States for housing out of approved borrowing programmes totalling £200,000,000.
Since the agreements came into operation in 1945-46, advances to ‘ the States for housing have increased from £6,795,000 to £21,640,000 in 1950-51, and to a maximum of £37,200,000 in 1953-54. To the 30th June, 1954, total advances to the States for housing had reached £178,000,000, and 68,773 dwellings had been completed under the agreement in the five participating States, including 12,683 during 1953-54. The number of dwellings under construction in those States at 30th June, 1954, was 9,787.
As about 75,000 houses were completed during the last financial year, it will be noticed that the number of houses constructed under the Commonwealth and State Housing Agreement is roughly one-sixth of the total number of houses built by private enterprise and by governments throughout Australia. The figures for the last financial year and the preceding year are quite interesting. The number of houses commenced in 1952-53 was about 64,000, and in 1953-54 about 75,000. The houses completed in the first of those years number 77,000 and in last year about 75,000. The houses under construction in 1952-53 numbered 70,000, and last year 71,000. An interesting fact is, as was pointed out in a statement recently issued by the Department of National Development, that the number of houses at present being built in Australia is tending to level off at about 75,000 a year as against an estimate that 60,000 a year are required to meet the normal growth of our population and its increase in immigration. In other words we are catching up with the backlog of housing by about 10,000 or 15,000 houses a year.
In the industrial section of the building industry the financial measures taken by this Government during the past two or three years have brought about a feeling of confidence and stability in the economy which has led to a considerable increase of the money that is being expended on industrial and commercial buildings. Factory and commercial building has increased from 15 per cent, of all new buildings completed in 1950-51, to 28 per cent, in the first nine months of 1953-54. Although I have the figures only for the first nine months of that year, I believe it is safe to 3ay that the percentage is still increasing. I know that in Melbourne, for instance, there was very little commercial building going on eighteen months ago, but I believe that now between £10,000,000 and £12,000,000 a year is being spent on that type of building. The figures that I have put before honorable members indicate the tremendous increase which has occurred in both industrial and commercial building, and that in itself has had a very great effect on the supply of building materials and building labour.
Employment in building construction increased by 5,400 persons during the year which ended in March, 1954, and that figure includes 2,400 persons employed by sub-contractors, which shows that private individuals are responding to the greater demands for increased building activity. In spite of the increase of the supply of building materials by an average of about 25 per cent. - 1 believe that it varies from 8 per cent, on some materials to 40 per cent, on others - there is still, unfortunately, a shortage of building materials, and to a greater degree a shortage of skilled labour in the industry. At present the overall figure suggests that an increase of the production of building materials of about 40 per cent, is still called for. The Australian Government is providing about £70,000,000 a year for the construction of houses in Australia, and in addition to that sum the Commonwealth Bank is providing another £20,000,000 to various societies such as the co-operative building societies, which makes a very large amount of finance provided from Commonwealth sources each year. In 1939 the number of persons per house in Australia “was 3.98 and, as far as I can gather, the figure at present is about 3.80. So in spite of the backlog of home building which was caused as a result of very few homes being built during the war years, Australia has become better and better housed over the last few years. Although I cannot recollect where I read the information, I noticed. in a journal in the Parliamentary Library that Sweden has the smallest number of persons per house of any country in the world but that Australia comes second.
– The other countries must be .badly off.
– The honorable member can say -what he likes, but the fact remains that Australians are the second best housed people in the world, and when we consider the services that are connected to the houses, Australians take first place in the world. Of course I do not suggest that we do not still require large numbers of houses, but I do say that the supply is now overtaking the demand.
– It is nowhere near the demand.
– I do not suggest that the supply at present equals the demand, but it is getting to be somewhere near the demand despite the unsubstantiated assertions of the honorable member for Watson (Mr. Curtin).
– 40,000 houses are needed in New South Wales alone.
– Some people have said that 100,000 houses are needed there, but I suggest that people .should put facts forward and not just catch figures out of the air. It is quite obvious that any one can put any figure at all forward, if he is not required to substantiate it. This Government is building many more houses each year than were built by the last Labour Government. Although we are not building as many as we were two years ago, we are gradually getting back to that record and catching up on the backlog of houses in this country by about 10,000 or 15,000 a year. That does not mean that the Government is satisfied that the demand is equalling the supply, because it is not. Nor are we satisfied that there are not too many houses of a sub-standard nature which we hope will be removed through the agency of the Commonwealth and State Housing Agreement and better houses builtin their place. During the last general election campaign the Government put forward a policy of home-ownership that would enable people to buy houses on relatively low deposits and on attractive terms. That policy is in contradistinction to the original basis on which the Commonwealth and State Housing Agreement was brought into being by the last Labour Government, which intended the houses built under it to be for rental purposes only.
– That is wrong.
– It .is not wrong, as I can quite easily prove. At the end of the last war a pamphlet was presented by the officers of the then Labour Government to returning servicemen. I received one on my return from abroad, and I have it in my office at present. If the honorable member for Melbourne (Mr. Calwell) would like to see it he may do so. . In the very first paragraph of the pamphlet the returning serviceman was informed that the Government had instituted a scheme in conjunction with the States to provide houses for rental. The Prime Minister (Mr.
Menzies) has referred to the expiration of the present agreement in the following words: -
When the housing agreement expires over the next year or two we will require that any new agreement shall encourage ownership and leave ample opportunity both financially and otherwise for the work of building by cooperative societies and private builders.
As the Prime Minister recently said, there have been several discussions among Commonwealth and State officials about the terms of an agreement for the sale of houses under the Commonwealth and State Housing Agreement. The Prime Minister has said that he hopes shortly to be able to make an announcement about that matter. This measure is to deal with the money to be allocated from loans this year for housing in Australia, which amount was decided by the Commonwealth and State Ministers. I commend the bill to the House.
Debate (on motion by Mr. Allan Eraser) adjourned.
Message recommending appropriation reported.
In committee (Consideration of GovernorGeneral’s message) :
Motion (by Mr. Kent Hughes) agreed to-
That it is expedient that an appropriation of moneys be made for the purposes of a bill for an act to approve the borrowing of moneys for a defence purpose, namely financial assistance to the States of South Australia, Western Australia and Tasmania in connexion with war service land settlement, and to authorize the expending of those moneys.
Standing Orders suspended ; resolution adopted.
That Mr. Kent Hughes and Sir Eric Harrison do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Kent Hughes, and read a first time.
– I move -
That the bill be now read a second time.
This bill provides for the raising, for war service land settlement, of loan moneys amounting to £5,000,000. This money will be advanced, under approved conditions, to South Australia, Western Australia and Tasmania, which are more generally known as the agent States, to be used by them for the acquisition, development and improvement of land for subdivision’ and allotment to classified exservicemen, and for providing those exservicemen with working capital and finance for the purchase of structural improvements, stock, plant and equipment. The money will be used solely by South Australia, Western Australia and Tasmania because, under the existing arrangements for war service land settlement, the other States are responsible for raising their own capital moneys’ for which they apply through the Australian Loan Council.
Previous loan acts have authorized the raising and. spending, on war service land settlement, of loan moneys amounting to £22,625,000. The expenditure to the 30th June, 1954, was £18,865,000, leaving a balance of £3,760,000 at the beginning of this financial year. Expenditure during the financial year 1953-54 was £5,500,000, of which £4,200,000 was new money, and £1,300,000 was the reexpenditure of repayments of amounts that were expended in previous years. In other words, the Commonwealth has been using the repayments, more or less, as a circulating fund to step up, year by year, war service land settlement in the agent States. The proposed appropriation is required to meet during this financial year an estimated expenditure on war service land settlement of £5,000,000, which will be supplemented by £1,744,000 that, it is estimated, will be received from repayments of advances made previously to settlers, and from similar sources.Financial assistance to all States for non-capital expenditure - for example, living allowances to settlers, interest and rent remissions, and writing-down of the cost of holdings - estimated to be £1,750,000 for the present financial year, will be met by the Commonwealth from Consolidated Revenue. Therefore, this bill deals wholly and solely with the amount of capital moneys that it is proposed to use in the three agent States.
The following statistics and general comments in relation to war service land settlement in the agent States will he of interest. From the inception of the scheme to the 30th June, 1954, approximately 3,000,000 acres of land have been approved by the Commonwealth for inclusion in the scheme and have been acquired for land settlement in Western Australia, South Australia and Tasmania. To date, about 1,500 holdings have been allotted to ex-servicemen.
– Can the Minister inform the Hou3e of the costs? ‘ There is a complete absence of statistics in relation to costs.
– I have not those figures here, but I can provide them for the honorable member for Lalor (Mr. Pollard) if he wishes to have them. In South Australia, allotments have been made to 602 ex-servicemen, and about iOp ex-servicemen are still awaiting settlement. Allotments of holdings have been made to approximately 900 exservicemen in Western Australia, and it is estimated that approximately 400 genuine seekers of holdings remain unsatisfied. The figures that I have just cited are round figures. The number of unsatisfied applicants may be even 500 or more, but the estimates I have given were made after consultation with the State authorities. They are not necessarily final figures, but they were the best estimates that I have been able to obtain. With 184 holdings allotted to Tasmania, it is considered that only about 40 genuine applicants remain, apart from applications from exservicemen from the mainland. When I refer to genuine applicants, I do not -wish to be misunderstood in relation to either the adjective or the noun. The term refers really to people who have remained on the land and who are still hoping to come under the war service land settlement scheme. Such people have applied and have been accepted. The term does not refer to people who are being repatriated in other ways, and who have been following other pursuits since their return from service. It is quite understandable that people should have thought that, if they got in during the early stages of the war service land settlement scheme, it was almost as good as, if not better than, winning first prize in a lottery. For that reason, there is still a large number of people who were original applicants and who were accepted by the war service land settlement boards in the various States on their previous record, but who have not continued to work in primary industry and who have, in effect, been repatriated in other jobs.
– Does that disqualify them ?
– No. I intended to refer to that matter. They are not necessarily disqualified. I am referring to people who have applied for settlement on the land,, who have done their best to make themselves efficient, and who are still, shall I say, keen applicants. I do not wish the adjective to he misunderstood. The sharp increase in the cost of acquisition of developed or partially developed land has emphasized the desirability of developing virgin land for war service land settlement purposes. Modern machinery has made possible the bringing of such development within reasonable economic limits and has, to a large degree, solved many technical problems that are associated with the development of new lands. The amount of work that is being undertaken at present is influenced by the desire of the Commonwealth to complete land settlement within the next five years. I can say without fear of contradiction - probably the process began under the previous Government, but it has been carried on to a very much larger extent by this Government - that in the agent States we have developed and brought into production more virgin territory than has any one of the three agent States.
– There is more land available.
– Yes, but in Queensland there is probably sufficient land on which to have settled all of the applicants under the war service land settlement scheme. The development, in Western Australia, of virgin land totalling 774,000 acres is expected to provide holdings for approximately 375 ex-servicemen. Substantial development ha3 been undertaken and 250 farms, apart from 90 that have already been allotted, are almost ready. A recent survey indicates that all applicants for dairy farms have been catered for, and projects that are now in train are expected to go close to meeting the demand of genuine applicants for wheat and sheep farms who are still waiting. In South Australia, six large projects are at present being undertaken. The approximate total area involved is 283,000 acres, from which it is expected to obtain 494 farms, 323 having been completed already. These projects include the Loxton irrigation area of 14,000 acres, from which it is estimated that. 255 farms will be available for allotment. Large areas in Tasmania, including King Island and Flinders Island, are being developed. The four main projects, totalling 196,500 acres, are expected to provide 509 farms, 60 of which have been completed. “When projects in Tasmania have been completed, there will be a surplus of farms in relation to the number of men in that State who have been classified. However, there is every indication of considerable interest, on. the part of classified ex-servicemen on the mainland, in obtaining holdings in Tasmania and on the islands to which I have referred.
I stated to the honorable member for Lalor that I would obtain any figures that he desired to have in relation to the costs of the farms. So far as I remember the figures, it is costing between £12,000 and £15,000 for dairy farms and between £18,000 and £20,000 for. fat lamb farms. If one compares those figures with the figures in relation to development that ‘is being undertaken by private enterprise, it will be seen that they are very similar. Having had some experience in that direction - I have not undertaken large projects - I can make that statement with a considerable degree of certainty. I feel that, eventually, the Commonwealth will have to face up to the need to write down to a considerable degree the cost of some of the farms that are now being bought and developed, as compared” with the early farms.
– Why would farms be so expensive on French Island ?
– They are not as dear on French Island and King Island as in other places. There has been a. tremendous lot of clearing of the original scrub. Moreover, it is not easy to get labour and machinery over there. Two people who were over there recently, and who know a great deal about this sort of work, were very much impressed. I am. referring to Flinders Island and King Island.
– The honorable member asked about French Island.
– I do not know. If anything is being done on French Island, it is being done by the Victorian Government. The people to whom I referred were very impressed with the work that had been done on Flinders Island and King Island. Farms have been established where previously there was no cultivation whatever. The holdings are allotted on a perpetual leasehold basis, but, in the case of Tasmanian holdings, with an option to purchase after six years and ten years for holdings in South Australia and Western Australia. The basis of valuation of holdings is as follows : -
That does not mean, of course, that, if there is a catastrophic fall in prices, the settler is not still protected.
– What does the term “ time of leasehold valuation “ mean ?
– The date at which he is given the leasehold tenure.
– That is, after a number of years?
– The honorable member is probably confusing it with the position in Victoria where they have the interim and the final lease. That applies under the Victorian legislation and that is one of the extras which the
Victorian Government has given out of the goodness of its heart and which has caused misunderstanding in that State. When the man is allotted the holding; he is given his leasehold tenure.
– And his leasehold valuation ?
– Not originally, because there was no freehold.
– And this becomes the ultimate basis of his freehold valuation?
– If he wishes to take up the option, he is given it at that time.
– At which time?
– At the time at which he goes on and is given the leasehold tenure. The fact that there was no freehold previously has caused a lag. We have to go back and get the valuation, and get as near as we can to that valuation on those areas that have already been allotted. That has caused some delay. Because considerable work has been done on land that is not yet sub-divided into holdings or not yet, allotted, and because of the sum of approximately £1,000,000 that is tied up in developmental plant and stores, the cost of holdings cannot be obtained, as is frequently done, from the simple division of total expenditure by the number of allotments. It is considered that, in general, the cost of farms from virgin land is not out of line with the establishment costs of farms that are developed with private capital. I mentioned that fact earlier, and I know that in Victoria recently it was held that at one time a fair cost of a farm was £7,900.
– That was before this Government came into office and allowed costs to rise.
– No, it was before the inflation that started under the Chifley Government, and which ran at such a. pace that it took us nearly two years to curb it.
– It has been running pretty fast since.
– The Labour Government put the spurs in. I” commend the bill to the House.
Debate (on motion by Mr. Pollard) adjourned.
Debate resumed from the 18th August (vide page 361), on motion by Mr. McEwen -
That the bill be now read a second time.
.- This is a small measure, but it is nevertheless of considerable importance, particularly to the meat industry. The bill seeks to amend the Meat Export Charges Act 1953, by which the Parliament authorized the collection, by an authority, of a levy on export meat. . The levy is intended to be utilized to meet the administrative costs of the Australian Meat Board, and to finance the functions that the board is empowered, under its charter, to carry out. The Minister for Commerce and Agriculture (Mr. McEwen) indicated, at some length, in his second-reading speech, that some changes had occurred since 1947, when the last meat export charges were actually levied. He mentioned that, since 1947 the revenue and administrative expenses of the board have come from profits made on the sale of meat by the Commonwealth under contract to the United Kingdom. These sales were made under contracts that were initiated during the war. These profits, which were on deals of very great magnitude, were considerable. As a matter of fact, under the control of the Australian Meat Controller, they amounted to £500,000. In addition, there has been accumulated another sum of £500,000, which is held in a trust fund, as are also the funds that accumulated under the jurisdiction of the controller. The Labour Government, conscious of the fact that these moneys came from the meat industry itself, did not hypothecate them to the Consolidated Revenue Fund. It established a trust fund, and one of the conditions under which money was paid into that fund was that it should be used in the interest of the meat industry itself. Already, under the very competent direction of the Australian Meat Board, a great part of the first sum of £500,000 has been allocated, and is being used in conjunction with the Commonwealth Scientific and Industrial Research Organization and the Queensland Government, in the interests of the meat industry. I know that in one case a sum of £50,000, the allocation of which I approved in principle, when I was Minister for Commerce and Agriculture, was allocated to the Veterinary School at the University of Sydney. The second sum of £500,000 is still held in reserve, and, I understand, will ultimately he utilized for research and other purposes.
Since 1947, when the original export charges were abandoned, the actual administrative charges and costs of the board have not come from the profits that I have mentioned, and it has not been necessary to continue to impose the export levy. The position to-day, however, is that the contracts with the United Kingdom, which ran for a number of years, have terminated. I understand that they actually terminated on the 30th of last month. It has now become necessary, if we are not to eat into the trust funds held by the hoard, to reimpose an export levy on meat in order to provide the hoard’s administrative cost3, and, more importantly, in order to enable an advertising campaign to continue in the United Kingdom, and in other possible export markets, designed to maintain and encourage the demand for our meat. That is desirable and eminently necessary. But there is another reason for the introduction of this measure which, of course, the Minister has hidden. I illustrate it by pointing out that the Government still has the right to levy a maximum charge of approximately one-eightieth of a penny a pound on all export meat. Until recent years that levy was adequate to cover the administrative costs of the board and to finance publicity in the United Kingdom. I do not think that, when the levy was originally fixed at tl] at, rate, it was ever considered that it would be other than adequate for those purposes. Everybody knows that, irrespective of the Government that may be in office, it is almost inevitable that in war-time inflation and increases of costs of production must occur. Governments endeavour to halt such increases, and in this country increasing costs were held substantially until the financial year 1947-48. Id that year, following the defeat in a referendum of proposals to empower this Parliament to control prices and keep costs at a reasonable level, they began to rise. Although there had been some upward moves of costs previously, the result of this Parliament’s lack of power to control prices and costs, coupled with the policy of this Government, has been that costs have doubled since 1949. In these circumstances, a levy of oneeightieth of a penny a pound is absolutely hopeless to finance the purposes for which the levy was originaly instituted. This measure, therefore, had to be brought down by the Government, which is largely responsible for the shocking increases of costs that have occurred. The honorable member for Capricornia (Mr. Pearce) who represents a great cattle exporting area in Queensland, laughs. He knows, however, that figures show only too clearly that between 1949, when the Chifley Government went out of office, and now, all costs of primary production in Australia have doubled. That applies to sugar, meat, wheat, barley, dried fruits, wines, and any other primary products that the honorable member would like to name. In these circumstances, it becomes necessary for the Government, with the support and consent of the honorable member for Capricornia, to increase the levy imposed on meat from his electorate, among others, from one-eightieth of one penny a pound to approximately one-, tenth of one penny a pound. A levy of one-eightieth of one penny is an insignificant amount for any body to have to pay on one pound of meat, although it means a lot of money when the rate is levied on tons of meat. It is even more infinitesimal when it is compared with the proposed levy of one-tenth of one penny.
– They will not use it all.
– The honorable member is, in effect, indicting the Government’s advisers who, in this particular instance, are the members of the Australian Meat Board. Those members are, almost without exception, representatives of the great meat exporting companies and of the primary industries, plus one representative of the employees in the meat industry. The honorable gentleman implies by his interjection that these people do not know their business, and that they have recommended to the
Government, which the honorable member for Wide Bay supports, the imposition of a charge on primary producers which will be in excess of requirements. I do not know how the honorable member could sustain such an argument. In any event, the members of the Labour party have always been ardent supporters of co-operative and organized marketing. The Labour Government substantially assisted the meat industry during the war, and was responsible for negotiating the various bulk sales contracts with the United Kingdom which expired recently.
– They also sold wheat cheaply to New Zealand.
– Yes, and New Zealand sold us hides, and fodder for the drought-stricken farmers of Australia, including those in the electorate of the Minister for Defence (Sir Philip McBride), at New Zealand values, and not at world market prices. The Minister knows only too well that that is so. and his interjection is a diversionary tactic. The Labour party supports this measure. We cannot overlook the fact that costs have run away, and that if this organization is to continue the good work it has done the bill is necessary. The members of the board are competent people. I have always had the greatestadmiration for them, and I think that their advice has been uniformly good. As I was saying, before the Minister for Defence interrupted me, the Labour Government negotiated the meat contracts with the United Kingdom. I fear that the demand for export meat under open market conditions will not be as good as it was under bulk sales contract conditions. The Labour Government also initiated the new fifteen - year meat agreement with the United Kingdom. I understand that this Government has now finalized that agreement. There has been a degree of dissatisfaction in the industry itself with that fifteen-year agreement. Any such dissatisfaction is perhaps understandable. Although my party was not responsible for the final detailed work of the agreement, I believe it is probable that the primary producers who object to its’ conclusion will find, ultimately, that the position as a result of the conclusion of the agreement will be better than would have been the case if no such agreement had been concluded. For all these reasons, the Opposition offers no objection to the bill, but offers only the criticism that I have voiced, and our regrets that it should be necessary, for this Parliament, because of shocking, galloping inflation, . to have this measure at all. Costs have so advanced in this fair Australia Lat it is admitted by honorable members on both sides of the House that we have already, to a very large degree, almost priced ourselves out of world markets - so much so that at present the Minister for Commerce and Agriculture is in the United Kingdom pleading with the government and people of that country not to buy their meat on the cheapest markets in the world, and not to trade with Argentina. He is urging thu United Kingdom to make the sort of agreement with the Commonwealth that harks back to the dim days of the Ottawa Agreement. He is pleading with the United Kingdom to revise the agreement in order to make it more advantageous to Australia.
The Ottawa Agreement, at the time it was entered into, was to the advantage of Australia, but because of circumstances which have since transpired, it is at the present moment a distinct disadvantage to this country. The Minister for Commerce and Agriculture is almost on his knees as he pleads with the people of the United Kingdom not to buy cheap meat from Argentina but to buy dearer meat from Australia, because this country is the best customer of Great Britain. It is humiliating that the Minister should have to plead with the United Kingdom in that manner, but it has to be done. The Minister is now doing it, and he has to do it. The reason, I re-emphasize, is that this Government has allowed the cost of production to soar to almost alpine heights, and has placed primary producers almost in the position of suppliants to the people of the United Kingdom. We are saying to them, in effect, “ Oh, please trade with us. Do not trade with Argentina, where you have invested your capital in the past. We shall always be your friends, and your best customer.” It is a humiliating position. Oh, how I wish this Government had been strong enough in its faith and capacity to change its conservative outlook, and bring its policies up to date ! It is necessary, notwithstanding the views that the Government has expressed in the past, that honorable members opposite should revise their opinions, as they have done with the reintroduction of capital issues control and export controls.
– Order! I ask the honorable member to relate his remarks to the “bill.
– I leave the matter there. I hope that the bill will have a quick passage through the Parliament.
– I received rather a pleasant surprise when the honorable member. for Lalor (Mr. Pollard) began his speech because, for once, I agreed with some of his remarks and I thought that he would make a sensible speech for a change. However, he reverted to normal about half-way through his speech, and proceeded in the usual fashion of most of his speeches in this House. This bill deals with the meat industry, which is of vital importance to the economy of Australia to-day, “and the honorable member could well have discussed the legislation in a less facetious manner.
