22nd Parliament · 1st Session
Mr. Deputy Speaker (Mr. C. F. Adermann) took the chair at 2.34 p.m., and read prayers.
– I have to announce that I have received a return to the writ which Mr. Speaker issued on the 27th March last, for the election of a member to serve for the electoral Division of Cunningham, in the State of New South Wales, to fill the vacancy caused by the death of Mr. William Davies, and that, by the endorsement on the writ, it was certified that Victor Dennis Kearney had been elected.
– I have received from His Excellency the Governor-General a commission authorizing me during any absence of the Speaker, to administer to members of the House the oath or affirmation of allegiance. I now lay the commission on the table.
Mr. Victor Dennis Kearney made and subscribed the oath of allegiance as member for the Division of Cunningham, New South Wales.
– I desire to address some questions to, I think, the Minister for Primary Industry, as the successor to the Minister for Trade, as the Minister in charge of the Australian Whaling Commission. The questions arise from a statement in the newspapers made, I think, by the Minister for Trade, and announcing the contract, or arrangement, for the sale of the assets of the commission. The industry, I point out, was established by a previous government, and is owned by the people, and is situated at Carnarvon in Western Australia. My questions are as follows: - Is the newspaper announcement correct? Will the responsible Minister give the full facts as to the various offers that have been made in connexion with that transaction? Will the Minister or the Government agree to, or participate in, an inquiry into the transaction by the Public Accounts Committee of this Parliament? Will the whole matter be inquired into by the said committee, or a similar committee, before any legislation is introduced into this House involving the sale of assets of the people, contrary to the very recent decision of the people of Western Australia, in effect, repudiatingthe Government’s action?
– I apologize to the Leader of the Opposition. Although I was in the House, I did not realize that he was addressing the question to me, and I did not hear the earlier part of it. If he wishes to acquaint me of facts as I attempt to reply, I shall be glad to try to oblige him. The position is that the Government made it quite clear almost four years ago that, in its judgment, and in accordance with its policies, there was no longer any purpose in the Commonwealth’s continuing to own, as a producing owner, the Australian Whaling Commission’s assets in Western Australia. It approved of the original concept of the whaling station as a demonstration unit and in that regard the station, as I have stated, has been highly successful. It has been so successful that nothing remains but to operate it as an ordinary producing unit, and no argument can be advanced to justify the Commonwealth continuing to operate the station which would not apply equally to its operation of a factory or a wheat farm. Continued operation of the station by the Government would be completely in accord with the socialist doctrine of the Leader of the Opposition, but it would be diametrically opposed to every antisocialist doctrine for which this Government stands. The successful formation of this whaling station has contributed greatly to the establishment in Australia of an immense whaling industry that is earning an annual export income of almost £2,000,000, and is providing a great amount of employment, mainly through private enterprise. The Government proposes to use the proceeds of the sale of the whaling station in another very valuable manner which I shall explain to the House later to-day, unless the right honorable gentleman chooses to deny me the opportunity to do so.
– My question ia directed to the Minister for External Affairs. I understand that Australia is represented at a conference that is at present being held in Malaya. I ask the Minister whether he is in a position to make a statement to the House in relation to the projected proceedings at the conference.
– To-day, a conference, which is called the British and Malayan “Working Party on Defence, is starting in Kuala Lumpur. Representatives at that conference will seek to work out, in the coming weeks or possibly months, the terms of an agreement or treaty between Great Britain and Malaya in relation to the conditions under which the troops of the United Kingdom and other British Commonwealth countries will remain in the Federation of Malaya after Malaya obtains independence, in August, 1957, or, possibly, towards the end of that year. I have noted that it has been stated that this working party will discuss whether the Federation of Malaya will adhere to the Seato pact. I have no information to that effect, and I believe that that part of the statement which has been circulated is not correct. Australia and New Zealand are each represented by an observer at the conference. I do not think there will be any insurmountable difficulties in reaching an agreement that will be satisfactory to all concerned.
– Will the Minister for Primary Industry make available, to-day or to-morrow, the report of the Division of Agricultural Economics in relation to the costs of production of the dried vine fruits industry?
– I have read carefully the analysis of the Division of Agricultural Economics in relation to the dried fruits industry, but I do not know that there is anything in it that would be of great interest to the honorable member. However, I shall consider his request and, if I think that any useful purpose can be served in making the report available, I shall let him know.
– Can the Minister for Defence tell the House whether it is a fact that, when national service trainees are injured or become sick during the course of their training, and are subsequently prevented from continuing their normal civilian occupations as a result of that injury or sickness, on many occasions at least four months elapse, and frequently a much longer time elapses, before they receive any form of compensation? If this is a fact, can the right honorable gentleman tell the House who or what is responsible for the considerable delays that occur, and whether he considers that it is justifiable to expect a national service trainee to be prevented, by virtue of his national service training, from continuing his normal* civilian occupation for a period of months without receiving any payment whatsoever, particularly when he would frequently receive more remuneration in that civilian occupation than he will as a national service trainee?
– I know that, occasionally, delay takes place before compensation is finally paid to an injured or sick national service trainee. I do not know the exact periods of such delays. Various instances of delays are sometimes cited, and occasionally it is, I believe, quite beyond the capacity of the services to expedite their decisions on these matters. I can assure the honorable member that I shall again investigate the steps that are taken departmentally before compensation is paid, and ascertain whether they can be accelerated, because I entirely agree with the honorable member that it is quite unfair for unnecessary delays to occur.
– Can the Prime Minister inform the House whether it is a part of the duties and functions of the armed services to assist the community in time of civil calamity, such as floods? If so, why are charges made by the Government for assistance rendered to communities and individuals? Will the Prime Minister consider immediately arranging for free rendition of such services? I point out that £60 an hour flying time is charged by the Royal Australian Air Force for the services of a Douglas aircraft, and I understand that other arms of the services charge on a similar basis for services rendered “with ducks and other equipment, to the financial embarrassment of many who are affected by the disastrous floods presently occurring in western New South Wales.
– I know nothing of the making of charges for these services, and I think I should be wiser to obtain the precise facts in relation to these matters rather than speak about them in general terms. I shall do that, and I shall let the honorable member and the House know the result.
– I direct a question to the Minister for External Affairs, as the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. I preface the question by reminding the Minister that, in view of the urgent necessity to provide adequate water supplies in our rural areas to meet the needs of our expanding primary production, some considerable time ago I made a request, to which the Minister agreed, that the Commonwealth Scientific and Industrial Research Organization should undertake an investigation of the process of ionic demineralization of water. I ask the Minister now whether that investigation has been conducted. The system of ionic demineralization has been in operation in the United States of America for some time, and I understand that there are portable plants available. Has the process been investigated, is it efficient and what does it cost? Is the Minister able to give any information as a result of any investigations that have taken place?
– Yes, the Commonwealth Scientific and Industrial Research Organization has kept in close touch with the work of Ionics Incorporated in the United States of America. I speak from memory, and not from memory of the last few weeks. The commercial results of their work over the last six or twelve months have been such that it appears that both the capital cost and the cost of running the ionics equipment is quite high particularly in respect of the amount of power that is necessary. I should not believe myself that, as a small unit, it is yet economic and practicable to suggest that this equipment might be used with advantage in Australia, except perhaps in certain particular instances. In addition to the work of Ionics Incorporated, the Commonwealth Scientific and Industrial Research Organization, plus the Department of National Development, has been participating in a cooperative investigational enterprise in Holland, where they have been reviewing all the various means of producing fresh water from salt water or brackish water. No results, of which I am aware, that would justify my reporting to the House have yet come out of that investigation, but that is a co-operative investigation in which all the various national parties concerned are paying their own proportion of the total cost. I believe that within a measurable period of time information will be available as to what, if any, artificial means of desalting water are available for reasonably economic commercial use. I shall certainly keep the honorable gentleman, and others whom I know are concerned because of the geographical location of their electorates, particularly in the south-west of Australia, informed of the progress of this matter.
– In view of the development of the pastoral, mining and agricultural industries that is taking place in the Northern Territory and New Guinea, will the Minister for Territories again make provision for an allparty delegation of members of this Parliament to visit these territories in the coming recess in order to give to members an opportunity to see and study the potential of these valuable areas at first hand? I might mention that these two territories are the direct responsibility of the Commonwealth Parliament and, as such, every encouragement should he given to members of the Parliament to visit them..
– Following the usual practice, there will be three parliamentary delegations to visit the Commonwealth territories during the coining winter recess. Each delegation will consist of six members, three from each side of the Parliament. One will go to the Northern Territory, one to Norfolk Island. and one to Papua and New Guinea. I have already dictated letters in the party whips informing them of these arrangements, so that the parties fan make arrangements for the selection of their representatives. I may mention in passing that the delegation to Norfolk Island will take part in the celebration of ihe centenary of that Territory, the first Australian territory to celebrate its centenary.
– In view of the gravity of the situation in the Middle East, can the Minister for External Affairs inform the House of the activities of the Secretary-General of the United Nations, Mr. Hammarskjoeld, in his present attempts to alleviate ArabIsraeli tension ? Is the Minister optimistic as to the outcome of this United Nations intervention?
– Mr. Dag Hammarskjoeld, the Secretary-General of the United Nations, has been for the last week in the Middle East attempting to reduce the tension as between the two principal protagonists, Israel and Egypt. He has already visited and spent some little time in Cairo, Tel Aviv and Beirut in the Lebanon. On the reports that we have had, both the Egyptian and the Israeli governments have undertaken, as [ understand it, to observe the conditions of the Israel-Egypt Armistice Agreement of a few years ago. If that is observed meticulously it will mean, the end of the present fighting; at least it will mean the end of the considerable tension that has overcome that part of the Middle East - the Levant coast and particularly the Gaza area - in the last month or two, the most severe tension to which the area has been subjected for si very considerable time. I should say, nl though the situation does not by any means enable one to make a final statement, that the position is relatively hopeful that the fighting will come to an end and that the tension, particularly the horder tension, especially in the Gaza (iron, will be very much reduced. At the same time, the Security Council of the United Nations must keep continuous watch on this area and on what is happening in it. As honorable members know, Australia is represented on the Security Council, and our representative there has been instructed to maintain a close watch on the situation in this area. I am very hopeful about the result of Mr. Hammarskjoeld’s visit to that area, which, in the circumstances, has been attended with all the success that could have been hoped for.
– I ask the Minister for Trade a supplementary question on the Austraiian Whaling Commission to which I referred earlier. Is it a fact that the Nor’ West Whaling Company Limited, pronounced the successful tenderer for the purchase of the Australian Whaling Commission’s station, was given an opportunity to make an offer or to revise it after an offer had been obtained from the State Government of Western Australia? Will the Minister produce all the valuations obtained by the Government in respect of - the various offers, so that they may be available during the debate on this subject?
– It is not a fact that the Nor’ West whaling company was given an opportunity to make an offer or to revise it or to submit a further offer after that of the Western Australian Government had been received. Several minor points of detail were discussed with that company, one of which would be of interest to the right honorable Leader of the Opposition. It was that an assurance was sought that there would be continuity of employment for employees of the commission who had established themselves at the station. As to the actual price offered by the Nor’ West whaling company, no revision whatever was made and no opportunity was given to make a revision. The Western Australian Government had the opportunity of access to Commonwealth departmental officers, an opportunity of which it did avail itself. The Western Australian Government did, however, make a firm offer. I think the proper time for me to reveal particulars of offers will be when the appropriate legislation is before the House - I had hoped that it would be this afternoon. It will be shown that the offer of the “Western Australian Government was substantially lower than the tender which was accepted. The Australian Government had the assets of the commission valued by its own valuers, and asked the institute of valuers to nominate a valuer to make a check valuation. As a result a government valuation and mi outside check valuation were made. I, personally, know of no reason why details of these matters should not be made available to the House, and unless there is some reason to prevent that from being done, they will be produced.
– I ask the right honorable Minister for External Affairs, in his capacity as head of the Commonwealth Scientific and Industrial Research Organization, whether there are two types of rabbits in. Brazil - the native rabbit, which has never bred like rabbits as Australians know them, and the European rabbit, introduced 300 years ago, and of the same species as the Australian rabbit. Is it a fact that the native Brazilian rabbit catches cold, known as myxomatosis, which to it is harmless, but which is fatal to the European rabbit and periodically over a period of 300 years has prevented the European rabbit population from’ reaching plague proportions? Is it a fact also that myxomatosis has maintained its effectiveness in Brazil because the native rabbits, through catching cold, continually develop new and stronger strains of the virus? If these are facts, would the Minister consider importing some Brazilian rabbits to an offshore island to assist the Commonwealth Scientific and Industrial Research Organization in its efforts to maintain the effectiveness of myxomatosis in Australia?
– I do not think the situation is precisely as outlined by the honorable member. According to my information there is only one type of indigenous rabbit in Brazil, but it is not of the European or English or Australian species. It is similar to the American type, and is more properly classified as :i hare than as a rabbit. As I under stand, the only rabbits of the European type or the Australian type in Brazil are those used in medical and other research establishments for scientific purposes. It is true that myxomatosis exists in Brazilian rabbits, but it is not a killing disease. It merely causes the rabbits some degree of discomfort. Owing to insects passing the disease from indigenous rabbits to rabbits used for scientific research purposes iri medical and other establishments, myxomatosis became rife among European rabbits in Rio de Janeiro and similar places in Brazil. It was from that source that we got the original strain of myxomatosis which was tried in Australia before the war and which has been used with such success ever since. I am not aware that a more virulent strain of myxomatosis has developed among indigenous Brazilian rabbits. In fact, my recollection is that that has not been the case. It is true, as I have said in answer to other questions in the House lately, that the efficiency or the killing effectiveness of myxomatosis in Australia has tended to decline during the last twelve months or so. But .the Commonwealth Scientific and Industrial Research Organization has been working quite hard, trying to restore the effectiveness of the disease, either by some mutation of the existing virus or by other means. On the basis of what I have said, I do not believe that there is any merit in the proposal to introduce the Brazilian rabbit into Australia or into islands off the Australian coast. *
– The Prime Minister suggested to a deputation of coal-miners which waited upon him in Canberra recently, that a further conference could be held to find a solution of the problems facing the coal-mining industry. Can the right honorable gentleman indicate to the House when and where that conference will take place?
– As I have some direct knowledge of the arrangements for the conference to which the honorable gentleman has referred, I shall answer his question. My understanding is that there will be a meeting in Sydney on Thursday ; the 26th of this month, at which the Minister for National Development and I will again confer with representatives of the management side and the union side of the industry on the matters which the honorable gentleman has mentioned.
– Has the Minister for Immigration any information to give the House about the reported return to their own country of a number of Czech immigrants to this country? Further, is the right honorable gentleman in a. position to offer any comments on the allegation that the return of these people is being deliberately engineered?
– I am not able to give the House very much information on this matter at this point. The movement of former Czechs, or of persons still of Czech nationality who had settled here, back to their homeland has certainly not been of such proportions as to attract attention within the Department of Immigration. I have seen the press reports of allegations made by a Czech in Melbourne, to the effect that another Czech who had become naturalized here was applying some pressure to his countrymen to return to Czechoslovakia. That person is being interviewed by officers of the department. If we get any information from him that will assist us to go further into the matter, we shall, of course, follow it up. I add, by way of general information, that it has been our practice to make a check - no pun is intended - of people before they come out to this country and again before naturalization occurs. The latter is an occasion when inquiries are made about suitability for naturalization.
– I direct a question to the Minister for External Affairs in his capacity as the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. Can the Minister tell the House whether, in this age of jet propulsion and atomic power in which the medical profession has been able to devise means of treating cancer, smallpox, tuberculosis, poliomyelitis, broken necks and broken spines, the Commonwealth Scientific and Industrial Research Organization has been able to find any method of destroying paspalum and nut grass ?
– I find some little difficulty in differentiating between the first and the second parts of the honorable gentleman’s question. Certainly, a good deal of research has been done on paspalum. I am not up to date with what may have been done during the last few months, but I shall be very glad to give the honorable gentleman, as soon as possible, a conspectus of what has been done in relation to the two grasses that he has mentioned.
– Will the Minister for Labour and National Service consult with his colleague the Minister for Shipping and Transport with a view to relieving congestion on the Hobart waterfront by having a Commonwealth ship, preferably Denman, call at Port Huon to pick up fruit for interstate markets, particularly as Port Huon has been a trouble-free port with an excellent loading record this season?
– I shall be glad to confer with my colleague to ascertain whether the suggestion made by the honorable member for Franklin, who has shown such active interest in this problem in recent weeks, can be usefully adopted. The honorable member and, I am sure, those honorable members who have mentioned the matter to me from time to time, will be interested to know that, arising out of further discussions between the Waterside Workers Federation of Australia and the shipowners, agreement was reached to-day, I understand, to supplement the additional 50 men who have been examined by the Stevedoring Industry Board and who should already be available for engagement. The Hobart branch of the union has undertaken to work an extra overtime night each week, and has agreed to the transfer of labour from ship to ship. This should have a very useful effect in augmenting, in substance, the work-force in the port. I am glad to be able to report to honorable members also that the loading rate at Hobart has improved substantially in recent days, according to my information.
– I address a question to the Minister for Social Services in his capacity as the Minister responsible for the War Service Homes Division. Is the Minister aware that, during the last few years, the South Australian branch of the War Service Homes Division has sold to the .South Australian Housing Trust large areas of good building land at prices far in excess of those originally paid by the division? Is the Minister aware, also, that a great percentage of the people who purchase homes from the housing trust aro ex-servicemen, that their finance is arranged through the War Service Homes Division, and that the transfer of the land at the higher price naturally increases the price paid by the purchaser for the home? Will the Minister inquire into this matter and ascertain whether it is possible to require such land to be transferred to the housing trust at the price originally paid for it by the War Service Homes Division, in order to allow ex-servicemen to receive the benefit of the foresight of those officers of the division who arranged the initial purchase of the land?
– I know that an arrangement has been entered into between the War Service Homes Division and the South Australian Housing Trust, and, indeed, similar arrangements have been made with the housing commissions in other States. I shall have investigations made to ascertain whether the honorable member’s suggestion has merit and can be implemented in due course.
– I ask the Minister for the Army : Is the Australian Army adopting the practice of the army of the United States of America in classifying its generals as one-star, two-star, or threestar generals? If this is so, in what category is the present Chief of the General Staff placed? Why is it considered necessary to have a special plate consisting of three golden stars on a. red background placed over the registered number plate of a Commonwealth vehicle used to transport the Chief of the General Staff when on business in Canberra? Does this special insignia bear a striking resemblance to the shoulder patches worn by third-class privates in the Japanese army? Will the Minister say whose bright idea it was to adopt this special insignia and will he say whether the General concerned really requires to have this distinctive number plate?
– It is rather a long, involved question. I can answer the first part by saying that the same system is not adopted in Australia as exists in America. As to the rest of the question. I think I had better examine it carefully and let the honorable member have a written answer in respect of the matters he has raised.
– My question is directed to the Minister for Social Services and concerns applications for second assistance from the War Service Homes Division. Under the present practice, I believe, where a person has received an advance from the War Service Homes Division to buy or build a house, and later wishes to sell that house and to obtain a second advance to buy or build another, the amount he repays on the first house goes into Consolidated Revenue, whilst the amount he receives for the second comes from the annual appropriation for the War Service Homes Division. Does the honorable gentleman agree that no unforeseen or increased public funds would be outlaid if the balance of the first advance were transferred during the balance of its term for the purpose of a second advance? Will he ask the Treaturer to alter Treasury procedure to enable premature repayments of first advances to be credited to the division instead of to Consolidated Revenue?
– There is a great deal of merit in what the honorable member suggests might be done under the administration of the War Service Homes Division. The proposal has been examined by the Government from time to time. The Government has been most anxious to render the maximum assistance to the greatest number of people who qualify under the act, and I have no doubt, that in the fullness of time the proposition submitted by the honorable member will be examined again. But in the meantime, if he would contain himself with patience, the policy of the Government will be ultimately determined.
– My question is addressed to the Minister for the Army. Is it a fact that the refusal of many wives to join their Australian servicemen husbands in Malaya has caused grave concern to the Army authorities? Was it necessary for the authorities to institute an inquiry to ascertain the reasons for the refusal? If so, will the Minister inform the House whether the investigation has been completed; and will he also supply the reasons advanced by the wives for the attitude they have adopted?
– I do not think that I can quite be expected to go into these domestic matters in detail in reply to a question. No doubt the wives and families of a number of soldiers in Malaya have refrained, for their own reasons, from joining them. I shall examine the matter specifically raised by the honorable member and ascertain whether there is anything particularly significant about it. We have provided a considerable number of homes for the families of servicemen in Malaya. A few families are yet to be provided for. However, I shall inquire into this particular aspect of the matter and let the honorable member know the result of my inquiry.
– I ask the Minister for Primary Industry whether, in view of the difficulties facing the tobacco-growing industry in Australia, any consideration has been given by the Government to any form of assistance to this industry, particularly in view of the importance of giving any possible encouragement to our local industries.
– I am not quite certain of the kind of assistance that the honorable gentleman suggests, whether it is in connexion with the recent floods in the southern parts of Queensland, or in connexion with incentive payments to induce greater production in the tobacco industry. I do not want to say very much on this latter subject at the present time, because negotiations are proceeding between tobacco leaf-growers and the British-Australasian Tobacco Company Proprietary Limited. These negotiations have come to a very delicate phase and are, perhaps, very close to solution. Therefore, I prefer not to say more about the subject at this particular time.
– Will the Minister for Trade advise the House why the Nor’ West Whaling Company Limited was advised about the sale of the Australian Whaling Commission station at Carnarvon when the other private whaling company, Cheynes Beach Whaling Company Proprietary Limited, at Albany, was not advised of the proposed sale?
– There was no discrimination in any advice about the Government’s policy, which was first publicly announced by me on a date that I have stated in the House and which, I think, from memory, was in November, 1952.
– The Minister advised the Nor’ West Whaling Company Limited personally, or the department did. The other company was not advised.
– The intention was publicly stated in this House.
– Order 1
– We gave advice, full information, and facilities to inspect the books and physical assets of the whaling station, to every party that was specially interested.
– Not right from the start.
– Order ! The honorable member for Stirling had better contain himself.
