22nd Parliament · 1st Session
Mr. Deputy Speaker (Mr. C. F. Adermann) took the chair at 2.30 p.m.. and read prayers.
page 1407
Acknowledgment by Her Majesty the Queen.
– I desire to inform the House that I have received from His Excellency the GovernorGeneral the following communication in connexion with the Address-in-Reply : -
I desire to acquaint you that the substance of the Address-in-RepIy which you presented to me on the 20th March, 1956, has been communicated to Her Majesty the Queen.
It is the Queen’s wish that I convey to you and to Honorable Members of the House of Representatives Her Majesty’s sincere thanks for the loyal message to which your Address gives expression.
page 1407
– I direct to the Minister for Labour and National Service a question in relation to the decision of the High Court of Australia in the Boilermakers case which invalidated certain action taken by the judges of the Commonwealth Court of Conciliation and Arbitration in relation to penalties. The right honorable gentleman has announced that the introduction of certain legislation is pending. I ask him whether, in framing that legislation, which will affect the administration of the arbitration system, he or the Government has taken into consultation, or has asked the advice of, the Chief Judge or any of the other judges of the Arbitration Court or any of the conciliation commissioners.
– As I indicated to the House yesterday, the Department of Labour and National Service, in its consideration, in consultation with myself, of the draft legislation now in the course of preparation has covered a very wide field, including the practices of other countries and the history of the development of our own arbitration system. I, personally, have not had any discussions about the matter with the judges or the conciliation commissioners. They have made their views on a number of points known in various ways over the years. My colleague, the AttorneyGeneral, is more directly in touch with them for administrative purposes than I am. I am sure that any views that might be submitted to him by the judges would be fully considered by the Government. I believe that, when the proposed legislation is introduced, it will be found to have covered very fully all the aspects of the matter that might legitimately be inquired into.
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– Has the Minister for Supply any knowledge of a statement made by the Leader of the Opposition in which the right honorable gentleman referred to what he called the grave consequences that may flow from recurrent tests of atomic weapons on and around the mainland of Australia ? Is this statement true, and what safeguards does the Government provide to prevent any such possible grave consequences?
– I saw some such statement by the Leader of the Opposition. The statement is not true.
– The Minister says that it is his opinion that the statement is not true.
-I say that it is not true.
– The Minister is dogmatic and, as usual, wrong.
– I suggest that my opinion is a bit better than that of the Leader of the Opposition. The Australian Government will not permit atom bomb tests of an intensity or frequency that would lead to danger to the Australian people. Furthermore, we have laid it down that there shall be no hydrogen bomb tests in Australia. Indeed, we have never been asked to stage such tests. As to atom bomb tests, we have stipulated - and this has been freely agreed to by the British Government - that before any such test takes place in Australia the opinion of a panel of distinguished Australian scientists must be obtained regarding the safety of such tests. That panel consists of Professor Baxter, a noted chemical engineer, Professor Titterton, of the Australian National University, Professor Martin, who is the professor of physics at Melbourne University and, of course, our Defence Scientific Adviser, and Dr. Eddy, who is the head of the Commonwealth X-ray and Radium Laboratory. All of those gentlemen must, give their opinions on the matter, and it is only when they are satisfied that no danger will be entailed that any atom bomb tests are permitted. In these circumstances we propose* to continue, in a remote and safe part of Australia, to make, in the words of the Prime Minister, a contribution to the safety of free men.
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– Having previously made representations to the Minister for Health on the subject of cortisone, I now ask the Minister whether he has yet received a recommendation from his advisory panel on the addition of cortisone to the list of life-saving drugs, particularly in cases of pernicious anaemia.
– I think it should be appreciated that the question of making drugs available as pharmaceutical benefits is a matter of clinical judgment. Tt is therefore left to a committee of doctors and pharmacists to examine all applications for the addition of drugs to the list. As it is a matter of clinical judgment, the Pharmaceutical Benefits Act provides that the Minister shall not have the necessary power himself to do so, but that he shall be guided by the recommendations of this committee. At present there are four diseases for which cortisone is available as a pharmaceutical benefit. Pernicious anaemia is not one of them, because, in the judgment of this committee of experts, it, should not be one.