One or two points emerge .from his remarks which need some reference and clarification. He retold the old story about the inflationary conditions in Australia. He .stated that the reason for the introduction of this bill to impose a charge of one-tenth of a penny on each pound of meat exported, was the .inflationary condition that had been created by this Government. I believe :that the people of Australia are fully aware of the fact that in 1949, as figures issued :by the Commonwealth Statistician show, costs were rising at the rate of approximately 12 per cent, .in the last year of office of the Chifley .Labour Government. The honorable member for I,alor was the Minister for Commerce and Agriculture in that Government, and .he was well aware of the rate at which costs were rising in 19.49 .so it is futile for .him at this stage to try to deceive the people with the argument that he introduced.
The honorable member has also made the claim, which, I think, has been made in one or two other quarters, that the new rate of levy of one-tenth of a penny is unduly high. I do not know the basis of that claim, or whether the income of the Australian Meat Board for the year have been taken into consideration, but T should like to make it quite clear to the House that the administrative costs of the board during this next financial year will be lower than they were in the last financial year. The reason for that is obvious. The administrative work of the board will decline, due to the reversion to the trader-to-trader basis of operations with the United Kingdom. The new charge of one-tenth of a penny is the maximum rate, and the honorable member for “Wide Bay (Mr. Brand) has pointed out that the maximum charge may not he used this year. It is possible that the operational costs of the board will be- considerably lower in the future than they have been in past years, and that during this year the maximum rate will not be gazetted. Perhaps a slightly lower rate will be fixed in order to produce a sum of money to cover the costs of the board. However, the maximum rate is set with a view to bringing in a certain income which will substantially cover the estimated costs in one year. That explanation deals with the- claim of the honorable member for Lalor, that the charge of one-tenth of a penny per lb. for each pound of meat exported is unduly high.
The honorable member for Lalor supported the conditions of the fifteenyear meat agreement negotiated by the Minister for Commerce and Agriculture with the British Ministry of Food, but he said that there was still some criticism of this agreement. I consider that there is very little criticism of that agreement at the present time. It is rather strange for a government to receive letters of congratulation, but during the last few months, letter of congratulation have been received by the Minister and the Government on this long-term meat agreement. Most people in Australia, realize the definite advantage to the meat industry of a fixed market with guaranteed conditions for a long term. The system of marketing is to be altered, but a definite protection will be given to the industry for a .prolonged period. I desire to read a passage from the August issue of the Meat Producer and Exporter, which is the journal of the Australian Meat Board. The extract is taken from an article entitled “ Congratulations on Long-term Meat Agreement “, and reads as follows: -
The Minister for Commerce and Agriculture, Mr. McEwen, has stated that the General Council of the Graziers’ Association of Kew South Wales has congratulated the Australian Government and the Australian Meat Board on achieving, under the Ions-term meat agreement with the United Kingdom, the unrestricted right of entry of the exportable surplus of Australian meat to the United Kingdom market and generally for the negotiation of the agreement.
That paragraph indicates an attitude which is fairly general throughout. Australia tc-day. In effect, most people within and outside, the industry appreciate the value of the agreement to Aus tralia’s economy now and for the next few years.
I was most interested to hear- the reference by the honorable member for Lalor to the visit of the Minister for Commerce and Agriculture to London. The honorable gentleman said that the Minister was begging the British Ministry of Food and the United Kingdom Government to buy Australian meat in preference, to meat from Argentina, although the price basis of meat from Argentina was lower than that of meat from Australia. I inform the honorable gentleman that the latest figures I have received on this matter indicate that meat from the Argentine is much dearer than meat from Australia at the present time. The honorable member is a former Minister for Commerce and Agriculture. He is doubtless conversant with the market trends, and he should be aware of that fact. I am surprised that he should try to convey the impression in this House that Australian meat is dearer at the present time than is- meat from Argentina.
– He may have been talking about wheat, not meat.
– The honorable member for Lalor has had experience of initiating contracts for the sale of Australian wheat to New Zealand at a much lower price than the market price.
The purpose of this bill is to amend the rate of levy which is chargeable- on meat exports and to increase it from approximately one-eightieth to one-tenth of a penny per lb. The situation which necessitates the introduction of this legislation should im considered in relation to the conditions which have existed for many years, in respect of the marketing of meat. There have been three distinct phases in meat marketing since the Meat Export Charges Act was introduced in 1935. The first phase was when export levies were collected at that time and were paid into Consolidated Revenue. Then appropriations from revenue were made to the Australian Meat Board to cover the cost of its operations. That phase- continued until 1947, when a change was made after the introduction, of govern.menttogovernment trading, and! ite, was found that the most suitable way with the introduction of the bulk buying system through the British Ministry of Pood was to finance the activities of the meat board by the imposition of a small percentage on the United Kingdom contract price. So the next phase after May, 1947, for financing the activities of the meat board was by charging a percentage on the returns from the sales under the United Kingdom agreement. The operation of the levy under the previous ac was suspended for the time, although the act still remained in force. Government trading terminated at the 30th September last, 8nd we are now in the third phase of operation in respect of financing thi operations of the board. “We again impose a levy, because obviously, with the trader-to-trader basis of trading, the method of raising finance by charging a percentage on the contract sales cannot be utilized. Therefore, it is necessary to re-impose a levy to cover the costs of the operations of the board. That is to be done, and that is why this bill muS be passed by the Parliament as quickly as possible.. It will have to be made retrospective to the first of the month so that operations may commence from that date. The charge of one-tenth of a penny per lb., it is estimated, wi’” produce an income in one year of approximately £22.000, which will be sufficient to cover any known costs for some years.
I should now like to say a few words about the functions of the Australian Meat Board. From 1947 until a few weeks ago, the hoard was responsible for the bulk selling of Australian meat to the British Ministry of Food which, in turn, marketed the meat through a standard rationing system in the United
Kingdam. But from now, there is a reversion to free trading, to tradertotrader arrangements, and there will obviously be far less administrative work for the board. But the board will still have to handle one matter in relation to sales. An adjustment may need to be made under the long-term meat agreement if the market price falls below the floor price, which is agreed upon and reviewed each year. The negotiations will be conducted by the representatives of the board with the representatives of the British Ministry of Food and the
United Kingdom Government. If the market price is below the floor price agreed upon, the United Kingdom Government has agreed to pay to the Australian Government an amount equivalent to the difference. If that should occur in any year during the period of this long-term agreement, it will become one of the tasks of the Australian Meat Board to handle the distribution of such moneys.
Another departmental activity which has, undoubtedly, been successful has been the arrangement of trade exhibitions by the Australian Meat Board in countries overseas. Arrangements are in hand for the staging of further exhibitions in certain countries, whilst it is proposed to continue exhibitions of a permanent, or semi-permanent, nature in some countries, particularly the United Kingdom. In addition, carcass competitions are arranged in the large meat-producing areas throughout Australia. The meat board is also responsible for the allocation of finance for extension services. As the industry is now about to enter more competitive markets overseas, the necessity for improved methods of merchandising and greater publicity becomes obvious. That work will be an added responsibility of the board. Tt is interesting to note that since the industry reverted to the trader-to-trader purchasing basis a fewweeks ago, the market in the United Kingdom has already settled down remarkably well. After a few days of confused trading, the Smithfield market, which is the largest in the world, has settled down to reasonably normal levels much more quickly than was expected. In the United Kingdom, very few people have had experience of trader-to-trader basis compared with the number conversant with it in pre-war years, and it is a tribute to operators on the Smithfield market that they have been able within a. few weeks of the changeover to establish normal trading conditions.
– “What about prices?
– Of course, during the first few days of the changeover there was a rapid upward movement of price levels, but they have fallen just as rapidly during the last week. At present, prices are substantially equal to those that normally prevailed prior to the reversion to tradertotrader basis.
The honorable member for Lalor mentioned the Meat Industry Advancement Trust Account. That fund is made up of the war-time profits. A short while ago it amounted to approximately £500,000. Portion of the fund has been used to purchase properties in New South Wales and Queensland and also for the purpose of making grants to the Commonwealth Scientific and Industrial Research Organization for developmental and research work in connexion with the meat industry. A grant has also been made to the Faculty of Veterinary Science in the University of Sydney which will carry out important investigations related to the development of the industry. In New South Wales, two farms at Camden have been purchased jointly by the Australian Dairy Produce Board, the Australian Meat Board and the Inter-departmental Committee on Wool Research. About two months ago, those properties were handed over to the University of Sydney which will engage in developmental and research work. In addition, two properties have been purchased in Queensland, both of them being situated in the electorate of the honorable member for Capricornia (Mr. Pearce), which includes one of the most important cattleproducing areas in Australia. As I know from my association with the Department of Commerce and Agriculture, the honorable member has always taken a keen interest in the development of the cattle industry. One of those properties is situated near Rockhampton, and the other near Gayndah. They will be used for experimental purposes associated with the development of the industry. The Australian Meat Board also has at its disposal a reserve fund, amounting to approximately £500,000, which was established on the profits made on the carryover stock in our trade with North America from 1951 to 1953. That fund is being retained as a reserve because it is realized that, at present, conditions in the industry are relatively buoyant.
Recently a report was published by the Department of Commerce and Agriculture which deals with specific aspects of the meat industry. That report stated -
The combined result of high prices for meat under the United Kingdom contract and the direct assistance given to the industry by the
Commonwealth Government has helped to produce buoyant conditions in the industry -
Most stations engaged in meat production have positive programmes for development, many of them well in hand; (b) overall meat production of exports are at a record level:
sheep and lamb population is at its highest point for ten years:
cattle numbers in southern Australia have increased by 40 per cent, since 1948;
despite the wide and disastrous drought in 1945-46 in Queensland and the 1951-52 drought in the Northern Territory, northern Queensland and the Kimberleys, the trend of increasing production and cattleproduction is nevertheless very evident from latest statistics available.
I should like to indicate measures that the Government has taken in order to assist the cattle industry during the last few years. I shall summarize the matter by saying that the Government has assisted the industry, first, by generous taxation measures especially in beef producing areas; secondly, it has expended approximately £1,200,000 within the last four years on the provision of roads in Queensland and Western Australiain order to assist meat production; thirdly, it has expended approximately £1,000,000 within the last three years in the Northern Territory in the provision of roads, stock routes and water points; fourthly, it has also made available an extension services grant of up to £500,000 per annum to assist agricultural production generally; fifthly, it has provided a dairy industry efficiency grant of £250,000 per annum and substantial amounts have been made available by the Australian Dairy Produce Board to assist the meat indu stry; and, sixthly, it has provided a subsidy for the transport of stock and meat in special cases. I submit that the assistance that has been made available by this Government to the meat industry, which is vital to the national economy, is without parallel in the history of Australia.
This bill is designed to cover changes in conditions of trade and, therefore, it should be supported by all honorable members.
.- As the honorable member for Lalor (Mr. Pollard) said, the honorable member for
Dawson (Mr. Davidson) and I represent one of the largest meat exporting areas in the world. Therefore, I regard this bill as being of vital importance. Its purpose is to increase the levy .payable by cattle producers to the Australian .Meat Board from one-eightieth of a penny per lb. to one-tenth of a penny per lb. The additional money is .required not to cover increases of cost of production or to meet inflationary conditions in any way, but to cover the expenditure of the board under the changed marketing conditions. T agree with the honorable member for Darling Downs (Mr. Swartz) that the board may not call for the full levy of one-tenth of a penny during the first year of its selling campaign. I should imagine that the board has in .mind a levy of approximately .one twentieth, or onethirtieth, of a penny per lb. to cover expenses that will be incurred in the initial stages of the sales campaign which it will undertake following the reversion to the trader-to-trader purchasing system. In this respect, the board will have a tremendous job. It is easy to sell meat, as the honorable member for Lalor said when, facetiously, he spoke about the work that is now being done by the Minister for Commerce and Agriculture (Mr. McEwen) on his present visit to London. Of course, it is easy to sell meat or any other primary product if one is prepared to sell it on the basis on which the Government of which the honorable member for Lalor was a member sold wheat to ~New Zealand. Any product that was sold under similar conditions would at once be snapped up ; but the producers would be broken in the process. For the first time in the history of the industry, beef producers are now secure in the knowledge that they will receive a payable price for their beef during the next fifteen years. Their present position is in strong contrast with that in which they found themselves under the Labour Government in 1949. At that time, they did not know where they -were going, or to what heights their costs of production would .soar. The industry then was in complete chaos.
The funds that the Australian Meat Board will derive from this levy will be sufficient to enable it to finance its normal activities. I commend the board on the healthy state of its finances. I am sure that no honorable member would desire that the board should draw upon its reserve fund at a time like the present when conditions in the industry are fairly buoyant. Criticism has been voiced to the effect that the Government, under this measure, proposes to impose a levy on growers at the rate of one-tenth of a penny per lb., whereas it is pointed out that a levy of only one-twentieth of a penny per lb. is imposed on the industry in New Zealand. As I said earlier, it is .not the intention of the meat board for tie present to impose a levy in excess of .that -which is in operation in New Zealand. Critics of the Government -have also said that the meat board in New Zealand has been able to accumulate much greater funds than has the Australian Meat Board. On paper, the position of the “New Zealand board in that respect might appear to be good, but on analysing the matter one finds that although that body has tremendous funds at its disposal, most of those funds are tied up in government securities, and. the board, if it were obliged to do so, could not draw upon those funds without seriously embarrassing the New Zealand Government. On that basis, the Australian Meat Board is probably in a better position.
Undoubtedly, the board will be obliged to intensify publicity in order to increase sales of Australian meat in Great Britain and to persuade people in the United Kingdom to buy cuts different from those that they have .been accustomed to .buy under the government-to-government purchasing system. As Australia, the United Kingdom and New Zealand have a common interest in meeting this problem I suggest that it would be a good thing if the three countries pooled their resources and shared the cost of financing the publicity campaign that will have to be undertaken to stimulate meat sales in the United Kingdom. One of the big problems of the meat industry to-day arises from the considerable reduction of prices for pigmeats in recent months. The Australian Meat Board could well institute a campaign to encourage the eating of pigmeats, both in Australia and in Great Britain. The export of canned hams could be increased by the use of publicity to induce the British people to eat more of that commodity.
The honorable member for Darling Downs was pleased to make a kindly reference to me, and in return I should like to say that he is a pretty good fellow too. At least we may rest assured that we enjoy each other’s support. The honorable member referred to the establishment of the Australian Meat Hoard’s experimental stations in the electorates of Dawson and Wide Bay. As those stations are virtually on the boundaries of the electorate of Capricornia, they are of particular interest to me. I remind the House that, unless the Parliament fixes a maximum of one-tenth of a penny per lb. for the proposed levy on meat producers, the board will have to ‘delve into its reserve funds in order to continue with its extremely interesting experimental work in central Queensland. At Belmont Station, which is just outside the city of Rockhampton, a series of interesting and valuable experiments is taking place. The outcome of those experiments will be of great importance to the Australian economy. The station at present carries 24 bulls, 532 breeding cows, and 300 calves and weaners. The board is conducting all sorts of experiments with these animals into diseases and pests that inflict themselves on the cattle industry, such as cattle ticks, buffalo fly and black leg, and the various vegetation pests such as noogoora burr, lantana and prickly pear.
The experimental genetics programme is of particular interest, because we are now passing through a period when people from overseas are encouraging the importation into Australia for crossbreeding purposes of such cattle as the Zebu, the Brahma, the Africander, and those raised on the King Ranch in the United States of America. The scientists at Belmont are trying to establish the most satisfactory cross-breed types by crossing Hereford with Hereford, Hereford with Shorthorn, Shorthorn with Shorthorn, Shorthorn with Hereford, and Zebus and Africanders with those various types. Plans have already been made for crossing cattle in various sub-groups as the progeny of the initial cross-breeding experiments develop. The first calves resulting from the experiments are now being born. Experiments with further cross-breeding between sub-groups will be arranged so that cattle breeders will be able to decide which are the most satisfactory types for central Queensland.
Meat producers of that area are keenly interested in the experiments and frequently visit the station. They have told me that they are very satisfied with the work that is being done and that they are watching the results with interest. People who are concerned with the slaughtering of the beasts, particularly the general manager of the Central Queensland Meat Exporting Company, have informed me that they, too, are closely interested in the experiments at Belmont Station. By the time the experimental breeding programme has reached the stage at which the experts can say with finality that certain breeds crossed with other breeds will produce a consistent and definite result, I believe that the scientists will be able to produce for central Queensland and, indeed, for all the cattle country north of Brisbane, a type of beef cattle that will be drought resistant and tick resistant and will have an early maturity date. This will be of great importance to the Australian economy. Therefore, I commend the Australian Meat Board for these experiments. I am glad to know that it is seeking to raise money for its work instead of diving into its reserve funds. The bill will provide it with money with which to go on with its general promotion of the meat-selling business overseas and with the work of encouraging cattle producers to raise a better class of beef for an assured market, which will help to give buoyancy to a healthy internal economy.
– I do not intend to delay the House, because honorable members on both sides have indicated their approval of the bill. However, I wish to make one or two comments in reply to statements that have been made during the debate. The honorable member for Lalor (Mr. Pollard) suggested that the increased rate of levy for which the bill provides was due entirely to inflation that had occurred in Australia during the last four or five years. I do not think that the honorable member is quite so innocent as that comment might suggest. He knows perfectly well that the functions of the Australian Meat Board, although they will be restricted in some respects because it will no longer deal with the marketing of our meat, will be extended in other respects, because undoubtedly it will have to undertake publicity campaigns, which were unnecessary during the period of governmenttogovernment trading. The board’s functions, therefore, have changed materially, and the proposal now before the House is based, on its recommendation. Although the initial cost of advertising is expected to be low, the amount may very well increase as time passes and the benefits of such campaigns become apparent. Finally, I assure the House that the proposed levy for the coming year will bp at the rate of one-twentieth of a penny per lb., not one-tenth of a penny, which is merely the maximum rate allowable under the bill. This point will he dealt with more fully by the appropriate Minister when the bill is before the Senate.
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 367), on motion by Mr. Hasluck -
That the bill be now read a second time.
.- As the Minister for Territories (Mr. Hasluck) said, in his second-reading speech, the purpose of the bill is to make several small amendments to the Papua and New Guinea Act, which was passed by this Parliament in 1949. Two principal alterations are proposed. The first applies to section 73 and involves a very important principle. I, for one, am very pleased to know that the Administrator of the Territory is to be relieved of the responsibility for making decisions in relation to sentences of death. In future, the practice in the Territory will be similar to the practice on the mainland, where the Governor-General, acting in Executive Council, exercises the prerogative of deciding whether or not a death sentence shall be carried out. The responsibility for the making of such decisions was too great to be placed upon the shoulders of the Administrator, and I am pleased to know that he is to be relieved of it.
The second important amendment provides for the alteration of the title of the Chief Judge of the Supreme Court .>f Papua and New Guinea to that of Chief Justice. I am delighted to know that a great and distinguished man will be the first Chief Justice of the Territory. I refer, of course, to Mr. Justice Phillips, for whom I have a very high regard. He has played a greater part, probably, than any other man in establishing the good conditions that now operate in Papua and New Guinea. I hoped at one time that Mr. Justice Phillips would be appointed Administrator of the Territory. However, he is doing a grand job in his present capacity, and I am in complete accord with the proposed alteration of the act so as to change his title to that of Chief Justice.
Another amendment for which the bill provides will remove from the principal act all references to native village councils and substitute the words “native local government councils “. The Minister pointed out in his second-reading speech that the reason for this proposal is that most of the native councils in the Territory represent groups of villages instead of individual villages. I should like the Minister to inform me whether any village that wishes to withdraw from a collective local government council will be able to do so and to function under an individual village council.
– That is the only point upon which I wish to have an assurance. I think that it is important. Many honorable members know that peculiar thoughts sometimes arise in the minds of New Guinea natives, and they will understand that a native village, which might be agreeable at one time to join in a collective council, might wish at another period to withdraw from the group and act independently. I am glad to have the assurance of the Minister that villages will be able to do so. The rest of the amendments for which the bill provides are of a machinery character and will, I agree, help the smooth running of the Administration. The Opposition does not oppose the bill.
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 420), on motion by Sir Arthur Fadden -
That the bill be now read a second time. [Quorum formed.]
.- This measure, which is consequent upon the budget, purports to give away a certain sum of money. It is a strange thing, in relation to legislation introduced by this Government to give benefits to the people by reducing taxes, that, at the end of the financial year in which the benefits have been given, it is found that the Government somehow has contrived to collect more money than it raised in the previous year and to show an increased profit even after the benefits have been distributed among the lucky beneficiaries. I shall prove that that is a fact by referring to the estimates of revenue for the financial year 1953-54. The Treasurer (Sir Arthur Fadden), in his 1953-54 budget speech, said that the Government had received £89,067,245 from the sales tax in the previous financial year, and that it estimated, before it gave effect to its 1953-54 proposals, that it would receive £96,500,000 in sales tax in 1953-54. The effect of the 1953-54 proposals, he said, would.be to benefit the people to the extent of £8,760,000. He estimated that the collections of sales tax, for the year 1953-54, after effect had been given to those proposals, would amount to £87,740,000. But the budget papers for the current financial year reveal that actual collections of sales tax in 1953-54 exceeded the estimate by £7,948,559, and totalled £95,688,559. If the Government had made its estimates for 1953-54 correctly, it should have distributed that £7,94S,559 in increased benefits during the financial year 1953-54.
The Treasurer estimated that collections of sales tax in the current financial year would amount to £102,000,000, before the Government gave effect to its proposals to make remissions amounting to £9,892,000. He estimates that after the Government has given away benefits in the current financial year, it will collect in sales tax only £3,580,559 less than it collected last financial year. The statement of Consolidated Revenue for the month of June last, issued by the Treasury, reveals that collections of sales tax in that month amounted to £8,471,000. Multiplied twelve times, that gives a total for the year of £101,652,000, or £9,544,000 more than the Treasurer’s estimate after the proposals have been given effect. It might be said by Ministers and Treasury officials that they must be a little conservative in their estimates. Experience has shown that this Government invariably makes wrong estimates of its receipts of sales tax, and that actual receipts always exceed the estimates by some millions of pounds. The excess last financial year amounted to approximately £8,000,000, and in the current financial year it will presumably total about £9,000,000. Therefore, the Government will collect in the current financial year approximately £17,000,000 in sales tax that it should not collect. It should have given back the £8,000,000 extra that it collected last financial year, and it should leave to the people the £9,000,000 above the estimate that it will collect in the current financial year. Had the Government, last financial year, remitted an additional £8,000,000 of sales tax, the general revenue account would still have shown a surplus and the people would have benefited greatly by the remissions. If it were to remit an additional £17,000,000 in the current financial year, a great number of very worthy Australians would receive the benefit.