– In respect of the Cheynes Beach Whaling Company Proprietary Limited - I am now speaking confidently from memory - a director of that company, Mr. Hunt, on occasions had discussions on matters other than the sale of the Australian Whaling Commission’s assets, as indeed all interested parties engaged in whaling have had discussions with those officers connected with quotas. Mr. Hunt, who is also a director of another associated company which, I think from memory, cans the whale meat produced by the Cheynes Beach Whaling Company Proprietary Limited, became recognized by the department as a gentleman acting with authority for the Cheynes Beach Whaling Company Proprietary Limited on successive occasions.’ To him the department directed full information in respect of certain aspects of the intention to sell the commission’s assets, the department confidently believing that Mr. Hunt would pass on to the company of which he was a director, as lie had done on other occasions,, the information conveyed by the department. 1 have no reason whatever to believe that Mr. Hunt did not do exactly that.
– I direct to the Prime Minister a question which deals with the retiring age of members of the Public Service. In the minds of many persons there is considered to be a distinct advantage to the country in retaining the services of men, and perhaps women, who have been trained and have gained valuable experience in their Public Service appointments, and it is considered that, provided a satisfactory medical certificate is available at the age of 65, the nation could well extend their services from 65 to perhaps 70 years of age. I ask the right honorable gentleman whether any action or any investigation has already taken place within the Public Service towards extending the retiring age from 65 to 70 years.
– This matter has engaged the attention of the Public Service Board on a number of occasions, the last being comparatively recently. I will see whether any report is available from the board as to its conclusions. If so, I will have it made available; if not, T will have some answer prepared for distribution to the House.
– My question is directed to the Minister for Primary Production. In view of the fact that the reports of the Division of Agricultural Economics in connexion with the production costs of eggs, butter and wheat, have already been made public, will the Minister explain why he is avoiding the tabling of the report of that body on the production costs of the dried fruit industry? Is it because the Government intends to pay £12 a ton less than the division said was the cost of. production ?
– Might I first remind the honorable member that the name of the department is the Department of Primary Industry and not Primary Production. On the second point with regard to costs, I should like to tell honorable members, who should know and understand the position fairly well, that I have not been the Minister in charge of this department for a very long period. Therefore, if a question is asked of me to which I cannot give an immediate answer but which, I think, might perhaps compromise me in the future, I give an answer which affords me an opportunity to think and to provide a better answer in the future. There is no intention to hold back any information which I consider it is wise to give or which would be for the benefit of the House.
Opposition members interjecting,
– Opposition members should not make a rather stupid attempt to take advantage of this situation when it is not necessary. I shall give this matter consideration and examine what has been done by my colleague, the former Minister, and I shall let the honorable member have an appropriate reply.
– I bring to the attention of the Minister for Health the serious inadequacies of the hospital and medical benefits schemes operating in Australia. In view of the extreme hardship being experienced by sufferers from chronic complaints who are being denied medical and hospital fund benefits, will the Minister immediately review the scope of the present legislation in order to ensure that the needy sick will not bo denied pharmaceutical, medical, and, hospital care and benefits?
– No one is denied pharmaceutical benefits now. With regard to the other aspects of the honorable gentleman’s question, the care of the chronic sick, of course, is not entirely a matter of hospital and medical benefits payments. There are many other arrangements made on their behalf. The answer is not provided merely by stating that more should he done within the realm of hospital and medical benefits.
– I direct a question to the Minister for Labour and National Service. In deciding what is to be the form of Commonwealth conciliation and arbitration in the future, has any review been made of the system in Great Britain, where joint consultation between management and employee organizations has displaced compulsory arbitration by a gradual but apparently permanent process? Is the Minister aware that a post-war examination of industry in Great Britain, over a fairly broad field, showed that only 26 per cent, of the firms investigated now pay flat time rates? Finally, is the Minister aware also that, broadly speaking, managers in Great Britain to-day now argue that if workers are to be expected to contribute to industrial efficiency, the system on which they are paid should be such as will bring them some economic advantage?
– In the review which the Department of Labour and National Service has been making with me on the functioning of our system of conciliation and arbitration in Australia, we have looked at the operation of systems of conciliation and negotiation, and matters of that character, in the United Kingdom, the United States of America and other countries whose experience in that connexion, we thought, might provide us with some guidance; but I am sure that the honorable gentleman will appreciate, as a result of his own experience, that it is not easy, and, indeed, it may be quite misleading, to attempt to draw too close a parallel between conditions in other countries and the conditions that obtain in Australia. I believe that there are three very important differences between conditions here and conditions elsewhere which make our situation quite unlike that which exists even in the United Kingdom. We have a very much higher proportion of trade unionism in our industries - something of the order of more than 60 per cent, of all wage-earners in Australia are members of trade unions, compared with 40 per cent, in the United Kingdom and about 30 per cent, in Canada and the United States. There is also a very much closer link between the industrial wing and the political wing of the labour movement in Australia than there is in those countries, which tends to make every industrial issue a political issue also. In addition, we have our long-established practice and tradition of compulsory arbitration, which operates through a system of arbitration courts, other arbitral tribunals of one kind and another and, in more recent years, conciliation commissioners. What we have tried to do is to evolve a system that, we believe, draws on the experience gained in the years since federation, and also to benefit from what we can learn of what has been done, or is being done, in other countries. I hope to present to the Parliament, quite soon, appropriate legislation that, I believe, will be accepted by all sections of the Parliament as being a useful improvement on anything we have known before.
– I ask the Minister for the Interior : Can he say to what extent school building projects in Canberra will be delayed by the recent cut-back in the works programme in this city ? Is it true that work on the new primary schools in the suburbs of Griffith and Turner, which is already seriously behind schedule, will be practically halted within a week, while there are overcrowded conditions in other primary schools in the Australia Capital Territory, with classes being held in makeshift quarters
– I have not any specific information to give the honorable gentleman as to the actual delay in the completion of the buildings he has mentioned. I do know, of course, that their dates of completion are being set back, but they are not being set back to anything like the extent that is being publicly discussed in Canberra at present. Indeed, I understand that one figure was quoted as the number of people who are leaving those particular jobs; but the actual figure quoted as those being taken off exceeded by quite a margin the actual number who had previously been employed on the job. However, I know the honorable gentleman’s concern, which, indeed, is shared by all of us, and I shall have the matter looked at and see whether or not I can give him some specific information on it.
– I ask the Prime Minister whether there is any truth in the complaints that are being made that government employees are doing private work in public time, or in any other time. No doubt, the right honorable gentleman understands that these allegations are fairly widespread, and that such aspersions naturally place a stigma on every public servant. For the sake of public servants, and in order that their names may be cleared in this matter, will the Prime Minister discover whether there is any truth in the allegations made and, if there is not, will he, if possible, apply the same rule of law to accusers who have made false accusations as would be applied to an accused person who was actually guilty?
– Information on that point is at present being gathered, so far as it can be. I have read the allegations, and I hope to be in a position, quite soon, to say something about them.
In the meantime, they are allegations, and should be regarded as such until the answer is available.
– I have received from the honorable member for Scullin (Mr. Peters) an intimation that he desires to submit a definite matter of urgent public importance to the House for discussion, namely -
The action of the Government in providing facilities to a single member of Parliament on the basis that he is entitled to be treated as the leader of a separate parliamentary party.
Is the proposal supported?
Eight honorable members having risen in support of the proposal,
– There is, in this Parliament, a member of Parliament who is the sole representative of the political organization to whichhe belongs. He constitutes a one-man parliamentary party. Although he is the only member of that party and, therefore, has no followers, he is regarded as the parliamentary leader of his party, and is provided by the Government, at a cost to the taxpayers of between £2,000 and £3,000 a year, with facilities over and above the facilities that are provided for an ordinary member of this Parliament. But the question of the cost of providing those facilities is not the particularly important thing that matters. Neither is the political complexion of the individual concerned the particularly important thing.
– Not much!
– The important thing is that facilities over and above the facilities provided for the average member of Parliament are given to this particular member of Parliament, who is the only representative in the Parliament of the political party to which he belongs.
– Who is he ?
– I do not intend to be diverted by interjections. Of course, the recognition of a one-man political party is a contradiction in terms; not only that, it is a departure from the procedures of this Parliament in the past, and a departure from the traditions of parliamentary government in the British Commonwealth. There is no other parliament in the British Commonwealth that recognizes, and provides additional facilities to, one-man parties. In this country there have been instances of single members representing a party in a parliament. There was a single member of the Communist party in the Queensland Parliament. He did not get additional facilities. In the Victorian Parliament, there was a one-man party - the Mutton-Blackburn party. He did not get these additional facilities. In the Commonwealth Parliament, there has been a single member of the Lang party, a single member of the CountryProgressive party, and a single member of the Mutton-Blackburn party at the same time as there was a single member of that party in the Victorian Parliament. These people did not, of course, get these privileges. Therefore, the granting of party privileges to one-man parties is a new departure.
The questions that arise are these: Will every single member of a political organization that gets into this Parliament be treated as a party leader? If one Communist, one member of the Henry George party or the Fisher Labour party, or one independent comes into this Parliament under his party name, will he get these privileges? When the present single member of a political party is joined by his recently elected colleague, will the second member be accorded the facilities of deputy leadership? If two members of that particular party como into this House, will they get the privileges of leadership and deputy leadership? Would similar treatment be accorded to representatives of the other parties I have mentioned ?
The Prime Minister (Mr. Menzies), in reply to a question that I asked him recently as to whether this recognition was to be regarded as a precedent, said that each case would be judged on its merits. That, of course, means that it will not be a question of principle, but a question of expediency that determines recognition. What constitutes merit in relation to a political party? To me, a political party has merit only insofar as it assists either the opposition or the government of the day. In the present case party recognition and the provision of party facilities are being turned into instruments of political bribery. It is in reality dishonouring the government that provides the facilities, and dishonouring equally the recipient of those facilities. It is because I believe in the parliamentary institution, and in fundamental honesty that I have raised this matter to-day. It is also because I believe that not only on this side of the House but among members of all parties, there are people who believe in the democratic parliamentary institution and do not want that institution brought into disrepute. There are too many members of the community to-day, both on the right and on the left, who seek to bring the parliamentary institution and all connected with it into contempt in order that they may ultimately bring about it? destruction. That method of destruction has occurred in other countries of the world; I do not want it to occur here. Therefore, I will take action in opposition to anything that would give such people outside this Parliament a legitimate argument that might bring our democratic institution into ridicule and contempt.
– Is the honorable member referring to the Anti-Communist Labour party?
– My friend, the honorable member for North Sydney (Mr. Jack) asks in his childish “way whether I am referring to the Anti-Communist Labour party. I want to discuss this matter from the point of view of principle, and without introducing the name of any political party. I say to honorable members opposite that if, to-day, it is an Anti-‘Communist Labour party member, to-morrow it may be a Communist, or some other person, to whom objection could be raised. I do not believe that facilities such as I have mentioned should be provided at the whim or pleasure of a government, neither do I believe that they should be taken away at the whim of the’ Government. If facilities or gifts are bestowed at the whim of a person or government upon a particular recipient, inevitably the recipient’s behaviour is, to a degree, motivated by the knowledge that those privileges can be as easily withdrawn. That, of course, is the objection I have to the particular action that is being taken at the present time. My objection is upon the grounds of principle. To give the privileges of leadership to a person who has no followers and who leads no one is an utter absurdity. It is contrary to all the traditions of the parliamentary institution in the British Commonwealth, contrary to the traditions of this Parliament, and contrary to the traditions of every Australian State parliament. I believe that an opportunity should be given for honorable members who are not members of the Ministry, mid who cannot be blamed for this action of recognition, to get up and join me in defence of the parliamentary institution in which we all believe.
– I hope that the honorable member for Scullin (Mr. Peters) will not object if I try to bring this case down to the real point that he has in mind. This is not an airy and abstract question. The honorable member is, in fact, talking about the answer that I gave to a question he asked in relation to the Leader of the Anti-Communist Labour party in another place. It is just as well that we should discuss this problem not as a mere abstraction, because I venture to say that if it were a mere abstraction, you, Mr. Deputy Speaker, could hardly have ruled that it was an urgent matter for consideration under this procedure. Therefore, it is designed, no doubt, to be a practical problem. I should point out that there is one principle that has been strictly adhered to. Whether any person sitting in either House of the Parliament is to be regarded as the leader of a party is a matter for the Presiding Officer - in this place, Mr. Speaker, and in another place, the President. I well remember that when the Anti-Communist Labour party members sat in the corner in this House in the last Parliament and their leader and deputy leader announced themselves the question naturally arose - it was very much canvassed in the lobbies - whether that party ought to be recognized by Mr. Speaker. I am sure that the honorable member for Scullin will recall that a great number of members of his own party took exception to that group being recognized, but Mr. Speaker said, “Yes, I recognize this party”. Although each of the seven members of the Anti-Communist Labour party in this House lost his seat at the last election, ;n common with a few members of the Labour -party, it could hardly be said that they had sat in Parliament representing nobody but themselves. They secured a massive number of votes in four States at the last general election, and in the. case of the State of Victoria, secured a’ vote of over 17 per cent., and a Senate quota and a seat in the Senate. So, we are not discussing some entirely imaginary body; we are discussing a party of substantial numbers, although at the moment its representation in the Parliament is extremely small. In fact, at the moment, the party has one representative in the Senate, and after next June it will have two.
– Eather small numbers.
– The numbers that 1 have mentioned are rather small numbers, but I do not think that honorable members opposite should be too attached to the gospel of numbers. The real principle is, has the presiding officer recognized them; and in the case of the senator involved in this matter, the President has acknowledged him as the Leader of the Australian Labour party (AntiCommunist). He so appears on the record of the Senate Hansard where the officers of the Senate are printed, and honorable members will see shown there - “Leader of the Anti-Communist Labour party - Senator George Ronald Cole “ - and he has, therefore, in the other place, which is the master of its own privileges, and, if I may say so, not to be told by us what it should do any more than we are to be told by it what we are to do in this place - been accorded the status of the leader of a party. If the Senate, being the master of its own procedure, had decided that that was a wrong thing for the Presiding Officer to do, then it could very readily have taken the necessary steps by resolution to overrule his decision. However, it has never done so.
In the other place the senator is the leader of the Australian Labour party (Anti-Communist). So far as we are concerned, administratively, the position is perfectly simple. I do not substitute my judgment for that of the Presiding Officer of the Senate. I say, “Very well, there is a practice, and honorable members opposite should not complain too much about it. There is a practice under which leaders of parties and deputy leaders, in certain circumstances, have privileges and benefits far greater now than they were some years ago “. We provide the minimum provision, having regard to the circumstances of the case, for the person recognized by the President of the Senate as the leader of a party in his House. Now, that seems to me, if this matter is to be discussed in terms of principle, to dispose of the matter, because I hope that the day will not come when any Administration, which happens to be led in this House, will presume to substitute for the judgment of the President of the Senate, and of the Senate itself, its own opinion as to whether what he did, or the Senate did, was right or wrong.
If we want a matter of parliamentary principle, there it is, and we adhere to it. There is only one other thing that I believe I ought to say. It is all very well to say that if one person sits in a House of the Parliament he cannot-
– There is none here.
– The matter under discussion is based on an argument about another House of the Parliament; do not let us forget that. Indeed, that is the whole fount and origin of this discussion. What does it matter if there is only one representative of a party in the Parliament? I can remember a time - before I was a member of this Parliament, I am happy to say - when there was a different system of voting for the Senate. In those days the Australian Labour party, which had many representatives in this House, had only one member in the Senate, the late Senator Albert Gardiner.
– But we had many members in this House.
– The late Senator Gardiner had colleagues in this House. If the honorable member for Melbourne Ports (Mr. Crean) takes his stand on that point, what an absurdity we come to ! The honorable member is indicating that Senator Cole could quite legitimately be treated as the leader of a party in the Senate when there were seven representatives of his party in this place, but because those seven members lost their seats the whole character of Senator Cole’s position has changed. I have never heard anything more remarkable. A man would be a leader one day, then cease to be a leader when his colleagues lost their seats in this place, and then when six or seven were re-elected to this House he would once more become a leader. It is a cheerful thing to recall that Senator
Gardiner - who knew his way around - when he was the sole representative of his party in the Senate, was not merely one Labour senator, but also was the Leader of the Opposition in the Senate. In fact, I can remember reading of his conducting a. few magnificent all-night stonewalls by the simple expedient of moving motions and amendments, relating to bills, and making a powerful speech on each motion, knowing that it would lapse for want of a seconder because there was not a seconder to be got. By that process, given ingenuity and powerful physical endurance, he managed to keep debates going for many hours. And Senator Gardiner will probably go down in history as the most effective Opposition leader that the Senate has ever known.
I do not know how far this passion for numbers goes, but I am sure that it will be a great comfort to the honorable member who submitted the motion to know - whether it will be a comfort to me or not, only history will reveal - that after the 30th June there will be two members of the Australian Labour party (Anti-Communist) in the Senate. I do not know whether he would think that two would constitute a party, or whether we should wait until there are three.
– What privileges will the deputy leader of that party have in the Senate?
– That matter will be dealt with when it arises.
– What would the Government have done if Jim Healy had been elected to the Senate?
– I would have done exactly as I am doing now. That question could not be more apropos. I would have waited to see whether the Presiding Officer recognized him as the leader of a party, and if he had, then willy nilly we would have provided him with an assistant secretary and with a motor vehicle to transport him from the airport to his home and back again. After all, what has the honorable member to complain about, because I will betthat when Labour was in office it provided more facilities and travelling expenses for Jim Healy than this Government can ever hope to do.
– I understand that the case has been put from two points of view, and there really is no conflict in principle. My colleague, the honorable member for Scullin (Mr. Peters), treated it as an abstract question - one member in the whole of the Parliament ; two Houses, one member - and said in no case could such a member be treated, not by the President of the Senate, but by the Government, as the leader of a party. What Mr. Speaker or the President does cannot be binding on the Government in that respect. In the business of the House or of the Senate, what the Presiding Officers do might be of some value in respect of a person claiming to be the leader of a party, but the view that I shall put will meet the Prime Minister (Mr. Menzies) on his own ground. This matter relates to a senator who is the sole member in either House of a party that he represents. Out of a total of 184 members and senators, only one person representing his particular party is elected to the Parliament.
– And he was not elected at the last general election.
– That, is true, he was not elected at the last general election, but his status is that of one representative of his party. The point made by the honorable member who interjected that the senator in question was not recently elected is important, but it does not affect the principle. One person out of 184 members and senators of the Parliament is treated by the Government as being entitled to the privileges attaching to the leadership of a party. Whom does he lead? We are dealing with a parliamentary system and not something independent of the Parliament. All that can be done by the Government in relation to members of the Parliament is to recognize decisions of the party iii appointing a leader and whether they are entitled to be regarded as parliamentary parties. Senator Cole is the leader; Senator Cole is the deputy leader; Senator . Cole, if we wish to go further and because such officers are provided by the parties, is the whip and other officer’? of his party. That is sufficient to dhow the absurdity of the Government’s posi tion. Tt is absurd because this is not the first time that this matter has been raised. It has been dealt with by many parliaments, and it is not new. The honorable member for Scullin gave several examples.
The case of a former member of the Senate, Senator Gardiner, is different. When Senator Gardiner led the Australian Labour party in the Senate, the party had a number of representatives in the House of Representatives and, from the point of view of parliamentary government, it would have been impossible for the government of the day to fail to recognize him if the government was to be fair and honest to all parties. That opinion would be upheld by the majority of honorable members whatever their party affiliations might be. It is the height of absurdity, however, to abandon the practice that has been recognized by all parliaments which have had to face a similar situation.
Mr. Justice Nicholas referred to special allowances for leaders of political parties in his report dealing with allowances fm honorable members, and he recommended ten as the minimum number that ought to be recognized as a party. That would be a fair number, having regard to the large number of members in the Parliament, for the Government and the Parliament to recognize when providing facilities for leaders of parties. I believe that in Canada the number is greater, depending, to an extent, upon the larger number of members in the House of Commons.
– The numbers there are mentioned for the purpose of additional allowances.
– As the leader of a party. Exactly! If the Government is going to recognize the decision of Mr. Speaker or the President of the Senate as final, it has no need to deny the member concerned an allowance. Is the member concerned entitled to the status of leader of a parliamentary party? The Prime Minister was correct in referring to support outside the Parliament, but, under the system of voting for the .Senate, that, might apply to many parties in certain circumstances. One reference has been made, by way of interjection, to the Communist party, which polled about 120,000 No. 1 votes in New South Wales, largely because of the position, of its candidates on the ballot-paper. The party which Senator Cole supports had a senator elected in Victoria. He, also, was assisted largely by his position on the ballot-paper.
I should like the Prime Minister to follow my argument, if he would, because what he is doing as the leader of the Government affects the whole parliamentary system. I am not referring to the system of democracy and decisions affecting it under the method of election, but to the manner in which the Parliament is to be conducted. How is leadership to be recognized by the Government? No answer has been given to the honorable member for Scullin. The party to which Senator Cole belongs is bitterly opposed to the Australian Labour party. It was recognized by Mr. Speaker (Mr. Archie Cameron) in the previous Parliament. He recognized a party of seven members in this House. With Senator Cole, the membership of the party in the Parliament was eight. There was a case f er recognition of Senator Cole then. The party’s numbers were fewer than those suggested for a party in the Nicholas report, but the party had parliamentary representation in both Houses corresponding broadly to the situation when Senator Gardiner was recognized as the leader of the Australian Labour party in the Senate. The Labour party then had a substantial number in this House.
Now, the Government has abandoned the principles that govern the recognition of parties by governments in other parts of the world. The position in Canada was referred to in the Nicholas report. The Prime Minister has stated that the position, as it applies to Senator Cole, was determined simply because the President of the Senate, the presiding officer in that chamber, recognized a senator as the leader of a party. The Opposition’s move in this case is directed, not at the recognition of the senator by the presiding officer, but at the action of the Government in providing facilities for the senator concerned as the leader of a party. Those facilities are determined by custom and, to some extent, by statute, and by recommendations in reports such as the Nicholas report. The matter is one of numbers. It is wrong for the Government to recognize Senator Cole as it has done.
The Prime Minister has asked whether the Government’s action was correct when there were seven members in this chamber, whereas now there is none. Yes, its action was justified then by the comparatively large number of members of the party concerned who were then in this House. All of them have lost their seats by the verdict of the electors. The Government cannot say that the party still exists, as a parliamentary party, because it had seven members in this chamber in the previous Parliament. Does it exist in the House of Representatives ? No ! No parliamentary party exists as such unless there is substantial representation for it in one House or the other, and it is the parliamentary situation that should be considered. The real position is that the Prime Minister has shut his eyes to the parliamentary situation. He has not taken into account the fact that the particular group under discussion was defeated in the electorate, so far as it could be defeated, at the last general election for the House of Representatives.