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– In view of the considerable challenge being made to wool by the new synthetics, does the Minister for External Affairs, as the Minister in charge of the Commonwealth Scientific and Industrial Research Organization, believe that the present funds being made available to the Commonwealth Scientific and Industrial Research Organization for wool research, partly by the growers and partly by the Government, are adequate?
– I have never actually asked that direct question of the senior officers of the Commonwealth Scientific and Industrial Research Organization. They have never, on the contrary, made any suggestion to me, that I recollect, that the funds were insufficient; but now that the honorable gentleman has brought the question to public notice I shall most certainly discuss it with them.
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– Is the Minister for Territories yet in a position to give a decision in connexion with the adjustment of the zone allowance applicable to the north-west of Western Australia? T might say that on a number of occasions in this Parliament I have raised this question with the Minister and on each occasion I have received either an evasive reply or a half promise that the matter would be considered. A decision is long overdue, .and I ask the Minister-
– Order ! The honorable member should ask a question and not comment.
– I ask the Minister whether he will consider the matter.
– The honorable member for Kalgoorlie, as one who has formerly held ministerial office, knows as well as I do that this is a matter that is decided, .and can only be decided, in connexion with the general taxation proposals introduced at budget time.
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– Can the Minister for Territories inform me whether arrangements are in. hand to bring to Australia one of the native bands from Papua in connexion with the pageantry a.t the Olympic Games ?
– Discussions are proceeding between officers of my department and Lieutenant-General Bridgeford, whom I think I may describe correctly as the executive officer of the Olympic Games, regarding the bringing to Australia of one of the bands from Papua.
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– In a recent statement, the Minister for External Affairs said that, in relation to Malaya, an agreement had been reached at the Malayan Constitutional Conference in London to allow the United Kingdom and British Commonwealth troops to remain in Malaya after independence in August, 1957. I think that that statement appears at page 115 of Hansard of the current sessional period. If that is the case, would it not have been more consistent with Malayan independence for this decision to have been left to the Government of Malaya which will be in office after August, 1957? I also ask the Minister whether, if he is interested in my views concerning the presence of Australian troops in Malaya, he would please make a direct inquiry of me and not rely on secondhand information from the Australian Country party or the press.
– As I understand the honorable gentleman, he quotes me as having said that Australian troops, among others, would remain in Malaya after Malayan independence. I may say that I have never made any such statement in my life. What I said was that, yesterday, a conference known as the British-Malayan Defence Working Party started its meetings in Kuala Lumpur in an effort to reach an agreement which would, in due course, be enshrined in a treaty to determine the conditions under which United Kingdom and other Commonwealth troops might remain in Malaya after independence in August, or perhaps slightly later, of next year. That is the statement that I made both publicly and in reply to questions in this House in the last few days. In respect of my reply to a question from an Australian Country party member lately, I confined myself, in answer to a statement alleged to have been made by the honorable member for Yarra, to quoting the Chief Minister of Malaya, Tengku Abdul Rahman, as to his views, which also are the views of the Government of the Federation of Malaya, concerning the need for British troops in general remaining in Malaya an the future.
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– Has the Minister for Health anything to advise regarding inquiries I made of him concerning the hospital and medical benefit fund known previously as the Commonwealth Hospital and Medical Benefit Fund, Canberra, Australian Capital Territory? The Minister will remember that I asked previously that he inquire into the state of the funds of the organization. I also asked whether he was aware that a salesman had represented the fund as the fund of the Commonwealth Government, and whether the Minister could publicize the fact that this is not a fund which is approved by the Government. I ask now whether the Medical Benefits Fund of Australia Limited, and perhaps other approved organizations, would accept members of this pseudo fund as continuing members by waiving the usual waiting period for new .members. Is the Minister aware that this organization still describes itself as the Commonwealth Hospital and Medical Benefit Fund in some of the new telephone directories?
– I have examined this matter, about which the honorable member asked me on a previous occasion. Unless a benefits fund is registered under the National Health Act, it is not’ entitled to use and is, in fact, prohibited from using, the word “ Commonwealth “ in its title. I have asked the Attorney-General to investigate the activities of the company mentioned, and also other companies not registered under the National Health Act, and I am awaiting his report. The acceptance of contributors to this fund as members of other organizations is a matter for each organization to decide, as is the question whether it will waive the waiting period. In the past, contributors have been treated sympathetically in this regard. As to the unauthorized use of the word “ Commonwealth “ in the title of organizations listed in telephone books, I was unaware that that had occurred. I shall have inquiries made, and inform the honorable member of the result.
page 1410
– I ask the Minister for Primary Industry whether he oan inform the House what is the governmentguaranteed indebtedness of the Australian Wheat Board to the Commonwealth Bank for first advances on wheat pools Nos. IS and 19.