It cannot be said that the Governmentis taxing only luxury items. The list of items included in the second schedule, which bear sales tax at the rate of 16$ per cent., includes fancygoods; artificial flowers ; fountain pens and propelling pencils ; cameras and photographic equipment and material; photographs; travelling bags suitcases, handbags and other types of bags, and. travel goods; baskets; and wireless receiving sets. Motor cars, which are included in this schedule, are not a luxury item to many people, but are business equipment. Fur garments, cut-glass ware and slot machines are included in this schedule, but there is not much else in it that could be classed as luxury items. The next classification,, which lists semi-luxury goods, as they are termed, and which are subject to tax at the rate of 12-J per cent., demonstrates how unfairly the Government is levying its impost. That classification covers items such as stationery, including books of account, writing requisites drawing instruments, paints and crayons ; paper and paper products, including paper patterns, serviettes, towels, confetti, and drinking straws; office requisites and equipment, including typewriters, duplicating machines, calculating machines and filing cabinets ; rubber goods, including tyres, tubes and hot-water bottles; rope and cordage, and canvas goods. It includes also foodstuffs such as cakes,, pastry scones, buns, puddings, and biscuits other than milk arrowroot and baby rice biscuits, which are exempt from sales tax; jelly crystals, custard powders, junket tablets, spices, curry powder, pepper, salt and imported canned fish. A number of items in this classification were subject to tax at the rate of 16§ per cent, last financial year, and are -now to be subject to sales tax at the rate of 12& per cent. Among these items- are musical instruments and instruments for bands and orchestras ; confectionery ; ice cream ; toys, games, and puzzles ; fireworks ; party decorations and the like.
– Does the honorable member want a reduction, on party decorations so that the Australian Labour party may use them at caucus meetings ?
– I suggest that the sales tax on toys, games and puzzles, be reduced for the benefit of the Liberal and Australian Country parties. Our absent Treasurer - one of the peripatetic Ministers, one of the travelling troubadours now absent abroad - on the 20th October, 1948, spoke during the debate on the Sales Tax (Exemptions and Classifications) Bil] 1948 and in a sentimental outburst harangued the Treasurer of the day the late Mr. J. B. Chifley, in the following vein: - . . is there any parent who would allow his child to grow up through a toyless and partyless childhood, or without some indulgence in sweets or ice cream ? It is only those of us who have experienced the intense happiness that children get from the. simple pleasures, who can appreciate the official niggardliness that taxes them so severely.
Yet, this self-same right honorable gentleman is taxing, at the rate of 12£ per cent., toys, ice creamy and the simple pleasures to which he referred. Last financial year, and for the previous financial year, he taxed them at the rate of 16 % per cent., whereas the Labour Government in its last budget, reduced the tax on these items to 8^ per cent. The present Treasurer in his horror budget demonstrated his enthusiasm to honour his promises and the sincerity of his protestations by increasing the tax on these goods to 50 per cent. His words were so much humbug, but they are merely the sort of utterances one might expect from many Government supporters. Also on the 20th October, 1948, speaking on the same bill, the present Treasurer’ said -
Many articles that are subject to sales tax and other indirect taxes continue to rise in price, thus adding- to the inflationary spiral. Among these are tobacco, soap powders and so on. As the revenue can certainly afford a reduction of these taxes, it would be much sounder economically if the price increases were- absorbed by reducing or eliminating- the indirect taxes on these items.
I commend his dictum to himself on his return from his expedition abroadIt is not a very profitable one, from Australia’s point of view.
– How does the honorable member know that?
– The Treasurer is talking a lot of nonsense overseas about, the General Agreement on Tariffs and Trade and the Ottawa Agreement, but I should, say that he is a more successful ambassador for Australia than would be the Minister for Social Services (Mr. McMahon), who rushed so eagerly to the
Treasurer’s defence. The Treasurer said, also, on the 20th October, 1948-
There would then be no need for sharp increases in the basic wage to cover their higher costs.
This Treasurer has piled on the taxes all the time, and has done the very thing that he warned Mr. Chifley against doing. He increased the maximum rate of. sales tax to 66$ per cent, in his horror budget, and the rate on the second classification of goods to 50 per cent. At the height of the war, the Labour Government did not impose sales tax at a rate greater than 25 per cent, in 1949 and reduced the general rate of tax to 8-J per cent.
– This Government has increased the number of classifications to six, and has made the sales tax. more complex and expensive to administer.
– I agree. It introduced the highest rate of 66 per cent., which was levied, not on luxury goods, but on ordinary items such as shaving soap, razor blades, and toilet preparations of all kinds. The Government now asks the Parliament to believe that it has really done something that deserves praise from the great mass of the people because it proposes to give back to them a few million pounds, but very much less than it should be giving back. Last year I asked the Commissioner of Taxation what would be the cost of reducing the general rate of sales tax from 12-J per cent, to 8?f per cent, to restore it to the level at which it stood when the Labour Government went out of office. I was told that the cost would be approximately £17,000,000. It might be even less now, because a number of items were exempted and others taken out of the 12£ per cent, category last year and put into a new category at the rate of 10 per cent. The Government should reduce the general rate of sales tax to 8$ per cent., because most of the requirements of the ordinary people fall within the general rate. The gem of the Treasurer’s contribution to the debate on the 20th October, 1948, was as follows : -
The bill should be withdrawn and redrafted on a sensible basis, having regard to our economic requirements and the indispensable need for an improvement in. the home life and health of the. community.
It is quite apparent that everything that the. Treasurer has done since he assumed his present office has negatived the philosophy that he expounded on the 20th October, 1948, and even now he does not intend to bring the sales tax rates back to the rates in existence when he uttered his criticism. He certainly has not improved the lot of the community at all. When he spoke of health, he had in mind the fact that at that time toothpaste, washing soap, soap powdei’3, dusters and dishcloths were all being taxed under the sales tax legislation. He said that those items were essential to cleanliness and the maintenance of healthy living standards, and that they should not be subject to a sales tax at the rate of 2s. in the £1. I remind the House that the Treasurer now taxes many of those items at more than 2s. in the £1, and that the particular measure now before the House is only now bringing soap into the 10 per cent, category, which means the imposition of a tax of 2s. in the £1, about which he protested as long, as six years ago. So, out of the mouth of the Treasurer himself comes the damnation of this particular legislation that we are debating.
I now desire to deal with some of the statements that the Treasurer made in his speech on this measure. He said that the Government intends to exempt all commercial aircraft from the sales tax. No longer will the great airline concerns such as Trans-Australia Airlines, Australian National Airways Proprietary Limited, Qantas Empire Airways Limited, and many others, have to pay sales tax when they purchase aircraft. That is an extraordinary concession, not only to the Government airline, but also to private airlines. If he intends to be generous in such a large way to those organizations, whether they be governmental or private, he should certainly give something more to people in much more humble circumstances - that is, to private individuals. But, the Treasurer intends to exempt the large airline concerns from sales tax, not from the. 1st July, 1954, but retrospectively from 1946. I requested the. sales tax officials to obtain some information for me about the degree to which, airline concerns will benefit as a result of the proposed concession, because the Treasurer had been deliberately vague in his speech and had given no estimate of any kind of the value of the concessions. He did not even make an educated guess.
– Will Australian National Airways Proprietary Limited benefit ?
– Yes, that company will be included in the concession. The Taxation Branch informed me in reply to my request -
No precise information is available as to what revenue is involved in respect of aeroplanes since 1946.
I do not know why the Treasurer could not give us the information because, as the honorable member for Maribyrnong (Mr. Drakeford) has pointed out, he has had plenty of time to get it. If he states that he has not got it, and the department refuses to give it to the Opposition, the only inference to be drawn is that there is a very large amount involved, and that the Government does not want the country to know precisely how large it is. I suggest that we are entitled to draw that deduction from the refusal of the Treasurer and the Taxation Branch to supply the information.
– It is a wrong deduction.
– If the Minister for Social Services (Mr. McMahon) knows more about the matter than we have been told, I hope that he will tell honorable members the exact amount by which the airlines concerned will benefit; because the note that I have read to honorable members was handed to me but a few moments ago. I should not like to believe that the taxation officials would refuse to give me, as Deputy Leader of the Opposition, information that they are prepared to give to the Minister. Trans-Australia Airlines has five Convairs, four DC4 Skymasters and a number of DC3 aircraft. Australian National Airways Proprietary Limited has two D06 aircraft, four DC4 aircraft and a number of DC3’s. Qantas Empire Airways Limited has DC6 aircraft. However, no matter how many or how few aircraft are involved, the fact is that the airline concerns are getting preferential treatment from the Government, and nobody is entitled to preferential treatment under sales tax legislation. The arguments used by the Treasurer are very paltry and unconvincing, and if the Government can do so much for large companies it can do a lot more for the people who are much more in need of assistance than are organizations like Trans-Australia Airlines and Australian National Airways Proprietary Limited.
Many people are very annoyed at the way in which the Government has treated representations made from time to time for further reductions of sales tax, or for the elimination of particular items from any form of sales tax. I have received a number of requests from people in various parts of Australia, and I shall put those requests before the House and ask the Government to give some consideration to them. It has been suggested to me that motor vehicles purchased for church purposes by ministers of religion should be exempt from sales tax, and I believe that they should be so exempt. Ministers of religion in a country which at least boasts that it has some respect for spiritual values, should be assisted to travel over the large areas of their charge. The argument for the abolition of sales tax on their vehicles has more weight in respect of large and remote country areas than city areas, but whether used in city or country, in most thickly populated or only sparsely populated areas, all motor vehicles used for church purposes should be exempt from the sales tax. A number of people have suggested to me that photographic supplies for commercial purposes, and also those used by amateur photographers, should be exempt from sales tax, and I submit that there is merit in that proposal. I believe that there should be at least a substantial reduction of the tax upon those particular items.
There is no need for the Government to impose a. minimum rate of 8* per cent, in the sales tax legislation, because when the tax was first introduced during the depth of the depression it was 2£ per cent. Then, still during the depression, it was increased to 6 per cent.,- and was only increased to S:V per cent, during the last war, with a maximum rate of 25 per cent. There is no reason why the Government should not draw up a new category of goods subject to tax at the rate of 5 per cent, or 6 per cent. If the arguments of the economists and pseudo economists on the Government side that the sales tax and other indirect taxes place an impossible burden on industry are valid, the obvious thing to do is to reduce the tax as much as possible. At any rate, the sales tax is a very heavy burden on the family man, and the larger the family the bigger and more unbearable the burden becomes. Then, of course, the greater the burden that the sales tax places on the family man, the more the standard of living of the family sinks below that of the general community. If we believe in levying taxation in accordance with right principles, and placing the burden on those best able to bear it, we should lower the rate of tax on items in general use. If the tax is to be retained at all, let it be applied only to genuine luxury or semi-luxury lines.
I have also received a request from part-time university students to press for the removal of the sales tax on text-books used by them. If there is any group in the community which should be helped, it is the young people who cannot afford full-time university courses and who work all day and study at night, and have to pay their university fees as well as buy their text-books out of their small earnings. They are being handicapped by having to pay a heavy general rate of tax in their attempt to acquire greater knowledge. I asked the sales tax authorities to give me an estimate of the cost of remitting the sales tax on books used by part-time university students, and they informed me that the sum involved was only £80,000. This Government has presented a budget of £960,000,000, and the sales tax will bring in about £.100,000,000, yet it cannot see its way to make an exemption amounting to £80,000 for very deserving part-time university students. It is entirely wrong to give large concessions to big airline concerns and refuse even an £80,000 concession to part-time university students. Those who sell radios believe that the rate of tax on those articles is too high, and I submit that it certainly is, because even now it is 16$ per cent. Radios are no longer luxuries, they are necessaries.
– They are necessary so that people can listen to the proceedings of the Parliament.
– I have suggested that myself on occasions, and I am glad that the honorable member for Burke (Mr. Peters) agrees with me. Some radios are used for many good purposes, and much information comes into thousands of homes through their agency. I suppose that Saturday afternoons would be as popular a time for using radios as any other time, and I can well imagine what would happen if the Government decided that radios should not be used. However, the Government has put radio sets in the top luxury class; I suggest that they should be in the 8-J per cent, class.
– The Australian Country party does not seem to be worrying about the farmers’ radios.
– The members of the Australian Country party are not interested in doing anything but holding their seats, and taking anything by way of crumbs of comfort thrown them by the all-powerful Liberal party. The association of the Australian Country party with the Liberal party may be likened to that of Lazarus with the rich man, Dives. There is a sales tax on ice cream, and for the purpose of drawing attention to the Government’s inconsistency in the matter of this particular tax, I again remind honorable members of something the Treasurer said in 1948. The honorable member for Canning (Mr. Hamilton), who has just entered the chamber, should remember that in 1948 his leader asked the following question: -
Is there any parent who would allow his child to grow up through a toyless and party- less childhood, or without some indulgence in sweets or ice cream?
To-day the Australian Country party is determined that children shall grow up without the simple pleasures about which he spoke. If that party really believes the statements that were made by its leader in 1948, it ought to aPply pressure to the representatives of big business not to make so many concessions to their section of the community but to do something more for the little people.
The Government has no right to continue the levying of sales tax upon such items of food as cakes and pastry. All of the other items of food are exempt. In addition to cakes and pastry, buns and jelly crystals, and even salt and pepper, are subject to a levy of 12£ per cent. The Government should remove those items from the schedule next year, even if it does not do so this year. As I have stated, it should introduce lower Tate categories of even 5 per cent, and, if possible, apply a maximum of 8-J per cent, to the luxury categories. Pastrycook lines, fruit juice cordials and concentrates should be exempt.
– “Would it help the honorable -member for Melbourne if sales tax were removed from all-day suckers?-
– I am looking at a few on the other side of the House now.
– I refer now to the imposition of sales tax on washing machines. It has been .represented to me by the manufacturers- of those instruments that they do help to ease the burden of housewives. A parliament of men ought to have some consideration for their wives, and for the wives of other citizens, and help them to obtain such amenities in their homes. Washing machines, like radios and all other electrical appliances, are no longer luxuries; they aTe necessaries. If the Government cannot reduce immediately to 8^ per cent, or less the sales tax on washing machines and the other items to which I :and other Opposition members have referred, it should do so eventually. I do not think that, in this bill, the Government, speaking generally, proposes to do very much for the people. I have a pretty shrewd suspicion that most of the benefit of £9,000,000 that it is proposed to distribute will be utilized to backdate the exemptions for airline companies and to give other concessions to big business.
– The honorable member is quite wrong.
– I might be.
– The benefit that will be given to the airline companies is very small.
– It may be, but nobody can tell me exactly what it will be.
– It is too small.
– lt is true that the Government proposes to do something for the agricultural industry by granting new exemptions for live-stock carriers of -the kind that are attached to motor vehicles or wagons. That is very desirable. The Chifley Government made many concessions to farmers by remitting sales tax on various goods and items of equipment. The lot of the man on the land is not easy. Many people are drifting from the country, and any remission of taxation that will help to draw them back or to make life easier for those who remain ought to be granted. If the Government -were to exempt from the payment of -sales tax motor cars that were purchased hy people on the land, there would always be the danger of a certain amount of trafficking in cars. There was that sort of abuse when the Australian Labour party was in office, and it had to take remedial action. Doubtless, the Government is conscious of the difficulties that would ‘ rise if it discriminated between motor cars that are used in the country and those that are used in the city. The sales tax on motor cars is still very high. People are buying ears, and they must pay sales tax on them. They are able to purchase motor cars only because of the excessive use of credit under hire-purchase agreements, but. that is not good for the community. The community would be helped considerably if action on the lines that I have suggested were taken.
The Government stated that the exemption of surgical goods is being extended to cover certain classes of goods that are used to overcome physical disabilities. I think it is very desirable that it should take that action. I remind honorable members that in the community there are crippled people who have to use some form of propulsion such as a tricycle. Others have to use some kind of motordriven vehicle. I am not too sure which classes of vehicle attract sales tax, but
I have been informed that persons who purchase a motor-driven vehicle are required to pay tax. Requests for the removal of sales tax from such items have been made. Not very many people would be involved, because, fortunately, the number of crippled people so affected is not very great. However, there are some such people, and they ought to receive the benefits that are being handed to other people who are in much less deserving circumstances.
A study of the rates of sales tax over the years is very interesting, but I do not intend to ask honorable members to listen to me repeat them. However, the figures for the total collections are very interesting. In 1930-31, the total amount of sales tax that was collected was only £3,000,000. In 1931-32, which was in the period of the depression, the collections rose to £8,000,000. In 1938-39, they were only £9,000,000. In 1940-41, when we were at war, they were only £19,000,000. In 1941-42, when the Japanese attacked Pearl Harbour and Singapore and blasted Darwin, the Government collected only £26,000,000. In 1949-50, -when there had been an increase in the volume of money because of a certain amount of inflation, and when the Government was faced with tremendous liabilities in relation to the repatriation and reestablishment of servicemen, the amount of sales tax that was collected was only £42,000,000. In 1950-51, when the present Government was in office, the sum rose to £57^000,000. In the following year, when the horror budget was presented, the Government collected £117,000,000, or twice the amount that it collected the previous year, nearly three times the amount that the Chifley Government collected just before it went out of office, and four and a half times the amount that the Curtin Government collected at the worst period of the war.
I do not know why the Government is hanging on, to the degree that it is, to sales tax, or to other forms _ of indirect taxation such as excise, to which I cannot refer except in passing. That the Government is extracting a lot of money from the pockets of the people by way of sales tax is undeniably true, and the people who are on small incomes and who have big family responsibilities must pay most. It would be much better, if the Government must raise money by taxation - and, of course, it must - for it to do so by taxing incomes than by imposing sales tax and other forms of indirect taxation. The levying of taxation in the manner in which the Government proposes in this bill will not help to raise the living standards of the people, or to protect those standards. Although the Government pretends all the time that it is giving concessions, it ends up, as I stated earlier, by collecting more in each financial year than it collected during the preceding year, this year, despite the proposed payment of benefits totalling £9,000,000, the same story is true. As I have stated on previous occasions in relation to this and other legislation, such action is merely trafficking in inflation, and it ought to be stopped.
.- Five years ago, before many honorable members were elected to the Parliament, we heard of the honorable member for Melbourne (Mr. Calwell) as being a man who was outstanding in debate, who was outstanding in mental capacity, and as being a man of fire and invective. Having listened to him to-day, I ask, “ Where is that fire and invective about which we heard some five years ago ? “
– The honorable member is saving it up till next Wednesday.
– Where are the honorable members who are supposed to support the honorable member for Melbourne, who has been proposed as a potential leader of the Australian Labour party ?
– What has that to do with sales tax?
– The honorable member for Melbourne had a lot to say about sales tax during the last three-quarters of an hour. Why was it that so few of the members of his own party sat behind him while he took part in the debate ? I believe that those people who uphold him as the prospective Leader of the Opposition have, to a very large degree, misplaced their confidence. It seems to me that he is a man who lives in the realms of ice cream or of party decorations, but we have not noticed in recent times any party decorations for the honorable member for Melbourne. I believe that many of the statements that he has made cannot be accepted by the House, or even by members of the public. I invite honorable members to consider the question of the payment of sales tax on ice cream. The honorable member sought to give to everybody the impression that the exemption of ice cream from the payment of sales tax would mean a substantial reduction in the price of that commodity to the children of the community. The greatest group of consumers of ice cream are the adults, not the children. Who would benefit from a reduction of sales tax on ice cream? Would it be the children? How could a reduction of 10 per cent, in relation to a 3d. ice cream be passed on? I believe that the manufacturer, or the distributor, would receive a substantial benefit, but that very little would be received by the consumers, particularly the children. For the honorable member to speak about such small things in the hope that people will listen to him is so much nonsense. The honorable member also advocated a substantial reduction, or even exemption from sales tax, in relation to radios. I appreciate the fact that to-day every person likes to have a. radio to which he may listen. May I say that I prefer to spend all the .income that I earn rather than give any of it back to the Government to spend. My sympathies lie with the person who, because he is thrifty, is satisfied to have a mantel model radio which costs £20 or £30 rather than the person who wishes to have a radiogram that costs in the vicinity of £200. If people wish to purchase the luxury type of radio, let them make some contribution to the finances of the country. I believe that it is not unreasonable to expect that things which, although essential, are still to some degree in the luxury class should attract a levy in the nature of sales tax.
The honorable member for Melbourne also criticized the Government because of the fact that, although there are reductions in the rates of taxation from time to time, it still receives a greater sum in one year than in the preceding year. I have not any great difficulty in understanding that fact; it seems to me to be very simple. If there is an expanding economy, if there is an increase in population, if there is an increase in the national income and in the incomes of members of the community generally, it is obvious that, with that greater spending power, the proceeds from the sale of goods and the revenue from sales tax must be greater. There is no great anomaly or problem associated with that matter. It follows naturally that in each succeeding year a government is likely to require more money for expenditure. Therefore, it must find more money and it finds it in that way. Although it makes some small reductions in the rates of taxation, it is still able to obtain a greater overall sum. I believe that, sales tax was introduced for the purpose of achieving economic stability, and it has been used for that purpose ever since. Many Opposition members adopt the attitude that sales tax was in the nature of a temporary expedient and that it should not be retained. I remember mentioning, during a similar debate in the last Parliament, that when sales tax was originally introduced it was pointed out definitely that it was likely to be a permanent tax. The Minister of the day was correct in his assertion. It will be many years before we are able to abolish sales tax as we now know it. Nobody likes such additional taxes, but everybody knows perfectly well that the Government must have the money that it requires to carry on its activities.
I regret that the honorable member for Melbourne made a derogatory reference to the Treasurer, who is now overseas. I have the greatest confidence in the Treasurer. I believe that he has done a remarkable job in the last five years, and that the present degree of stability in the economy is due, in large measure, to his foresight, and to the policies that he has adopted during a dreadful inflationary period in the last few years. The honorable member for Melbourne also offered criticism in relation to the exemption, including retrospective exemption, of sales tax on aircraft. The best answer to his comments is contained in the Treasurer’s speech, which set out the actual reasons why this adjustment is being made. The Treasurer said -
A thorough examination made since that date has disclosed that the imposition of sales tax on aeroplanes would impose a heavy hurden on commercial airline operators, resulting in the substantial inflation of their already heavy costs of new aircraft and would, in due course, be reflected in higher fare and freight costs. The problem of costs of these operators has been accentuated by the necessity to expend large sums of money in the purchase of a considerable number of new aircraft at the present time in order to replace old machines and maintain efficient service. It is relevant to note also in this connexion, that ships are not subject to sales tax whilst railway rolling stock does not bear sales tax because of the exemption of government departments.
For these reasons it has been decided to make the exemption absolute so as to exempt these goods regardless of the purpose of their use, as was the case before .1940. The exemption will apply not only to freight and passenger airliners, but also to aircraft used foi agricultural purposes in spraying or spreading fertilizer or seed.
The honorable member for Melbourne has suggested that a very large sum of money is involved, but I have been assured by one of the Ministers who heard his criticism that the amount involved is small, and will be restricted, in the main, to small operators and to aero clubs. In these circumstances there is no justification for criticism such as that levelled by the honorable member for Melbourne. 1 believe that the attitude adopted by the Treasurer is correct.
I should like now to deal with certain major aspects of the bill, rather than to deal with, every item serialim. In the first place, I point out that the concessions made under the bill will have a value o: not less than £12,822.000 in a full year and, in the current financial year, will amount to £9,S92,000. I wish to make this point very early. The Government has laid special emphasis on the fact that the reductions to be made under this legislation are to be made, in the main, a contribution by the Government to reduction of costs in industry. I have mentioned on previous occasions, as 7 did yesterday, during the debate on the Pay-roll Tax Assessment Bill, that I believe it is essential that the Government should make a contribution to the reduction of costs. That aspect ha* been stressed by the Treasurer. I also emphasize it at this particular juncture. This measure is designed to give assistance particularly to home builders and the purchasers of home furnishings. Provision is also made for the exemption of plant used by manufacturers, and by persons engaged in the mining industry for the repair and maintenance of machinery. The actual plant used in the mining industry is already exempt from sales tax and it is a strange anomaly that small machines that are used to repair that plant have been subject to sales tax. The bill will remove that anomaly.