– Senator Cole could not be defeated.
– No, because Senator Cole did not stand at the last election, and now he is everything in the party.
– There is no guarantee, that Senator Cole would have been reelected.
– It is a one-man party. Senator Cole is the leader, deputy leader, whip, and everything else.
– At any rate he has a unanimous party.
– I know that the Prime Minister regards that as very desirable. Leaders of all parties do. I appreciate the wit and the application of the right honorable gentleman’s remark, especially so far as the Prime Minister himself is concerned. His remark indicates clearly that there is no genuineness in the Government’s recognition of the party to which Senator Cole belongs. The attitude of the Prime Minister is dictated by political expediency. The Government has said, in effect, “After the 30th June, things might be difficult in the Senate. We had better not discontinue this allowance”. That is what happened, and the Prime Minister himself would not deny it if it were put to him privately. From a parliamentary point of view this is a shocking and scandalous thing, and the honorable member for Scullin was completely justified in raising the matter.
– I have listened with much interest to the honorable member for Scullin (Mr. Peters) and the Leader of the Opposition (Dr. Evatt). I should like to have my mind clear as to just where those two honorable members are going in their argument. The Leader of the Opposition said that this was a matter of status, and that Senator Cole should not be recognized as the leader of a party. Then the right honorable gentleman said that even if Senator Cole were recognized as the leader of a party, the Prime Minister (Mr. Menzies) should not give him the facilities associated with that office. Let us examine that point of view because it is important that we should do so.
The Prime Minister has already pointed out that the authority to determine party leadership, or whether a party exists in fact, resides in the House concerned. In this instance, it resides in the Senate, and may be exercised by the senators themselves. They have decided - because no objection has been taken and all their records show that they are in agreement - that there is a party, and that it is led by Senator Cole. That being so, what would the honorable member for Scullin or the Leader of the Opposition have us do? Would they have us challenge the procedure of the Senate ? That would be a new departure, and the Leader of the Opposition and the honorable member for Scullin would object strongly if the Senate dared to criticize procedure in the House of Representatives. Indeed, honorable members generally would object most vociferously if that were done. The Senate has the same privilege in that connexion. It should conduct its own affairs. If the Senate has decided to recognize a senator as the leader of a party, that is the Senate’s responsibility and not curs.
In his concluding remarks, the Leader of the Opposition imported into this debate something that I hoped he would not import into it. He said that this matter was scandalous, and that the attitude of the Prime Minister had been dictated by political expediency. He says that if it were not for the fact that we seek to gain something, we would never do this. I venture to state that if this honorable senator had not been a member of a group that opposed the right honorable gentleman in this House, he would not be setting out ruthlessly now to destroy him. With all the ruthlessness of jungle warfare, the right honorable gentleman seeks him out to destroy him, purely for sectarian reasons, because he knows that unofficially the honorable senator is supported in this chamber by a great number of the honorable members who sit behind him. He knows that those honorable members take a very poor view of the matter that has been submitted by the honorable member for Scullin.
Let me give an illustration by referring to something that happened in the days that are long since gone, because this sort of thing is not unknown, as the Prime Minister made clear, when speaking of Senator Albert Gardiner.
– An entirely different situation.
– The honorable member says it is an entirely different situation. Senator Gardiner was the only representative in the Senate chamber of a political party.
– A recognized party.
– He was recognized by the Senate, under its procedure, as the leader of a party in the Senate. The Senate has no obligation whatever to the House of Representatives, but it certainly has an obligation to its own procedures. At that time, Senator Gardiner was the sole representative in the Senate of a political party. He was recognized by the Senate as the leader of a party, and was treated as such. 1 mention, by way of passing reference, that Senator Gardiner’s secretary at that time became the secretary of the late Mr. Curtin and of the late Mr. Chifley. He was later appointed by the present Leader of. the Opposition to the position of conciliation commissioner, an office which he now holds. In that instance, we see a recognition of. that senator, as the leader of a party, through the appointment of a secretary to him. That secretary has since been translated to the hierarchy by the hand of the Leader of the Opposition. Yet the right honorable gentleman accuses the Government of seeking to gain a political advantage by making facilities available to a recognized leader of a party in the Senate. He imports political considerations into this question, though he himself stands condemned in that respect.
Mr. Deputy Speaker, so far as I can see, the position is perfectly clear. If I happened to be a senator, I certainly would take objection to the House of Representatives daring to challenge the procedure of the Senate in this matter. The Senate is a separate chamber and, as such, has a right to determine its own procedures. It has used those processes. If the Senate were to criticize our procedures, we would object. This is not a question connected with the separation of the two Houses; it is merely one of establishing the inalienable right of each chamber to decide its own procedures. This subject is put forward for purely political purposes. Because the honorable senator opposed the Leader of the Opposition, be must be destroyed. The Opposition is now setting out, with all the machinery within its grasp, to prevent him from maintaining even a semblance of the party that dared to oppose the Leader of the Opposition. In the Opposition’s view, all reference to this party must be erased from the political books of this House and of the Senate. That is what has prompted the honorable member for Scullin to raise this matter. Again and again, I have seen him in this place join issue, in the most bitter fashion, with members of the group who were: formerly in this chamber. That is only what I would have expected of him. 1 expect him to extend that bitter feud to the man who now represents that party in the Senate and who represents a great number of people outside this Parliament as well as a great number of honorable members on the opposite side of this chamber. I repeat that he has introduced this matter for purely political purposes. Certainly, if I happened to be a senator, T should take strong exception to this House daring to criticize, and interfere with, the Senate’s procedures, and, indeed, attempting, by this move, to destroy them.
.- I think it is time that we brought this matter back into the proper perspective. If ever a question has been answered in a careless manner, this one has been ; and I want to deny immediately any assertion that there is an attempt to take a set at any particular individual in this Parliament. I make that denial also on behalf of the honorable member for Scullin (M.r. Peters) and the Leader of the Opposition (Dr. Evatt). The Vice-President of the Executive Council (Sir Eric Harrison), as is usual with him, is rude enough now to conduct a conversation at the table. That is entirely out of order, and is typical of the way in which the Opposition is being treated daily in this House. One is entitled to expect the Vice-President of the Executive Council to have better manners. One is entitled to expect him to treat other honorable members as courteously as he is treated by them.
– Order ! Will the honorable gentleman return to the subject.
– The VicePresident of the Executive Council is not courteous, and I am amazed that you, Mr. Deputy Speaker, permit .the conversation to go on at the table.
– The honorable member cannot have much to say.
– I want to say that the Government has raised a peculiar argument here to-day. The Government now suggests that because the President of the Senate favours the recognition of the member of a one-man party as its leader, this House must accept that decision. I should like to know whether the Australian taxpayers are called upon to defray the cost of the offices pertaining to this one-man party. If the provision of some extra privileges to the leader of the one-man party, such as a motor car, a room here and a room somewhere else, and a. secretary and typist, are to be a call upon the Treasury or the taxpayers of Australia, I appeal to the Government on behalf of those taxpayers to be move considerate, particularly in a period like this. In making this statement, I emphasize that I am not concerned about the individual at the moment; T am referring now to the principle. I appeal to the
Government to be more considerate, especially when, daily in this House, we hear appeals from the Government to reduce expenditure.
What argument has been put forward by the Government to justify its attitude in this matter? I ask members of the Australian Country party whether they would have agreed that Mr. Charles Russell, if he had been elected to this Parliament at the last election, should be made the leader of, and given all the privileges pertaining to the office of the leader of, a one-man political party. Australian Country party members are as silent as the grave. They are as silent us they were when I asked the Government, during my speech on the motion for the adoption of the Address-in-Reply, whether the Government would have recognized a Communist had he been elected to this Parliament at the last election. I remind them that a Communist could have been elected. I said then, and I say now, that I hope the Government would not have done so, but it seems that any individual who breaks away from a political party, even from the Liberal party, would be recognized as the leader of a party in the Senate. Under our system of election, with that form of procedure, a situation could arise in which there would be half a dozen one-man parties in this Parliament. Such a position is Gilbertian, it is a mockery to the parliamentary life of this country. I did think that when the Prime Minister replied to the matter put forward by the honorable member for Scullin, he would have taken the view that a real Prime Minister would take, and would have admitted that the situation was unsatisfactory and must be remedied.
It is the responsibility of the Parliament to lay down clear and definite rules about what shall comprise a political party so as to justify the costs that are associated with the leadership and the deputy leadership of parties. To allow any person, who is the only representative of a party, in. the Parliament to cost the taxpayers thousands of pounds over and above his salary is wrong in principle and is making a farce of the Parliament. I do not care whether the Anti-Communist Labour party, the Liberal party, the Australian Country party or the Australian
Labour party is involved, I do not believe in the principle, and it is on the principle that I take my stand on the floor of the House this afternoon.
The Leader of the House has referred to the case of Senator Gardiner as being analogous. His case is not analogous. At that time, the Labour party, which had many members in this chamber, constituted the official Opposition. 1 remember when there were very few Liberal party and Australian Country party senators, but they were recognized because many members of those parties sat in this chamber.
In conclusion, I appeal to the Government to approach the matter seriously. The deputy leader of the Government, or whatever his rank is - there are so many ministerial changes that I cannot follow them - has stated that the Opposition is making capital out of this situation. It is doing nothing of the sort. I emphatically deny that charge. I would adopt the same stand in relation to any other person who was similarly treated. I ask the Leader of the House to take the same serious view of the matter and I urge the Government to adopt a proper standard in determining what shall constitute a party.
– It could follow the Canadian practice.
– I do not mind what practice it is, but 1 ask the Government to follow the practice that under no conditions, in this House or in another place, will it accord leadership privileges to a person who is the only representative of his party. On other occasions over the years, we have had the spectacle of one person representing a party, but never before, in circumstances such as those now existing, has a government, Labour or Liberal, given to such persons the benefits that are associated with the leadership of a party.
– Why does not the Opposition persuade the senators to say something about it?
– It is the responsibility of the taxpayers and of the Treasury. That being so, how can the Prime Minister or the leader of the House say that parliamentary procedure is not involved?
– lt is not.
– It is, because the Treasury and the taxpayers are responsible for footing the bill to maintain a system that is wrong in principle. I hope it will be rectified in the very near future.
– I believe that the matter that is now before the House should be approached clearly, calmly, and without heat, but unfortunately I have the feeling - and I am sure every other honorable member on this side agrees with me - that Opposition members are trying to get some cheap political advantage from it. At the same time, they are trying to hide the divisions in their own ranks, both in this Parliament and in New South Wales. It is quite clear that honorable members opposite do not really understand the subject that the House is debating. They do not understand what the honorable member for Scullin (Mr. Peters) is trying to show. The honorable member stated that he was not concerned about the financial side, yet the honorable member for Adelaide (Mr. Chambers) completely swept aside the arguments of the honorable member for Scullin, and suggested that the financial aspect was the most important.
The honorable member for Scullin asked what the Government proposed to do in the future if this kind of thing happened again, and the Prime Minister (Mr. Menzies) replied that each case would be treated on its merits. I agree that it would not be right for the sole member of a breakaway party to obtain the privileges that are accorded the leader of a party. I might break away and form a progressive Liberal party, or my friend, the honorable member for Higinbotham (Mr. Timson), and I might form some other party, but neither of us could honestly expect to obtain the privileges that are extended to a party leader. The case in question is completely different. We are now considering the survival (if a political party that was represented in both Houses. It is true that the party disappeared from this House, but it still exists in the other House. Not only does it still exist in the Senate, but it is a growing party in that place. After the 30th June next, another representative of the party will take his seat in the Senate.
– Its strength will be doubled.
– As the Treasurer (Sir Arthur Fadden) has suggested,’ its strength will be doubled. As I have stated, it is a growing party, and it is likely to grow still more, if we can believe the comments of Mr. E. H. Cox in the Melbourne Herald of the 29th December, 1955. I think it is worth while reading the following short passage from those comments : -
The arithmetic of the Federal election shows that it is just an accident, not likely to lie repeated, that the Anti-Communist Labour party lias only two members in the Senate.
If, us seems likely, it can strengthen its organization in other States to the level reached in Victoria, it can generally be certain of electing in each State one of the five Senators to be returned to Canberra at each future Senate election.
It is particularly likely to do so when Mie tide of political favour flows back to Labour.
The fact that this is a growing party has already been recognized in the Senate, because senators-elect were invited by the President of the Senate to be present at the opening of the Parliament a couple of months ago.
Whether we approve of this party or not, it has big support in Australia. Fu Tasmania, Victoria and South Australia it polled nearly 250,000 votes. Certainly it has not been eliminated and I honestly believe that its members are entitled to party recognition until it completely disappears from the parliamentary scene. I can quite imagine that, if members of the Australian Labour party allow their factional fights to continue - they are trying to hide them, but it is obvious that they still exist - very soon we may look across the aisle and see only one member of that party in this chamber. The honorable member for Wills (Mr. Bryant) thinks he might be that member, but I am more inclined to think it would he the honorable member for Port Adelaide (Mr. Thompson). As is suggested to me by one of my colleagues, it might even be the honorable member for Hunter (Mr. James). I am certain that, if such a thing did happen, that one surviving member of the Labour party would expect to have these privileges made available to him.
Since I have been a member of this Parliament it has been quite obvious that this Government is doing its best to reduce the expense entailed in providing members’ privileges. I remember that when I was first elected I used to travel by train, from the country town in Victoria in which I lived, to Melbourne to try to catch an aircraft which would get me to Canberra before the Parliament assembled. The train was late by an average time of 79 minutes each day, and I asked the Chief Property Officer in Melbourne to arrange for a car to meet me on any occasion which I telephoned from Ballarat to say that the train would be late. A car was provided for me on one occasion only, after which I was told that I would have to make other arrangements, and that no car would be made available for me. I remember also an occasion when I flew to Melbourne. On arrival at the airport at Essendon a car was in attendance for the use of the wife and secretary of a Minister. Another car was there for the use of two typists or secretaries from a Commonwealth department. Another car was there for one of the members of the Opposition who is entitled to the use of a car, and that member invited three Opposition members to accompany him into Melbourne in that car. I, the only member of a Government party who travelled on that aircraft, had the airline bus to myself - and perhaps I should be thankful that at least I was able to be alone.
– Order ! The matter of members’ privileges is not under discussion.
– This is, I believe, a subject which needs the strict attention of all parties, in order to ensure that these privileges are not abused. Although the present strength of one that the AntiCommunist Labour party enjoys in the Senate, or of two if one takes into consideration the senator-elect, may make the privileges extended to the leader of that party seem excessive, I believe that the steps taken by the President of the Senate are justified. I deplore the actions of members of the Opposition who have tried to make cheap political capital out of this matter, in which attempt I believe they have utterly and completely failed.
– I endorse the remarks of the honorable member for Scullin (Mr. Peters).
Motion (by Sir Eric Harrison) put -
That the business of the day be called on.
The House divided. (Mr. Deputy Speaker - Mr. C. F. . Adermann.)
Majority . . . . 16
Question so resolved in the affirmative.
Motion (by Sir ARTHUR Fadden) - by leave - agreed to -
That leave be given to bring in a bill for an act to amend the Income Tax and Social Services Contribution Assessment Act 1936-1955, mid for other purposes.
Bill presented, and read a first time.
Sir ARTHUR FADDEN (McPhersonTreasurer [4.35]. - by leave - I move -
That the bill be now read a second time.
The principal purpose of the bill now before the House is to extend for a period of three years the 20 per cent, special depreciation allowances to primary producers. This extension was announced by the Prime Minister in the course of his recent review of the Australian economy.
The special depreciation allowance applies to the cost of plant, machinery and equipment, other than passenger motor vehicles, used wholly and exclusively for the purposes of agricultural or pastoral pursuits, and to certain structural improvements situated on land used for those purposes. In effect, onefifth of the cost of these assets is deducted from income of the year in which the plant is installed or the improvement is constructed, and one-fifth is deducted in each of the next succeeding four years. This special deduction applies to plant installed and improvements constructed in the period commencing on the 1st July, 1951, and ending on the 30th June, 1956. In the case of improvements, however, the deduction is allowable if construction has been commenced in the specified period and is completed by the 30th June, 1957.
By this bill, it is proposed to continue the special deduction for plant installed and improvements constructed during the period commencing on the 1st July, 1956, and ending on the 30th June, 1959. The deduction will also be allowed, if improvements are commenced in that period and completed by the 30th June, I960. When the special allowance was introduced five years ago, £2,000 was specified as the maximum amount on which 20 per cent, depreciation was allowable on housing for each employee, tenant or share-farmer. Expenditure on housing in excess of £2,000 was subject to depreciation at normal rates. It is proposed by this bill to raise the maximum from £2,000 to £2,750 and that the new maximum will apply where the erection of housing is commenced after the 30th June, 1956, subject, of course, to the completion date, the 30th June, 1960, which I have already mentioned.
Another important provision of the bill relates to uranium-mining. In 1952, an exemption was provided for income derived from the working of a mining property in Australia, Papua or New Guinea for the purpose of obtaining uranium-bearing ore. That exemption, as originally provided, was to operate until 1960. Last year, the exemption was expanded to include income from the treatment of the ore for the purpose of recovering concentrates, if the treatment was carried out by the company or syndicate or individual who mined the ore.
In recent months, it has become evident that some three or more years must elapse before treatment plant will be in effective operation in this country. At the very earliest, treatment plant for the recovery of uranium concentrates is not expected to develop into a profit-making undertaking before 1959. In these circumstances, it will be readily recognized that the period of exemption will need to be extended, if it is to be of real value in encouraging investment of capital in the industry. It is accordingly proposed by clause 2 of the bill that the exemption shall be extended for a period of five years, that is, until the end of the income year 1964-65.
It is necessary to mention only one other provision of this bill - clause 4. This is in the nature of a drafting provision, and it is complementary to the resolution and bill relating to company rates of income tax.
Debate (on motion by Mr. Calwell) adjourned.
In Committee of Ways and Means:
– I move -
– (1.) That, in this Resolution - “ co-operative company” have the name meaning as in Division 9 of Part III. of the Assessment Act; “ life assurance company “ have the same meaning as in Division8 of Part III. of the Assessment Act; “ mutual income “, in relation to a life assurance company (other than a mutual life assurance company), mean -
so much of that part of the taxable income of the company which has been derived from its life assurance business as bears the same proportion to that part of the taxable income as the amount of the profits divided for the same year of income among the life assurance policy holders of the company bears to the total profits divided among those policy holders and the shareholders of the company in respect of the company’s life assurance business for the same year of income ; or
where no profits in respect of the company’s life assurance business are divided for the year of income but, by virtue of the company’s memorandum or articles of association, any profits to be divided among the life assurance policy holders of the company are required to be a certain proportion of the total profits to be divided - that proportion of that part of the taxable income of the company which has been derived from, itslife assurance business: “ mutual life assurance company “ have the same meaning as in Division8 of PartIII. of the Assessment Act: “ non-profit company “ mean a company which is not carried on for the purposes of profit or gain to its individual members and is, by the terms of the memorandum or articles of association, rules or other document constituting the company or governing its activities, prohibited from making any distribution, whether in money, property or otherwise, to its members: “ private company “ have the same meaning as in Division 7 of Part III. of the Assessment Act: “ the Assessment Act “ mean the Income Tax and Social Services Contribution Assessment Act 1936-1955, as proposed to be amended by the Income Tax and Social Services Contribution Assessment Bill 1956. (2.) That a reference in this Resolution to taxable income be read as a reference to taxable income of the year of income.
That the Assessment Act he incorporated and read as one with the Act passed to give effect to this Resolution.
Imposition of Income Tax and Social Services Contribution.
– (1.) That a tax, payable by companies, by the name of income tax and social services contribution be imposed in accordance with this Resolution and at the rates declared in this Resolution. (2.) That, notwithstanding anything contained in this Resolution, income tax and social services contribution he not imposed upon a taxable income which does not exceed One hundred and four pounds derived bya non-profit company.
Rates of Income Tax and Social Services Contribution Payable by a Company.
– (1.) That the rates of income tax and social services contribution payable by a company, other than a company in the capacity of a trustee, be as set out in the Schedule to this Resolution. ‘ (2. ) That where the taxable income of a nonprofit company does not exceed Two hundred and twenty-eight pounds, the maximum amount of income tax and social services contribution payable by the company be eleven-twentieths of the amount by which the taxable income exceeds One hundred and four pounds. .
Elimination of Pence.
That where the amount of the income tax and social services contribution which a company would be liable to pay under the preceding provisions of this Resolution, before deducting any rebate or credit to which it is entitled in its assessment, is an amount of pounds, shillings and pence or shillings and pence -
if the pence do not exceed six - the amount be deemed to-be reduced by the amount of the pence ; and
if the pence exceed six - the amount be deemed to be increased by treating the pence as One shilling.
Levy of Income Tax and Social Services Contribution.
– (1.) That the income tax and social services contribution imposed in pursuance of the preceding provisions of this Resolution be levied and paid for the financial year commencing on the first day of July, One thousand nine hundred and fifty-six. (2.) That, until the commencement of an Act for the levying and payment of income tax and social services contribution upon companies for the financial year commencing on the first day of July, One thousand nine hundred and fifty-seven, the Act passed to give effect to the preceding provisions of this Resolution also apply for all financial years subsequent to that commencing on the first day of
July, One thousand nine hundred and fifty-six.
rates of Tax and Contribution Payable by a company other than a company in the Capacity of a Trustee.
By this resolution, it is proposed to declare the rates at which income tax will be payable by companies for the next financial year, 1956-57, that is, tax payable on income of the current income year, 1955-56. The new rates will be1s. higher all round than the present rates. This increase was announced by the Prime Minister in the course of his recent review of the Australian economy.
It will be noted that the resolution is intended to apply to the taxable income of companies only and does not affect in any way the rates at which personal income tax will be payable. The declara - tion of rates on taxable incomes currently being derived by companies will place company directorates in a position to know precisely their income tax commitments when preparing their financial statements after the close of the present income year, 1955-56. The additional revenue from the increase in the company rates is estimated at £27,800,000 in the financial year 1956-57, and at £30,000,000 in a complete assessment year.
So far as companies are concerned, the provisions of the resolution follow broadly the pattern of resolutions annually adopted for the imposition of rates of income tax. It is accordingly unnecessary for me to embark on a detailed explanation of those provisions. The Prime Minister has explained adequately the views of the Government on the increased income tax which companies are being required to pay in the next financial year and there is no occasion for those views to be restated by me. It will suffice if I submit the formal resolution for the consideration of honorable members of this House.
Motion (by Sir Arthur Fadden) - by leave - agreed to -
That leavebe given to bring in a bill for an act relating to arrangements with the States in connexion with statistics.
Bill presented, and read a first time.
– by leave - I move -
That the bill be now read a second time.
The purpose of this bill is to seek parliamentary approval of the making of arrangements with individual States for, and the setting up of, integrated statistical services. As honorable members will know, the Constitution Act of 1901 includes “ Census and Statistics “ among the functions of the Commonwealth. During the time that has elapsed since federation attempts have been made from time to time to regularize the collection of statistical data, and this bill represents the present culmination of these endeavours.
With the foundation of the Commonwealth Bureau of Census and Statistics in 1906 a regular body of Australian statistics began to emerge. However, the necessary development of statistical investigation has been impeded by the absence of effective means of ensuring uniformity of State data required to produce Australian totals and by the difficulty of arranging that six States should collect additional facts on a common basis. The economic problems that arose after World War I. drew attention to deficiencies in the Australian statistical data. With a view to overcoming these weaknesses the then Prime Minister proposed to a Premiers conference that State statistical offices be transferred to the Commonwealth. Tasmania alone agreed to this proposal.
During and since World War II., a considerable volume of new statistical information has been issued and much of it very promptly. Such items as national income, balance of payments, employment, migration, building, retail sales, banking, hire purchase, company capital raisings and monthly factory output have become increasingly important. Furthermore, improvements in the speed of compilation and detail of most of the pre-existing statistics have been accomplished despite the basic weaknesses in the statistical system. But much remains to be done.
Improvements have been achieved in part by establishing Commonwealth statistical offices in some of the State capitals. This was done in the knowledge that ultimately steps would have to be taken to consolidate the statistical system by means of formal agreements with the States. This is the more necessary now because the statistical coverage in several States has been deteriorating and there looms ahead the possibility of breakdown in some statistical fields, particularly those of primary and secondary production. The stage has been reached where further improvisations cannot cure the situation.
The emergence of this problem was foreseen during the war, and in . 1949 discussions were initiated with the Premiers of the several States by the late Prime Minister, theRight Honorable J. B. Chifley, with the object of integrating the statistical services of the Commonwealth and the States by agreement. These negotiationshave been continued by the Prime Minister (Mr. Menzies) and myself by correspondence. The present position is as follows.: - In Tasmania, the amalgamated office is functioning satisfactorily as a Commonwealth office which also serves State statistical needs. The Government of “Western Australia recently accepted a draft agreement under which it is envisaged that the statistical offices of the Commonwealth and State will he amalgamated if this enabling legislation is passed.
The Prime Minister has submitted the terms of a similar agreement for consideration by the Premiers of New South Wales and South Australia in the course of negotiations with those States, and each has accepted the terms in substance subject to negotiations on matters of detail. In each case, an undertaking was given to these States by the Commonwealth to introduce legislation to authorize agreements of the type to be made concerning statistical administration. The bill proposed honours that undertaking. It is permissive in nature and will enable the Commonwealth to enter into an agreement with a State to effect an amalgamation of Commonwealth and State statistical offices and services.
– Would that apply to States other than New South Wales and South Australia?
– Yes, any State can enter into the agreement. The objective of the agreements is that in each State accepting them there would be an, integrated statistical service operated by’ Commonwealth statistical officers under the immediate direction of a statistician in the State who would hold office under both the Commonwealth and State governments. By this means Commonwealth and State will both be adequately served with statistics. No State would be required to surrender its existing powers in the field of statistics. It would agree to exercise them in a special way through the integrated service. As is the case at present in Tasmania, it would always have available an officer to function as State statistician, its Statistics Act would continue in force for use if necessary, it could appoint a group of statistical research officers to work for it on any special project under the statistician. In the unlikely event of any of the arrange ments or services proving unsatisfactory, procedures are provided for rectifying the position. On the Commonwealth side, it is evident that an adequate Australian statistical service is urgently necessary and we believe it can come into being best by agreement with the States.
The bill proposed contains, in addition to the clauses authorizing agreements with the States for, and the setting up of, an integrated statistical service throughout the Commonwealth, the usual machinery clauses defining the rights of officers transferred under any agreement entered into. In any State which accepts an agreement any statistical employee of that State will have the right to decide for himself whether he will transfer to the Commonwealth Public Service or remain a State employee. The procedure would be for the Commonwealth Public Service Board to offer each such State employee a specified statistical position in the Commonwealth Service in the State in which the agreement is made. This follows the precedents established in connexion with previous transfers of taxation officers and other groups of officers to the Commonwealth Public Service.
Provision is also made whereby it may be arranged with one State that the Government Statistician of that State may be appointed as Commonwealth Statistician and that this officer may by agreement continue as Government Statistician of the State with appropriate arrangements between Commonwealth and State as to his remuneration. This would make it possible to implement a proposal recently submitted by the Prime Minister to the Premier of New South Wales in respect of the services of the present Acting Commonwealth Statistician, and thus ensure the closest co-ordination between Commonwealth and States during the transition period in which the integrated statistical service is being established.
The staff proposed to be transferred from the States of New South Wales, South Australia and Western Australia is estimated to be about 176 persons. The total of annual salaries of the officers so transferred is estimated to be £175,000 and the expenditure on contingencies will amount to about £30,000.
As I have said, the bill authorizes the mating of agreements between the Commonwealth and States individually whereby the organization of the statistical services of Australia may be integrated and improved. Statisticians carry a big responsibility to produce the increasing body of statistics upon which we rely in the formulation of governmental policies and business policies alike. If ever Australia needed good and prompt statistics, and more of them, it needs them now. If the present opportunity for agreement with the States is lost it may not be possible to create another for a long time to come. I commend the bill to honorable members, therefore, as a non-controversial measure that should have general approval.
Debate (on motion by Mr. Calwell) adjourned.
Message recommending appropriation reported.
In committee (Consideration of Governor-General’s message) :
Motion (by Sir Arthur Fadden) agreed to -
That it is expedient that an appropriation of revenue he made for the purposes of a bill for an act to amend the Superannuation Act 1922-1955.
Standing Orders suspended; resolution adopted.
That Sir Arthur Fadden and Mr.Roberton do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Sir Arthur Fadden, and read a first time.
– I move -
That the bill be now read a second time.
The purpose of this short bill is to increase the pensions payable under section. 57 of the Superannuation Act 1922- 1955to former State officers transferred to the Commonwealth at federation. Their pension rights, which originated under State law, and are preserved to them by section 84 of the Commonwealth Constitution, entitled them to retire on the pension which would be permitted by the law of the State if their service with the Commonwealth were a continuation of their service with the State. State pension rights prior to federation did not include widows’ and children’s benefits. However, provision was made in the Superannuation Act 1922 for former State officers to exchange for their State rights others which included widows’ and children’s benefits. Their new rights represented the actuarial equivalent of the State rights.
These pensions have not been adjusted when there have been increases in the contributory pensions provided by the Superannuation Act 1922-1955. It has been the policy of successive governments, however, to vary the pensions in accordance with increases provided by State legislation. The majority of the pensioners were transferred to the Commonwealth Service from the Western Australian State service, and their pension rights flowed from the Western Australian Superannuation Act 1871. Increases were granted by the Western Australian Government in 1948, 1951. and 1954, and the Commonwealth granted corresponding increases in pensions payable under section 57 of the Commonwealth Superannuation Act.
Under the Pensions Supplementation Act Amendment Act 1955 (Act No. 21 of 1955) the Western Australian Parliament again increased those pensions by a flat rate of £26 per annum with effect from the 12th November, 1955. Consistently with past policy, the Government considers that the former State officers transferred to the Commonwealth, and their dependants, should be granted the same increases. That is the purpose of the bill.
Debate (on motion by Mr. Calwell) adjourned.
Message recommending appropriation reported.
In committee (Consideration of Governor-General’s message) :
Motion (by Sir Arthur Fadden) agreed to -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Transferred Officers’ Allowances Act 1948-1954.
Standing Orders suspended; resolution adopted.
That Sir Arthur Fadden and Mr.Roberton do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Sir Arthur Fadden, and read a first time.
-I move -
T hat the bill be now read a second time.
The purpose of this short bill is to increase the amounts payable under the Transferred Officers’ Allowances Act 1948-1954, to former State officers transferred to theCommonwealth. Their pension rights, which originated under State law, were preserved to them by section Si of the Commonwealth Constitution and entitled them to retire on the pension which would be permitted by the law of the State if their service with the Commonwealth were a continuation of their service with the State. These pensions have not been adjusted when there havebeen increases in the contributory pensions provided by the Superannuation Act 1922-1955. It has been the policy of successive governments, however, to vary the pensions in accordance with increases provided by State legislation.
The majority of the pensioners were transferred to theCommonwealth Service from theWestern Australian State service, and their pension rights flowed from the “Western Australian Superannuation Act 1871. Increases were granted by the Western Australian Government in 1948, 1951 and 1954, and the Commonwealth granted corresponding increases. Under the Pensions Supplementation Act Amendment Act 1955 (Act No. 21 of 1955) the Western Australian Parliament againincreased those pensions by a flat rate of £26 per annum with effect from the 12th November, 1955. Consistently with past policy, the Government considers that the former State officers transferred to the Commonwealth, and their dependants, should be granted the same increases. That is the purpose of this bill.
Debate (on motion by Mr. Calwell) adjourned.
Debate resumed from the 14th March (vide page 797), on motion by Sir Arthur Fadden -
That the bill be now read a second time.
.- This sales tax bill is one of the awful bills in this awful supplementary budget which this Government is imposing on the Australian people. The Labour party will oppose the bill. We will divide the House on it. We will seek to separate the sheep from the goats in the Government’s ranks. We do not expect to find any sheep, but we do expect to see a few sheepish faces as Government supporters vote in support of this most reactionary measure. We of the Australian Labour party believe that the Government is intellectually sterile. It has not one positive idea for the solution of the problems that it has itself created. Unless something happens very soon to rid it of the idea that it can tax Australia back into prosperity, inflation will cause very grave damage throughout the community. The leaders of the present Government parties used to say, when they were in Opposition, that the sales tax and all forms of indirect taxation should be reduced. The present Prime Minister (Mr. Menzies), in his policy speech for the 1949 general elections, delivered at Canterbury, Victoria, stated -
We will review the incidence of indirect taxes (which are a huge though sometimes unrecognized item in Australia) upon basic wage and cost of living items and housing costs.
– He did it, too.
– He did not do it, as I shall proceed to show very effectively. The leader of the party to which the honorable member for Wide Bay (Mr. Brand) belongs - the present Treasurer (Sir Arthur Fadden) - speaking at Boonah, Queensland, on the following night, paraphrased what the leader of the senior partner in the political combination that at present forms the Government had to say. The Treasurer said -
We promise that a competent review will also be made of the incidence of indirect taxation because we recognize the necessity for sensible reductions in the many cases where such reductions will arrest the upward trend of living costs.
– They did reduce indirect taxation.
– They did not. I ask the honorable member to restrain his impatience a little longer. The present Treasurer, speaking in this House on the 20th October, 1948, during the debate on the Sales Tax (Exemptions and Classifications) Bill consequent upon the budget brought down in that year, said -
The bill should be withdrawn and re-drafted on a sensible basis .having regard to our economic requirements and the indispensible need for an improvement of the home life and health of the community.
He actually moved an amendment to the second reading in those very terms. In 194S-49, the Chifley Government collected in sales tax £39,029,276. In the following financial year, £42,424,580 was collected. The general rate, from the 1st J uly, 1949, to the 7th September, 1949, was only 10 per cent., and the third schedule rate was 25 per cent. The Chifley Government levied only two rates. From’ the 8th September, 1949, to the 30th June, 1950, the general rate was only 8?( per cent., and the third schedule rate was 25 per cent. The Chifley Government actually reduced the general rate ti> the lowest it had been since the beginning of the war. In 1939-40, the general rate was 8$ per cent,, at which level it remained until, in 1940-41, it was increased to 10 per cent, under the necessities of war-time finance. In 1941-42, the third schedule rate was raised to 25 per cent. Throughout the war, the Labour Government never levied more than 25 per cent, under the third schedule, and the general rate was never more than 10 per cent. Labour did take income tax as high as 18s. 6d. in the £1 on taxable incomes of more than £5,000, because it believed that the incidence of the sales tax and all other forms of indirect taxation was heavy and their effect on the consuming public very great. Tt felt that it was much fairer and much more honest to finance the war by high taxation and to keep the sales tax rates low. However, when the present Government took office, it reversed the whole procedure. Not only is the sales tax higher to-day than it was in 1949, but also it is the highest it has been during four of the six years for which this Government has held office.
In 1950-51, this Government increased the maximum rate of the sales tax to 33^ per cent, and added a fourth schedule. In 1951-52, it added two more schedules. The Labour Government managed during the war with two schedules, but the present Government wanted six when there was no war, except a war in Korea in which Australia had two battalions of troops engaged. The only wars with which the Government was really concerned at that time were the wars in the Cabinet room. This Government increased the classifications of the sales tax to six in 1951-52, and made the tax more complex and more expensive to collect. In that financial year, not only did it impose higher sales taxes than Labour- had levied during the war, by continuing the maximum rate of 33^ per cent, of the previous year, but it introduced in addition a fifth schedule, at the rate of 50 per cent., and a sixth schedule at the rate of 66§ per cent. That is the record of the present Government parties, the leaders of which, in their policy speeches for the 1949 general elections, protested that the sales tax and all other forms of indirect taxation were too high, said they must be reduced, and promised to reduce them.
Let me translate the effect of these imposts on the Australian people in the form of tax collections. In 1948-49, as I have stated, the Labour Government took £39,029,276 from the public by this form of taxation. In 1949-50, £42,424,580 was taken. In 1950-51, the present Government took £57,170,473. In the next financial year - the year of the horror budget - it took approximately £95,000,000. Then there was a slight easing off, when it was getting ready for the Senate elections of 1953. It reduced the rates and collected about £S9,000,000 in 1952-53. In 1953-54, the collections soared again to some £95,000,000. In 1954-55, they totalled approximately £100,000,000.’ The estimate for 1955-56, as stated in the budget brought down last August, is £106,000,000. The Prime Minister has told us that the increased rates now to be levied will return to the
Government £30,000,000 in a full financial year. Therefore, the sales tax will yield no less than £136,000,000 in 1956-57. The present Prime Minister and ‘ the present Treasurer stated, when they were in Opposition, that £39,000,000 a year wa3 too much. They have demonstrated their sincerity by adding nearly £100,000,000 and bringing the sales tax revenue up to £136,000,000. It is no wonder the Government is in disrepute.
I wish now to mention one point particularly to illustrate my argument. The Government has maintained a sales tax over the years of 12$ per cent, on ordinary soap, shaving soap, shaving sticks, creams and powders, which were taxed at 16$ per cent, under the last budget but have been increased to 25 per cent, under the new schedule. Of course, cosmetics and such things as baby powder are also taxed at the higher rate. The reason the Government gives for taxing baby powders at that high rate is that mothers sometimes use the baby powders as cosmetics. If a government cannot carry on without imposing a sales tax of 12^ per cent, on ordinary soap there is something the matter with that government. At least the imposition of this sales tax on soap has left the Government in very bad odour.
The Chifley Government was continually pressed for money during the war years, and yet it never raised sales tax beyond what it thought was a reasonable sum. It borrowed all it could and in order to bridge the gap between revenue and expenditure it used the huge total of £344,000,000 treasury-bills. This Government says it has to increase sales tax because it does not believe in using treasury-bills. There is nothing particularly wrong in using treasury-bills. In fact, on occasions, it is a very beneficial method of raising finance, provided always that the Government can see money forthcoming, either in surplus taxation or in the fulfilment of its loan programme, to enable it to discharge those bills. This Government is raising too much by way of sales tax and the surplus money of which it forms a part is being raised, not for the purpose of defeating inflation, but of contributing to that total of £57,000,000 with which it hopes to finance the deficit between its loan raisings and its loan commitments under decisions of the Australian Loan Council for the purpose of carrying on State public works. The case against this Government on the question of this sales tax legislation, as, indeed, in respect of every other taxation measure it brings down under this supplementary budget, is a particularly deadly one. Sales tax was once described by the VicePresident of the Executive Council (Sir Eric Harrison), when he was in Opposition, as a vicious form of taxation. He now shows his love for this vicious type of taxation by helping to increase the burden so heavily upon the Australian people.
One of the authors of this previous budget was Professor Arndt. He and Professor Swan sent the document, which forms in part the basis of the Government’s plans, to the other six economists for their approval. It provided for increased sales tax, increased excise duties and the rest. Professor Arndt, writing in the April issue of a publication called Voice, used these words -
By omitting any increase in personal income tax the Government made a major departure from the recommendations of the eight university economists. This drastically shifts the burden of the levies away from the well-to-do towards the lower income groups.
– Who said that?
– The honorable gentleman’s friend, Professor Arndt.
– He is not my friend.
– Well, he is a friend of the Government. The economists have done well out of this Government. They used to be called bureaucrats when the Labour Government employed them, but since this Government has taken over they have all been promoted and two of them have been knighted. Professor Arndt, who apparently is in line for a title, said -
The Government must be on the lookout in the coming months to be ready to put its policy gears in reverse. It must be ready with measures to stimulate spending should there be evidence of a serious danger of general unemployment.
What is more likely to cause unemployment than the levy of sales tax to the point where it becomes regressive? The Treasurer himself admitted that in hia 1954 speech.
– The honorable member has been prophesying that for over six years.
– Some unemployment is evident and it will become worse. If the honorable gentleman has not seen it let him take a walk around Canberra and he will see plenty of it. The Treasurer, when he made his second-reading speech on the bill dealing with sales tax exemptions and classifications, wherein the Government had decided to reduce the tax on certain items from 16$ per cent, to 12£ per cent., used these words - 1 co-cream, confectionery, musical instruments and toys arid associated goods are at present subject to tax at the maximum rate of 10s per cent. The Government has had continuous and pressing representations concerning the effect of increasing costs on thu market for these commodities. Though, in some senses, they may be regarded as less essential commodities, they occupy a very definite place in the economy, some using large quantities of primary products and all providing much work in a variety of industries. To prevent the tax becoming too regressive in its effect, it has been decided to transfer these goods to the general classification and henceforth they will be subject to tax at 12i per cent.
That is what he said in 1954. In the bill before us he has taken all those items from the 12-J per cent, category and put them back into the 16$ per cent, category. He is not now concerned whether the tax becomes too regressive in its effect. If it does become regressive, then there will be considerable unemployment, and members of the Australian Country party, who allegedly are concerned about primary products and primary industry, should be careful about supporting a measure of this sort, ls it not a grave reflection on the capacity of this Government to raise money when it has to tax goods at the rate of 16$ per cent., or, in effect, levy a special tax of fi in every £6 on money spent on items such as ice-cream, confectionery, musical instruments, toys and associated goods? Those things are not luxuries. The Prime Minister, the other night, said that luxuries were the only things he was going to tax.
– He has put a tax on meat pies.
– Yes, indeed, I could give the House a list of all the other things that this Government is still taxing, many of which the Labour party did not tax. The Prime Minister during the course of his speech the other night said that some goods were being maintained in the 10 per cent, category. We protest that none of these goods should be in the 10 per cent, category. Household goods and appliances, furniture and crockery should bear no tax at all. How are young people going to set up homes if household goods are to continue to be taxed ? Th? Prime Minister says, in effect, that the people are very lucky because these goods are taxed at only 10 per cent. Presumably, if they had been unlucky they would have had to pay 12-J per cent, or even 30 per cent.
When he announced that he was going to levy the motor industry to the extent of 30 per cent, on non-commercial vehicles, he said -
I would not have it thought that wc are in any sense hostile to the motor vehicle industry.
I do not know just what degree of hostility one has to display to become regarded as a person not friendly to the industry; but for the benefit of honorable members opposite who never seem to read anything about sales tax, or about anything else, I should like to remind them that when we were a government we taxed motor cars at the rate of S-J- per cent., not 30 per cent. This Government in its 1950 budget increased the rate to 10 per cent.; in its 1951-52 budget to 20 per cent. ; and from 1952 up to date it has been 20 per cent. Then the rate was reduced to 16$ per cent. ; now it is being increased to 30 per cent.
– With the tax on petrol increased as well.
– That, of course, is another matter. I cannot discuss that subject in this debate, but it is incidental to the capacity of a nian, who has to buy and operate a car, to pay the increased sales tax and be slugged an extra 3d. a gallon on the petrol he uses. This Government even went so far as to put a levy of 66$ per cent, on such luxuries as party decorations and novelties. The hats which the children wear at Christmas and birthday parties had to bear this heavy tax because the country had to be saved from the evils of intiation. As a matter of fact, if one wishes to buy a small replica of a decoration that has been awarded, he has not to pay any sales tax at all, but if he happens to wish to buy a medallion to present to a school or a prize for school sports, he has to pay a tax because those items are luxuries. Apparently the little bit of ironmongery which represents a decoration that is bestowed, a knighthood or whatever it may be, is not a luxury; presumably, that is an important item of apparel. The things which we used to try to remove altogether from the realm of taxation have now come back under the surveillance of the Government and been made subject to tax.
T should like to give the House some idea of how sales tax has operated since it was first introduced many years ago. It started at about 5 per cent, or less and remained at that rate until the war came, and only under the pressure of war was it increased. It was always understood that when the war ended, sales tax, like income tax, would be reduced and that ultimately it would be abolished. The policy of the Australian Labour party provides for the abolition of all such forms of taxation. I am indebted to the honorable member for Melbourne Ports (Mr. Crean) for handing me a statement of the statistical history of sales tax. It shows that in 1930-31, when the tax was first applied, the percentage it bore to total collections was 6.9 per cent., and I correct myself by saying that the rate of tax was then only 2£ per cent. The next year sales tax collections were 15.6 per cent, of total tax collections, and the rate of tax was only 6 per cent. Over the succeeding years, the rate of tax dropped from 5 per cent, to 4 per cent., rising again to 5 per cent, in 1938-39, 6 per cent, in 1939-40, and then increasing to 8-j per cent., the rate which I mentioned as having been imposed in the early stages of the war.