– In which clause is that provision contained?
– The honorable member for Hunter (Mr. James) seems to have wakened up. In his second-reading speech the Treasurer said -
Exemption is being granted in respect of machinery and equipment used for business purposes in the servicing or repair of motor vehicles and aircraft. Equipment used in business operations in the construction, repair or maintenance of buildings, roads, dams and other works will also be exempt. Machinery used by boot repairers will be exempt. Exemption is being granted in respect of safety equipment for use in industrial operations . . .
I believe that no honorable member opposite will take exception to that - and also in respect of clock systems and timerecording apparatus for use for business or industrial purposes, other than clocks and watches which remain subject to tux at the rate of 10j per cent.
Hand tools of a kind used for industrial purposes ure to be exempt.
That is an item that particularly affects those who are supposed to be represented in this Parliament by honorable members opposite. This again indicates the Government’s desire to reduce industrial costs. In addition, there is to be an exemption in relation to bottles, cases and crates used by the manufacturers of carbonated beverages. “We know that for a long time manufacturers of these products have complained about having to pay tax on the containers in which their goods are Sold, and asked for exemption from sales tax. Whilst we do not go the full distance that they want us to go, at least in regard to some parts of their equipment we are giving them some relief. During the last general election campaign honorable members opposite - or should I 3ay the Leader of the Opposition (Dr. Evatt) ? - decided that the policy of the Labour party would include exemption from sales tax of furniture. The Government has not gone to the extent to which, the Labour party- said it would go, but at least it has made a move in the right direction, because this bill, will reduce the rate of tax on furniture from 12^-per cent, to 10 per cent.
– That is a very small reduction.
– I appreciate that it is small, but, taken in conjunction with the overall aspect of the budget and the financial situation of the. country, it is at least a contribution. The honorable member, for Melbourne mentioned icecreams, confectionery and similar items. Sales tax on. these is. to be reduced from 16. per cent, to the general rate, of 12£ per cent.
I regret the introduction of the. rate of 10 per cent. Honorable members will recall that in. 1950 the Government decided to increase the number of sales: tax categories, and as a result of legislation, the number of. categories was increased to four, comprising 8$ per cent., 10 per cent., 25 per cent, and 33-J per cent. In 1951, when the Government really came to grips with inflation, two further categories, 50 per cent, and 66f per cent., were added. These higher rates applied to items that were really luxuries. In 1952, the Government decided that it would start to remove some of the categories, and it reduced the number to four - 12i per cent., 20 per cent., 33^ per cent, and 50 per. cent.. Last year, largely as a result of representations made- by honorable members on this side of the House, the Treasurer decided to reduce the number of categories to two - 12£ per cent, general rate, and 16ff per cent, special rate. Honorable members on this side of the House believe that there was great virtue in that action, because of the tremendous costs to which the business community was subjected by the necessity to keep records of account and make payments of sales tax to the Treasury. I know that many businesses in Australia, were spending anything from £1,500 or £3,000 a year out of their ordinary earnings on keeping sales tax: records and on the other work associated with the payment of sales tax. We believed, therefore, that the Government could help to reduce costs in industry by reducing- the number of categories. Such costs’ were incurred by businesses, particularly in relation to the more involved forms of stationery that were required by business people in order to include in. their accounts sales tax records. My only regret is that theTreasurer, on this occasion, has introduced a third category, which will causea certain degree of. additional complication to business people who are called upon to keep records of sales tax. However, I am bound, to say that perhaps the problem, is not so great as it was earlier, because: those businesses which usually sell furniture will not be the kind of firms that are called upon to pay the 12-J. per cent, rate or the 16§ per cent, rate. Therefore, it may not be. so great a problem as would appear at first glance. Nevertheless, I state quite definitely, as a matter of principle, that because the responsibility and the cost in relation to the collection of this tax is thrown upon the business community and is not accepted by the Government, I feel that the Government at all times should take into consideration the number of categories-
– Businesses receive a tax reduction for the responsibility of it.
– I appreciate that members of the business community receive a tax reduction for the responsibility of it, but I am sure that the honorable member for Perth (Mr. Tom Burke), if he will think for a moment, will realize that into the costs- of a particular business go the costs of work- in relation te the preparation of sales tax material, which inevitably means that the costs enter into the prices of goods which are bought by members of the community,, and, consequently, -produce higher costs for the public. I do not believe that it is of any use for Opposition members to say that the reductions of sales tax will not be followed by reductions of prices.
I support the bill, and commend it to the House, because I believe that the Government is. carrying on with the policy which it has expounded on many occasions, particularly during the last general election campaign, that it is a tax-reducing government. I know that Opposition members say that such a statement is not correct, but L think that- one can go even further, and say that it is a tax-abolition government. I point out, briefly, that this Government in the last five years has abolished two taxes, land tax and entertainments tax, which caused some degree of annoyance-
– Wealthy land-owners have benefited from “the abolition of the land tax.
– Yes, and the ordinary individual who goes to the pictures once or twice a week has benefited from the abolition of the entertainments tax. This Government is considerate of the needs of every section, and is not concerned with only one section, as honorable members opposite suggest it is. I commend the bill to the House, and deplore some of the comments which have been made by the honorable member for Melbourne.
– I oppose any type of sales tax. A sales tax of any description whatsoever is contrary to the principle of the equitable taxation of members of this community. Taxes should be imposed in proportion to the capacity of each individual to pay. Unlike honorable members on the Government benches, I would not fine a member of the working class, or any other member of the community, approximately £30 when he purchased a washing machine so that his wife would no longer have to toil over a trough. I would not impose a fine upon a person because he desired to buy a refrigerator or an ice chest. I would not impose a fine upon a member of this community because he decided to get married and buy furniture for the home. I would not determine the amount of money to be extracted in tax from those persons on account of the goods that they desired to buy. Yet that is precisely what sales tax is doing.
The position is even worse than that. The sales tax is an inequitable method of taxation for everyone, hut it gives the wealthy section opportunities to exact an increased toll from the average citizen. What has happened? I shall not say what might happen, or what could happen. I shall tell honorable members exactly what has happened. I have before me a’ price list issued by Cadbury-Fry-Pascall Proprietary Lim ited, for the 1st February, 1954, which reads as follows : -
Because of the very heavy increases in the price of coffee beans and cocoa-butter, we regret that it is necessary to increase the prices of our chocolate lines. New prices, as set out below, will operate from Monday next, the 1st February, 1954: -
I also have before me a list of new prices issued hy Cadbury-Fry-Pascall Proprietary Limited, which reads as follows : -
As a result of the recent reduction in sales tax from 16j per cent, to 12^ per cent., the following alterations to prices will operate from Thursday, the 26th August, 1954.
The first price list shows that half a dozen half-pound blocks of dairy-milk chocolate were sold to the retailer for 17s., and to the consumer at 4s. 4d. a block. The new price list shows that half a dozen cakes of this chocolate were sold to the retailer for 17s. Id. - an increase of Id. - and that the retailer was to sell them to the consumer at 4s. 3d. a block. Therefore, the consumer received the benefit of the reduction of sales tax, but the price to the retailer was increased.
The first price-list also shows that one dozen cakes of quarter-pound dairy-milk chocolate were to be sold to the retailer for 17s. 8d., and the retailer was to sell them to the public at 2s. 3d. a block. After the reduction of sales tax, the price of a dozen Hocks to the retailer was 18s. 2d. - an increase of 6d. - and the price to the consumer remained unaltered. Two dozen cakes of dairy-milk chocolate were sold to the retailer in February last for 18s. 4d., and to the consumer at ls. 2d. a block. After the reduction of sales tax, the price to the retailer was 18s. lOd. and the price to the consumer was ls. 2d. This re-arrangement of prices is to be seen in other parts of the list.
What is happening in connexion with the sale of chocolates and sweets is also happening in connexion with other commodities. The honorable member for Petrie (Mr. Hulme) has pointed out that the effect of the reduction of sales tax on ice cream is so minute that it cannot be passed on to the consumer. Therefore, the advantage of the reduction is reaped by the wholesaler. The benefits of the reductions of sales tax on many kinds of commodities are not being passed on to the consumer. Years ago, sales tax at the rate of 25 per cent, was imposed upon many items, hut it has been reduced from time to time at the rate of 2-J per cent. The result is that most manufacturers of the commodities and the wholesalers are still selling their goods at the prices which prevailed when the sales tax was 25 per cent. I am not putting up Aunt-sallies in order to knock them down. I am not saying that these things could occur. I am saying definitely that these things have occurred, and I have produced evidence of it in connexion with confectionery.
There exists in this community an organization of crippled people, and the object of that body is to secure the abolition of sales tax on motor cars purchased by crippled persons. They are unable to travel to their places pf employment by the ordinary means of transport, and if they had motor cars and were taught to drive them, they could move to and from their places of employment and would not incur the almost prohibitive cost of hiring motor vehicles. But the Government, when it is asked in the name of humanity to waive the sales tax on motor vehicles purchased by that unfortunate section of the community, declines to do so. I admit that the concession has been granted in the past. ‘ The Chifley Labour Government granted it to persons who suffered disabilities as a result of war service. However, there are large numbers of people who suffer disabilities which are not attributable to war service, and they are not granted a remission of sales tax on the motor vehicles that they purchase.
Another instance of the peculiar operation of the sales tax will be of interest to the House. Sales tax is not imposed upon fruit cordials, but sales tax at the rate of 12-1 per cent, is imposed upon a similar article which is bottled by manufacturers. That discrimination is inequitable and unjust. But then, the whole system of sales tax lends itself to injustices and discrimination between people whose rights in respect of taxation are absolutely inseparable. Sales tax cannot be administered equitably even between those sections of the business community upon whose goods it is imposed, but there is vast discrimination between the various people who pay sales tax. The bulk of the proceeds of the sales tax is collected, from the average citizen and the wealthy sections, to that degree, have their direct contribution to the administration and development of this country reduced.. The sales tax is a sectional tax designed, to extract money to defray the cost of public administration and services from, those least able to bear the burden. I hazard a guess that the average family pays twice or three times as much in salestax as it pays in direct taxation. Such, minute reductions of sales tax cannot bepassed on, and purchasers of such goodsare still obliged to pay general taxation toa degree that is out of all proportion .to their means.
The honorable member for Melbourne (Mr. Calwell) pointed out that sales tax is levied on radio sets at the rate of 16f per cent., and the honorable member for Petrie (Mr. Hulme) r who followed him, replied, in effect,. “ What is wrong with that ? If a person can afford to buy such an expensive radiowhy should he not be obliged to pay sales tax at the rate of 16§ per cent?” The point is, of course, that if a person buys a cheap radio set he still has to pay sales tax at the same rate. Persons who live in remote areas and to whom radio receiving sets are essential should not be taxed to that degree. Sales tax at the rate of 16f per cent, represents nearly onequarter of the price of a radio set. Why should residents in outback districts be obliged to pay such a heavy tax on radio sets which are an essential amenity in such districts? A person who purchases a radio set for £200 would pay in sales tax the sum of nearly £50. That is an unfair impost to place upon persons in outback areas. Certainly, it is a heavy tax to pay for the enjoyment which many persons experience in switching off broadcasts of proceedings in this House. Such a high rate of sales tax on essential commodities is utterly unjustifiable.
The honorable member for Petrie said that ice cream, which is presumed to be eaten mainly by children, is consumed in larger quantities by adults. Comics are presumed to be read mostly by children, and many, in fact, are read more widely by adults; but, whereas sales tax is levied on school exercise books at the rate of 12£ per cent., comics are not subject to sales tax at all. If the Government really desires to promote the interests of the individual, it should eliminate sales tax as quickly as possible. I ardently hope that if a Labour government is returned to power it will, with my assistance, abolish sales tax altogether, and also, in imposing taxation generally, will take as its criterion the capacity of the individual to pay. That is the principle by which any responsible government should be guided in imposing taxation. No responsible government would follow the catch-as-catch-can method by which this Government imposes sales tax.
.- It is curious to hear the honorable member for Burke (Mr. Peters) prophesying that a Labour government, supported by him, would be the first to abolish sales tax because, after all, one recalls it was a Labour government that first imposed sales tax in this country.
– I know that, too.
– I am delighted to learn that the honorable member knows thai it was the party to which he belongs that actually introduced sales tax in this country.
– That is not news.
– No; because the people of Australia are perfectly aware of the many iniquities that have been perpetrated by Labour governments.
– Does the honorable gentleman regard sales tax as an iniquity ?
– I shall deal with the honorable member’s remarks as I go along. The honorable member not only failed to mention that Labour introduced sales tax in this country but also refrained from mentioning the fact that during the long period that it was in office, from 1941 to .1949, it made no attempt to abolish sales tax. In other words, the party to which he belongs has always been committed to sales tax and his hope that Labour will abolish sales tax is just as hopeless as his hope that Labour will once, again be returned to office in this Parliament. As I understand the honorable gentleman’s remarks, he objects to sales tax altogether and would like to see it wiped out completely.
Let us examine that proposition logically. What would be the position if no taxes at all were levied? There would be no government, and, consequently, there would be chaos. I should hate to think that the honorable member for Burke is a person of the type that one would describe as an anarchist, anxious to bring about a state of anarchy and chaos in this country. The honorable member could hardly be taken seriously- if he suggested that taxation should be abolished altogether. He realizes that taxes are inevitable, and that the question that always arises is whether the measure of taxation is sufficient to carry on the business of the country, or whether taxes should be reduced to such a degree that the Government would be unable to meet its commitments. Heaven forbid that this Government would adopt such a policy ! It will never adopt a policy that would render it unable to meet its commitments. The Labour Government ended its last year of office with a deficit which this Government was called upon to make good and, in fact, did make good. The honorable member for Burke spoke about the prices of chocolates and sweets. He could not have cited a worse example in support of his remarks, because the less chocolates and sweets that are consumed the better will be the health of the children in the community. Consequently, one can have no sympathy with his plea for a reduction of sales tax on chocolates and sweets. The policy that has been adopted by this Government in reducing sales tax is to benefit industry as a whole; and it would not agree to any measure that would injure the health of Australian children. The honorable member for Burke also complained about the injustice that is done to persons in the outback who are obliged to pay sales tax on a radio receiving set that costs £200. Such a set would be pretty expensive. Apparently, in this instance, the honorable member was speaking not on behalf of down-trodden persons, about whom he is so fond of expressing himself, but on behalf of the well-to-do. In any event, the sales tax payable on a radio receiving set that costs £200 would not be £50 but £33 6s. 8d. It would appear that the honorable member for Burke is so anxious to get rid of. sales tax altogether that he does not: mind whose claims he supports. Judging from his remarks, he would be perfectly, agreeable to the retention of. the sales tax so long as it was payable only by supporters of the Government, but when his own supporters have to pay it he would like to see. it abolished.. He said that it was a sectional tax, and by that he meant, in effect, “ Take it all off. those who support me, and I. shall, be happy “. I have endeavored to show up the honorable member’s remarks in their true light.
This measure will, in. fact, effect reductions of taxes in. accordance with the promises that were made, by the Prime Minister (Mr. Menzies) during the last recent general election campaign. The right honorable gentleman was able to promise that his Government would reduce taxes because it had re-established economic stability and had restored a high level of prosperity in this country by bringing about full employment and higher production and by maintaining a sound financial system. However, after those promises were made, clouds began to gather from overseas and it became apparent that very substantial reductions of taxes could not be made at present. Consequently, the reductions that the Government now proposes to effect, including the reduction of sales tax with which this measure is concerned, are of a moderate, nature. Nevertheless, they are still substantial. The reduction of sales tax proposed to be effected under this measure will amount to £10,000,000 in the current financial year and approximately £13,000,000 in a full financial year. For instance, the rate of sales tax on household furniture. crockery, cutlery, floor coverings, and appliances is to be reduced from 12.-J per cent, to 10 per cent. That reduction will represent a loss to revenue of £4,000,000 in a full financial year and £3,000,000 in the current financial year. If sales tax on articles of that kind were to be abolished altogether, the amount of the reduction, would be of the order of £20,000,000; and that, incidentally, was one of: tha promises that’ was made by the Labour party during the recent general election campaign. If Labour had been returned, to- office, how would it have replaced that, sum.?” It could have done so only by imposing other forms of taxes, or by the wholesale issue of treasury-bills which, inevitably, would have caused inflation. When one realizes what would have been the effect of Labour’s election promises one understands why the people, who are to& sensible to allow themselves to be misled all the time, could not stomach such promises and, therefore, would have nothing to do with Labour. It is’ very cold comfort for Labour to be still in Opposition in this Parliament. Honorable members opposite do not like to be in Opposition. That is my answer to those honorable members who have been interjecting throughout my remarks. I assure them that they will be in Opposition for a very long time yet.
When one turns to other reductions of sales tax, one sees that they have been made with the intention of benefiting industry. It is of the utmost importance, in a high cost structure country such as Australia,, that the costs of production, particularly of manufactured goods, should be kept down as much as possible. Consequently, one sees that the Government in this case has extended the sales tax exemption to plant and equipment used for the repair of plant and machinery for the mining industry as well as for general manufacturing. That is an attempt on the part of the Government to aid in bringing down the costs of manufacturing. It not merely affects the people who purchase manufactured goods in this, country, but also deals with the matter of recovering the export, markets that we have lost because our cost structure is too high. Every effort must be made to keep down, high manufacturing costs, and. it is a very sensible and sound policy on the part of the Government to reduce sales tax on those items I have mentioned. In addition to that, one sees that safety equipment has been taken out of the field of taxation altogether. One of the modern features of industry is the use of safety appliances and. the employment of safety engineers in order that those who work in industry shall be secured, as far as possible, from accident and fatality. This is a magnificent step forward, both from a humanitarian point of view and also from the point of view of endeavouring to help industry by saving man-hours, by keeping men in production and by increasing production, and also, incidentally, by reducing costs. It is in those and other ways that the Government has been able,, by a sound policy of sales tax reduction, to present to the Parliament and the country a measure which undoubtedly calls for commendation.
– I should like to correct a misinterpretation which the honorable member for Balaclava (Mr. Joske) placed upon the remarks of the honorable member for Burke (Mr. Peters). He implied that the honorable member for Burke had suggested that there should be no taxation whatever. That, of course, is not what the honorable member said. He did say that there should be no sale3 tax, and I must say that, in broad principle, I agree with him. This Government is relying upon sales tax as one of the basic forms of revenue collection. The sales tax, it is true, was introduced in depression days by a Labour Government, but it has since been expanded into one of the principal taxes levied by the Commonwealth and, at the moment, it accounts for about 10 per cent, of the total revenue collected by the Government. I am sure that this Government each year is more concerned with the aggregate amount that it is going to raise by way of sales tax than with the incidence of that tax upon the various classifications of commodities upon which it falls. “When this tax is subjected to an analysis, it appears that the bulk of the revenue from it is derived from articles that fall in the general category. That is why, unless we do as the honorable member for Burke suggested and eliminate the sales tax altogether, we can make only minor concessions from year to year. If we are going to rely upon the collection of about £90,000,000 a year in the form of sales tax, we must continue to levy the tax upon many of those items which to-day are regarded as essentials and which are purchased, for the most part, by ordinary families. The remarks of the Treasurer (Sir Arthur Fadden) when he presented this bill to the House were rather ironical. Speaking of the reduction of sales tax on furniture and household equipment from 12£ per cent, to 10 per cent., he said -
It is believed that this will appreciably reduce the costs of home establishment.
A suite of furniture which previously cost, say, £100, will, as a result of the reduction of sales tax from 12£ per cent to 10 per cent., cost about £97. I ask in all seriousness: “Will that reduction of a mere £3 in the final price appreciably reduce the costs of home establishment ? I ask honorable members to study the list of articles subject to the general 2’ate of sales tax. Again in. all seriousness I ask: Why should there be any sales tax at all on such articles? Here is a list of articles on which the sales tax is to be reduced from 12£ per cent, to 10 per cent. -
Furniture; crockery and articles of a material, other than earthenware; glassware; cutlery; refrigerators; washing machines: vacuum cleaners; radiators; kitchen utensils and hardware; brooms, mops, dusters, brushes, buckets, dippers, basins and garbage cans; fruit bottling outfits and fruit preserving bottles and jars ; floor coverings and. bath and door mats; blinds; mattresses, pillows, &c. ; sewing machines; appliances and fittings used for or in connexion with electric, gas or other lighting.
Could anybody in this House seriously say that a government with a total revenue of £960,000,000 annually ought to rely for £60,000,000 or £70,000,000 of that amount on the imposition of a tax on items of that kind?
Members of the Opposition have maintained ever since the budget was presented to the Parliament that, if there is to be any justice, the Government should examine more systematically and seriously the tax concessions that it proposes to give to the people. We say without any equivocation that, if the Government is able to reduce taxation by £50,000,000 or £60,000,000, it would be far more just to eliminate the sales tax on the items that. I have mentioned than to apply concessions to the basic income tax. Those items cannot seriously be regarded as luxuries. They are essential in a modern home. Nobody, surely,, would deny that people ought to buy refrigerators if technology and. science can make it possible for them to do so.. Why should not refrigerators be freely available to the ordinary housewife? It is bad enough that she has to pay £70 or £80 for a refrigerator. There is no logic or justice in the imposition of a tax of £10 or £12 in addition to that price. We do not beat about the bush. We say that this Government is more concerned with the aggregate amount of its sales tax collections than with the dispensing of justice. The sales tax represents an easy way of getting £80,000,000 or £90,000,000, because people who buy articles that are liable to tax are not always aware that it is included in the price they pay.
One has only to consider the needs of an ordinary family in order to realize the severity with which the sales tax falls upon the average household. A young married couple setting up a home, or an older couple trying to buy a washing machine, a refrigerator, a new suite of furniture, or a sewing machine, pay perhaps more sales tax on each of those purchases than they pay in income tax each year. Obviously, there is no justice in such a system. This Government, which claims credit because it has reduced taxation by’ £10,000,000 or £12,000,000, will collect from sales tax in the aggregate this year approximately as much as it collected in the same way last year. Revenue from sales tax this year will be about £92,000,000 as compared with £95,000,000 for the previous year, notwithstanding the reductions for which the bill provides. The reason for thi” is that more and more of the articles that are subject to this concealed tax are being bought. The Government removes one or two articles from the sales tax list each year and boasts of- its achievement, but it says nothing of the items which remain liable to the tax.
– The reductions have been generous.
– Is the honorable member for Canning (Mr. Hamilton) prepared to go to his constituents and say that there ought to be sales tax on a refrigerator because it is a luxury item ever, in the warm climate of the electorate that he represents? Would he tell the women in that electorate that a sewing machine should bear the sales tax because it is a luxury? If so, I suggest that he cannot approach his constituents very often.
The system of sales tax is riddled with anomalies and iniquities. Despite the comments made by the honorable member for Balaclava, I do not think that the honorable gentleman, if he applied hicritical faculties accurately and honestly to an appraisal of this tax, would be quite as complacent about it as he appears to be. I have before me a letter from a lady who is a semi-invalid. I shall not mention’ her name, but I shall refer to the subject of her letter in order to point to an anomaly in the sales tax legislation which has been overlooked, apparently, from year to year as its unfairness has been accentuated by the decreasing value of money. Members and supporters of the Government announced proudly recently that they would assist in thirehabilitation of disabled members of th, community. Well, this woman suffers from tuberculosis and is not able to take regular employment. In order to contribute to her support, she has learned a handcraft of some kind, but she findthat the raw materials that she needs are subject to sales tax if she buys a quantity valued at more than £500 in any year. I suspect that, when this provision was introduced, an amount of £500 was probably reasonable. The argument apparently was that it would be unfair to exempt from sales tax raw materials used in large quantities by big manufacturing companies, but that individuals, such as the woman I have mentioned, should be helped by an exemption from the tax. However, the decreased value of money has changed the situation, and the £500 limit is now sadly out of date. Even if this woman, for argument’s sake, were to make a profit of 50 per cent, on her products - and I do not think it would be anything like that rate - her net income from her own efforts would be only about £250, which would be insufficient to maintain a reasonable standard of living for her.
The Government ought to examine anomalies like this. The £500 exemption might have been adequate some years ago, but it is certainly inadequate now. When this woman pays more than £500 for raw materials in any year, all her handwork becomes liable to sales tax, and it is unable to compete with machine-made products of the same kind.
The purpose of the sales tax legislation initially, of course, was to have an effect the very reverse of that. Now, because of inflation and neglect, the original purpose has been nullified. Government supporters ought to examine the system more critically in order to discover such anomalies and eliminate them. As I have said, the number of items liable to bc taxed is being slowly reduced, but the tax is imposed on the remaining goods in such a way that it has its severest impact upon the ordinary family. The latest figure that I have been able to obtain is that published in the Quarterly Summary of Australian Statistics for the month of December, 1953. It reveals that total sales during the month of September, 1953, amounted to approximately £188,000,000. Only £60,000,000 of this total was subject to sales tax. Of the amount subject to sales tax about £40,000,000 related to goods in the general category. As I have indicated, the greater part of the sales tax collections of approximately £92,000,000 is obtained from sales of goods in the general category and not from sales of luxury items.
For the most part I agree with the honorable member for Burke (Mr. Peters) that the sales tax is basically unjust and inequitable and that it should be progressively reduced, but if it is to be retained, there is at least some argument in favour of imposing it on luxury goods rather than on necessaries. At a time when an economic crisis, a3 it was called, occurred, this Government taxed luxury goods such as fur coats, but as soon as the waves of recession or depression, or whatever it might be called, receded, the tax, not on the basic items, but on luxury goods, was reduced. The result is that to-day there are virtually only three categories of goods - those that are taxed at the rates of 10 per cent., 124- per cent, and 16$ per cent. In all logic, surely it would be more just to impose a high rate of sales tax on, say, mink coats and other fur goods, than on refrigerators, washing machines and sewing machines. But this Government’s logic is such that it does the very opposite. It reduces income tax on high incomes and exempts luxury goods altogether from sales tax. The time has come for the Parliament to review the whole structure of the sales tax, but the tendency seems to be to think that it is better to leave an old tax where it is than to impose a new one or to re-adjust the incidence of taxes on the various sections of the community.
There is no doubt that this Government continues to rely upon the sales tax as a basic source of revenue. Approximately 10 per cent, of revenue is obtained from it. Each financial year this Government, believes that it must make a few concessions. For example, it might reduce the price of carpets from £100 each to £9S each, and assert that that action will stimulate the economy. That is a farcical way to act, and the Government is merely perpetuating injustices in the community. The Government must not take credit to itself for reducing sales tax. It should remove sales tax completely from many basic commodities that, in an ordinary civilized community, cannot be considered luxuries, because the ordinary citizen is entitled to be able to buy them. From the point of view of the economy as a whole, the more the consumption of the less fortunate sections of the community is stimulated, the more healthy will be the general level of economic activity. I appeal to the Government to consider sales tax anomalies as they affect people who are not wealthy, and not as they affect vested interests. It sometimes seems that the best organized groups in the community are able to peddle their goods free of sales tax. But the Government does not seem to care very much about the less fortunate people who are perhaps trying to rehabilitate themselves. They are regarded as individuals in isolation, because they have not the support of an organized pressure group. I ask the Government to consider these matters and to try to do justice in giving concessions and reducing taxes.
.- From the remarks of members of the Opposition, it might be thought that the purpose of this bill is to impose sales tax, whereas in fact it provides for relief from sales tax. I emphasize that fact in order to dispel the obviously grossly unfair attempts of the Opposition to create a false impression in the minds of the people who will hear and read the debate on this measure. The purpose of the bill - and I emphasize it - is to give relief from sales tax to the extent of £12,000,000 in a full financial year. The main part of that remission of £12,000,000 will be given in respect of the general category of goods to which the honorable member for Melbourne Ports (Mr. Crean) .referred. A major remission of sales tax will apply to furniture and other goods that the average -person in the ordinary household - if there is such a person - would purchase.
– The reduction of sales tax on those goods Will be 2^ per cent.
– Whatever the percentage might be, I suggest that £12,000,000 is a substantial amount, even in the language of a Tasmanian. That is the important aspect that must be considered. The honorable member for Melbourne Ports stated that the Government retains the sales tax because it regards it as a basic source of revenue, and that it amounts to 10 per cent, of the total revenue.
– It amounts to about £92,000,000 a year.
– I do not deny that it totals approximately £92,000,000 a year. That amount is only 10 per cent, of the Government’s total revenue. The honorable member for Melbourne Ports stated also that the Government is .more concerned With the amount of the sales tax than with its incidence or the classes of goods upon which it is imposed. If the honorable member cares to examine the history of the sales tax and the action taken by this Government in respect of it, he will find that the position is the reverse of that which he implies. This Administration has shifted the incidence of sales tax from the goods upon which most of the usual family budget is expended. I remind the House that a Labour government .first levied .sales tax - on everything. It was left to this Administration to acknowledge the needs of the family ;man and progressively to remove sales tax from the goods on which the major part of .a family’s weekly expenditure is made. The result is that at present virtually no sales tax is levied on those goods. That fact cannot be denied.
The honorable member for Melbourne (Mr. Calwell) concentrated his attention upon commodities such as ice-cream and sweets. If it is true that he aspires to a particular position, as rumour has it, he would do well to discard his milkbar economy ideas, if he wishes to impress the people with his ability to discharge the functions of Treasurer. I suggest that his concentration on icecream and sweets was intended as an emotional appeal to the people. If the sales tax on ice-cream were increased so much as to induce the average family man to spend his money on a pint of milk instead of on an ice-cream, which contains perhaps a teaspoonful of milk, the family would .benefit. It is all very well .for .the honorable member for Melbourne to tell the people how they should spend their money. The honorable member stated that an inequitable sales tax is still imposed on sweets. He would play a better role as a national statesman if he urged the Government so to arrange its fiscal policy “as to encourage the people to eat jams and honey instead of .sweets, which have almost no food value. .Any medical practitioner will tell the honorable member that sweets are of questionable value to the health of children. This bill is designed to relieve the Australian taxpayers of a considerable burden of sales tax, but the only criticism of it that the honorable member for Melbourne can offer is that it does not completely exempt ice-cream and sweets from, .sales tax. The sales tax on furniture and other household goods has been substantially reduced in the 1954-55 budget, in accordance with the Government’s policy, which it has adopted throughout its term of office, of progressively reducing sales tax.
J deny the allegation of the honorable member for Melbourne Ports that the sales tax .falls substantially upon the items of goods in the general category. If he cares to analyse the problem thoroughly, he will learn that the goods that make up the major part of the average family’s expenditure do not return the greater part of the sales tax revenues. He suggested that, if the . sales tax is to be retained, it should be .levied only upon luxury items such as fur coats. Very few mink coats are sold in Australia in a year, and the revenue obtained from a sales tax on them would not amount to anything. The honorable member’s suggestion is foolish. Before Opposition members talk about imposing sales tax on luxury goods, they must define luxury goods. 1 agree that a mink coat is a luxury item. Surely Opposition members would not go to the extreme lengths of imposing a sales tax on those goods or on other goods, the total sales of which are so small in value, though each item might be very costly, that the sales tax returns would not justify the expense of employing the clerk required to handle the returns in the Taxation Branch. It is foolish for Opposition members to advance such extreme arguments in order to bolster a weak case. The honorable member for Burke spoke about the severity of sales tax as it bears on the average family man. The average family man feels the impost of sales tax least of all, because the main items in his budget are exempt from it.
Sitting suspended from 6 to 8 p.m.
– Before the suspension of the sitting I was engaged in showing honorable members that this bill is designed to relieve taxpayers from taxation, and is not for the purpose of imposing sales tax. Sales tax was originally imposed by a Labour government, during the depression years when the people could least afford to pay it. Since this Government has assumed office it has progressively reduced the incidence of sales tax until to-day the items included in the average family’s weekly budget are all exempt from the sales tax. The Government has concerned itself not with the amount of sales tax that can be collected, but with the incidence of it ; and we have removed the burden of the tax progressively from the items about which the average person is mostly concerned for his ordinary living. This measure is designed to ease the tax burden on consumers by about £12,000,000 in a full year. On the purchasers of furniture alone, the relief given by the measure will total about £4,500,000. Honorable members will realize that that is a substantial reduction of the sales tax, and it indicates that those persons who buy furniture for their average household requirements will benefit greatly under the Government’s legislation. Of course the sales tax will remain a heavy burden on those who buy luxury furniture and other luxury fittings for their homes, but the average householder will gain much relief under the measure.
The honorable member for Melbourne (Mr. Calwell), when ‘ speaking earlier in the debate, seemed to be able to criticize the Government only because it had not removed the sales tax from ice cream and lollies for the children. I would prefer the sales tax on ice cream to be increased in order to give further encouragement to the average family to purchase more milk. After all, there is about 4d. worth of milk in the average ice cream carton or cone, and that same 4d. would buy quite a worth-while quantity of milk. As I said previously the Government’s policy is to encourage the consumption of wholesome foods such as honey, jams, and dried fruits, rather than to encourage the use of sweets and ice cream. To-day the dried fruits industry is conducting a very vigorous campaign to encourage people to use more of its products, and the people should realize that dried fruits are among the finest of foodstuffs and could be incorporated with advantage in the average household diet. Moreover, dried fruits are completely free from the sales tax, wholly because of the policy of this Government. The Government has removed the sales tax not only from the essential items of an average family’s budget, but: also from the average items of the weekly budget of all Australian families. We are concerned with the requirements of the people, and not with the amount of money that the .tax will produce for the revenues of the country. Of course, the sales tax is expected to produce almost as much this year as it produced in the last year,, but that very fact is a splendid tribute to the policy of the Government as it indicates that the prosperity of the people will continue to increase.
However, there are some anomalies in the application of the sales tax. About two years ago I said in this House that because of the way in which the sales tax is assessed, that is, upon the wholesale price of goods, which includes freight, a severe injustice was being suffered by our less industrialized States, particularly by Western Australia, which is my home State, and also by people in country districts in all the States. I thank the Treasurer sincerely because he was so impressed by my submissions that he referred the matter to the Commonwealth Committee on Taxation for investigation and report. I now have before me the committee’s report on freight charges on goods subject to the tax. The terms of reference to the committee were -
The desirability of amending the Sales Tax Assessment Acts so as to allow exemption from sales tax in respect of all charges for freight included in the sale price of taxable goods.
In its report about the matter the committee said, in effect, what I had previously said in this House. It stated -
At present, the last wholesale sale is selected as the taxing point in the general plan of the legislation to tax goods once during the course of dealing between manufacturer and consumption The main point made in the representations before the committee is that selection of the price for which goods an; sold as the sale value operates to the disadvantage of country wholesalers operating independently or as branches of city businesses. It is contended that it is inequitable and unjust to impose tax on so much of the sale price as represents freight charges to the place of business in the country, and that the acts should be amended to exempt freight in Australia or freight intra-state.
I was mainly concerned with interstate freight, and its effect on Western Australia, because the lack of industrial development in that State forces its people to buy most of the goods that they require from the eastern States. Indeed, we in Western Australia purchase most of the goods that we use from the eastern States, or import them from abroad. Because of the import policy of the Government, we cannot get many goods from abroad at present, and so we have to turn almost exclusively to the eastern States. The sales tax on goods sold wholesale in Western Australia is charged on the price of the goods at the factory in the eastern State, plus the freight from the factory to Western Australia. I am reminded that the same state of affairs operates to the disadvantage of people in Queensland. Because of that position, the consumers in the eastern States pay less for their goods than the consumers in Western Australia and Queensland. The committee investigated the matter and stated -
In considering these representations it is important to bear in mind that actual freight charges are not taxed.
Of course they are not, but they are when they are included in the wholesale price of an article. The committee continued -
The problem of taxed freights arises only where charges for freight are included in the price for which goods are sold From its examination of the subject-matter, the committee is satisfied that theoretical equity is virtually unobtainable. It is fundamental that sales tax should be simple enough in form to be collected economically and, to this end, a small measure of equity might be sacrificed.
Well, honorable members should realize that the members of that committee are all resident in the eastern States of Australia, and apparently that is why the measure of equity which must be sacrificed has to be sacrificed by the people of Western Australia and Queensland. I am not happy about the finding of that committee, which I consider is unjust. The committee, in its report, substantiated my case that there was an unjust burden on the people of the less industrialized States, but considered that the people in those States must bear the sacrifice for the benefit of the people in the eastern States, and for the convenience of the authorities who collect the tax. I ask the Government again to consider this matter, and in spite of the committee’s findings and recommendations to amend the Sales Tax Assessment Act to provide that the tax should be levied on the wholesale price of goods at the factory or point of issue, or at the port where the_ goods are imported into the country. If the Government should amend the law to that effect, then every consumer throughout Australia would pay the same sales tax on the same goods, and that would remove the tremendously heavy burden that has been placed on the distant States by the sales tax being levied on the freight charged to bring the goods to those States.
Freights are very heavy at present, the rail freight being about £50 a ton and the shipping freight about £5 a ton on goods brought to Western Australia from the eastern States. Honorable members should remember that the sale3 tax is levied on the wholesale price of the goods which, when they are sold in Western Australia, includes the freight. It is pertinent for us to ask why the committee, should consider that the more distant and less populous States should hear a heavier burden of sales tax in order to give some measure of equity to the eastern States. This matter is rather important for the people of Western Australia and Queensland, and I ask the Treasurer and the Government again to consider the matter with a view to amending the Sales Tax Assessment Act in order to remove the unjust burden that I have described which has been placed upon distant States.
There is still a section of our trading community that is taking an unfair advantage of the sales tax legislation, and I commend the following remarks to the officers of the Taxation Brand because I believe that the matter is worthy of serious investigation and constant supervision. I refer to persons and organizations who trade both wholesale and retail. The sales tax is required to Ve paid on the wholesale price of an article. Some wholesaler-retailers charge out the wholesale goods to the retail departments at a discount of about 20 per cent. Sales tax is payable on the discounted price of the goods, but, if private consumers go into those places and buy goods, they are charged the retail price and are charged sales tax on that retail price. I am not very worried about whether those stores pay to the Taxation Branch all of the tax that is collected, but I am concerned about the fact that the consumer is obliged to pay sales tax on goods in relation to which, by law, he is not compelled to pay it. He is supposed to pay sales tax only on the wholesale price of the article, but the Taxation Branch is obtaining money from a section of the community to which it is not entitled. Frankly, I doubt whether the branch receives all of that money all the time, because I am sure that the books in which the sales tax accounting is done do not always take into account the sales tax that is charged and collected by the wholesaler-retailer who is selling his goods on a discount basis. I go so far as to say that such traders are engaged principally in the sale of such items as hardware and automobile parts, on which sales tax is not a small item. Very often, the difference between the wholesale price and the retail price is between 20 per cent, and 25 per cent. For the consumer to be charged sales tax on the extra 20 per cent, to 25 per cent, is grossly unjust. The Taxation Branch should investigate the position of the wholesaler-retailer to ensure that he is not inflicting an unjust burden on the consumer. I shall not add that it should do so for the purpose of ensuring that the Taxation Branch is receiving all of the tax, because it should not receive it if it is not collected correctly.
I refer now to representations that were made to the Taxation Branch in relation to the exemption from sales tax of goods that were purchased by Country Women’s Association hostels in Western Australia. In that State, the Country Women’s Association, with the support of the Education Department, conducts hostels in conjunction with high schools. Those hostels can be regarded as part and parcel of the education system. If those hostels were conducted by the schools themselves in the same manner as private schools conduct them, articles of furniture would be exempt from sales tax. The Country Women’s Association conducts these hostels as a. public benefit. They are not connected with the schools; they are non-profit-making hostels. Because they are not part of the school or college to which they are attached, they are compelled to pay sales tax on articles which they purchase. Representations were made to the Taxation Branch, and the following reply was received: -
There is no similar provision in the sales tax law whereby exemption may be granted in respect of all goods purchased for use by Country Women’s Association hostels.
Because of the peculiar circumstances which appertain to those hostels, there should be a similar provision.
I ask the Treasurer (Sir Arthur Fadden) to investigate this matter personally. I suggest that the officers of the Taxation Branch should have another look at it, because I believe that the representations that were made by the Country Women’s Association were not clearly understood or that the association did not paint a clear picture of the circumstances under which its hostels are conducted. It it an injustice, merely because the residential part of the school which the children attend is conducted by the Country Women’s Association and not as part and parcel of the school itself, to compel the association to pay sales tax when the private schools and colleges do not pay it. In conclusion, the Government is to be commended very sincerely for its continuing attempts to relieve the average taxpayer of the burden of direct taxation and of indirect taxation such as sales tax. This matter has been tackled by the Government on a humane basis. I believe that the Opposition should join honorable members on this side of the House in commending the Government for attending to the wishes of the average person.
– Order ! The honorable gentleman’s time has expired.
-Despite the metaphorical back-slapping of the Government by the honorable member for Moore (Mr. Leslie), who grew almost hysterical in his praise of the Government because it proposes to make some reductions, the incontrovertible fact is that the relief that is contemplated in this bill . is totally and -woefully inadequate. The honorable member for Moore suggested that, since this Government assumed office, it has progressively reduced the incidence of sales tax.
– Of all tax.
– I suggest that it is quite apparent that the honorable member for Moore has not made a detailed study of the incidence of sales tax since the Government assumed office. When the Labour Government left office in 1949, there were two rates of sales tax, namely, 8-J per cent, and 25 per cent. During the first year that the present Government was in office, the rates were 8$ pei- cent., 10 per cent., 25 per cent, and 33 per cent. In the following year, the base rate was raised from 8*J per cent, to 12+ per cent., and the other rates were 20 per cent., 25 per cent., 33£ per cent, 50 per cent, and 66f per cent. In the succeeding year, the rates were reduced somewhat and they became 12-J per cent., 20 per cent., 33$ per cent, and 50 per cent. I suggest that it is gross impertinence on the part of the honorable member for Moore to suggest that the Government has progressively reduced the incidence of taxation when the indisputable figures that I have enumerated prove conclusively that such is not the case. All that the Government proposes to do on this occasion is to reduce the rates’ so that they will be restored to approximately what they were when the Australian Labour party left office in 1949. The Government has nothing to be. enthusiastic about when it is handing back to the people something that it should never have taken from them.
The aggregate figures constitute the true test of the amount of money that has been extracted from the people in the guise of sales tax. During the fiscal year in which the Chifley Government left office, £42,000,000 was collected in sales tax. During the first year that this Government was in office and when, as the honorable member for Moore stated, it started to reduce progressively the incidence of taxation, it collected £57,000,000, or £15,000,000 more than the Chifley Government collected. It was not satisfied with that, because in the next year the collections rose to £95,000,000. In 1952-53, the total amount was £89,000,000, and in 1953-54 it was £95,000,000. The Government estimates that, in the present financial year, it will collect £92,000,000, as against £42,000,000 during the last year that the Chifley Government was in office. The people of Australia should know that since this Government assumed office, it has raised the annual collection of sales tax to a sum that is £50,000,000 more than the amount that was collected -when the last Labour Government was in office. The estimate for this year is £92,000,000, but I hazard the guess that collections will be approximately £100,000,000, because, although the estimate for the last financial year was £88,000,000, the Government collected £95,000,000. In other words, during the last financial year, the Government collected £7,000,000 more than the estimate. It is quite possible that the same thing -will happen this year, and that, for the first time in Australian history, £100,000,000 will be collected in sales tax. That is not a record of which any self-respecting government may be proud. To prate about the fact that it is reducing the incidence of taxation is, in the light of the figures I have enumerated, only blatant hypocrisy.
There has been some comment, by honorable members on both sides of the House, upon the effect of sales tax. I suggest that numerous good and logical reasons can be advanced why sales tax should not be imposed on the wide range of goods on which it is imposed under the present regime. Under the Government’s policy, basic consumer goods that are purchased by the basic wage earner and the pensioners are taxed upon the same basis as are luxury goods that are purchased by the affluent and the well-to-do section of the community. Because of that fact, the imposition of sales tax contravenes every sound principle of taxation. I suggest to the House that, in considering the desirability of continuing any method of taxation, the prime considerations should be as follows: - First, what have been the practical results and, secondly, how is it accepted by the people who pay it? Assessed in the light of those tests, the hill before the House must stand roundly condemned, and it cannot be justified. The practical result is that sales tax has been increased from year to year, and it is imposing unfair hardship upon that section of the community that is least able to bear it. Sales tax has certainly been accepted by the Australian people in a spirit of annoyance. When the Government has increased the incidence of sales tax during the five years it has been in office, business has been stultified. It increased the incidence of sales tax to astronomical heights, and, naturally, sales were hampered. That has affected the interests of the business community and of the wageearner. There has been, widespread public resentment because of inability to purchase goods as a result of the incidence of sales tax. It has not caused jubilation amongst the people of Australia.
I concede that there are periods in the history of a nation when sales tax may be justified and condoned. The honorable member for Moore stated, with quite a gleeful chuckle in his voice, that it was a Labour government which introduced sales tax. That fact has never been denied; it is an historical fact. I point out that, when sales tax was inflicted upon the Australian people in 1930, economic conditions were not by any means parallel to present economic conditions. It was introduced during the trying years of the depression. I hope that honorable members opposite will not get it into their heads that, in 1930, the Australian Government was the only government that imposed sales tax. Approximately 20 or 25 governments all over the world imposed sales tax at that time because of the prevailing economic conditions. There was an obvious reason for it. I venture to suggest that any government that may have been in office in that year would have found it necessary to impose sales tax. The recognized channels of taxation were drying up. Unemployment was widespread, no income tax was being collected from hundreds of thousands of Australian wage-earners, and no customs duties were being paid because people were unable to purchase goods. It was essential that people who had any money at all should be compelled to pay some of it to the Government for the purpose of maintaining elementary and essential services. That was the whole theory on which sales tax was originally based. It was by no means m Australian principle, because the Australian Government in 1930 merely followed the example of fifteen other governments that had already instituted sales tax, and its action was in turn followed by similar action on the part of ten other govern ments. It is sheer nonsense to suggest that the Australian Government in 1930 was responsible, because of maladministration, for the need to introduce sales tax. It was forced, by economic conditions at the time, to institute that form of taxation. If any serious attention were paid to the statement of the honorable member for Moore, it would be logical to assume that the first anti-Labour government to attain office after the defeat of the Scullin Government, which introduced sales tax, would have immediately abolished that form of taxation. But the United Australia party Government which took office after the defeat of the
Scullin Government, far from abolishing sales tax, increased the rates of sales tax. In 1930 the Scullin Labour Government imposed sales tax at a flat rate of 2i per cent. The United Australia party Government in 1932 increased the rate from 2£ per cent, to 6 per cent. So it is obviously sheer hypocrisy for the honorable member for Moore to’ state that a Labour government was responsible for imposing the burden of sales tax on the people, when one of the predecessors of the Government that he now supports was responsible for increasing the rate of tax by more than 100 per cent.