If this Government really wanted to help the people, it would relieve them of the burden of indirect taxes as much as it possibly could. If it must raise the money that it says it requires, the money should be got in the form of income tax. The Australian Labour party is not a high-tax party, and as a government after the war we reduced the burden of taxes in all directions. We reduced the rates of company tax and income tax, so that instead of a man paying 18s. 6d. in the fi on all taxable income of £5,000 and over, he paid only 13s. id. in the £1 on all taxable income of £10,000 and over. But this Govern.ment. now that it is in difficulties’, thinks that hitting the great mass of the people who do not realize how they are being taxed, is a good and safe method of raising its revenue, but this course is increasing the cost of living, contributing to the inflationary spiral, and doing harm to the economy. 1 suggest to the Government that there are some of the items which should be exempted altogether from sales tax. Foi’ instance, the Government should reduce the sales tax on motor vehicles used for church purposes. Any clergyman who uses hi® car for church purposes, either on Sunday or when he is visiting members of his congregation between services, should be able to obtain a vehicle without paying sales tax. Motor vehicles used for church purposes are exempt from the tax if they are fitted with a platform on the back which can be used as a pulpit, but otherwise the purchaser of a motor vehicle has to bear a sales tax burden. In spite of repeated protests by myself and others, the Government still taxes the printed signs which are displayed outside churches, advertizing the name of the clergyman who is to preach on the following Sunday, or displaying exhortations from the Scriptures. In the Government’s opinion these are luxury items and their use ought to be discontinued, or if not, tax must be paid.
– At 12) per cent.
– Yes, at 12£ per cent. Even fishing tackle, which is used by quite a number of people, professional fishermen, is taxed, and this leads to an increase in the cost of living.
– It is used by parsons, too.
– Yes, and by politicians and others.
– And professional fishermen.
– 1 was dealing with the case of professional fishermen, bales tax is imposed on commercial photographs, ice-cream, cakes and pastry, all pastrycooks’ lines, washing machines, fruit juice cordials and concentrates and, of course, there is a heavy sales tax on radios. A heavy sales tax is imposed on vacuum cleaners. None of these things is a luxury to-day. All are necessaries in the home; all are amenities. How can the Government protest that it is really tackling the problem of inflation? One does not know whether to admire its ingenuity or pity its ingenuousness, but the Australian people certainly realize what is happening to them, and I doubt, if the Government has a friend anywhere in Australia to-day. Perhaps the Government reckons that it can do this now, and then, as the next election comes clue, relieve the burden a little and advertize itself once again, as it did in 1953-54, as a tax-reduction government. I regard all that has happened over the years, in the manipulations of the budget, and in the general political dishonesty which lias been exhibited, as something which does harm to the standing and prestige of parliamentarians and certainly does a grave disservice to democratic institutions.
I shall not take up much more time, but let me mention a few more items which are now subject to the 16$ per cent, sales tax levied by this Government. They are fancy goods of all sorts, 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 gramophone records. The extraordinary thing about the Government is that it imposes a limit on the size of baskets that one can buy without paying sales tax. If one buys a lunch basket which is twelve inches long, his purchase is exempt from tax. The purchaser of such a bag 13 inches long has to pay sales tax. The person with a good appetite pays sales tax, but a person who can limit his appetite to conform to the contents of a 12-in. lunch bag does not have to pay tax. Some leather bags are subject to tax, but plastic bags used for the same purpose are either not subject to tax or are subject to a lower rate of tax.
I shall conclude with a further reference to a statement from the speech made by the present Treasurer, in support of an amendment moved to the corresponding bill in 1948, which was to the effect that the bill be withdrawn and re-drafted because it was obnoxious and, he said, against the public interest. Waxing melodramatic and striking a theatrical pose, he said, on the 20th October, 1948 - is there any parent who would allow his child to grow up through a toyless and partyless childhood, or without some indulgence in sweets or ice cream? It is only those of us who have experienced the intense happiness that children gut from the simple pleasures, who can appreciate the official niggardliness that taxes them so severely.
As somebody said, what humbug! That was what the present Treasurer had to say when he was in opposition in 1948; but he is now levying sales tax on ice cream at such a rate that of every eight ice creams consumed, the Treasury, in effect, gets one. There is another gem from the right honorable gentleman’s speech on that occasion in 1948. It reads -
Tooth paste, washing soap, soap powders, dusters and dish cloths are essential aids to cleanliness and to the maintenance of healthy living standards, yet they are all subject tn sales tax at the rate of 2s. in the £1.
Ten per cent ! He went on -
Surely prevention is better than cure in this case, as in others. Is it not ridiculous that the Government should spend tens of millions of pounds on social services, and at the same time place a heavy tax on essential aids to » healthy existence?
But, since he has been Treasurer, he has increased the sales tax rate on all those items by at least 100 per cent, on occasions and, under this measure, the rate will be much higher than 2s. in the £1. If the honorable member for Mallee (Mr. Turnbull) can swallow that, and vote for the Government in the division on this measure, after all his protestations when he was in opposition, and in more recent times, then the electorate of Mallee certainly ought to get itself a new representative in this Parliament. Only the other night the honorable gentleman told us that bread containing currants was subject to sales tax, but that bread not containing currants was not subject to sales tax. He told us about “ concentrated sunlight “ not that he is a very good advertisement for it himself; but he told us all about it, and gave us an excellent and entertaining impersonation of “Raisin Joe “. We shall see where he stands when the divisions on this bill take place. As I said at the beginning of my speech, when the House divides on this measure, we shall separate the sheep from the goats in the Government’s ranks, but we shall not find a single sheep. I repeat something else that I said at the commencement of my speech, as follows : - We shall see a few honorable members with sheepish looks on the Government side, but I do not include even the honorable member for Mallee in that category.
.- It has been my privilege, or otherwise, during the last six years to follow, on many occasions, the honorable member for Melbourne (Mr. Calwell) in debates on measures of this type, and I suggest to honorable members, particularly to new members, that on each occasion the honorable member for Melbourne has gone through the same kind of act as Ave saw him perform, this afternoon. He has a great habit of indicating things that are in the act, but which are not related particularly to the bill. It happens that the things he is talking about are to a very large degree not included in this measure, but, in his opinion, are likely to produce a reaction from the public that, from, his point of view, is much better than he could otherwise produce.
I shall not attempt to follow in my speech all the diversions he included in his, although I was very interested in some of his statements. The first statement, and the one which stands out in substantial relief, is the honorable gentleman’s suggestion that the Opposition does not believe in the levying of indirect taxes, but does believe in substantial increases of direct taxes. That is very interesting information for the public. In effect, the Labour party believes in smaller pay envelopes at the end of each week as a result of the imposition of increased direct taxation. If that is the Labour party’s attitude I am pleased that the honorable member for Melbourne, who is deputy leader of the parliamentary Labour party, spoke this afternoon, be cause this is the first occasion since the session began on which the Labour party has given the slightest indication of what its beliefs are in relation to the economic problem with which the nation is now faced.
The second point to which I want to make some reference is the pastime - and I call it that advisedly - in which he has indulged, not for the first time, I assure honorable members, in the last few years, of using money comparisons in order to support his arguments. It has been for a long time the habit of the Labour party, both in the Parliament and outside it during election campaigns, from the highest Labour party member, the Leader of the Opposition (Dr. Evatt) himself, down to the lowliest member of the party-
– We are all equal.
– That is something that is also very interesting, because that has not been evident in this place over the last few years. Labour party speakers support their arguments with comparisons of money volume, irrespective of the changes that have taken place since the last Labour government was in office, irrespective of inflation, irrespective of the higher levels of incomes now compared with some years ago, and irrespective of the increase of population that has occurred during this Government’s term of office. I think that I am right in saying, in respect of the higher level of wages now compared with some years ago, that the average income of the Australian wage-earner to-day is in the vicinity of £17 a week compared with £8 or £9 a week five or six years ago; and that during the same period our population has increased from under 7,000,000 to nearly 9,000,000. Irrespective of those factors, the Labour party still takes the total volume of money as its basis when comparing conditions in the country under this Government with conditions under the last Labour Government. I cannot believe that anybody, either in this place or among the public, will be gulled by that kind of argument advanced in a debate on such a measure as this. -
The honorable member referred particularly to two items in the schedule. He said that crockery is subject to sales tax of 10 per cent., and should not be subject to even that rate of tax. A few days ago, I noticed in a retail shop in Brisbane, dinner sets priced from £111 to £115. Yet the honorable member has implied to-day that expenditure on such items should not be subject to sales tax. I stand in my place and I say that I do not agree with him in any circumstances. If people can afford to make purchases of goods of that kind which, I say deliberately, are in the luxury class, then they can make a contribution, through indirect tax, to the revenues of the country.
The honorable member also said that under Labour, motor cars carried sales tax at the rate of only Si per cent. But what were the circumstances in relation to motor cars between 1945, at the end of the war, and 1949, when the Labour Government left office? Most people were still using the cars they had used during the war - cars that were worn out. “We know perfectly well that after the war finished, a considerable time elapsed before the motor car industry was able to increase its production in order to meet the requirements of people who were, using the cars that had been worn out in the war period. Therefore, I suggest that it is ridiculous to compare the situation in relation to motor cars existing at that time with that existing to-day. Motor vehicle statistics are illuminating. A few years ago, approximately 4,000 new motor vehicles were registered each month, compared with approximately 13,000 a month now. That indicates the improvement that has taken place in the number of motor cars available. I should like to remind the House and the public that, since this Government has been in office, it has done what both the Prime Minister (Mr. Menzies) and the Treasurer (Sir Arthur Fadden) said, when sitting in opposition, that the parties which now form the Government would do if elected to office. It has reviewed the incidence of indirect taxation. I remind honorable members particularly that when inflation placed heavy demands on the Australian economy in 1951, this Government did not hesitate to increase sales tax for the purpose of drawing off surplus money, with a view to stabilizing the economy. When stability was reached, we reduced sales tax, but now that an unsatisfactory inflationary situation is again developing, the Government has no hesitation, once more, in increasing sales tax.
Apart from these general comments, and the general statement made by the honorable member for Melbourne in relation to sales tax, let us examine what is involved in the measure now before the House. In the main, the bill gives legislative effect to the proposals outlined by the Prime Minister in his statement on the Australian economy and referred to also by the Treasurer in his secondreading speech. Briefly, they are as follows :- Private motor cars, including station wagons and estate cars, are to be taxed at the new rate of 30 per cent, instead of the old rate of 16$ per cent. Commercial vehicles, motor cycles, motor scooters and auto-cycles, and all accessories and parts for all vehicles, excluding tyres and tubes, are to be taxed at the new rate of 16$ per cent, instead of the old rate of 12£ per cent. Tyres and tubes for all vehicles - whether used for commercial or private purposes - will continue to be taxed at the rate of 12f per cent. The rate of tax on all other goods in the 16$ per cent, classification, except motor vehicles, on which the rate has risen to 30 per cent., will rise to 25 per cent. Except for commercial vehicles, motor scooters and the like, no increase of tax is proposed in relation to goods in the 12$ per cent, category or in categories bearing tax at less than 12£ per cent. Apart from motor vehicles and accessories, the only commodities on which sales tax has been increased are those generally regarded as being in the luxury group. Of course, the honorable member for Melbourne referred only to the luxury group, but I go further and say that, with the exceptions I have mentioned, the commodities which will bear increased sales tax are luxury items, goods of a less essential character, and items which are only purchased occasionally. I consider that the two last-mentioned qualifications have an important bearing on our consideration of the relevant parts of the sales tax legislation that are affected by the measure now before us. I think every honorable member will agree with me that there are included in this particular category some items which are more essential than others. Expressed in another way, certain types of goods within the classification are more of the nature of luxury items than others. Of course, from the point, of view of sales taxation, it is quite impossible for anybody to classify goods in a manner satisfactory to every individual. For instance, if a person’s watch wears out, it is essential for him to buy another watch. Here, n distinction must be made between watches that are worn by average people and expensive watches, such as diamond studded wristlet watches which may cost as much as 500 guineas, lt is a difficult matter to establish a basis of discrimination in this connexion. A similar position exists in relation to clocks. Fountain pens are purchased only occasionally. How often does the average individual purchase a fountain pen, and what additional amounts of sales tax will he pay? As far as the individual is concerned, I suggest that, he will pay only a very small additional amount indeed. Similar comment could be made in relation to safety razors, travelling bags and handbags. These items are only occasionally purchased by people, because they last for many years.
As the honorable member for Melbourne has said, for many people a wireless set is an essential item. On the other hand, I point out that, in the case of people who want a wireless set in the kitchen and another in the bedroom in addition to the one in the lounge room, the purchase of wireless sets comes within the range of luxury buying. Therefore, within these categories, it is impossible to distinguish between essential and luxury buying in a way that would be completely satisfactory to everybody.
I point out that there is a real problem in relation to the number of categories of goods for sales taxation purposes. Repeatedly in this House during the last few years, I have stressed that the fewer the number of categories the better. As one who has been associated with business undertakings which have had to operate under the sales tax legislation, T know that, if there are numerous sales tax categories, it is a very expensive matter to keep track of the goods in the various percentage grades, and those which are exempt from sales tax, in order to determine at the end of each month the amount of sales tax payable. Inevitably, there are inequalities in relation to different types of goods, and therefore it is more satisfactory, overall, to have as few categories as possible.
I wish now to make some comment on the new rates. 1 mentioned earlier that motor cycles and motor scooters will be taxed at the same rate as. commercial vehicles. To be very candid with the Treasurer and the Government, I cannot understand why a motor cycle which is not used for business purposes - the vast majority of motor cycles arid motor scooters are not used for business purposes - should be in a different category from private motor cars. Although I regard many motor cyclists as a menace on the roads from the point of view of the accident potential, I point out that generally speaking only one person derives a real benefit from a motor cycle. During week-ends, of course, perhaps two people might obtain a benefit from a motor cycle. On the other hand, a motor car confers a benefit on every member of a family. At week-ends, motor cars containing as many as seven people can be seen proceeding to the seaside. I do not quite understand why there should be discrimination against the private car owner in favour of the motor cyclists, and I should be very pleased if the Treasurer would explain the reason to me. I suggest that herein lies one of the faults of the legislation before us. It would appear, and I think it is right to say, that many honorable members were shocked by the very steep increases in the rates of sales tax on private motor cars. Most people do not understand why this was done by the Government, but I believe that it was done not only to stop people from purchasing motor cars to the same degree as previously, but also to take some action against the increased use of hire purchase. Every honorable member knows that the Commonwealth has no authority in relation either to hire-purchase deposits or the interest charged under hire-purchase agreements. That authority resides in the States, and the States have consistently refused to exercise it.
When the Commonwealth suggested (hat the State governments should hand authority to deal with hire purchase over to the Commonwealth, the Premier of Queensland went straight back to his State and reduced the deposit required in respect of goods sold under hirepurchase agreements. Surely such action on the part of a Labour Premier is a clear indication that the Labour party does not want any control to be exercised over hire purchase, irrespective of whether hire purchase is a substantial factor in the inflation of our economy. There is virtue in this measure, if it means that the average private owner of a. motor car will use his present vehicle for an extra year or two. “Most of us will agree that most private cars can bc used for an extra year or two before they need to be traded in for new vehicles; and if there is a postponement of a certain amount of spending in the community for the next year or so, that will bo an important contribution towards overcoming inflation.
Sitting suspended from 5.57 lo S p.m.
– When the sitting was suspended, I was speaking of the measure before the House in relation to the Government’s economic plans, as they were outlined by the Prime Minister in his economic statement, and also by the Treasurer, who introduced this bill a few days ago. The honorable member for Melbourne, who is deputy Leader of the Opposition, preceded me in this debate, and he gave the impression that all items in the various schedules of sales tax were affected by this legislation. I have pointed out, and I repeat, that it applies only to goods in the highest schedule of tax - ‘that is, the 16$ per cent, schedule - and to the motor cars which are under the 12^ per cent, schedule. I hope that T have been able to show clearly that the honorable member for Melbourne was off the beam when he spoke on this matter.
I also directed the attention of the. House to at least one anomaly that I see in this legislation. Private motor cars are to be taxed at the rate of 30 per cent., but motor scooters and motor cycles are to be taxed at the rate of only 16$ per cent. This seemed to me to be an anomaly, because a private motor car, in general terms and particularly for week-end motoring, serves the whole family. A motor cycle or a motor scooter, on the other hand, generally serves only one person, or at the most, two.
– At great risk, too.
– I overlook, at this stage, the traffic hazards related to the riding of motor cycles and motor scooters to which the honorable member for Corangamite has referred, and emphasize the anomaly that has been created by this legislation. I believe, also, that those who use motor cycles generally can afford to pay the additional tax, because most of them are unmarried and receive an adult wage although they have not the family responsibilities of many adults. I believe, also, that the rate of tax on private motor cars represents rather a steep increase. Most persons were surprised by the increase of the impost.
As I have said, the new rate of taxes has been made necessary by the hirepurchase problem. The responsibility for control of hire purchase lies with the State governments, but they have never attempted to tackle the problem, either in relation to the deposit on goods that are to be bought by hire purchase, or in relation to the interest charges on hirepurchase agreements. In the case of Queensland, after the Australian Government had asked to be given control of hire purchase the Premier of Queensland, Mr. Gair, returned to Brisbane and, immediately, the deposit required under Queensland legislation for goods bought under hire purchase was reduced.
It has become necessary for this Government to use any measures it can adopt to meet this problem. Since motor car business represents between 60 per cent, and 75 per cent, of hire-purchase transactions, it seems that some sort of control must be imposed on it during this inflationary period. The Government believes that the higher cost of motor cars will have that result. In most cases, a private motor car will last for an additional year or two and, in many cases, there is no necessity for the owners to sell a car as soon as they do. Therefore, they can postpone the effect upon themselves, personally, of the increase of tax. In that way, they will be making a contribution to the fight against inflation for which this legislation is intended.
I make the further comment that I do not quite understand how £30,000,000 more in revenue will be derived from the imposition of this tax in a full year. It must come about in one or, perhaps, two ways. In the first place, it might come about through the essential purchase of new trucks for commercial use, or through the purchase of motor cars for private purposes because of the age of the vehicles that the owners possess. Some persons will purchase new motor cars for private purposes, irrespective of the price. We know that there are people who want to trade in their cars every twelve months, whether they have completed a useful life or not. In such a circumstance, the Government is justified in asking the persons concerned to make a contribution to revenue, but I cannot understand how an additional amount of £30,000,000 is to be raised from this additional impost. As the honorable member for Melbourne has said, it is estimated that revenue from sales tax will rise from £100,000,000 to about £130,000,000, representing an increase of one-third in relation to these particular items. I wish the Treasurer had explained just how that amount of £30,000,000 was calculated because, with the discouragement of the purchase of new motor vehicles, I would not expect the substantial increase of revenue that the right honorable gentleman has mentioned.
In 1951, when inflation was severe, the Government adopted the principle, as it is doing now, that some spending power should be drawn off from the community. Some believe that we shall not be drawing off spending power to any great extent with this legislation. In fact, we might be making some inroads into the people’s savings, but I do not believe that all of the additional amount to be paid in sales tax will come out of savings. Some of it, at least, will come out of current earnings. If current earnings are used to pay sales tax, I suggest that there will be fewer purchases of commodities other than those upon which sales tax has been increased. If that happens, surely the Government’s purpose will he achieved, and there will be a reduction of consumer spending by the community. Some might ask how we can prove that that will be the result. In 1951, we could not prove that that result would be achieved, but, in fact, it was achieved by measures which were not dissimilar from the legislation now under consideration. I believe that this measure will have the effect of drawing off some consumer spending and, to that extent, it will assist, quite considerably, the Government’s attempt to check inflation.
I support the measure that is before the House. I know that nobody is happy about imposing additional taxation. Nevertheless, Australians have a broad outlook, and I believe that they see the justification and the necessity for what the Government is trying to do, not in its own interests, but in the interests of the people as a whole, because if inflation races away, as it did in 1951, every person in the community will suffer. I am certain that, unpalatable though it may have been in the first instance, the public have come to see the sense of the measure which is now beforethe House, and will accept it as an honest attempt by the Government to do the things which are in their interests.
.- This bill is visible evidence of the complete inconsistency of the Government’s philosophy before and after assuming office. When Government members were in opposition, they consistently attacked the principle, and the operation of the sales tax. On every occasion when the Labour Government found it necessary to bring before the House a bill for the alteration of the then-existing schedules, honorable members who now form the Government waxed very sarcastic at the incidence of the tax, and said on numerous occasions that once a Liberal government graced the treasury bench, this tax would be reduced considerably. Facts, however, have completely belied that most interesting assertion made by present Government members when they were in opposition.
For the last fiscal year of the Labour Government’s term, the year 1949-50, £42,000,000 was collected in sales tax. That represented 8.4 per cent, of total tax collections. By 1954-55, that amount of £42,000,000 had risen to £100,000,000. and in addition to that, the percentage that sales tax bore to total tax collections increased. Whereas in 1949-50 sales tax represented 8.4 per cent, of total tax collections, in 1954-55 it represented 10.7 per cent, of them. After the present schedules have been in operation for a full year, sales tax collections will amount to £13’6,000,000, and if the rates in other avenues of taxation remain as they are, the sales tax collections will represent 10.8 per cent, of total tax collections. When we consider the actual amounts collected, and the percentage that sales tax bears to total tax collections, and when we remember the very airy promises made by its members when they were sitting in the shades of opposition, this Government stands condemned.
When Labour went out of office in 1949, the general rate of sales tax was 8 1/3 per cent. In 1951, this Government increased the rate to 12£ per cent., and it has stayed at that level ever since. It will be readily seen from this that the average consumer is paying 50 per cent, more in sales tax for general articles than he did when Labour was in office. Many valid and legitimate arguments could be advanced as to why sales tax should not be levied on a wide range of articles, but suffice it to say that in Labour’s view sales tax contravenes every sound principle of taxation. I will admit that, in certain circumstances, it can be justified and condoned. For example, the circumstances that justified its introduction in 1930 are not parallel with those obtaining to-day.
Sales tax was first introduced into the Commonwealth fiscal policy in 1930 which, as every honorable member knows, was a depression year. Not only was it introduced in Australia but it became an almost universal policy because of the peculiar circumstances existing in that tragic year. Governments all over the world found that the usual streams of taxation were drying up, and they were forced to tap other channels of taxation to acquire revenue to carry on ordinary state services. The revenue from income tax, as everybody knows, became lower and lower because of unemployment, and the government was forced to look round for another method of raising some ready cash. It was for that reason that in 1930 the Australian Government, and indeed, governments all over the world irrespective of their political complexions, introduced sales tax as a temporary measure to provide desperately needed revenue. Unfortunately, like many other temporary measures, with the passing of the years sales tax has changed from a. temporary to a permanent revenue source. It has proved very difficult to eradicate as its full effects have often passed unnoticed by the taxpayer, because it is an indirect tax.
There was a great deal of justification for the imposition of sales tax during the depression years. The Labour Government introduced it, and the United Australia, party Government carried it on. There was very little diminution of the rate of tax when the United Australia party Government was in office from 193 1 to 1941. As a matter of fact, when Labour went out of office, it was collecting £18,000,000 in sales tax. When the United Australia party Government went out of office in 1941, it was collecting £19,000,000 in this way. So there was very little difference between the amounts collected by either Liberal or Labour governments at that time. It is safe to say that at that particular period no valid objection could be levelled at the government of the day in respect of the imposition of sales tax. The rate of unemployment became so high and wage standards were so low, that revenue from income tax fell to an unprecedentedly low level, and the Government had to resort to other means of obtaining money to carry on the necessary services. The Government found that it had to establish some stable source of revenue, and introduced the system of sales tax.
But whilst sales tax could be justified in the peculiar circumstances operating in those very distressing years, entirely different circumstances obtain to-day. For instance, nobody could suggest that income levels are low to-day, as they were in 1930. Incomes in the top brackets are now at an all-time record high. From 1940, when large amounts of money had to be found for the purposes of war, the rates of sales tax were increased. No objection could be offered to that, because money had to be found for the purpose of carrying on hostilities. In 1940, the general rate was increased to 10 per cent., and, later, during the war period, it rose to 12$ per cent. After the war, the Chifley Government, recognizing the inequity of the tax, reduced the general rate to 8$ per cent, before it went out £>(. office. It was the Chifley Government’s policy to reduce the incidence of sales tax progressively, because of its unfair incidence, particularly in the lower income groups. This Government, despite its insistence, when it was in opposition, that it would reduce the tax, actually increased it in the year 1950-51. Whilst the maximum rate, which was 66$ per cent, in 1951, has been reduced, the general rate is still 12$ per cent, to-day as against per cent, when the Chifley Government was in office.
Labour’s basic objection to the sales tax is that it does not comply with the principles of equitable taxation. It is a. tax on the purchase of goods, and as such, simply ignores the taxpayers’ ability to pay. It runs counter to the principle of ability to pay and imposes the heaviest burden on those least able to bear it. As a matter of fact, sales tax is a kind of gross income tax that falls upon the payer in inverse proportion to income. For instance, the less a man earns the greater is the proportion of his income that is taken in sales tax. It has been reliably computed that the average person spends something like half his income on goods on which indirect taxes, including sales tax, are levied, while the wealthy man spends on such goods as little as 5 per cent, of his income. Because it is impossible to assess the economic position of those making purchases, we find that every purchaser pays the same rate of tax irrespective of whether his income is £20,000 a year or a mere pension of £20S a year. Because the rate is the same for all buyers, it ignores the principle of levying taxation in accordance with ability to pay. In the past, sales tax was accepted with no marked hostility, because it was an indirect form of taxation. It was concealed, and because the rate was low, no one noticed the increases that were levied. It is safe to say that until 1951 consumers, generally speaking, were ignorant of the sales tax impost, because up to that time the inexorable collection of comparatively small amounts of tax from millions of purchasers more or less arno im ted to painless extraction. In 1951 the picture was completely altered, because the incidence of the horror budget brought home to people just how savage sales tax could be and how unfair it was in its application, particularly to the lower income groups. It is reliably estimated that approximately 80 per cent, of sales tax is extracted from the ordinary wage and salary earners, who are struggling to maintain a meagre standard of living in a period of high prices. Sales tax makes those prices even higher.
The average person in the community is clamouring for an increase of real purchasing power. If the Government had done the right thing for these people - and it claims to represent all sections of the community - it would have reduced sales tax, not increased it. That would have been a. boon to the ordinary people, who are now being placed under a very severe and unfair handicap. I have no doubt that if the Australian Labour party had been in office, it would have reduced sales tax. The resultant increase of pinchasing power would not have been inflationary, because, under existing conditions, it would have been spent on essential consumer goods. Shopkeepers in the division of Batman have told me that, because of the incidence of sales tax, goods are starting to stockpile on the shelves of the ordinary shops. We have been told by Government spokesmen that one of the purposes of this bill is to discourage the purchase of luxury and semiluxury goods. A perusal of the schedules indicates that many of the items on which sales tax has been increased are by no means in the luxury classification.
It is safe to say that, because essential consumer goods are being subjected to increased sales tax, some unemployment must occur. Fewer workers will be engaged in essential industries, because those industries, too, have felt the impact of the present economic policy. The idea behind the 1951 budget was the transfer of workers from luxury industries to essential industries, but to-day, because increased financial accommodation is not available, those industries are forced to restrict their activities. Government supporters have stated that the Government must have increased revenue for the purpose of carrying on certain vital community services. If it must have increased revenue, it could impose other forms of taxation. I suggest that any tax should be judged by its impact upon our economic well-being and its effect upon the stability of the economy. In the light of that test, sales tax fails dismally. Personal taxation of high incomes and wealth on a wide scale seems to furnish the best available instrument for achieving this end without greatly damaging the productivity of the economic system.
When we examine any form of taxation, be it sales tax, income tax or excess profits tax, I suggest that, in order to obtain an assessment of its effect upon the community, it should be considered from three points of view. The first question that we should ask, and which the Labour party places in the forefront of any examination of taxation proposals, is : In what way does it apportion the burden among persons on different incomes? I should say that even supporters of the Government could not refute the argument that thu imposition of sales tax throws on the backs of the poor a burden that is out of all proportion to their ability to pay. The Labour party suggests that the acceptance of the idea that people should be taxed according to their ability to pay rather than in proportion to their inability to resist is a tremendous social achievement that must be safeguarded at all costs. The recognition of that principle, as a result of Labour’s advocacy over many years, has been slow and painful. As the imposition of sales tax cuts across this much-prized principle, it must be indicted by all Labour spokesmen.
The second question that we should asb about any past form of taxation is : What is its efficiency as measured by costs of administration in relation to revenue produced? The imposition of sales tax, the incidence of which ranges from 10 per cent, to 30 per cent., compels firms to employ people to do nothing more productive than the accounting that is involved in submitting returns to the Taxation Branch. This is a veritable nightmare to the small businessman who has to do the work himself. It is necessary also to have an army of public servants to supervise the administration of the sales tax legislation to ensure that the correct rates are charged and collected. Thirdly, I think it is reasonable to ask in regard to any proposed form of taxation: What is its effect upon the productivity of the economic system ? Past experience, particularly immediately after 1951, has shown that increases of sales tax have been followed by a decline of production of not only so-called luxury goods but also essential consumer goods, because those goods have been taxed out of the reach of the average purchaser. I suggest that sales tax, as a form of taxation, does not measure up to those three tests, and that therefore it must be cast aside by all protagonists of reasonable and fair forms of taxation.
I submit that the increases envisaged by the bill accentuate the insidious effect of sales tax on the community at large. If taxes are to be increased, wiry cannot they be increased equitably? I refer now in particular to the unfair discrimination against the motor vehicle manufacturing industry that is revealed in the bill. The motor industry is essential to our community. Industry is expanding in all directions. Factories are being built in the outer suburbs of Melbourne wherever and whenever land can be acquired. Industrialization is proceeding apace. Whether or not Government supporters like motor transport, the fact is that expanding industry, irrespective of the costs involved - and the new imposts will certainly add to production costs and accelerate the inflationary spiral - must have motor transport. The motor vehicle manufacturing industry plays a very important part in Australia’s development. We are proud of the expansion of this industry, because Australia is one country that motor transport has helped to develop. Because of the long distances that must be traversed, in very many respects motor transport is more convenient, and, in some cases, cheaper than rail or other similar means of transport.
There is one commercial motor vehicle to every fourteen persons in Australia, which proportion is higher than in any other country. That fact indicates the extent to which commercial enterprises in Australia, depend upon motor transport. I should like to give the House some figures regarding road transport. These facts have been told before, but there is no harm in telling them again, if Government members will listen to them, because they show the very important part that road transport plays in the economic life of our community. Road transport accounts for 63 per cent, of all passenger miles travelled; it accounts for 26 per cent, of freight ton-miles traversed, and it accounts for 76 per cent of all freights carried by land in Australia. Notwithstanding those facts, the Government has decided, for some reason or other, to impose unfair penalties upon an industry that is doing so much for the development of the country.
Now I deal with the matter of private motor vehicles, on which sales tax has been increased from 16$ per cent, to 30 per cent. Before 1951, the rate of sales tax on private motor cars was 10 per cent. It was increased in the 1951 budget to 20 per cent., but it was subsequently reduced to 16$ per cent. I should have thought that, if the Government had contemplated increasing the sales tax, it certainly would not have imposed a rate higher than that which obtained in 1951. Yet it has fixed a rate 50 per cent, higher than that which operated in 1951, and the sales tax rate now stands at the all-time high figure of 30 per cent. In view of this 80 per cent, increase in the rate of sales tax on private motor vehicles, it is time that the Government appointed a committee to examine the ramifications and the importance of the motor car industry in Australia. The Government has a. habit of appointing committees for all sorts of purposes, to examine this, that or the other problem, and if it appointed such a committee as I suggest, and if that committee made even a cursory examination, it would be found that private passenger motor cars have played and are playing a tremendous part in Australia’s development. They are used for numerous purposes, other than for purposes of pleasure. They play a large part in family life, enabling a man to take his family for a drive on thu week-end, but there are various other purposes to which the private car is pur. today. As an example, let me mention that many factories have recently been built on the outskirts of Melbourne. “Workers in those factories find it extremely difficult to get to and from their places of employment rapidly and cheaply, and private motor vehicles are used extensively for this purpose. No doubt similar circumstances exist in other cities as in Melbourne. The person who buys a car primarily for that purpose must pay sales tax of 30 per cent., although no one can gainsay that that vehicle is playing an important part in increasing Australia’s productivity, by providing cheap and rapid transport for workers between their homes and their places of employment.
It is true to say that the private passenger-ear plays an essential and integral part in our way of life. I suggest that there are many luxuries whose disappearance from Australia entirely would cause no great inconvenience, but if some one waved a magician’s wand and caused every motor car in Australia to be immobilized, the whole life of the community would be thrown into a state of chaos. Such is the importance of the private motor ear, for the purchase of which a sales tax of 30 per cent, has to be paid. If motor cars were removed from the Australian scene, our standard of living would drop sharply overnight, unemployment would be the order of the day, there would be complete dislocation of industry, and general living standards would descend to the level that obtained in about the year 1950. The plain fact is that but for the motor car, both private and commercial, our existence to-day would be very drab, but for some mysterious reason as yet unexplained by Government supporters, the motor car industry has been singled out for special attack. This heavy impost of 30 per cent, has been introduced, while other goods which could much move reasonably be classed as luxuries have not been subjected to that high rate of sales tax.
I now deal with another class of goods, on which the sales tax has been increased from 16$ per cent, to 25 per cent. 1 refer to shaving requisites. Surely no one can say that shaving requisites are luxuries.
– The honorable member might look well in a beard.
– I know that the honorable member for Deakin, who interjects, would look just as well in a beard as he does clean-shaven. He might even look better; it might give him a more dignified appearance. I look upon shaving requisites as articles necessary for the maintenance of personal hygiene and cleanliness, and why sales tax on those articles should he increased is beyond my comprehension. Surely we should encourage people to be clean and to keep their personal appearance above reproach, but we find that articles which are made for the express purpose of ensuring a high standard of cleanliness in the community have been subjected to increased sales tax. I cannot understand why the Government has singled out these articles and imposed upon them this high rate of sales tax.
Ifr. GEORGE Lawson. - What about ordinary soap?
– As the honorable member for Brisbane (Mr. George Lawson), reminds me, the sales tax on ordinary soap that a person uses to wash himself has been increased from 16$ per cent, to 25 per cent. Surely no member of the Government parties can suggest that a cake of soap is a luxury. Yet this Government, which claims to look after the interests of the people, proposes to make it even more difficult for people to keep themselves clean. As a matter of fact, if we examine hundreds of items appearing in the various schedules to this legislation, many anomalies will be seen.
Finally, I submit that this Govern- ment has made a gross blunder in bringing forward the bill under discussion. It is a blunder that will not be forgotten by the Australian people when next they have an opportunity to cast their votes at a.n election.
– I am pleased to follow in this debate my distinguished friend, the honorable member for Batman (Mr. Bird), who closed on the optimistic but somewhat unreal note on which so many of his colleagues have closed their speeches for years past. I refer to his optimistic assertion that the Opposition will, after the next election, occupy the places that we now occupy. The honorable member’s distinguished colleague, the honorable member for Melbourne (Mr. Calwell), has been notorious during the last six years for prophecies of that kind. I do not want to develop this theme unduly, but I should like to refer to one of the items of unconscious humour in which the honorable member for Batman indulged. He referred to the difficulties of, and the expense involved and labour employed in preparing returns for purposes of sales tax. Because of circumstances beyond my control, and due to economic necessity, I worked in an office during the war years. To any one who worked in au office during the eight years that the Labour party was in power, it is certainly ironical to hear members of that party objecting to the controls and regimentation which necessitated such hateful work and produced such endless rebuke during those years. As my friend, the honorable member for Capricornia (Mr. Pearce), reminds me, Labour governments were guilty also of other and more outrageous misdeeds, but, if I may say so with respect, those things have nothing to do with the matter of sales t.ix which is under discussion.
The honorable member for Melbourne, to whom I had the misfortune to listen, and his colleague, the honorable member for Batman, referred to the motor industry. The honorable member for Melbourne referred to the speech of the Prime Minister (Mr. Menzies) in this respect, but with his characteristic approach to matters of this kind, he quoted only one sentence of a large section of the speech in which the Prime Minister referred to the motor car industry. To help the honorable gentleman to get a more complete view of the picture, and also to assist his colleague, the honorable member for Batman, I propose to read the paragraph in which the Prime Minister referred to the problems involved and the attitude of the Government to the action, disagreeable though it may be, that the Government feels obliged to take. The Prime Minister concluded the paragraph to which the honorable member for Melbourne referred by saying -
In other words, a large demand for and supply of motor vehicles in Australia is a good thing. But an excessive demand may, to the extent to which it increases inflationary pressures, actually damage those export industries upon which our international solvency depends.
It was, no doubt, convenient for the honorable member for Melbourne to ignore that passage. “Whatever else the honorable gentleman may not be, he is certainly not inexperienced in debate, and 1 have no doubt that it was equally convenient for horn to confine his approach to this matter that we are discussing, which is of some importance, purely to the question of the raising of revenue. On another occasion, when Mr. Speaker (the Honorable A. G. Cameron) was in the chair, I ventured to speculate upon the possibilities inherent in a situation in which the honorable member for Melbourne was Treasurer, and Mr. Speaker ruled me out of order. Therefore, I shall not proceed further with that matter now, other than to say that in my opinion no greater disaster could befall this country. As I say, the honorable member referred to revenue and suggested that we should collect revenue hare, there and in other places. He referred to the figure that is optimistically called a surplus in the budget. The honorable member knows, and indeed he said, that the purpose of this so-called surplus is to finance State works. I ask you, sir, in the absence of the honorable member for Melbourne, who is no doubt conferring with his leader: Does tho honorable member, who speaks, I believe,for the Australian Labour party, favour the financing of State works or does he not ? That is the situation that faces him on this issue. Either .State works are financed as we propose to finance them or they are not financed at all. The honorable gentleman knows that perfectly well. He was merely playing with words, when he spoke as he did this afternoon, and he presented only one side of the case.
I think it will be agreed by any one who applies himself to this problem that we cannot treat the measure that we are discussing; in isolation. The honorable member for Batman, whose contributions ti> the debates of this House usually are thoughtful and admired by some, was guilty of doing that. He took the bill that we are discussing and looked at i t in isolation, but if we consider it realistically we must do so in relation to all the measures which the Prime Minister announced the Government has taken and proposes to take to meet the situation that confronts Australia. We have to view these proposals against the background of the permanent change which has taken place in living standards, and also against the background of the principles of taxation to which the honorable member for Petrie (Mr. Hulme) referred.
I want to make it perfectly clear that, I think that, in principle, sales tax is a tax which should never have been levied and which should have been removed long ago. I believe it to be essentially an inflationary tax. However, the situation which confronts the Australian Government to-day is a disturbing one. It has been said that the estimated receipts from sales tax for the current year are £106,000,000, and for the next financial year they probably will be £136,000,000. The question of reducing the incidence of sales tax is a very real problem for any government, and so too is the question of where to obtain the finances necessary to carry on the business of the country if that were done.
In my opinion, it is entirely fallacious to reason, as the honorable member for Melbourne and the honorable member for Batman did, by saying that in .1932 sales tax was such-and-such a percentage of revenue, whereas to-day it is a substantially greater percentage. That approach, unfortunately, is too commonly made by members of the Opposition. It is an approach based upon the thinking of the depression days. Indeed, if I remember correctly, the honorable member for Batman referred at some length to the fact that sales tax commenced at the rate of 2$ per cent, in 1930 or 1932. As I see this problem, we should not endeavour to consider sales tax purely as a revenueproducer. In that respect, I disagree fundamentally with most honorable members opposite who have spoken, and 1 have no doubt that I shall also disagree in this respect with those who have yer. to speak.
If I understand them correctly, they look upon sales tax purely as a revenue tax. Their alternative is to reduce sales tax and increase direct taxation. I am pleased to see that my friend the honorable member for Yarra (Mr. Cairns), who has been resting from his parliamentary labours of late, is now back in Parliament. I hope he has come back refreshed and that Ave shall find him entertaining in the debate. I have read with great interest what the honorable gentleman has been writing while the House has been otherwise occupied. But let us have a look at. this question of direct taxation, if we admit, first, the necessity to increase revenue by some means or other. We must increase revenue in order to meet the obligations of the Government. If we admit that that is necessary, let us then pass to the illuminating remarks of the honorable member for Melbourne. He said that the Labour party was not a high taxation party, and that after the war the Labour government reduced income tax, which was then 18s. 6d. in the £1 on incomes of more than £5,000 a year, to 13s. 4d. in the £1. When he said that, the honorable gentleman beamed happily because, according to him, that was indicative of a low taxation party. In fact, no political party to-day is a low tax party. Do not let us play with words. If we accept the obligation to govern, then we must also accept the obligation to raise revenue to finance government.
Further direct taxation unquestionably would retard industry generally. Indeed, it might bear so heavily on some industries that either they would go out of production or their productivity would decline. It would bear so heavily on the additional income gained from working overtime, which is general enough in the community to-day, that overtime would decrease as it decreased under the socalled low taxation Labour party. Every one here knows that I speak only common sense when I say that those would be the inevitable consequences. In this peculiar economy of ours, whether we like it or not, many people expect the Government to be responsible for everything and to direct everything. That is not my political philosophy, but it is one which I and others are at the moment forced to accept. If honorable members believe that that is so, the raising of direct taxation would probably adversely affect those industries regarded as essential, and benefit those which, irrespective of our political views, are regarded as less essential. High taxation at the present time would tend to promote again the “milk bar “ economy of which so many honorable members complained in the past. 1 wish to refer to some important factors in the present situation, and direct the attention of the House to statistics contained in a White Paper on the national income and expenditure. . In the year 1953-54, the value of Australia’s wool export was £410.000,000. i: 1954-55 it dropped to £353,000,000. Thai was a decrease of £57,000,000 in the value of the main export on which our national economy is based. In the same period investments in motor vehicles, including both motor cars and motor trucks, rose from £210,000,000 to £256,000,000- au increase in that item alone of £46,000,000. Investments in capital equipment, which is a vital factor in industry and, consequently, in the national welfare, rose from £260,000,000 to £2S2,000,000, an increase of only £22,000,000; but sales of tobacco, cigarettes and beer rose from £304,000,000 to £328,000,000, an increase of £24,000,000 in a year.
Against those figures, the sum spent on education in Australia in 1953-54 was £65,000,000, and in the following year it rose to £72,000,000. Honorable member? on both sides of the House, particularly members of the Opposition, have spoken with a great deal of logic on the need for private building. In 1953-54, the amount spent -on private building was £175,000,000 and in 1954-55 it rose bv £20,000,000 to £195,000,000. Expenditure by public authorities on roads, sewerage, water and electricity supplies increased from £397,000,000 in 1953-54 to £412,000,000 in 1954-55, a rise of £15.000,000: If further illustration bc needed, it is readily obtainable from this White Paper, which honorable members can accept as a reliable document.
These figures reveal a lack of balance in spending in the community. If the theory is accepted that governments arc responsible for the control of expenditure of this kind, those figures clearly demonstrate the reason for action by the Government. It is a farcical and a disturbing position that during a year when the value of Australia’s basic export - wool- drops by £57,000,000, spending on these other commodities increases. In th, aggregate, something like £79,000.000 more was spent on motor vehicles, tobacco, beer and cigarettes in 1954-55 than in 1953-54, but in that same year the amount spent on education and private building increased by only £27,000,000. The need for public amenities increases every year because, of the increase of population. I have previously expressed the view that the rate of immigration is too rapid for Australia. But, in spite of the added need for public amenities, spending by public authorities increased in the year under review by only £15,000,000. Surely, the need for the Government to do something about these matters is most apparent.
I direct the attention of the House to what I consider to be the most important feature of this legislation, and of similar bills foreshadowed by the Government. This bill has two purposes, the first of which is the raising of revenue. The second, which is far more important, is the diversion of capital equipment, materials and man-power to essential industries. I remind honorable members that when the amount spent on motor vehicles, beer, tobacco and cigarettes increases by £70,000,000 in one year, that increase is expressed in a demand for capital equipment, man-power and materials; and if the demand, as the honorable member for Batman (Mr. Bird) so rightly pointed out, is reduced in consequence of the measures now being brought down by the Government, in all probability these essentials, the capital equipment, man-power and materials, will be diverted to more necessary industries. The truth of the situation is that the public want more motor cars and amenities and luxuries. The honorable member for Melbourne (Mr. Calwell) talked about low taxation under the Labour Government, but he completely ignored the fact that in those days, although sales tax was 8$ per cent., it was impossible to buy motor cars, refrigerators or vacuum cleaners or to live in the state of luxury that the honorable member suggested existed. Although the honorable member’s description of conditions at that time may be theoretically correct, the fact is that the amenities were not available. But, as a result of the policy of the Menzies Government, and the development and expansion of industry that has taken place during the past six years, the stage has been reached when both Par liament and the people have to ask whether we can afford to increase the number of motor vehicles on the road or to spend as much as is being spent on cigarettes, beer and gambling. Should we not curtail expenditure on these items in order that there may be more houses and amenities such as public authorities provide? The blunt truth is that we cannot have both, and however unpalatable the position may be in the shortterm political sense, in the long run few people will dispute that, if a choice has to be made because of the limitations imposed on Australia by its geographical position and its population, it is better to support a policy calculated in the long run to produce houses and amenities that are urgently necessary, and even such additional benefits as refrigerators and vacuum cleaners, about which the honorable member for Melbourne talked, but which, in fact, were not available when the Labour government of which he was a member was in office. I believe that all people who accept jOIn( responsibility for the good government of this country will come down on the side of measures which are unpopular at the moment but which, in the long run, will prove, their worth to the community.