Sales tax was originally intended as a temporary measure to produce revenue in an emergency. Unfortunately, it has tended to become a permanent feature of our tax laws. Fair-minded honorable members will agree that there was a great measure of justification for the original imposition of sales tax in the depression, because of falling price levels and widespread unemployment, which seriously affected income tax receipts. Some of the revenue normally obtained from income tax had to be obtained by some other means. But, however justifiable the original imposition of a flat rate of sales tax of 2+ per cent, was, the increase of the rate to 6 per cent, by the United Australia party Government in 1932 was unjustifiable. I shall concede that the increase of the rate to 8f, per cent, in 1939 was justifiable, because World War II. had broken out just prior to the introduction of that year’s budget. Everybody recognized that all sources of revenue had to be tapped in order to finance our war effort. The people did not cavil when the rate was increased to 15 per cent, in 1941, because that increase also was justified by the exigencies of Avar. It is safe to say that it was during the war period that sales tax assumed the mantle of permanency, because of its indirect nature and its concealed effect on the taxpayers. But to-day, the conditions which justified heavy sales taxation in war-time no longer apply. Income tax revenue has reached astronomical heights, and there is, therefore, no need to impose sales taxes on sections of the community in the unfair manner in which it now applies, at a time when the Government is able to extend reductions of income tax to wealthy sections of the population. Income taxation is a fairer method of taxation- than is sales taxation. As 1 have said, sales taxation was justified during the war only because of the overriding necessity to increase revenue greatly by every possible means. During the war period, however, supporters of the Labour Government recognized the inequity of sales tax in normal times, and, as reference to Hansard shows, they stated that after the war they would ensure that sales tax burdens would be lightened. The Labour Government carried that promise into effect, because after the war it reduced the general rate of sales tax to 8$ per cent., which embraced 75 per cent, of all taxable sales. To-day, the general rate is 10 per cent. Yet the honorable member for Moore talks complacently about the Government’s progressive tax reductions.
When the present Government came into office, after having made glowing promises in 1949 about tax reductions, the taxpayers naturally expected to receive the benefit of a reduction of sales tax rates. What actually happened was that sales tax revenue, which was £42,0!)0,0(>(i in 1949-50, the last financial year in which the Chifley Government was i’= office, jumped to £95,000,000 in 1953-“–S and, it is estimated, will be £92,000,000 in the current financial year. I-.- 1953-54, when sales tax produced £95,000.000, it had been estimated thai it would produce only £88,000,000, so ir is safe to asume that this year’s estimate of £92,000,000 will also be exceeded. Government supporters need not comfort themselves with the thought that the reductions of sales tax granted by thi? measure will appease the great majority of the people, at a time when huge amounts of income tax are being remitted to wealthy people. Apparently the Government believes that because sales ta has existed since 1930, nothing can hedone about abolishing it now. Under present conditions it i3 no longer an equitable form of taxation. Sales tax is a tax on goods, and contravenes every sound principle of taxation, because, not only does it ignore the taxpayer’s capacity to pay, but it also actually lays the heaviest burdens on the people least able to bear them. Examined objectively, it is a species of gross income tax that bears on the taxpayer in inverse ratio to his income. It cannot be controverted that the less a man earns the greater is the proportion of his income that is extracted by the Government by means of sales tax. It has been computed that the average wage-earner spends about 40 per cent, of his income on goods that are subject to sales tax, whereas the average wealthy person spends on such goods as little as 5 per cent, of his income. By its verynature, sales tax cannot take into account the personal economic position of the purchaser of goods on which it is levied. A pauper who buys a packet of rar.o blades pays the same amount of sale.rax on his purchase as a millionaire pay:when he purchases a similar packet razor blades. Such a system definitely controverts one principle of fair taxation which is that it should be levied in accordance with ability to pay.
Prior to 1949-50. when the Chifley Government was collecting £42,000,000 in sales tax revenue, the people accepted sales taxation without grumbling. The fact that rates were low, coupled with the indirect method of payment, allowed payment of the tax to pass almost unnoticed by the consumer. The tax was collected in the form of a comparatively small levy on each one of millions of purchases made by a multitude of buyers, and amounted to painless extraction. The Government altered that state of affairs in 1951, when it bumped the rates up from 12-J- per cent, to as high as 66$ per cent. Such w.is the wave of indignation that followed the Government’s action, that during thfollowing year it reduced the rates to return £6,000,000 less in revenue. In th next year it again decreased the revenue from’ sales tax by £1,000,000. It now estimates that revenue from that source this year will decrease by another £10,000,000. As I have pointed out, it is reasonable to assume, however, that the ietaa? amount of revenue collected will be in excess of the Government’s estimate.
The Government boasts about its reductions of sales tax, but, in actual fact, the whole vicious incidence of that form of taxation is being retained. There are to be some trifling reductions, but no real effort is being made to eradicate the worst, features of this form of taxation.
One of the deleterious effects of sales tax is that it causes a serious reduction of the real purchasing power of consumers, which inevitably leads to reduced production of goods and services, as happened in 1951-52, and consequent severe unemployment. A perusal of the schedules indicates that about 80 per cent, of the amount to be collected will be extracted from ordinary wage-earner–. There arn the very people who are struggling to maintain a not very high standard of living in an era of high prices. Sales tax makes high prices even higher. A tangible and appreciable reduction of sales tax would be of practical benefit to the community generally. I suggest that a far better alternative than a general increase of wages would, under present conditions, be genuine reductions of sales tax, because every increase of wages now merely forces prices up. A reduction of sales tax rates would increase the real purchasing power of wageearners, a goal at which the Government always claims to be aiming. If the Government is sincere in that claim, let it make a real effort to attain that goal by making big reductions of sales tax on a wide range of consumer goods.
As I have already said, the Government went so far in 1951-52, in relation to increases of sales tax, that even its own supporters revolted against it. The increases it made in that year drew such strong protests from commercial interests, with the result that, year by year since then, it has been making small progressive reductions of sales tax rates. However, the amount of revenue that it collects from sales tax never falls below £90,000,000, although the Labour Government in its last year of office collected only £42,000,000 from that source. There are alternative methods of raising revenue, with which the honorable member for Melbourne Ports (Mr. Crean) dealt adequately in his speech. I suggest that any method of taxation proposed by a government that really has the welfare of the people at heart should take into consideration the well-being and economic stability of the nation. It naturally follows that unless compensatory advantages can be found for them, taxes which are unfair and unequitable in their operation are repugnant to sound taxation policy. Acceptance of the principle of taxing people according to their a’bility to pay taxes, rather than in proportion to their- inability to resist them, is a tremendous social achievement thatmust be safeguarded at all costs. That is what the Labour party is attempting to do now. The Labour party was entirely responsible for that great social achievement. This goal has been slowly and painfully approached and, as sales tax, as we know it, is the very antithesis of this laudable ideal, Ave must fight against increases of that tax with all the vigour at our command.
The present schedules bristle with anomalies and injustices. Apparently the Government has discovered some of those anomalies and injustices, because it is taking steps to remove them. There are many still in existence. I shall mention a few of them. Pastrycooks, for instance have a legitimate grievance because of the unfair treatment that they have received from the Government in relation to their products. Their industry was subject to a small levy of sales tax in 1931, but it was removed’. It was reimposed in 1940, and pastrycooks did not object to that, because they were patriotic Australians, and recognized that money had to be raised from all sources for the prosecution of the war. At the end of the war they were paying 1-2-J per cent, sales tax. The rate has been reduced progressively to 3-J- per cent., but I cannot understand why sales tax on pastry is retained. Its retention is most unfair when it i3 realized that other less-important products are completely exempted from sales tax. Block cake, buns, scones and small cakes are subject to sales tax. Those are the kind of goods that are purchased by workers in all types of industries so, in effect, the Government is levying a tax on workers’ lunches. One of the biggest sections of the pastry industry is engaged in the supply of cakes and pastry for industrial, commercial and government canteens. Another big section caters for school children’s lunches. The pastrycook produces his lines from the most important health-giving raw materials, including flour, sugar, eggs, butter, margarine, dried fruits, processed fruits and jams, all of which have high food value. A pastrycook uses all these foods, and pays sales tax on the finished product, whilst other manufacturers, who convert only one primary product into a finished article, are not liable to pay sales tax. I put this question to the Government: Why should a first-class food in the form of fruited block cake containing flour, sugar, eggs, butter or margarine, and dried fruits, bear sales tax when jam or tinned fruit is free from that impost? The whole question is ridiculous and one section of the food industry is placed at a disadvantage compared to another section of that industry. If the Government had any regard for the canons of decency, it would immediately set this position aright. This discrimination has been responsible for a large diminution of the sales of certain lines of pastry, and the least the Government can do is to take immediate action to rectify the matters I have mentioned.
There is another section of industry which has’ received most unfair treatment. In 1953, sales’ tax was- removed from fruit juice cordials or concentrates which consist of not less than 25 per cent, by volume of juices of Australian fruits, but sales’ tax at the rate of 12^ per cent, remained on bottled aerated fruit drinks. Just why on earth that distinction should be made, I cannot understand. This elimination of tax from fruit juice cordials and the retention of tax on carbonated fruit drinks have aggravated a most serious anomaly. Drinks which are made up in retail establishments are nontaxable, whereas similar drinks made up in the bottle by manufacturers are subject to tax on the delivered cost into the shops. If a customer enters a shop and asks for a fruit drink, and the shop assistant pours an inch of cordial into a glass and fills it up with water or soda water, that fruit cordial is not subject to sales tax. But if the soda water is added to the cordial and bottled in a factory, it is subject to sales tax. That discrimination is most unfair. The Government has been apprised of that position, but ignores it. Surely no self-respecting government would tolerate such a condition of affairs! The least this Government can do is to have fruit-based aerated waters exempted from sales tax, as control of the necessary fruit juice content of the aerated bottle would not present any greater difficulty than the control of the fruit juice content of the cordial or concentrate from which it is made. I hope that the Government will rectify that anomaly at the first opportunity.
The last matter that I wish to raise in this debate is sales tax upon furniture. The honorable member for Moore (Mr. Leslie), in his enthusiasm, said that the purchasers of furniture would benefit substantially from the reduction of sales tax in this financial year. The rate of sales tax last year was 12$ per cent., and the new rate is to be 10 per cent. Nobody will convince me that a reduction of sales tax from 12i per cent, to 10 per cent, is substantial, and will enable the purchasers of furniture to mate a considerable saving. The Government should do the fair thing by those people who, in the main, are young married couples struggling to establish their homes. The Government should abolish sales tax on household furniture. The average cost of furnishing a home in these days is approximately £400, so that a young married couple who set out to furnish their home would make a saving of £40 if the sales tax on household furniture were abolished. The reduction of sales tax from 12i per cent, to 10 per cent, this year will enable them to make a saving of only £S. The cost of housing has increased out of all proportion since this Government has been in power. Sales tax on refrigerators and washing machines should be abolished. Why this tax has been retained i3 beyond my comprehension. Refrigerators and washing machines are household necessities to-day. The housewife is entitled to any labour-saving devices that will reduce the drudgery of household duties. The Government should recognize that refrigerators and washing machines are necessities, and should endeavour to make them available to the public as cheaply as possible. The mere fact that our grandfathers or fathers did not have refrigerators and washing machines in their homes is no reason why we should not have them in our homes. The Labour party does not believe that, what was good enough for grandfather or father is good enough for us. We believe that the benefits of machinery should be passed on to the average person. A re duction of sales tax upon those household necessities by a paltry 2$ per cent, is “most unfair.
There .are many other items, too numerous to mention now, that could be submitted as evidence of the Government’s incomprehensible and blundering attitude. If the Government wishes to do the right and proper thing by the people, this bill should be withdrawn and redrafted with the object of removing the host of anomalies which make it so objectionable.
.- A very prominent member of the preceding Labour Government said, in support of the retention of sales tax, that it was impossible to make further reductions of sales tax in view of the heavy expenditures that were being incurred by that administration. The honorable member for Batman (Mr. Bird) has taken my colleague, the honorable member for Moore (Mr. Leslie), to task because he said that the general rate of sales tax had been reduced to 10 per cent. The reason given by the very prominent member of the preceding Labour Government to the Opposition of the day for the retention of sales tax can be applied with equal force to the present bill. This Government has incurred far greater expenditures than ever the Labour Government incurred after World War II. I shall give a few interesting figures on this matter.
The defence vote when the Labour party was in office in 1949 was £40,000,000, and in this financial year it is £200,000,000. The repatriation vote when the Labour party was in office in 1S49 was £19,000,000, and is £36,250,000 in this financial year. Yet Opposition members constantly tell the people what they would do if they had the opportunity. This Government is embarking on a procedure which was not dreamed of by the Labour Government during that wonderful period of the golden age from 1947-1949. In those days the Labour Government gave to the States by way of Joan money, only what it compulsorily took from the people. This Government has assisted the States by underwriting their loans in the last three pears by the amounts .of £153,000,000, £135,000,000 and £90,000,000 respectively.
During this debate we have heard a good deal from Opposition members which might convey to the listening public, and even to some honorable members, trie impression thai this Government originally imposed sales tax on the particular items that they have mentioned. I agree that the honorable member for Batman admitted that the Labour party introduced sales tax in 1930, but some Opposition members who have spoken to-day have not admitted that fact, but have taken the Government to task .because it has not abolished the sales tax. Those honorable members deliberately failed to mention that this Government did not introduce sales tax or that the preceding Labour Government, in the four years after the end of World. War II., did not seize the opportunity to abolish sales tax.
Let us see what happened in those years. The former Prime Minister, the late Mr. J. B. Chifley, said on the 4th October, 1949, during the debate on the budget -
It is true that the man who buys a few pots of beer, or who goes to the races, for a man does not live by bread alone, has to pay some indirect taxes; but the basic necessaries of life ure free of indirect taxes.
The honorable member foi: Melbourne (Mr. Calwell), who aspires to become the Leader of the Labour party in the near future, and, therefore, the heir-apparent to the Prime Ministership, said that this Government had imposed the sales tax on salt and pepper and many other basic necessities of life. Evidently he had forgotten, or chose to ignore, the statement made by his leader in 1949. During the suspension of the sitting I took the opportunity to find out the real position in the days between 1946 and 1949. We have heard a good deal of talk to-day about the imposition of sales tax on kiddies’ ice-cream and confectionery-
– The sales tax was imposed upon ice-cream and confectionery by a. non-Labour government.
– I shall give the honorable member for’ Shortland (Mr. Griffiths) a little information about these matters. I have found that the Labour Government imposed sales tax on icecream at the rate of 25 per cent, in 1946-
– Surely not?
– Yes. I shall be a little magnanimous about that, and admit that the tax was imposed at that rate in the immediate post-war period when conditions generally were somewhat difficult. But in 1947, which was the beginning of the golden age of which Labour members dreamed, ice-cream was still subject to sales tax at the rate of 25 per cent.
– What was the rate in 1949?
– The rate was .10 per cent, in 1948 and 8$ per cent, in 1949. The Labour party had an opportunity over four years to abolish sales tax on ice-cream and confectionery. In this debate Opposition members have stated quite freely that an incoming Labour government will abolish the imposts on those items. Well, the preceding Labour Government had four years in which to please the kiddies in that way, and now Labour members talk glibly to-day about what they would do if they were in office. The honorable member for Melbourne referred to the imposition of sales tax on salt and pepper. I find that sales tax at the rate of .124 per cent, was imposed on. salt and pepper in 1946. The tax was reduced to 1.0 per cent, in 1947, remained unchanged in 1948, and was further reduced to 8-?, per cent, in 1949. Children’s toys in 1946 wore subject to sales tax at the rate of 25 per cent. This was reduced to 10 per cent, in 1947, and to 8& per cent, in 1949. Of course, children’s toys are exempt from, sales tax to-day. When Labour was in office, sales tax was imposed on what were then called Dedman’s tailless shirts. It is useless for Opposition members to say that sales tax must be abolished and that it is most inequitable. The Labour party had the opportunity for four years after the end of World War II. to abolish the sales tax, but Labour Ministers in those days were satisfied to tell the people that they were living in the golden age. The gentleman who devised the tailless shirt is reported in Hansard, of the 19th November, 1949, as having said -
There are qualifications to the Labour party’s desire to decrease or abolish indirect taxes.
May I be permitted, Mr. Speaker, to ask the Labour party through you what those qualifications to the abolition or decrease of indirect taxes are? Is this another of the many things which Labour does very little about when it is in office but which it speaks so glibly about when it is in opposition ? Mr. Dedman then proceeded -
It is true, as a matter of theory, that direct taxation is a much more equitable way of raising revenue than indirect taxation is, but on account of heavy war expenditures, the Government has not found it possible to grant greater concessions than it has proposed in the budget. 1 remind Opposition members that the war expenditures of the Labour Government in 1949 were substantially less than the war expenditures of the present Government. The international situation warrants the expenditure of the amount of money that the Government has provided for defence. Large expenditures are to be incurred within Australia for the various purposes of government. The honorable member for Melbourne discussed the amounts that had been collected from the people by way of sales tax. I do not know where he obtained his figures, but he began with the year 1939. I noticed that he stopped abruptly when he reached the year 1951-52 when the Treasurer (Sir Arthur Fadden) introduced what Labour decribed as the horror budget. I have taken the opportunity to get some figures from officials of the Taxation Branch, and I find that the percentage of sales tax collections to total taxation revenue are most interesting. In the financial years 1947-48, 1948-49, and 1949-50 that’ percentage varied between 11.2 per cent, and 1.1.7 per cent., but in 1950-51, the first full financial year of office of this Government, it dropped to 9.5 per cent. Then, as every one will recall, tha Korean war broke out, and it started to rise. To-day, it i3 13.9 per cent., or only 2 per cent, higher than it was in 1949-50, although since 1950-51 the Government has been obliged to meet heavy commitments in respect of the Korean conflict. I am amazed at the vast reductions of taxes that have been mad,. in the aggregate by this Government. As that money has gone into the pockets of the people, obviously the purchasing power of the community has increased to a corresponding degree and, consequently, the percentage of sales tax collections to total tax revenue must continue to rise in spite of reductions of this kind. In 1950-51, the Government was obliged to impose sales tax on sporting goods, games and toys at the rate of 33 per cent., whilst the sales tax on ice-cream and confectionery was increased to 20 per cent. In the meantime, however, sales tax on those articles has been appreciably reduced. These reductions have been effected in order to return to the people money which the Government had no option but to take from the.m in the days when the international position was such that our greatest democratic leaders declared that unless the democracies made themselves strong within a period of three years they would run the risk of complete annihilation. In those circumstances, any government would have been disgraced if it had refused to recognize its responsibilities. At present, sales tax is imposed in three categories, namely at rates of 10 per cent., 12-2 per cent, and l(5f per cent., but each of those rates is far below those that are applicable to similar goods in the United States of America and Canada and less than the purchase tax in Great Britain.
Whilst the Government was obliged to increase sales tax in the circumstances that I have indicated, the rates all-round have been reduced and, at present, are comparable with those that operate in any country in the democratic world. Members of the Opposition talk glibly about this Government retaining sales tax upon ice-cream. Labour is committed to remove that tax. When, a Labour government imposed sales tax on ice-cream, butter was rationed in this country, ostensibly for the purpose of making more butter available for export to Great Britain. The imposition of sales tax on ice-cream in that instance did not achieve that objective because the Labour Government permitted factories to transfer to the manufacture of dried milk products which were sold at a profit as high as 400 per cent, to near Eastern countries. It was left to this Government to reduce the sales tax on ice-cream, but portion of that tax was retained with the object of reducing the quantities of milk that were being used in the manufacture of chocolate and ice-cream and to divert greater quantities of milk for the manufacture of butter and cheese. Unlike the Labour Government, this- Government achieved that objective. I remind honorable members opposite that more ice-cream is consumed by adults than is eaten by children.. Any one may confirm that observation by visiting any eating, house in Australia.
I have answered many of the charges that honorable members opposite have made against the Government in thismatter. I should like the Government to give consideration to several matters to which I now turn. The first of them relates to the sales tax on printing matter that is used by rifle clubs. I am indebted to the honorable member for Lawson (Mr. Failes) for much of the information that I shall present to the House on this subject. Some of the reasons for which the rifle clubs claim exemption from sales tax on printed matter purchased and used by them are, first, the rifle club movement is a non-profit-making organization; and secondly, its objectives are the encouragement of proficiency in the art of rifle shooting among members of the defence forces, Australian rifle clubs and senior cadets, and also the promotion of rifle shooting generally as a necessary element in national defence. I do not know what honorable members opposite think about this matter, but Government supporters are desirous of giving every encouragement possible to national defence. On that ground alone, the Government would be justified in abolishing sales- tax on printed material that is purchased and used by rifle clubs. Another reason for the claim which these clubs make is that the rifle club movement is linked with the Army and, broadly, is run 011 lines laid down by the Department of the Army and is accountable to it. The rifle club movement is national in character: Futhermore, it conducts a competitive sport. The honorable member for Werriwa (Mr. Whitlam) referred to a shoot that is at present being conducted in his electorate for a well-known trophy. Rifle shooting differs from ordinary sport, in that every rifleman must take an oath, or make an affirmation of loyalty, and attest that he is willing to serve in Her Majesty’s defence forces.
Persons are permitted to join the movement only on a selective basis. Each member is. allotted a number on. the roll by the Supervisor of Rifle Clubs. As 1 have said, the movement is linked with the Army in national defence. Of course, the; Army, as a government department, is exempt from the payment of sales tax. I urge the Government to. give immediate consideration to the abolition of sales tax on. printed matter that is printed and used by these- clubs.. By the provision, of an- appropriate declaration, it would be possible to ensure that such matter that is exempt from sales tax shall be used’ only Ky rifle clubs. The loss to revenue if the sales tax on such printed matter were removed would be insignificant in relation to the national income, but, in that way the Government could- render substantial assistance to the rifle club movement. Some time ago, the Government saw fit to grant a concession of this kind to pastoral and agricultural societies which are non-profit-making organizations. Printed matter that is used by such societies is now exempt from sales tax. I again urge the Government to give consideration to this request which I make on behalf of the rifle club movement.
I also urge the Government to exempt from, sales tax motor car parts that are purchased by ex-servicemen who have lost an arm. The Government has given wonderful consideration to ex-servicemen generally. It has gone so far as to provide motor cars for ex-servicemen who are paralysed from the hips down. Ex-servicemen who have lost a leg can purchase motor car spare parts free of sales tax. I now make a plea that a similar concession be given to exservicemen who have lost an arm, because they find as much difficulty in getting around as do legless men.
The final request that I make relates to the egg industry. Recently, following the fall in the price of eggs overseas, the industry requested the Government to subsidize it. Unfortunately, however, only two of the States actually submitted a case on that matter, whilst three of the States, which produce a substantial proportion of eggs in this country, failed to do so. I request the Government to exempt from sales tax articles that are purchased by egg boards which, virtually, are the marketing authorities for the egg producers. Purchases which such boards are obliged to make on behalf of poultrymen should be exempt from sales tax. If the poultryman were permitted to market his own products he would, very likely, be entitled, as a primary producer, to an exemption of this kind.
– The wheat-growers enjoy that concession.
– That is so. I repeat that if the poultryman were permitted to market his own products he would probably be entitled to this concession. However, under State laws poultrymen are obliged to market their eggs through egg boards which are simply agents for the farmers on whose behalf they receive the eggs, grade them, pack them, export them and sell them on the local market. Those boards have made representations to the Taxation Branch that sales tax be lifted on articles which they are obliged to purchase. The Government has seen fit to lift the sales tax on grading machines, egg scales and equipment used in pulping plant. However, sales tax still applies to hydraulic trucks which are used on the grading floor. These trucks are not used in any way to make profit. It is requested that sales tax be lifted from purchases by egg boards of stationery, office machines, including bookkeeping machines and calculators, and sundry items of equipment and stores.
I urge the Government to give consideration to the matters that I have raised in the order that I have raised them. I support the bill. The Government has nothing to be ashamed of. It promised the people that it would reduce imposts of all kinds as the opportunity arose to do so. In respect of reduction of taxes, this Government has never made any fantastic promises, such as candidates nf the Australian Labour party made during the recent general election campaign. The Government will continue to pursue that policy and to reduce taxes as quickly as possible, because it believes that such benefits are due to the people having regard to our present prosperity which, I have no doubt, will continue to increase as a result of the sound policy that it has adopted.
.- The honorable member for Canning (Mr. Hamilton) concluded his speech on a note not of expectation but of hope. The people of this country have long since given up all hope that this Government will achieve anything constructive. The honorable member for Canning said that the Government had never made any fantastic promises and that it had carried out all the promises that it had made. He added that taxes had been steadily reduced and would be reduced still further as the economic prosperity of this country increased. In the first place, the Government did make fantastic promises. Whatever one may say about promises that were made during the recent general election campaign, no more irresponsible or extravagant promises have been made to the people than those which the present Government parties made to them during the general election campaign in 1949. The Government has since made no attempt to fulfil those promises, or even to justify them. By a simple sleight of hand, it raised taxes to extraordinary heights under what has been termed, for want of a better name, the horror budget. Simply described, it was a bad budget. It was bad in principle, bad in policy, and inequitable in practice. Not only did it fail to achieve its purpose, but, in addition, it actually pushed still higher the rising prices which were undermining the economy at the time and which the Government had promised to check.
The honorable gentleman then went on to say that the Government had been magnanimous in its efforts to assist the State governments. The most curious methods of finance in the history of any country have been practised by this Government. All sorts of strange procedures were followed in Germany prior to World War II., but they pale into insignificance compared with the manoeuvre that the honorable member described as the underwriting of State government loans by this Government. I shall briefly describe the history of that tragic period.. I refer, of course, not to the. position in? Germany, but to the position here..
This Government inherited a sound economy from the Labour Administration. The loan market was sound. A large investing public was prepared to entrust greater amounts than ever before to the bond issues of the Australian Government. That was the situation that this Government inherited. But what did it do? It deliberately forced the rate of interest higher. It did not do so on any economic ground. It could not have acted on any sound financial advice. Its action could have resulted only from the pressure applied to it by those who could gain financial advantage from higher interest rates. As I have said before, the newest office boy in the Treasury could have warned the Government of the effect of its action. When bond rates are raised and governments are still seeking to borrow, capital values must depreciate.
– Order ! The honorable member is talking of bond rates, capital values and the Lord knows what else. Let us come somewhere within measurable distance of the subject of sales taxation.
– I shall do so very briefly. You will recollect, Mr. Speaker, if you have followed the debate closely, as I am sure you have done, that the honorable member for Canning drew great comfort from his statement that this Government underwrote State government loans. With great deference, I remind you that you allowed him to go unchecked. I am answering his contention.
– The answer had better be very brief.
– Having destroyed the confidence of investors by the most effective method, the Government naturally could not fill its loans. But, instead of giving money from the Treasury to the State governments in order to underwrite their loans, it finally took money from all the people of Australia. It imposed a forced contribution on them and lent tho proceeds to the State governments. I emphasize that it did not raise a forced loan to be repaid at some future date. It extracted the money from the pockets of Australians as a forced contribution. Then it had the audacity to take that money and lend it, not give it, to tho
State governments at interest. That is the way in which it underwrote the loan issues of the State governments. It could not continue to do so for very long, because the tragic effect of that policy soon became manifest. The next way in which it raised funds to underwrite State governments’ loans was to issue treasury-bills.
– Order ! ls the honorable member approaching the subject of sales tax?
– I shall do so very quickly. Then the Government showed that-
– Order ! Is the honorable gentleman attempting to defy me? If so, he had better sit down.
– I would not attempt to do so, Mr. Speaker, but if the honorable member for Canning–
– Order ! I listened to the honorable member for Canning.
– If the honorable member made a major point of the subject to which I am referring, I submit that I have every reason to answer his argument. I say further to you, Mr. Speaker, that the honorable member for Fisher (Mr. Adermann), who is attempting to interject, makes a very poor effort when he is in the chair and is certainly not entitled to operate as Deputy Speaker from the back bench. I now move on to what the honorable member for Canning described as a deception practised by members of the Opposition. He said that we had not indicated that a Labour Government had introduced sales tax. We thought that the honorable member knew the facts of history. It is well known to almost every child in the Australian community that a Labour government introduced sales tax.
I move next to a comparison of the situation that existed when this Government came to power with the situation to-day. When the Government came to office, the general rate of sales tax - the really important rate - was 8-J per cent. The general rate applies to a very large body of commodities. The present general rate is 12$ per cent. Will any supporter of the Government in this House, or anywhere in the country, say, in the light of that fact, that the Government has carried out its announced policy of reducing taxes? The honorable member for Canning has said, as Government spokesmen said during the last general election campaign, that the Government will reduce taxation as prosperity increases and production expands. But supporters of this Government claimed during the election campaign that there was then a state of unprecedented prosperity in Australia, and the prediction made by the Government supporters when the budget was introduced not long ago was that we might not continue to enjoy such a high degree of prosperity during the current financial year. The Government’s tax estimates are based upon an expectation of reduced prosperity. It seems that, although the Government promised to reduce sales tax when prosperity justified a reduction, we have already passed what it regards as the peak of national prosperity.
Sales tax rates, instead of being reduced, have been doubled. I refer to the actual impact of the tax on individual Australians. Sales tax rates have increased, total collections of sales tax have increased, and the tax, as it applies to each individual in Australia, has very sharply increased under the regime of this Government. The budget papers for 1954-55 show that the sales tax rate in 1952-53 amounted to £10 3s. 8d. per capita. It rose last year to £10 14s. 8d. The estimate for the current year is £10 3s. Id. Thus, in the last three financial years, according to the Government’s accounting, the incidence of sales tax has fallen by the magnificent sum of 7d. per capita. But the records show that the Government’s estimate was completely out of touch with the final figures last year. That clearly will be the case again this year, so there will certainly be an increased collection, instead of a reduction, compared with the collection two years ago, and the cost of sales tax per capita will be much greater than it was in 1952-53.
I refer now, for the purposes of my comparison, to the budget for 1944-45, which, was presented by a Labour Treasurer. I have selected that year because we were then at the peak of the conflict in which we were engaged. The total col lections of sales tax, of course, were very much below the present level. But the rate per capita, too, was much below the rate at present. The actual collection per capita in 1942-43 was £4 Os. rid. In 1943-44 it was £3 16s. 9 3/4d., and the estimate for 1944-45 was £3 14s. lid. Thus, the official figures demonstrate that, by every test that can be applied, this Government has failed to honour its promises, and, indeed, has not even endeavoured to honour them. The general rate, which, as I have said, is the important rate because it applies to a very wide range of goods and services, is now .”)0 per cent, higher than it was when the Labour Government left, office. The rate per capita is more than twice as high now as it was in the peak year of Australia’s great war effort, which, up to that time, was the peak year of Australian taxation.
There is a great body of literature upon taxing systems as a whole, written by responsible experts. These writers direct attention to the essential needs of a sound, equitable and economic taxing system. Broadly, all enlightened writers have come to the conclusion that the three basic requirements are equity, a low cost of collection, and a tax, or body of taxes, that does not disrupt the national economy. Furthermore, every survey that has been made has led to the condemnation of indirect taxation such as the sales tax. This tax is called by different names in different countries. It is the sales tax in one, the purchase tax in another, and the turnover tax in a third. All qualified writers on the subject have condemned it. It is all very well to say, as the honorable member for Canning said, that sales tax does not apply to the items in the basic wage regimen. The truth is that sales tax is passed on, and is meant to be passed on, and that, except for a very limited range of goods, the sales tax is borne by the ultimate consumer of all goods and services. The tax does not rest where it is first lodged, but is passed on in the form of higher costs and higher prices. This Government now is passing on to every individual in the Australian community, whether he he rich or poor, family man or single, pensioner or wealthy businessman, a charge of approximately £10 per capita annually.
The general tax reductions for which the Government has made provision this year will be of slight benefit to men on the lower ranges of income but of great advantage to those with high incomes. Its pension proposals provide nothing for those in the worst financial position and give such benefits as are provided to persons who are in less needy .circumstances. The sales tax is not being lightened as the Government promised, but is being increased all the time. As I have said, the incidence of the tax has steadily increased until, on the average, everybody in Australia, regardless of hi3 financial situation or his family responsibilities, pays £10 sales tax each year. Indeed, as the honorable member for Burke (Mr. Peters) pointed out this afternoon, the man with the largest family responsibilities makes the greatest sales tax contribution out of a single income in the whole Australian community. A man with a dependent wife and two children pays sales tax on everything that his family eats, wears and uses. He pays sales tax on the needs of four people, whereas a single man in the highest income bracket pays for only one person. The single man might pay £10 a year in sales tax, but the man with a dependent wife and two children would pay £40 a year. That is an illustration of an inequitable method of imposing sales tax that works a real injustice on the Australian people.
The Colwyn committee on taxation of the British House of Commons reported that sales tax represents 11.3 per cent, of the income of the person in the lowest income range. That figure applies to any economy. But sales tax represents less than 1 per cent, of the income of the man in the highest income group. That fact demonstrates the regressive nature of the sales tax. The honorable member for Canning asked why the Chifley Government did not abolish the sales tax when it was in office. The Chifley Administration moved steadily towards that objective. It reduced the rates to low levels and each year .moved nearer to the stage at which the tax could be abolished entirely. This Government claims that it has had to undertake additional expenditure, that it has had to cope with inflation and that it has had to increase the rates of sales tax in order to meet its heavy commitments. In fact, the effect of sales tax is the reverse of that attributed to it by the Government. The burden of the sales tax is passed on to the consumer. First, it increases the cost of goods and services. Secondly, it increases the cost of products that compete in overseas markets. It increases, also, the cost of goods and services in the home market, and imported goods also are subject to it. The net effect of the sales tax is to make inflation worse. This Government has made no attempt to reduce the pressure of inflation. In fact, by increasing the sales tax, it has done the reverse of what it claims. This Administration throughout its term of office has regarded the sales tax as revenue-producing and has used it on a large scale for that purpose. It has changed the proportion of indirect taxation to direct taxation and, for the raising of revenues, has leaned more heavily on the sales tax and other regressive and inequitable taxes than on income and other direct taxes. It has completely reversed the relation between direct and indirect taxes that was established by the Labour Government.
The Government parties also have made the sales tax more complex and more expensive to collect every time they have been in office. The first Menzies Government introduced a number of categories of sales tax in 1940. The Chifley Government reduced the sales tax rates. The present Government increased the rates and the number of categories, which now number six. This measure introduces still another new category, and further increases the complexity of the sales tax and the cost of its collection. YOU, Mr. Speaker., do not need me to tell you that that is the case. The honorable member for Petrie (Mr. Hulme) pointed out this afternoon that increasing the number of categories makes collection more difficult and expensive, and entails greater expense to businesses, which have to makes sales tax returns. That statement is very true. The expense and trouble imposed upon businesses helps to increase the cost of goods and services by more than the amount of the sales tax. which, also, further directly increases the cost of goods and services. In fact, the sales tax is one of the prime causes of the inflation that exists at the present time. The cost incurred by business firms in collating information and making returns to the Taxation Branch, being a business cost, is a deduction for income tax purposes. As a result, the amount of income tax collected is less than it -would otherwise be. Any sales tax, and particularly one of the present magnitude, inevitably reacts adversely upon the total collections from other forms of direct taxation.
There is no need for the Australian Labour party to defend its administration of the sales tax. The Labour Government moved steadily and directly towards a reduction of the field sales tax. It sharply reduced the rates and the categories of tax each financial year. Labour need fear no charge that might be made by Government supporters on that score. The Labour Government’s record stands alone in the history of Australian financing. This Government, on the contrary, is increasing the rates of tax, the total amount collected and the per capita burden of the tax. This Administration has not honoured its election promises, and it has failed to continue the reasonable policy of reductions as soon as commitments would allow, which was adopted by the Labour Government. Not only are the existing rates of sales tax viciously inequitable to individuals in the community, but also they adversely affect the price structure. That is one of the most worrying features of the national economy at present. The present high rates of sales tax do not result in the collection of commensurately increased revenue, and they must sharply reduce the collections of income tax. As I have pointed out, the cost incurred by business firms in preparing and making returns of sales tax, substantially reduces the collections of income tax, which is based upon the taxpayer’s income and ability to pay. Government supporters may talk as much as they like in the Parliament and outside it, but they cannot justify a claim that this Government has honoured the promises that the Liberal and Australian Country parties made to the electors before the general election in 1949. Far worse, it has not even attempted to honour those promises. Government supporters may argue on any economic ground they choose, but this Government’s attitude and policies are completely condemned on any sober analysis and any reasonable appreciation of economic standards. This Administration is not adopting sane methods of finance. It is not using practicable and sensible means of raising necessary revenues and of halting the increase in prices.
This measure is bad. It is a consequence of a bad budget, and it is part of the work of a bad government, which took over a sound system, let it run haywire and then relied on an emotional appeal to the electors to extend its life and allow it to continue its work, which has been bad in every respect. Government supporters have no comprehension of sound financial policy. They do not look closely at the effect of taxation measures such as this one. They do not look to see where the burden of taxation finally rests. They do not concern themselves with the economic effects of their taxation policy. Until this Government is removed from office, there will be little hope for Australia’s economic future. Unless development can be advanced by sane and sensible methods it is of little use to expend vast sums of money on defence.
.- I should like to make a plea for the exemption from sales tax of private railways in Australia. It is probably not generally known that there are a number of private railways in Australia, which pay sales tax, payroll tax, income tax and other taxes, from which public railways are exempt. I refer particularly to the Emu Bay Railway Company, which operates 88 miles of railway line between Burnie!, in northern Tasmania, and Zeehan, on the west coast. That company has been in operation for more than 50 years. During that time its financial position has steadily deteriorated. It has provided for Australia, and particularly for the people of the north-west coast of Tasmania, a service that no other private or government organization, was willing to give. The Treasurer (Sir Arthur Fadden), in his second-reading speech, referred to the exemption from sales tax of aircraft and aircraft parts, and stated that it was. relevant to note also that ships are not subject to sales tax and that railway rolling-stock is not subject to sales tax, because of the exemption allowed to government departments. It is clear that railway rolling-stock and equipment are not subject to sales tax.
The Emu Bay Railway Company employs 230 men at present. It has a nominal capital of £350,000 and a SUDscribed capital of £300,000. I am sorry to say that it has issued debenture stock to the total of £397,000. After writing off shareholders’ capital to the amount of £143,000, it now owes to debenture shareholders £266,000. It is not a matter only of exemption from sales tax, but also of the other taxes that the company must pay. This private railway has done a particularly good job for the mining interests on the west coast of Tasmania. The Electrolytic Zinc Company of Australasia Limited consigns from Rosebery 75,000 tons of concentrates a year. That company and the other mining companies on the west coast of Tasmania have no road outlet from places such as Renison Bell and Tullah. The railway transports the products of those companies at very high charges - ls. 2d. a mile for concentrates, and ls. a ton for ordinary goods traffic. Those mines could not continue in existence without the service provided by the railway. I ask the Government to give attention particularly to the sales tax imposed on railway equipment, some of which is produced by the railway company at its own factory at Burnie, and some of which is obtained overseas. The company pays customs duty, import duty, payroll tax, sales tax and, in addition, as I have said, income tax It must receive assistance. It receives no help from the Tasmanian Government, and it should be assisted by the Australian Government easing the burden of the taxes that I have mentioned. It is unreasonable to expect the railway company to pay such heavy taxation. The position of the company is reflected in its balance sheet, which shows that, at the end of 1935, £59,000 was owing as interest to debenture holders. In 1940 the amount owing had increased to £122,000, and in 1953 to £269,000. I suggest that that is not a reasonable burden for any private company to bear, and in my opinion it is the responsibility of the Commonwealth and also of Tasmania to do their share towards assisting this company which is providing a service for the mines on the west coast of Tasmania that ,no other body or concern is prepared to provide. Australia owes a great debt to this particular company, because it assisted in the production of 70 per cent, of the copper used in Australia during the last war, which was mined on the west coast of Tasmania. It also assisted in production of a very big proportion of the zinc, that we then used, and I remind honorable members that zinc is produced in Australia at a much lower price than it is produced in many other parts of the world, that much of the zinc that Australia produces comes from Roseberry on the west coast of Tasmania and this company assists in its production. Therefore, Australia owes a great debt to the company. It is probably far too late for the Government to include private railways among those bodies that will be exempted from sales tax, but I do urge that the Government should, at the next opportunity, include private railway companies among those bodies so exempted. There are very few private railway companies in Australia, and the Emu Bay Railway Company on the west coast of Tasmania is probably the only one that is at present acting purely as a private railway company. The Midland Railway Company of Western Australia. Limited is engaged in pastoral and manufacturing activities as well as conducting a railway, and therefore is not in the same category as the Emu Bay Railway Company. In Queensland there are private railway lines operating in connexion with the sugar industry, but they are not run for the general public. Therefore, I strongly urge that the Government should give earnest consideration to assisting the Tasmanian company that I have mentioned.
.- 1 believe that some of the remarks made by honorable members of the Opposition should be elaborated, and that Government supporters who have contended that the sales tax proposals will be extremely beneficial to the people of Australia should be answered. I shall refer to the history of the sales tax in this country, in order to answer the honorable member for Balaclava (Mr. Joske), who drew attention to the fact that sales tax was first introduced in Australia by the Scullin Labour Government in the early 1930’s. While that is quite true, the honorable member should appreciate the circumstances that confronted the Labour government of that time. He knows, and we all know, that at that time most of the sources from which the government drew its revenue were drying up, and that new sources of revenue had to be exploited if the wheels of government were to be kept turning during the depression. Therefore, although it is correct to say that a Labour government introduced sales tax, it is also correct to say that it imposed the tax with far less severity than has been done by succeeding governments.
There is very clear support for that contention in the 30th report of the Commissioner of Taxation. In that report the Commissioner drew attention to the fact that in 1930-31, when the sales tax was introduced, it brought in £3,473,000 and sales tax collections were 6.9 per cent, of the total collections of taxation throughout the Commonwealth. Moreover, the rate of taxation was only 2-1 per cent. However, during the years following 1930-31 successive governments realized that the sales tax was a very valuable component of the government revenues, and consequently they made very little effort to contract the incidence of the tax. The Opposition has repeatedly pointed out that this Government has nothing to be proud of in its history of sales tax imposition. I again quote from the 30th report of the Commissioner of Taxation and draw attention to the rates of tax that have been levied by governments other than the present one. During the first ten years of the operation of the tax, from 1930 to 1940, the tax rate increased from 2$ per cent, to 8$ per cent. But in 1941, a year in which we suffered increased pressure from war, the rates became 5 per cent., 10 per cent, and 15 per cent. In 1942-43 they were 5 per cent., 10 per cent, and 20 per cent., in 1943-44 they were 12$ per cent, and 25 per cent., and in 1944-45 they were 7$ per cent., 12$ per cent, and 25 per cent. At the end of the war the then Labour Government reduced the rates of the sales tax so that they covered only two fields, the rates being 10 per cent, and 25 per cent. It remained for this Government, which was pledged to a policy of reducing direct and indirect taxes, to set an all-time high level for rates of sales tax and consequently an alltime high level for collections from tax.
In 1949-50 the rates of the tax were increased to 8$ per cent, and 25 per cent. In 1950-51 they were increased to Si per cent., 10 per cent., 25 per cent., and 33^ per cent., and in 1951-52, as a result of what is now known as the horror budget, they were increased to 12$ per cent., 20 per cent., 25 per cent., 33-J per cent., 50 per cent, and 66f per cent. Therefore, even considering only the rates of the sales tax, it cannot be said by the most magnanimous supporters of the Government that the Government ha3 anything to be particularly proud of in its dealings with the sales tax. In their campaign before the general elections of .1949, the Government parties said quite a number of interesting things to the electors. Among the promises that were made, but not carried out was the following promise made by the Treasurer (Sir Arthur Fadden) : - ‘
If the socialists are defeated, the rates of taxation, both direct and indirect, can, and will be steadily reduced. In short, our policy it- a successive reduction of taxation on individuals and on the community in general.
Of course, the Treasurer meant the Labour party when he referred to the socialists. Not to be outdone in generosity, the general policy of the Government parties at that time emphasized tax reductions. The policy stated-
We still believe that rates of taxation must be steadily reduced as national production and income rises, and as economies are effected in administration. We will review the incidence of indirect taxes, which are a huge though sometimes unrecognized item in Australia, upon basic wage and cost of living rises and bousing costs.
I agree with what has been said to-day by the honorabel member for Burke (Mr. Peters) and other members of the Opposition who stated that sales tax falls with greatest severity upon the working class families and upon those who are ir receipt of small incomes, and to my mind it is not a tax that can be continued with equity and with any consideration of the struggles of the family man. I am not alone in thinking that way. A former Prime Minister of Australia, the late Right Honorable W. M. Hughes, concurred with that opinion in 1930 when he said -
What with income tax increases, increased, customs taxation, increased excise duties, primage duties, land tax and now this sale tax plucking our plumage, we have hardly a feather left.
Then he made another very true statement. He said -
The effect of sales tax of course will be to reduce the purchasing power of wages by increasing the cost of living, and make necessary, or at all events desirable, increased, wages. This being done there will naturally follow increases in the cost of living again, in turn making necessary a further increase in wages and. so on.
The present Minister for Health (Sir Earle Page), supporting Mr. Hughes at the time, made the following statement -
This taxation (the sales tax) will make living no cheaper but dearer. We could not impose more harassing taxation upon the workers, the consumers and the common people of this country.
Those remarks, made in 1930, artstrangely inappropriate when one remembers that the Minister for Health is a member of the present Government, which has a most iniquitous record in the sales- tax field. The figures that 1 shall now quote are rather interesting, and have some bearing on the claim of the Government that it is progressively reducing the sales tax. They indicate a complete negation of the promises that it made in 1949 to reduce taxation. From the year 1946-47 to the present time, the taxation per head of the people of this country increased from £49 l’6s. 9d. to its present rate of £99 8s. 7d. Of that latter figure, the people to-day pay £36 13s. 7d’. per head in indirect taxation. Indirect taxation is a contribution to the Government’s revenues through the sale3 tax, the excise and any other imposts that are not taken into account in the income tax. Every Australian pays £10 a head each year out of that £36 13s 7d. as sales tax. The average family unit in Australia is considered to be four persons, consisting of a husband, wife and two children. There is a sales tas impost on the average Australian family of £40 a year. In other words, there is a levy of 15s. a week on the family budget.