. - It was rather interesting to listen to the dissertation by the honorable member for Deakin (Mr. Davis). He spoke of an increase of £70,000,000, or some other large sum in the expenditure on beer, cigarettes, tobacco and motor cars. Then he spoke about the necessity to choose between those things and other things. If it is wrong for us to spend so much each year on beer, cigarettes, tobacco and motor cars, why has the Government increased the taxes on them to such an extent that, at the present rate of consumption, expenditure will rise by another £30,000,000? In those circumstances, I cannot see how the people will be able to get the other things to which the honorable member referred.
The measure that we are considering now illustrates very clearly the difference between the philosophy of the Australian Labour party and the philosophy, or the dogma, of the Liberal party and the Australian Country party. The Labour party, throughout its history, has believed that taxation should be a means of equalizing the distribution of the wealth of the country among the people of the country. For my part, throughout my association with the Labour party in a State parliament and in this Parliament, I have always endeavoured to ensure that taxation shall be levied in such a way that it will bear most heavily upon those who are best able to bear the burden. I believe that a system of taxation should be a means of levelling out the distribution of the nation’s wealth among the people. “When I look at the measure before us, I wonder what is in the minds of honorable members opposite, who are supporting it so blindly. In 1947-48, when a Labour government was in office, the members of the Liberal party and the Australian Country party, then in opposition, took advantage of every opportunity to lash the Labour government’ for, as they alleged, hiding from the people the full amount of taxation that the people had to pay. They said then that they did not believe in indirect taxation. The honorable member for Melbourne (Mr. Calwell) read to us this afternoon extracts from speeches made in 1948 by the present Treasurer (Sir Arthur Fadden) in connexion with the sales tax. In the course of those speeches, the right honorable gentleman said that a tax of that description was wrong.
Let us look back to see what has happened in this country in the field of taxation during the last quarter of a century. It was only a quarter of a century ago that this Parliament brought into being the system of sales tax that we have to-day. This afternoon, the honorable member for Mallee (Mr. Turnbull) asked, “Who brought in the sales tax?” Then, answering the question himself, he said, “ The Labour party, the Scullin Government “. Honorable members who are familiar with the events of 1931 know why the Labour party brought in a very mild form of sales tax at that time. The Commonwealth Bank was under the control of the Commonwealth Bank Board and the Scullin Government was faced with a hostile Senate. When Labour tried to put through the Parliament financial measures to meet the needs of that time, those measures were turned down by the Senate, and also by the Commonwealth Bank Board. So Mr. Scullin, the then Prime Minister, was forced to find other ways to raise the revenue required to meet the needs of the country. One of the methods that he adopted was the imposition of a sales tax. That tax was imposed, not because we liked it, not because we believed in a tax of that type, but because, owing to lack of numbers in another place, we could not pass other taxation measures through the Parliament.
Before the present Government came into office in 1949, members of the Liberal party and the Australian Country party in this Parliament attacked the principle of the sales tax. They said that it was wrong. We on this side of the House say to-night that it is absolutely wrong to force up prices by increasing the sales tax. I have been amazed to hear honorable members opposite rise to support this measure and talk about the Government’s efforts to check inflation. By the methods it is adopting, the Government is increasing inflation. A little while ago, I was trying to think of a simple example that I could give to show the effect of an increase of the sales tax. I decided to select an item from the list of articles on .which the rate of the sales tax will be increased from 16$ per cent, to 25 per cent. I looked down the list and I saw that it included serviette rings, book-ends, jardinieres, vases and watches. A watch is something that everybody buys at some time or another, so I shall take it a? an illustration.
Let us assume that a retail jeweller purchased a watch from an importer for £6 when the rate of the sales tax was 16$ per cent. The jeweller had to pay out £6, plus £1 in sales tax, or £7 altogether. His profit would be based on that figure. I shall assume that his margin of profit was 33$ per cent., which I think is much below the actual margin on which a jeweller would work. On that basis, the jeweller would add £2 6s. 8d. to the price, so the cost to the customer would be £9 6s. 8d. What is the position now that the sales tax has been increased? The original cost of the watch is still £6. but. as the sales tax has been increased from 16$ per cent, to 25 per cent., tb. jeweller has to pay the importer £6 plus £1 10s. The cost of the watch to the jeweller plus the sales tax is £7 10s. Then he adds his margin of 33$ per cent., or £2 10s., which makes the cost of the watch to the customer £10.
Reference has been made to keeping accounts and books and sending in returns to the department so that the tax can be collected. A retail jeweller had to keep exactly the same books and had to follow exactly the same procedure when the tax was 16$ per cent, as he did when it went up to 25 per cent., but, because the Government has said that it wants an extra 30s. in sales tax on a watch, the jeweller gets another 3s. 4d. for handling the watch. I was talking to a couple of businessmen in an hotel here the other day. f referred to the sales tax and to the way in which profit margins were based on the cost of an article to the retailer plus the sales tax. They said, “ It is generally recognized that your margin must be based on the cost of the article to you. The sales tax is included in that cost “. Suppose the sales tax on something priced at £6 - it does not matter whether it is a watch, a jardiniere, or any of the scores of things in the list that the Minister has given us - is to be increased by 10s. The purchaser will pay, in addition to the extra 10s. sales tax, another 3s. 4d. to make up the retailer’s margin of 33$ per cent, of the cost to him, including the sales tax. If, as in many instances, the retailer’s margin is 50 per cent., the purchaser will pay a total of 15s. extra, instead of only the 10s. by which the sales tax has been increased. The increase will, be correspondingly greater for every multiple, of £6 represented by the cost of an article.
The honorable member for Petrie (Mr. Hulme) mentioned a dinner set selling for £100, or approximately sixteen times £6. If the increase of the retailer’s margin on an article selling at £6 were 6s., the increase on the dinner set selling at £100 would be about £5. The retailer contends that he is entitled to the additional amount, because he has put up the money in the first place; yet he does nothing more in the way of handling the article sold, he has no more rent to pay, his overhead charges are no greater, and he has no additional forms to complete for the Government. But, on something selling for £100, he will reap an extra £5 of profit. In spite of this, we are told that the Government’s measures will check inflation and direct money into the right channels. Let us consider again what the sales tax, or hidden tax, does to the people. 1 agree with what was said by the present Treasurer, and the present honorable member for Richmond (Mr. Anthony), in 1948, when they were in opposition. They lambasted the sales tax as a hidden tax. “What will be the effect of the increased sales tax on motor car prices? We say that motor cars already are too dear. Figures published in the newspapers in Melbourne and elsewhere show that the increase of the sales tax rate from 16$ per cent, to 30 per cent, will raise the price of a Holden motor car by approximately £100. If honorable members work it out, they will find that 30 per cent, of the basic price comes to about £225. Do motor car buyers realize that every purchase puts £225 into the Government’s coffers by way of the sales tax? They realize that there is some sales tax, but they do not know how much it is. Before the increases were imposed, an intending purchaser would be told, for example, that the price of a Holden special sedan was approximately £1,050, and of a standard sedan approximately £1,000, including sales tax. He would not know what margin of profit was being made by the retailer or how much the sales tax was. Before the sales tax rates were increased, the sales tax on a Holden sedan was approximately £125. It will now be approximately £225’. Can any one wonder why Opposition members claim that most of the measures adopted by the Government are rebounding against those least able to pay the increased prices?
To illustrate my argument, I wish to mention a statement that was made about interest rates. We were .recently told by the Governor of the Commonwealth Bank of Australia how overdraft interest rates were to be maintained at an average of 5$ per cent. He stated that primary producers and exporters of manufactured goods would be charged about 5 per cent., and that business people who wanted overdrafts would be charged 6 per cent.
Who will pay the extra charge for those who have to pay 6 per cent.? If the M.yer Emporium Limited, or any other firm, has to pay 6 per cent, instead of 5 per cent, interest on its overdraft, it will not pay the additional charge out of its profits. It will merely increase its prices in order to make enough additional profit to pay the extra 1 per cent, interest on its overdraft. This means that the increased charge will be passed on to the consumer all along the line. This is exactly what happens with the sales tax. The Treasurer has made a statement in connexion with motor cars and the petrol tax. I cannot deal with the petrol tax at this juncture, except so far as the Treasurer’s statement concerns it. He said that 70 per cent, of the petrol consumed in Australia is used by business people who can pass on the additional petrol tax. To whom will they pass it on? If the charge for the cartage of i load of goods from a wharf, or elsewhere, to a business house i3 increased from 10s. to 12s., who will pay the additional 2s.? We know that, initially, it will be paid by the storekeeper, but, in the long run, it will be paid by the consumer, as is every increased charge.
We have to remember that the increase of the sales tax is only one of the measures designed to give effect to the economic propositions advanced by the Prime Minister (Mr. Menzies). The honorable member for Deakin has just told us that we cannot isolate the sales tax from the economic situation. He stated that some people were trying to isolate it. In his view, the sales tax cannot be isolated from the problem of the raising of funds for local-governing bodies and for government services. The sales tax increases all are part and parcel of the measures to be taken to meet the Government’s financial needs. The honorable member for Deakin stated also that we must not look at the sales tax increases merely as revenue-producing proposals. The Prime Minister has said that the sales tax and other taxes have been increased in order to prevent a cash deficit and, if we have to accept these increases in the light of that statement, their purpose is definitely revenue-producing and not merely to prevent people from buying goods.
I wish to mention again the effect of the increased sales tax on the purchasers of motor cars. A day or two after the Government’s proposals were announced, I received a letter from a man in South Australia, my home State. He was not merely being critical of the Government. He wrote that he was lucky that he had bought a new car a month or two before, and pointed out that a number of men who worked with him were waiting for the delivery, at almost any time, of new cars that they had ordered, and in anticipation of which they had sold their old cars. He stated that they now found that they had not sufficient money to buy the new vehicles and had had to cancel their orders. Others, however, have not found it necessary to cancel their orders for new motor cars. Let us suppose that a person who intended buying a new Holden motor car at the old price of approximately £1,000 had £700 in hand and intended to obtain the other £300 under a hire-purchase transaction, to be repaid, perhaps, over two or two and a half years at a flat rate of interest of S per cent. Instead of obtaining £300 under the hire-purchase transaction, he will now have to obtain £400. He will have to pay off a little more, but he will go ahead with his purchase. Is that sort of thing going to limit hire-purchase transactions ? We have been told of the great amount of hire-purchase business involved in the purchase of motor cars, and we can see that, even if the increase of the rates of sales tax to 30 per cent, will deter a few people from purchasing new vehicles, most intending purchasers will go ahead with the purchase, and the increased prices will merely swell the volume of hire-purchase business.
I realize the difficulties and the complexities of this question. If we are told immediately that it is revenue and that the Government intends to get it where it can be obtained most easily, I would quite understand that; but when we are told that this is part and parcel of an economic proposition brought down by economists, I sometimes wonder whether an interjection made to-day about long-haired economists does not have some bearing on the matter. I read an article a few days ago in a non-Labour newspaper, which criticized the Government for acting upon the opinions of economists who always seem to be wanting to cure u depression. The leading article in that newspaper said that the economists were always looking for some way to stop a depression seeming to forget that they could do something about prosperity. Economists do not think about prosperity. Their main theme, as with some doctors, is how to deal with people when they are sick. They do not worry about them when they are well. Some of the economists are of the same way of thinking ; they think only of a sick economy and do not look at prosperity in the way they should. I am afraid that if we are to go on in this manner and say we are just going to borrow in this way, we shall come to grief.
The honorable member for Melbourne (Mr. Calwell), in opening the debate to-day, said that the Labour party would oppose this measure. I shall oppose it most heartily because I believe it is wrong. As I stated earlier, the philosophy of the Labour party on taxation is that it should be levied on those who are best able to bear it. To apply, this method is not levying taxation where it can best be borne. I am not concerned only with the increase in respect of the items in the schedule. The honorable member for Petrie (Mr. Hulme) said that the honorable member for Melbourne had referred to a number of goods affected by sales tax which are not included in this bill. The honorable member for Melbourne spoke about other items, but I do not think he said that they were affected by any increase in this bill. He referred to some items that attracted 12$ per cent., and he mentioned soap as being one of the things on which there should be no charge. He gave us quite a homily on the subject of soap and cleanliness. I do not desire to go into that; but apart altogether from the increases that are being made now, we on this side of the House are very concerned about the tremendous impost of sales tax. The honorable member for Melbourne this afternoon stated that when the Labour Government went out of office in 1949 the total amount of revenue received by way of sales tax was £39,000,000 a year. The revenue this year, excluding these increases, was estimated at £106,000,000 and, on the Treasurer’s figures these increases will bring an additional £30,000,000. We have to remember that these increased taxes were imposed some weeks ago, and are in force at the present time. We are now only validating them. The amount of sales tax that will be collected will be in the vicinity of £139,000,000 for the year.
When the Labour party imposed sales tax, the revenue therefrom was just over £30,000,000, and it was condemned bitterly by honorable members opposite. Yet, we find the Treasurer, who joined in the condemnation, bringing this bill before the House, and we find honorable members on the Government side supporting it. I do not blame them for that, because they belong to the Government party and they have to stick to it. The only thing I say to them is that it seems to me that at times some people can approach things in a hypocritical manner. When in opposition, they say they do not believe in sales tax, but when the Government brings in a bill like this they accept it. On top of that, they tell members on this side of the House that we are caucus-ridden and have to do what our party decides.
– That is true.
– Of course, it is. true.
– Honorable members of this party do not have to.
– They do so as an act of grace, even though they may not have to. I have been in this Parliament for some few years now and I was previously in the South Australian Parliament for many years and on each occasion when a showdown occurred when the Labour party moved an amendment and members of the Government party admitted that there was something in it, they voted against it after their Minister stated that he would not accept the amendment. I remember a dear old independent in the South Australian Parliament years ago who got up after the Labour party had moved an amendment and said, “I think it is a good amendment, I shall support it, but if it means the defeat of the Government I shall vote against it”. Of course, he was an independent; and we have the same kind of people on the Government side to-day. I am not blaming them, but when they accuse honorable members on this side of being led by a party, of having to support a platform, or of having to follow their leader, I say to them that.no matter how much they may chafe against it, when it comes to a showdown they do the same thing and support the Government. They know very well that if they do not support the Government it will become a rabble and will not be a government for very long.
– The honorable member has to admit we have made a good job of it.
– The Labour party made a good job of sales tax. When it went out, sales tax, on a percentage basis, was about one-third of what it is to-day. The Labour party was able to get along all right with that amount of sales tax. The honorable member speaks about the job this Government has done; but the Labour party did not have to come along in a time like the present, the most prosperous this country has ever experienced, and impose taxes like this upon the community. The method of the Government in imposing sales tax such as this is in keeping with the other methods it has adopted from time to time. It is in accordance with its political philosophy, and I do not expect anything different from it. I do not accuse honorable members opposite of being dishonorable. I think they are trying to carry out what they think is a right policy; but I do say to them that a policy such as this, which takes from the person at the bottom, or which takes from one section unfairly, is not in the best interests of the people of Australia.
I hope that this sales tax imposition will not last for very long. Thousands of electors in my district are employed in the motor industry. The great works of General Motors-Holden’s Limited is situated in my electorate, and the other portion of that company’s works is in the electorate of my friend the honorable member for Melbourne Ports (Mr. Crean). From 12,000 to 15,000 employees are engaged in the industry in our two electorates. If an unfair imposition is to be placed upon that industry and something is to be done which will injure it and cause men to be put off, those men will be the people whom I represent. It was reported that 150 men were put off by one firm in Adelaide a fortnight ago, and I read in the press that two or three other firms also were affected. A spokesman for those firms was reported as saying, “ You cannot blame the sales tax for this because we have periods of fluctuations”. It is a remarkable coincidence, however, that immediately the increased sales tax came into force the services of those men were dispensed with. I say to the Government and to those persons supporting it that their philosophy is a wrong philosophy and that in the end they will have to come back to the course which Labour proposes.
.- The Sales Tax “(Exemptions and Classifications) Bill which is at present before the House is one of a series of measures which have been brought forward by the Government for the purpose of maintaining the prosperity of this country. The Treasurer (Sir Arthur Fadden) indicated in the budget last year that the boom through which the country is at present progressing was showing certain signs that probably before very long steps would have to be taken in order to maintain prosperity and to restrain the inflation which was obviously increasing. That warning which was then given by the Treasurer was subsequently repeated by the Prime Minister (Mr. Menzies) in Jus September statement on the economic situation. The Prime Minister, in his policy speech, made it quite clear that the Government would be prepared to take any steps, including taxation measures, which were necessary in orderto maintain the existing prosperity. In the Speech which the Governor-General delivered on behalf of his Government, it was made quite clear that taxation measures would have to be taken and that the Government would take such steps as were appropriate - hence this bill which is now ‘before the House. The bill will serve the purpose of producing revenue and will also act as an antiinflationary measure. In addition, it will have the effect of steadying the fall in the balance of payments overseas. It is therefore a very important and useful piece of legislation.
The position with regard to revenue is that within the next fifteen months the amount of £253,000,000 has to be found by the Government for loan redemption. That is over and above the ordinary loan funds which we expect to come to us from the loan market. So, within the next year, or fifteen months, we need to obtain far more than £253,000,000 from loans nr some other source. In addition, an amount of £61,000,000 has to be found by the Government in order to provide for State public works. It will be seen from the statement that I have made that, having regard to the present state of the loan market, which is well known, it is unite impossible to expect that these huge amounts should come from loans. It may very well be that the fact that these m mounts have to be found will encourage the Government to take steps which will improve the loan market. That matter lias been debated at some length in the course of this sessional period, and I do not propose to traverse it again. Apart from that, the alternative to taxation as a means of obtaining these moneys is the issue of a tremendous flow of treasurybills, and no course could be more violently inflationary than that. ‘Therefore, in these circumstances the Government has to resort to taxation. In a period of expansion, development, and prosperity, it is quite evident that Statepublic works must be continued. Consequently, the Government has undertaken that State public works shall be provided for and that the money for them shall bc found.
At the same time, the Government has decided to decrease, its own expenditure on public works by £10,000,000 and, as was pointed out in a recent speech by the honorable member for Bendigo (Mr. Clarey), it also cancelled £19,000,000 worth of imports of government materials. When it is said in an idle way by so many people that the Government is not endeavouring to reduce its own expenditure, they seem to overlook the fact that there alone is £29,000,000 which the Government will not expend this year. The Government has definitely cut down its own expenditure to that extent, but at the same time it has said to the States, You have vitally necessary public works which must be carried out and we will see that you have the money for that purpose”. I would say that no member of this House, and certainly no member who lias any sense of responsibility at all, would feel that it was wrong so to decide By this measure, which provides for increased sales tax ou certain items, the Government will be cutting down on imports in the first place, and in that way there will be an improvement in the balance of payments, which has gone against us very greatly of recent months find must be prevented from going any further against us. By restricting imports of these goods which are now subjected to a heavier tax, imports will be lessened and it will be possible to restore the balance of payments at least to a reasonable level.
In addition, there has been an excessive amount of capital expenditure, principally through hire purchase, and because of that the economic position in the community has become somewhat grossly inflated. That is quite a serious position, because unless the inflation is curbed the boom through which we have been passing could easily lead to quite a depression, and certainly a regression, and we do not want that. The Government is determined, by measures such as this, to see that that position does not occur.
The highest tax rate is imposed on less essential goods. For example, it applies to motor cars. Let us see what the position has. been with regard to motor cars. During the financial year 1954-55, imports connected with the motor industry were valued at £152,000,000, representing IS per cent, of this country’s gross imports. During that year, the country spent the huge amount of £581,000,000 upon motor vehicles, motor vehicle parts, and petrol, and no fewer than about 230,000 new motor vehicles were registered, of which 160,000 were motor cars. That shows the enormous expansion that has taken place in the motor car industry and that expansion has, to a great extent, been brought about by the tremendous increase in hire-purchase dealings, which have now got quite out of hand. They are, in fact affecting the economic position of the community and the Government therefore says that they must be curbed. The Government’s measure dows not suppress hire-purchase transactions. It has been said that hire purchase is the friend of the poor man. T>he Government will not take that friend away from the poor man. We will still have hire purchase with us, but its extent will be restrained.
What has the Opposition to say with regard to these measures ? Quite a number of specious statements have been made by Opposition members in the course of debates in this House, one of them being that motor cars are simply necessaries, that one cannot regard them as anything else, and therefore that sales tax on them should not be increased even though they are throwing the economic structure of the community out of balance.
Let us nave a close look at the past attitude of honorable gentlemen opposite, who now talk about motor cars being necessaries, and compare it with their present professions in that respect. What view did they take when they sat in this House under the leadership of Mr. Chifley, as Prime Minister? They did not then regard motor cars as necessaries. Mi’. Chifley and his Government, many of the members and supporters of which sit in this chamber now, were determined that motor cars should be used as little as possible. They refused to provide petrol in the quantities required by motor car owners. In fact, when Mr. Chifley was urged to provide the necessary petrol, he said that it could not be obtained. When he was told that it could be obtained, because it was easily available, he definitely denied that fact, and his Government supported him in that denial. That very refusal to provide people with the petrol that they required was one of the causes of the defeat of the Chifley Government.
When the Menzies Government came into office, one of its first measures was to see that the people got the petrol they needed, and they have been able to get it ever since in order to run the cars which members of the Labour party now say are so necessary. But Labour party members, now say that cars are necessaries, and not luxuries, only because it suits them at the moment to say so. When it did not suit them to regard motor oars as necessaries, they refused to provide the petrol to run them.