The total amount of sales tax that was collected from the year 1931 to the year 1949, when the Labour Government went out of office,, was £404,000,000. The average annual collection of sales tax for those nineteen years was £21,300,000. The record of this Government since it assumed office at the end of 1949 has been an inglorious one. In 1950-51, the total collection of sales tax: by the Menzies Government was £57,000,000. In 1951- 52, the total was £95,500,000; in 1952- 53, it was £89,000,000; and, in 1953- 54, it was £95,500,000. It is estimated that, in the current financial year, the total’ sales tax collections will amount to £92,000,000. In other words, for the five years that this Government has been in charge of the financial affairs of the nation, there has been a total collection in sales tax of £429,000,000, an average of more than £85,000,000 a year, or four times the average for the nineteen years ended in 1949. In the. last four years of Labour’s administration, the total collections of sales tax amounted to £152,000;000, or an average of £38,000,000 a year. I point out that, in the four years from 1946 to 1949, the Labour Government had to finance costly post-war rehabilitation plans and other schemes. [Quorum formed.] This Government has collected more than twice as much sales tax as the Labour Government collected in the years from 1945 to 1949, when it had. to finance the costly post-war rehabilitation plans that it put into operation. When the position is correctly analysed, it is seen that the Government has very little of which it can be proud.
I draw the attention of the House to the fact that, in the current sales tax proposals, a very humanitarian approach has been made to the problem with which young people are confronted. It is proposed to reduce sales tax on goods in Statement A from 12$ per cent, to 10 per cent. Furniture is included in that category. I have heard supporters of the Government say, with a great deal of pride, that that is a step in the right direction. Although it is something to be appreciated by those who are commencing married life and who are setting up homes, the imposition of 10 per cent. sales tax on furniture is not in the best interests of the community. In my opinion, sale tax on furniture should be abolished. In adopting that attitude, I have the support of no less a distinguished authority than the Vice-President of the Executive Council (Sir Eric Harrison). With tears in his eyes and a throb in his voice,, the right honorable gentleman made the following statement in relation to the sales tax proposal that was introduced by the Labour Government -
The happiness, harmony and satisfaction of young couples would mean far more to this country in the long run than the obtaining by the Government of even hundreds of thousands of pounds by way of sales tax on these commodities.
– The Government has reduced sales tax by £4,000,000 this year.
– But it is still imposing 10 per cent, sales tax on household furniture. The right honorable gentleman who made that very desirable and. laudable statement is still a member of a government which imposes 10 per cent, sales tax on household furniture. In that spirit of humanitarianism that generally applies itself to the principles that the light honorable gentleman enunciated, he made the following statement: -
Young couples, who are embarking on married life, in addition to having to pay exorbitant prices to get their homes built, must pay sales tax on their bedroom suites, the mattresses on which they will sleep, thu tables and chairs that they will use, and the knives and forks that they will UBe when having their meals.
– That was a very good speech.
– The laudable sentiments that prompted the right honorable gentleman on that occasion are sadly absent from, his support of the proposal now before the House.
– The Government proposes to reduce sales tax by £4,000,000.
– The Government may propose to reduce the tax’ by £4,000,000, but it still proposes to collect £92,000,000 from 9,000,000 people. Since the Government assumed office, the collections of sales tax have been increased by nearly 45 per rent. The Treasurer (Sir Arthur
Fadden) did not wish to be outdone in generosity by the Vice-President of the Executive Council, because, when he, too, was discussing the sales tax proposals that were introduced by the Labour Government, lie made the following statement
– -From which book is the honorable member quoting?
– I am quoting from Hansard of 1952.
– It is not document J, by any chance?
– It is not document J . It is a very reputable document which the honorable member for Capricornia (Mr. Pearce) and the Vice-President of the Executive Council might well study when they are making comments on proposals before the House. We can imagine the tears that were in the eyes of the Treasurer when he made the following statement on the same subject in 1948.: - fs there any parent who would allow his child to grow up through a toyless and party- less childhood, or without some indulgence in sweets or ica cream ? It is only those of us who have experienced the intense happiness that children get from the simple pleasures, who can appreciate the official niggardliness that taxes them so severely.
– Who made that statement ?
– The present. Treasurer.
– I simply cannot hear the honorable member who is speaking. I ask honorable members to cease their private conferences.
– The Government., which takes a great deal of pride in telling the world that it has carried out its 1949 pre-election promises to reduce all rates of taxation, fails lamentably to prove its contention when that contention is subjected to the scrutiny of figures and facts. Honorable members on both sides of the House are justified in stating that certain items should be removed altogether from the schedules. Certain items should be removed from the sales tax schedule if this young nation is to develop properly. I submit, with very great respect, that the Opposition has proved conclusively, for the benefit of those who can think - and I make that exclusion - that there is nothing in the boast of the Government that it has done a great job in the field of sales tax.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 6 agreed to.
Clause 7 (Aeroplanes).
Mr. CREAN (Melbourne Ports) 3 0.13]. - I call the attention of the committee to clause 7, and to what seems to me to be a rather wicked proposal that is contained therein. The clause states -
Notwithstanding anything contained in any Sales Tax Assessment Act, sales tax is not payable, and shall be deemed not to have been payable, upon the sale value under any Sales Tax Assessment Act of an aeroplane, including a Hying boat, seaplane or helicopter, if the transaction, act or operation in relation to which the sale value arose was effected or done on or after the first day of January, One thousand nine hundred and forty-six, and before the commencement of this Act.
I call the attention of the committee to the fact that the operation of this clause is retrospective for eight years. It frees from liability to taxation sales which, technically, have been subject to taxation during that period. That clause should be read in conjunction with the report of the Auditor-General for the year ended the 30th June, 1954 which, at page 27, directs attention to an item of sales tax on aircraft. The report reads -
Recent enquiries revealed that sales tax of approximately £393,750 had not been paid by an airline company on aircraft imported since February, 1940. An investigation by Taxation officers disclosed that, in addition to £143,750 payable on two aircraft imported at the end of 1053, for which extension of time to pay had been granted, the company concerned had not paid sales tax of approximately £250,000 uri fifteen other aircraft imported in earlier years.
The company secured entry of the aircraft into Australia by quoting the number of its certificate of registration under the Sales Tax Assessment Act, but failed to declare when the aircraft were placed in commission and to pay the sales tax involved. The total amount of such tax was still owing to thu Commonwealth on 30th June, 1954, but doo not appear in the statement of outstanding taxes hereunder because it had not bee, assessed by the Commissioner of Taxation at that date.
Then the Auditor-General makes the following pertinent observation: -
It is noted that, in the Sales Tax (Exemption and Classifications) Bill submitted to the Parliament on 18th August, . 1954, provision is made that sales tax be not payable upon aeroplanes retrospectively to 1st January, 1940.
He was referring to the present bill. There are two things that should be mad« clear. Each year in the report of the Commissioner of Taxation is published a list of the names of individuals who have committed sales tax offences. The3«? names are published to the world, as it were. In this case, however, we have a company which has deliberately refused to pay taxation, but in the report of the Auditor-General it enjoys the shelter of anonymity. I presume from, the size of the amount involved that the company concerned is Australian National Airways Proprietary Limited.
– How much is involved ?
– £393,000. Now we have a bill, which contains a provision that is to operate retrospectively to this 1st January, 1946, the effect of which is to alter the policy deliberately laid down by a previous Government. I cited in this chamber to-day the case of an unfortunate woman who was attempting to rehabilitate herself, who found that, as a result of some technicality, she had become liable to sales tax. If sh-j had refused for six or seven years to pay the amount of sales tax due, how would the Government have treated her? Whether there is any justification for this provision in the bill, and whether Australian National Airways Proprietary Limited should have paid the tax, is beside the point. Legally, the company was liable to pay it in terms of the legislation that applied at the time. Any aircraft purchased by Australian National Airways Proprietary Limited in the period from 1946 to h”e present time is technically liable to the general rate of sales tax which operated during that period, and ranged from 8J, per cent, to 10 per cent, or 12$ per cent.
– Why was it excluded?
– I also ask why it was excluded. Why was this allowed to continue in abeyance for so long?
– Order! The honorable member for East Sydney (Mr. Ward) must remain silent.
– The Auditor-General directed attention to the matter in his report. This bill- may create a very dangerous precedent. It provides for a discrimination in favour of a large concern, as against individuals in the genera] run of taxpayers who, through some technical fault, might have, either wittingly or unwittingly, made mistakes in their returns, and might have their names published in the annual report of the Commissioner of Taxation. Here is a company which, as I see it, has blantantly refused to pay sales tax, and now this Parliament is being asked to pass a legislative provision that will operate retrospectively to a date in 1946 which precedes the purchase of the aircraft concerned. I think that this is a critical matter, and I feel that there is an obligation on honorable members to inquire into it fully, instead of simply letting it slip through this last clause of the bill which, I submit, is out of countenance with the rest of the bill, which simply deals with changes of rates of sales tax and exemption of some items from sales tax. In this case the whole amount involved is to be made free of tax. I am not impressed by the reasoning that the Treasurer gave when he introduced the measure. It seems to me thai, there is deliberate discrimination in favour of this company, which the Auditor-General chose not to name in his report. The inference to be drawn from the size of the amount involved - because it represents an expenditure of about £3,000,000, since the rate of tax was between S-:V per cent, and 12^ per cent, in the relevant periods - is that the company concerned is Australian National Airways Proprietary Limited. It seems to me to be most unfair and unjust that this clause should be made retrospective in operation. I suggest that if we permit a government to alter, as it were, the policy of a previous government, we shall create a dangerous precedent. It may be that the Government considers that Australian National Airways Proprietary Limited ought to have been placed years ago on the same basis at Trans-Australia Airlines, but the Government should only be in a position to implement that policy from the time it took office, and should not be able to go back so far into history and deliberately alter the policy of a previous government. There are dangerous precedents involved here, and 1 consider that the Government should give a better explanation of the necessity for this clause than was given by the Treasurer.
– I rise only to reply to the honorable member for Melbourne Ports (Mr. Crean), because I am astonished that he should, have mentioned any names in regard to this matter.
– Why should he not have done so?
– Because he dom not know which company is involved.
– The company involved is Australian National Airways Proprietary Limited.
– Order! I have asked honorable members to remain silent, and I expect them to do so, or I shall have to deal with them.
– I only said, Mr. Chairman, that the company involved was Australian National Airways Proprietary Limited.
– The honorable gentleman knows-
Dr. Evatt and Mr. Whitlam interjecting,
– Order! The honorable member for Werriwa (Mr. Whitlam) and the Leader of the Opposition (Dr. Evatt) are disobeying the order of the Chair.
– The honorable member for Melbourne Ports knows the provisions of the law very well. One provision of the law is that if a criminal offence has been committed, it is the responsibility of the. authorities to pursue the remedies available at law. If, on the other hand, there has been a deliberate attempt at evasion of taxes, and that attempt is discovered, it is the responsibility of the Com missioner of Taxation to file his report in this House, specifying the amount involved in the attempted evasion, and giving the name of the offender. It is not proper for honorable gentlemen to bandy names about in this chamber unless there is proof of the identity of the organization involved, and nobody knows that better than the honorable member for Melbourne Ports. Names should not be mentioned until an inquiry has taken place and responsibility has been properly sheeted home. It is disgraceful that the honorable member for Melbourne Ports should have acted as he has done. If such conduct were indulged in by an honorable member on this side of the chamber every honorable member opposite would be speaking about the liberty of the subject, the protection of the rights of the individual, and so on.
I come now to the facts. It is perfectly obvious that in this case there was no attempt at evasion, and that a bona fide mistake was made, because it was as a result of information supplied to a Commonwealth department by the company concerned that the mistake waa discovered and that the question of whether or not tax should be paid was raised. At that time there was already a tax appeal pending, and nobody could have said conclusively then whether or not the tax was payable. At that time also, the Government was making its decision that sales tax on aircraft and aircraft parts would be abolished. The history of this matter shows that in 1946 and 1947 British Commonwealth Pacific Airlines and Qantas were granted exemption from the payment of sales tax. TransAustralia Airlines has not paid sales tax in respect of aircraft it has purchased. It was included for tax purposes only in 1952, but, owing to the fact that it had not purchased any aircraft until recently, the purchases having occurred after the date on which the Government made its decision that sales tax on aircraft and aircraft parts would not be payable, Trans-Australia Airlines has paid no sales tax, and it will receive the benefit of this measure. The ‘Other two ‘Companies were specifically exempted from payment of sales tax in 1946 and 1947. There sv.as no attempt .at evasion ‘by the company concerned in this case, because,, as I have said, a bona fide error was madeat a time when a taxation appeal waspending. On all those grounds, I venture to suggest that nobody could possibly blame or criticize the Government- for the action it has taken.
Two things should be home very clearly in mind. The first is that the Government has decided to put commercial airline companies, as far as is reasonably practicable, on terms of fair competition with the Commonwealth owned airlinecorporations. Whilst that cannot be done in identical terms and with complete justice, none the less an attempt is being made to put all the companies on a basis of fair competition. The other point which the honorable member for Melbourne Ports might like to know is that already rolling stock owned by governments, and ships, are exempt from salestax. This bill merely extends that exemption to one other system of transport.
– Motor transport pays sales tax.
– Yes, but of a different kind. The Government says clearly that it is wrong for the honorable member for Melbourne Ports to bandy names about in this chamber. Although he knows that it is improper for him to do so, he has done so in the knowledge that he is protected by Parliamentary privilege. I repeat, in order to make the point perfectly clear, that the company concerned acted bona fide throughout. It was as the result of its own action, in stating its position to a Commonwealth department, that the possible non-payment of tax was discovered. I say quite clearly that I know the company acted in good faith.
– Did the Labour Government collect the tax due?
– No, it did not, although it had ample opportunity to do so. There is one other important factor in this matter. I wonder whether the Leader of the Opposition (Dr. Evatt) will question whether the AuditorGeneral has a complete right to make statements of the kind that were read out hy the honorable member for Melbourne Ports, because I remember that when the right honorable gentleman was AttorneyGeneral in 1949 the acting AttorneyGeneral ruled that it was not the responsibility of the Auditor-General to examine the affairs of private companies. His responsibility was to see that public moneys were properly collected and expended. The acting Attorney-General said that it was not the responsibility of the Auditor-General to encroach upon what might be regarded as the field of the Commissioner of Taxation. I wish to make that point clear, because I believe that there was no necessity for this matter to have been raised. In due course, as a result of the normal checks made by the Taxation Branch, the matter would have been discovered. The honorable member for Melbourne Ports probably knows that there have been regular cycles of examination of the affairs of various companies. At one time the cycles were of three years, but they were extended to four, and then to five years, the reason for the extension being the reduction of staffs in the Taxation Branch, which meant that examinations could not be carried out as regularly as formerly. This company has a good record and is known for its high reputation. So, on all the facts, I submit that this company acted bona fide. The Government has acted quite properly in seeing that one section of the transport industry was relieved from the payment of sales tax. When we realize that one of the great responsibilities of government is to keep the cost of living low, and, therefore, to keep the cost of transport low, I think that every one who gives the matter proper consideration will concede that, far from being differentiation and far from giving a privilege, it was a very proper course to take, and one which will be commended by all sensible citizens.
.- Mr. Chairman-
Motion (by Sir Eric Harrison) put -
That the question be now put.
The committee divided. (The Chairman - Ms. C. F. Adermann.)
Majority . . . . 11
Honorable members interjecting,
TheCHAIRM AN.- Order ! If honorable members will not remain quiet, I shall name them.
Question so resolved in the affirmative.
Question put -
That the clause be agreed to.
The committee divided. (The Chairman - Mr. C. F. Adermann.)
Majority . . 10
Question so resolved in the affirmative.
Title agreed to.
Bill reported without amendment; report adopted.
Motion (by Mr. McMahon) - by leave - proposed -
That the bill be now read a third time.
.- This bill should not be allowed to pass until the Government gives a satisfactory explanation of the provision to which the honorable member for Melbourne Ports (Mr. Crean) has directed attention and which seeks to give retrospectively a substantial benefit to an airlines company, or perhaps, to a number of airline companies. Such action borders on a public scandal. The principal company concerned has successfully evaded the payment of a substantial sum by way of sales tax. Of course, as the Government parties rely to a large degree upon this organization for financial support, the Government is prepared to capitulate to it. For that reason it has introduced this measure under which it will make a gift of a substantial sum to that company. The Parliament should demand from the Government a better explanation of this matter than was vouchsafed to the honorable member for Melbourne Ports when he raised it. The Government must answer two major points. First, it must explain why it introduced a measure of this kind at all. If any person, or organization, is liable to the payment of a tax of any kind, the Government should enforce the payment of that tax. In this instance, the Government, apparently, does not desire to follow that course which it could have followed at any time since it assumed office. It allowed the matter to run on for several years, and now it has introduced this measure which will make retrospective the exemption of an airlines company from the payment of sales tax. As a result, according to the Auditor-General’s last annual report, the company will benefit to the extent of approximately £400,000.
The second point that the Government must answer, and to which the honorable member for Melbourne Ports referred, is why it has made a provision of this nature retrospective to the time that it assumed control of the Treasury bench. That is not the way in which a measure of this kind should operate. Such differentiation in the treatment of persons liable for payment of tax will be deplored by the country. But the Government has done far worse by making this measure retrospective for a period that includes a. number of years in which the Chifley Labour Government was in office. The Parliament, at that time, imposed the sales tax in question. Now, this Government actually seeks to revoke that law in respect of a period prior to the date at which it assumed office. The Government has cancelled a decision that was made by two Parliaments before it assumed office. If the Minister vouchsafes an explanation on that point, he will probably say that a remarkable thing occurred. He will probably say, in effect, “ The company came along and said that it forgot to pay this tax, but is prepared to pay it now “. The Government says to the company, in effect, “We do not want you to pay this tax. We shall remit it. We shall introducea measure for that purpose and make that remission retrospective for a period of eight years in order to give you a benefit of ?400,000 “. Such action borders upon a public scandal. The Parliament and the country must demand a complete explanation of this matter. If such an explanation is not forthcoming, public confidence in the equity of our taxation laws will be shaken. Persons, or organizations, who may be arraigned in the future for a breach of a taxation law will surely feel at a great disadvantage if they have no influence over the Government when they know that in this cast: a wealthy organization has come along and said to it, in effect, “ True, we owe you sales tax, and true, we should pay it “ - it was not until the matter was dealt with in the Auditor-General’s report that the company conrcerned admitted liability in this respect - and the Government has replied in effect, “ Jolly bad luck. Of course, you are powerful and you have friends’ in high places. We will remit your liability in respect of tax that you incurred over eight years ago “. The Government may offer the defence that Trans- Australia Airlines and British Commonwealth Pacific Airlines have not paid sales tax. Those organizations are owned and controlled by the Government. Obviously, if they were liable for payment of sales tax their earnings would be effected to a corresponding degree and the Government would be obliged to assist them in another way. The position of those organizations differs entirely from that of private airline operators. Such an argument merely begs the issue, and can be advanced only as a smoke screen to obscure a matter that demands a complete explanation from the Government which will stand condemned if it fails to give such an explanation.
Sir ERIC HARRISON (WentworthVicePresident of the Executive Council and Minister for Defence Production) of nonsense spoken in this chamber as has been uttered by honorable members opposite during the last half-hour or three-quarters of an hour on the matter which the honorable member for Perth (Mr. Tom Burke) has again raised. I allowed the honorable member to complete his remarks in order that it might be made quite clear to those who may be listening to this debate that the Opposition is endeavouring to seize upon this matter as a means of diverting public attention from the position that has developed within the last few days in the ranks of the Australian Labour party.
Honorable members interjecting,
– (Hon. Archie Cameron). Order! It appears that both the number of honorable members present and the tension have increased since the House was in committee. I shall insist upon quietness being maintained from now on. I shall deal with any honorable member who interjects.
– I shall make clear the insincerity of the approach of honorable members opposite to this matter. The Labour Government had the right to collect this sales tax in the years 1946, 1947, 1948 and 1949, but it refused to do so. Now, members of the Opposition say that this Government should collect this tax which they themselves, when they were in office, did not have the moral courage to enforce because they knew that it would be impossible to do so.
– There are a terrible lot of things which honorable members opposite did not know, and also a. terrible lot of things which they failed to put into operation when they were in office. Now, they want this Government to pull this chestnut out of the fire for them as they obliged us to pull this country’s finances out of the deficit in which they left them. If honorable members opposite were sincere in their approach to this matter they would have applied, when they were in office, the very principles which they now ask this Government to apply and would have collected this tax in the period from 1946 to 1949. They failed to do that. Now, they seize upon this matter in order to divert public attention that has been concentrated upon certain happenings in their own ranks during the last few days. The Minister for Social Services (Mr. McMahon) made a full explanation to the committee, but honorable members opposite choose to ignore that explanation and now attempt to make party political capital out of this matter.
Honorable members interjecting,
– Order ! I shall ask the House, for the last time, to be silent. I have certain ways of dealing with a situation of this kind. I can name honorable members who interject, or I can leave the chair until I am ready to come back.
– I shall obviate the necessity for the Chair to take such action.I repeat that honorable members opposite now ask this Government to do something which they did not have the moral courage to do when they were in office. I mov -
That the question be now put.
Question put. The House divided. (Mb. Speaker - Hon. Archie Cameron.)
Majority . . . . 8
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a third time.
Bill returned from the Senate without requests.
(Nos. 1 to 9) 1954.
In Committee of Ways and Means:
Consideration resumed from the 18th August (vide page 420), on motion by Sir Arthur Fadden -
That, on and after the nineteenth day of August, in lieu of sales tax imposed . . . ( vide page 420).
Question resolved in the affirmative.
Standing Orders suspended; resolution adopted.
That Sir Eric Harrison and Sir Philip McBride do prepare and bring in bills to carry out the foregoing resolution.
Motion (by Sir Eric Harrison) agreed to -
That so much of the Standing Orders be suspended as would prevent questions in regard to the first and second readings, committee’sreport stage, and third readings being put in one motion covering several or all of the Sales Tax BillsNos. 1 to 9, and the consideration of several or all of such bills together in a committee of the whole.
Bills (Nos. 1 to 9) presented by Sir Eric Harrison, and passed through all stages without amendment or debate.
Motion (by Sir Eric Harrison) proposed -
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 . . . . 7
– Order! The honorable member will withdraw that remark forthwith and apologize.
– I ask you to repeat specifically the remark which you wish me to withdraw.
– I will not do so. I shall name the honorable member if he does not withdraw and apologize.
– I withdraw the remark in whichI asked honorable gentlemen on the Government side of the House to please state whether-
– Order ! The honorable gentleman will withdraw and apologize. Otherwise he will be named as soon as the division ends.
– I withdraw and apologize.
Question go resolved in the affirmative.
Original question resolved in the affirmative.
The following papers were presented : -
Public Service Act - Appointments - Repatriation Department - A. J. Clark, A. R. Turner.
Repatriation Act - War Pensions Entitlement Appeal Tribunal No. 1 - Report for year 1953-54.
Whaling Industry Act - Australian Whaling Commission - Fifth Annual Report, for period 1st April, 1953, to Slat March, 1954.
House adjourned at 11.16 p.m.
d asked the Minister repre senting the Minister acting for the Minister for Commerce and Agriculture, upon notice -
– The Minister acting for the Minister for Commerce and Agriculture has supplied the following information. -
Cite as: Australia, House of Representatives, Debates, 14 October 1954, viewed 22 October 2017, <http://historichansard.net/hofreps/1954/19541014_reps_21_hor5/>.