The change that has occurred in the six years since the Chifley Labour Government went out of office is interesting. That government took the view that the use of motor cars was to be (restricted as much as possible. Obviously, it wished motor cars to be regarded as luxuries, which could be used only by people who were able to afford luxuries. In the six years of the Menzies Administration, motor cars, according to honorable gentlemen opposite have become, no longer luxuries, but necessaries. In other words, the result of the Menzies Government’s prosperity administration is that the living standards of the people have risen tremendously, and are now as high as living standards anywhere else in the world. That is a triumph of the Menzies Government, a fact which, apparently, members of the Labour party who are now arguing so vehemently about the necessity of cars, do not realize.
I pass to another argument advanced by the Labour party, which is that the need for increased taxes would not have arisen if we had price-fixing. What occurred when we had prices control? We had shortages of goods, we had black markets, we bad double prices - the ordinary price at which goods could not be obtained because they were not there to be purchased at the correct price, and the black market ‘price for which it was possible to buy goods. In effect, we might almost be said to have had two currencies in operation during that period - the ordinary £1 which could not find goods for sale, and the black market £1 which could buy goods at astronomical prices. People endured intense hardship during the period of prices control because of the great shortages of goods available for purchase at the correct prices. Honorable members opposite say that sales tax was not heavy under the Chifley Labour Government. Quite apart from the difference between the present value of the £1 and its value then, the fact remains that goods were simply not available for purchase during the term of the Chifley Government to anything like the extent to which they are now available. Nowadays, when we have prosperity, there are goods to buy, and we do not have the hardships that existed under the Chifley Government’s price-fixing policy. If we were to return to price fixation which, as everybody knows, the Commonwealth has no power to impose, and which, in any event, this Government would not impose if it had the power, we would find happening the same things as happened before. Those things have not happened under this Government’s administration only because we have not had in operation the same system of price fixation as was used by the Labour Government.
What else does the Opposition have to say with regard to this measure ? Honorable members opposite say, in effect, “ If we were in office, we would introduce excess profits taxation instead of increases of indirect taxes”. We have heard tonight what I can describe only as moans on the part of honorable members opposite about what is going to happen to the motor car industry as a result of the increase of sales tax on motor cars, and the increase of the petrol tax. What would happen to the motor car industry as a result of the introduction of excess profits taxation, a principle which the Opposition claims to support ? The motor car industry would be the industry that would be most heavily hit by excess profits taxation, because it has been making tremendous profits. Time and time again in this House honorable members opposite have reviled the industry because of its allegedly excessive profits. The result on the motor car industry of the introduction of excess profits taxation would be that men would be driven out of employment, because the industry would no longer be able to expand. The effect of the industry’s ability to make substantial profits is to give it an opportunity to plough those profits back into the business, to expand the business greatly, and to provide magnificent avenues for employment.
That is what the motor car companies have been doing. Instead of the industry being crushed, as it would be under excess profits taxes, the only result of the Government’s present measures will be to slow down slightly the purchase of motor cars. As many motor cars will be bought as before, but over a slightly longer period. Nobody, or practically nobody, will be thrown out of employment, and things will go on quite happily. Indeed, during the course of the debates in the present session, one member of the Opposition indicated that, because of the Government’s proposed measures, primary producers and workers will have to ensure that they receive much larger incomes. No doubt, the honorable member did not realize the obvious implication of that statement which is that if the people he mentioned want to keep their incomes up, they will ensure that we get greater production. That is the only way in which they will be able to increase their incomes. I say that if greater production is brought about by the Government’s measures, then those measures are indeed anti-inflationary in effect.
But, supposing the motor car industry will be somewhat affected by this measure, we shall certainly not have anything in the nature of gross unemployment as a result, because profits from the production and sale of motor cars have been so high that the industry can easily absorb the extra tax from its profits, if it chooses to do so. If the alternatives were going out of business, and absorbing the tax in profits, we can be sure that the motor car industry would carry on by absorbing the tax. But, as I have pointed out, that state of affairs is hardly likely to eventuate.
In 1954 this Government reduced sales tax on household furniture and equipment, and also exempted from that tax various articles that were of importance in, and of great use to, industry, and in the construction of machinery. Under the present measure, that exemption remains, and sales tax is not to be increased on household goods, or on many useful articles. Sales tax is imposed only on less essential articles.
A great deal has been said to-night about the iniquity of sales taxation. We have the theorists who say that they do not believe in indirect taxation. There are two forms of taxation, as is well known, - direct and indirect - and, say what the theorists will, the fact remains that both forms are still utilized. There is this to be said in favour of indirect taxation - that it means that every person in the community will bear at least some measure of the responsibility for the carrying on of the business of the government of the country. Consequently, indirect taxation must he regarded as definitely a democratic form of taxation.
Air. Glyde Cameron. - Rubbish!
– What does Labour say about sales tax? The honorable member for Hindmarsh (Mr. Clyde Cameron) has interjected something about sales tax being rubbish. Other members of his party have interjected to the effect that it is an unjust tax. What does the platform of the Labour party say about it? It says that sales tax should be abolished as soon as possible. Notice the words “ as soon as possible “ - not to-day, always to-morrow. What is the history of sales tax ? The history of sales tax in this country is that it was introduced by a Labour government. The honorable member for Port Adelaide (Mr. Thompson) may try to explain it away as much as he likes, but when a political party ha.s a black mark against it. it takes a lot or rubbing out, and he certainly was not a good enough eraser. If sales tax is an unjust tax, why did the Labour Government keep it going for so many years? This tax was levied by the Chifley Government during the war and was continued by Labour after the war. In 1949, when Mr. Dedman, who was Minister for Post-war Reconstruction in the Labour Government, was in charge of sales tax legislation before this House he was asked, “ Why do you not carry out your platform and policy in relation to sales tax?” He replied, “ Labour does not make any promise to reduce tax “. That was a very truthful answer. Labour does not make promises to reduce taxation. The people cannot expect a Labour government to reduce taxation. Instead, something of the nature of an excess profits tax would be imposed, and would ruin industry and create unemployment.
– What about land taxation ?
– The Menzies Government abolished the land tax. This Government stands for tax reduction wherever possible. The point I make in relation to sales tax is that, in the circumstances of to-day, it is not possible for the Government to reduce taxation. Unfortunately, it has become necessary to increase taxation. If sales tax is unjust - although I believe, as I have pointed out, that it is democratic taxation - Labour cannot shake off its shoulders its own responsibility. Labour is steeped in the injustice, because Labour created the tax and fostered it.
Mr. CREAN (Melbourne Ports) [9.53 1. - One might be a bit doubtful, after listening to various members of the Government, what this measure is intended to achieve. Some of them claim that its purpose is to raise revenue. Others say tha.t its purpose is to reduce imports. One honorable member opposite has said that it will abate inflation. Others have said that it will regulate hirepurchase activity. Yet another supporter of the Government has suggested that it will divert resources from apparently socially undesirable purposes to socially more desirable purposes. I doubt whether the bill could achieve all of those things at once. Indeed, there is a real doubt whether it will achieve any of them at all. Looked at simply, in the words of the Treasurer (Sir Arthur Fadden), the bill is designed, in the aggregate of this financial year, to raise an additional £30,000,000. I do not think that there was any equivocation on that point as far as the right honorable gentleman was concerned, nor do I think there has been any equivocation about the realities of the circumstances confronting this Government. Because of its failure to see clearly ahead it now finds that it can maintain public works that are necessary for the development of this country only by raising an additional £30,000,000 by the end of this financial year, and something like £120,000,000 in the course of a whole financial year. That is the plight in which the Government finds itself, because of its failure to grapple properly with the economic problems of this country. Because it has to get a certain amount of money by the end of this financial year it cannot do so by the fairest method of taxation, which is income taxation. It has to adopt a short-term expedient in order to get in as much money as possible as quickly as possible. It has to resort to increasing sales tax - the increases applying immediately - and to increasing taxes on petrol, beer and so on.
To-night, we are considering the collection of sales tax. I think that we need to consider .closely where this money will come from, and the assumptions upon which the Government is relying in its aim to collect an additional £30,000,000 before the end’ of this financial year. I suggest that when these assumptions are examined there is room for doubt whether the Government’s objectives will be achieved, and there is good reason to suggest that the situation will become more confused than it is now.
The Treasurer stated that, in the course of this financial year, the Government will collect an additional £30,000,000 in sales tax. If the schedules under which sales tax is ‘collected are examined closely, it will be seen that, for the greater part of the additional £30,000,000 of revenue, the Treasurer is relying on additional tax on motor vehicles, motor vehicle parts, and motor accessories. He assumes that the present rate of consumption of those articles will continue. I urge those honorable gentlemen on the Government side of the House who pride themselves on being apostles of free enterprise and the law that they describe as the law of supply and demand, to consider whether, if the price of, say, a. £1,000 motor car is increased by about £130, there will be no difference in tha aggregate purchase of motor cars. I suggest that this is a very shallow interpretation of economic reality, and yet it seems to be the assumption underlying this measure.
Tt has been said by several honorable members that the Government already derives about £100,000,000 a year from sales tas. With this additional impost, the revenue from sales tax, in round figures, will be £130,000,000 a year. The estimated revenue from sales tax of £] 00,000,000 for the year ending in June next - I believe that it was a reliable estimate - includes something like £35,000,000 from tax on motor vehicles, motor vehicle parts, and ancillary items connected with the motor industry. In other words, at present about 35 per cent, of sales tax revenue is derived from taxa tion on motor vehicles. Therefore, already sales tax is quite a significant component in the prices of motor vehicles and motor vehicle parts. There might be some reason to suggest, therefore, that the prices of motor vehicles could stand an increase of about £130 per vehicle without making very much difference to the industry.
Again, if the categories of items on which sales tax is collected are analysed - motor ears would appear to be the biggest single item - it appears that £22,000,000 of the contemplated additional £30,000,000 will be collected as a result of the increase of sales tax on moto vehicles, whether commercial vehicles on which the tax will be 16$ per cent, instead of 12$ per cent., or private vehicles which will carry 30 per cent, instead of 16$ per cent. I say the assumption is that the turnover of motor cars will be roughly the same after the sales tax increase as it was before the increase. I seriously ask honorable members on the Government side whether they regard that as a reasonable assumption? Do they think that there will be just as many motor cars bought if the price of those cars is about £130 more for an average moto:vehicle used for domestic purposes, as distinct from one used for commercial purposes? At least the honorable members of the Opposition have reasonable grounds for suggesting that that assumption is false, and that because it is false there must be a retarding of activity in the motor industry generally.
I represent an electorate in which are situated the factories of General MotorsHolden’s Limited, the Rootes group of motor manufacturers and Standard Cars Proprietary Limited. During the last twelve months, so far as the Rootes group and Standard Cars Proprietary Limited are concerned, I know that the Prime Minister (Mr. Menzies) himself has officiated at functions when their plants have been extended, and has patted those industries on the back and has praised them for what they have done to develop Australian industry. Surely, the Prime Minister is not going to suggest that the measure now proposed will encourage those industries. I doubt whether he intends to say that, but I submit that there is a very good case to show that there will be a retardation of those industries, and that the same sort of thing will happen to them after June, 1956, as happened to them during the past period of import restrictions.
When imports were last restricted, the motor industries could not get from overseas the components they use to build motor vehicles, and, in consequence, employees were put off work. More than 1,000 people were out of work in that area at that time for periods up to three months. Fortunately, in accordance with the stop-start policy of this Government, import restrictions were abated to some degree, and the industry has continued to expand. Now, apparently, the Government considers that import restrictions cannot be tried again, and, looking around for revenue, it has decided that the motor trade can “ take it “ without much interference with its activities.
It is not often realized how closely the motor industry is integrated with the Australian economy. Some people talk about over-full employment, and suggest that a few thousand people can be put out of work because, after all, if they are out of work in one direction to-day they can find employment in another direction to-morrow. Such an outlook ignores the reality of the situation, which is that people out of work to-day may be out of work transitionally for months. In the motor industry the workers are very specialized, and their skills cannot be applied in any other direction. A man cannot be taken out of an assembly line at Standard Cars Proprietary Limited and put to work on a new high school at Dandenong, because his capacity is not of the kind that can be transferred in that way. Consequently, when we begin to retard activity in the motor industry we begin to retard it in all directions, and cannot isolate it at a particular point.
The Commonwealth Statistician publishes very comprehensive figures on the employment of both- capital and labour in what he calls the motor vehicles and cycles industry. The last year for which his statistics are available is the year ended June, 1954, and, as the Prime Minister indicated, since 1954 there has been a considerable expansion of . the motor car industry. The honorable member for Balaclava (Mr. Joske), who pre ceded me in this debate, quoted figures published in the Treasury Information Bulletin, an official publication of this Government, in January, 1956. That publication showed, on page 10, a summing-up of the position to the end of December, 1955. The biggest expansion of capital expenditure was expected by firms in the engineering and vehicle groups. The Government has encouraged those interested in those industries to put additional capital into the motor industry, and if the figures in that document are examined, it will be found that about £40,000,000 has been put into land, buildings and plant for the motor industry in Australia during the last three years. That is a very significant figure, which indicates the encouragement which was given to the industry to make Australia more self-contained in motor vehicles and less reliant on imports. It is hard to know, at present, how this particular measure will reduce imports. If it will not reduce activity in the motor industry generally, obviously it cannot reduce the imported components of motor cars. I suggest that if the Government felt that too much money was being expended on motor cars in Australia, one thing it could have done was entirely to prohibit the import of motor cars entirely made outside Australia - cars like Jaguars and Humber Snipes and other vehicles of that description which could hardly be regarded as making up the simple pleasures of the working man. There would have been no harm in restricting the importation of such vehicles, and if that were done, we should at least have a saving of imports, and there would have been no direct impact on employment in the motor industry in Australia.
– Only a very small number of such vehicles enter Australia.
– Then no great hardship would be done if their importation were prohibited. The honorable member for Balaclava claimed that in some way or other indirect taxation was democratic taxation. I submit that this kind of impost envisaged by the Government is the very reverse of democracy. There is nothing democratic about a measure that allows the honorable member for Corangamite, for example, to buy a car at the end of December, 1955, for £130 or £150 less than another person has to pay for the same car if he did not want it until the 1st April, 1956. I fail to see any democracy about a tax of that kind. In the name of democracy I also do not see that any great hardship would be done by eliminating the importation of vehicles that can be regarded as of the luxury type.
The thesis that I am trying to develop is that in our opinion the assumption of the Government that this tax will make no difference whatever to the motor car industry is based on false grounds. The honorable member for Balaclava suggested that the tax might slightly slow down activity in the motor industry, and that there may be a certain amount of unemployment in that industry. I suggest that the honorable member is not very well acquainted with the ramnifications of the motor industry in Australia. The figures show that the construction and assembly of motor vehicles in Australia is confined to what may be called the American group of Holden’s, Ford’s and Chrysler’s, and the British group. Those groups at the end of June, 1954 employed 1.5,335 people. If an analysis is made of those workers it will be seen that almost the entire work force of the motor industry is made up of males over the age of 21 years. That suggests that for the most part the workers are skilled workers, and would tend to be married men.
It is easy enough to say that there might be a small amount of unemployment in the motor industry for a while; but even if there were as many people out of work in the electorate of Melbourne Ports after this action of the Government as there were previously when import restrictions were applied, I certainly could not regard it “as a matter that could be taken lightly. The workers whose employment is threatened are, for the most part, family men. Perhaps they are buying homes and have families of two or three children. They are contributing to the welfare of the community, and believe they have found employment in a reasonably secure industry.
In addition to the 15,000 people engaged in construction and assembly, there are 21,000 more engaged in motor body building, and if there is a decline in the number of units obviously there must be a decline also in the demand for bodies and component parts. Sixty thousand persons are engaged in ancillary departments making motor accessories, and in the construction of motor cycles and cycles generally. This is a highly integrated industry, but the Government evidently fails to recognize its part in the Australian economy. The Government seems to think that it does not matter if it cuts public works by 10 per cent, or, in the words of the economists, “ dampens down “ activities. The Government seems to believe that such action will not have effects in other directions. That fine publication, National Development, in the issue of March, 1955, contains an article on the Australian labour industry from which I quote the following: -
The importance of the industry in the Australian economy is also illustrated by its impressively large usage of raw materials. It is estimated that it uses about 85,000 tons of steel sheet, bar and strip each year, or 27 per cent, of the total Australian consumption of these materials, and about 30,000 tons of rubber, or 35 per cent, of the total Australian consumption. In addition, it consumes annually about 1,500,000 gallons of paint and paint products, 30,000,000 square feet of leather and leatherette and 4,250,000 square feet of safety glass. Its consumption of these and other materials will rise still further as development in the industry continues.
I submit that the Government in this case, as in its measures generally, is taking a short-sighted view. The Government looked around to see where it could raise money, and expediency dictated its policy of increasing taxes on motor cars, petrol, beer, cigarettes and tobacco. The Government has reached its present position because of its failure to see ahead when the last budget was introduced, and because of its failure to tell the people of Australia before the election of the 10th December last what was the real situation in Australia.
The honorable member for Balaclava (Mr. Joske) has suggested that Australia is facing a problem in the conversion of war loans amounting in the next financial year to £253,000,000. Again, that is only a problem because this Government has made it one. Loans totalling another £600,000,000 will fall due in the next four or five years, so the problem is not one for this Government only. The only way in which the loans falling due next year differ from most other loans is that a higher proportion of these loans is held by individual investors, including small men who invested £100, £500 or £1,000 during the war period out of a patriotic impulse. Because this Government has destroyed confidence in the loan market, it is fearful that not enough bond-holders will convert their holdings. There would be no difficulty at all if the people had confidence in the loan market. Lack of confidence is the creation of this Government, and that is only another one of many problems that the Government has made for itself by its own mismanagement.
At budget times, and on the occasion of the submission of supplementary budgets, we are faced with expedients of the sort now under discussion. The Government claims, on the one hand, that there is too much prosperity and that it must be dampened down; yet it assumes, when estimating its revenue, that prosperity will continue at the present level. The very phrases used by the Prime Minister (Mr. Menzies) proved that. He said, almost in so many words, that assuming a continuance of the present level of consumption, we should get so much from taxes. He used the same presumption in connexion with the measure that is before the House, and so also have the Treasurer (Sir Arthur Fadden) and his advisors. They have shown that they believe there will be a continuance of the demand for motor cars and components in Australia in the future, even though the price of a. motor car will be increased by £130. I suggest that at least we can be sceptical on that point.
I take up the theme of the honorable member for Balaclava that, if the present level of prosperity continues, we can envisage a most undemocratic move to bring into existence rationing by the purse. Until recently a prospective buyer might have to wait twelve months to get the Holden motor car he wanted. There was a waiting list. Now, a number of persons who cannot afford the additional £130 will drop off the list. That will mean that the person who is fortunate enough to have the additional £130 will be able to purchase a motor car sooner than the person who had ordered one before him. That sort of process is far from being democratic, to use again the words of the honorable member for Balaclava.
It also seems to me to be undemocratic that because the price of a new car is increased as a result of sales tax, the price of a used car should automatically rise somewhere in the region of £130. The cost of a second-hand model will rise because the new model is dearer ; yet a transaction involving a second-hand model is not subject to sales tax. The increase, therefore, becomes an unearned capital increment in the hand of the used car dealer. Is that a democratic method of sharing out the unbounded prosperity that exists in Australia? Tha Government’s proposals may provide a solution of a kind, but it is a solution at the expense of the unfortunate person in the community who wants a motor car, but who cannot afford the higher price.
I believe that one of the reasons why so many motor cars are being bought in Australia can be found in the fact that an ordinary Australian who, some years ago under a Labour government yearned to purchase a home, and felt that he had a reasonable opportunity to do so, now believes that he has no chance because of the high interest rates and prices. With a motor car, he can at least take his family out of the unsavoury dwelling that he is forced to rent. He can take them in a motor car into the hills or to the beaches at the week-end, and give them a certain amount of pleasure. Apparently, even that is to be torn from him under the policy of this Government.
Because the buyer has to get tha vehicle through a hire-purchase arrangement, he will have to borrow another £100 from the hire-purchase agency, as the honorable member for Port Adelaide (Mr. Thomson) has said, and will pay about £30 or £40 more in interest on the transaction. The Government is doing nothing to abate that evil; neither is it doing anything to check the practice, to which the honorable member for Port Adelaide referred, of including sales tax in the price that the retailer charges for goods upon which tax was supposed to have been paid at the wholesale level. When this matter was investigated by the Public Accounts Committee some time ago, attention was drawn to the practice that was developing in the community.
When the practice of charging sales tax was discussed with the Commissioner, he was informed that some wholesaleretail firms adopted the practice of charging sales- tax on the retail price instead of on the wholesale price. The possibility of this course being followed was discussed in 1930. The Commissioner has said that there is little that can be done to prevent the practice, because the purchaser seldom knows that he is being overcharged. I suggest that there can be no valid reason why provision should not be made in the Sales Tax (Exemptions and Classifications) Act or other legislation for the sales tax on articles such as motor cars and other things, the value of which exceeds £10. to be shown on the price tag.
It may be suggested by some persons that this requirement would mean disclosing trade secrets, that it would be an indication of the profit margin enjoyed by the vendor, but I doubt whether anything is lost by compelling private enterprise to reveal for public information what the mark-ups are. If private enterprise is something that can be justified, it ought to be prepared to defend itself against malpractices such as those to which I have referred. I submit for the consideration of the Government the suggestion that on articles of a value exceeding £10, or £100, whatever figure may be decided upon, the amount of sales tax involved, if any, should be indicated, so that the purchaser may know just how much sales tax he is paying.
I suggested, when I began my speech, that it seemed that Government supporters were not quite clear as to what was intended in this measure. Is it merely a revenue-raising proposal ? I submit that it is. If it is, then it will not have the effects that the Government implies it will have. On the contrary, it will cause dislocation and possibly unemployment in the motor industry generally. So far as I can see, it does not do anything to lower the level of imports. It certainly does nothing to abate inflation. Bather does it aggravate and exaggerate the effects of inflation. It will not lessen the evils of hire purchase, but will put the small man even more forcibly into the hands of those people who charge extortionate interest for the services they render, because of the extremity of the person who is compelled to use them. I submit that, on those grounds, this measure ought to be condemned.
Debate (on motion by Mr. Anderson) adjourned.
House adjourned at 10.2’4 p.m.
The following answers to questions were circulated : -
r asked the Minister for Health, upon notice -
– The answers to the honorable member’s questions are as follows: -
r asked the Minister for the Interior, upon notice -
– The answers to the honorable member’s questions are as follows : -
Cite as: Australia, House of Representatives, Debates, 17 April 1956, viewed 22 October 2017, <http://historichansard.net/hofreps/1956/19560417_reps_22_hor10/>.