– I should not like to rely upon my memory to give the honorable member the exact figures of the probable indebtedness of the Australian Wheat Board to the Commonwealth Bank in connexion with the pools mentioned, but I shall ascertain that information from the department and let him have it this afternoon.
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– My question is addressed to the Treasurer. Has the Treasury been able to devise any means of protecting the public against the imposition of current counterfeit five pound notes? As these notes have “ been responsible for the slowing down of business transactions and have caused general anxiety, can the right honorable gentleman supply any up-to-date information on this subject?
– In anticipation of such a question being asked on this subject, I have had a statement prepared, and if the House will bear with me I will read it. The Commonwealth Hank has supplied the following statement -
Forged five pound notes of the current design were first detected in Camberwell, Victoria, on Saturday, the 7th April. Since then approximately 75 of these forgeries have come under notice - all in Melbourne and suburbs. Although on close inspection the difference between the genuine note and the forgery is discernible, t.he forgery is a dangerous reproduction and could be passed by unsuspecting persons. The forgery lacks some of the solidity of colour and clarity of the genuine note, and generally the printing has not the same fineness of line as in the genuine note. There is a flat appearance in the portraits of Sir John Franklin on the front and the animals on the hark.
The honorable member for Mallee will recognize that one of the animals is not a rabbit. The statement continues -
On the genuine note the shaded cross-lines in the letters of the title “ Commonwealth of Australia “ are produced in such a way that there is a gradual progression in the appearance from grey to white. On the forgery the cross-lines are definitely finalised so that a distinct narrow white line along the top of the title is produced. Some of the forgeries are slightly smaller than the genuine note.
The quality of the paper used in the forgeries so far detected is not good and it quickly becomes ragged if rubbed vigorously.
That does not apply, of course, to some of the people who hold them -
On some of the forgeries an attempt hae been made to imitate the watermark of Captain Cook on the front panel and the words “ Five “ on the panel containing the signatures. Up to the present, the forger has used about twenty different numbers, some of which have been repeated. Investigations regarding the forgeries are being made by the Criminal Investigation Branch, Melbourne, and the Commonwealth Investigation Service.
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– In view of the remarks made at the conference of engineers now being held in Canberra, urging the establishment of a heavy electricalequipment industry in Australia, and having regard to the fact that Australia manufactures most of the appliances which use electricity, thereby causing a doubling of the demand for electricity every eight years, will the Prime Minister, during his forthcoming visit to Europe, make efforts to encourage manufacturers of heavy electrical equipment to establish themselves in Australia?
– I have always made a point, as opportunity offered, of persuading, if I could, large undertakings in Great Britain to establish themselves* in Australia. I think that is a very good process, and it has been successful lo a very large extent so far. Therefore. I will have what the honorable member has mentioned well in mind in the course of this journey.
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– On the 14th March, the Minister for Supply replied to a question by the honorable member for Mitchell concerning the contract between the United Kingdom Atomic Energy
Authority and Mary Kathleen Uranium Limited for the sale of uranium oxide, and indicated that the Australian Atomic Energy Commission had not imposed any prohibitions on the publication of the results of assays, grades of ore and so forth. As this reply has been misinterpreted in some quarters, to the possible detriment of some of the interests concerned in the development of the uranium industry, will the Minister clarify the position so as to remove any possible misunderstanding ?
– I shall be glad to elaborate what I said then, although I do not think that the words that I used were reasonably capable of being misinterpreted. What happened was that Australian Oil Exploration Limited, having acquired the Mary Kathleen leases, made & contract with the Bao Tinto Company for the formation of a joint company, to be called Mary Kathleen Uranium Limited, to sell a large quantity of Australian uranium to the United Kingdom Atomic Energy Authority. Just before that arrangement was finalized and was to be announced, one of the directors of Australian Oil Exploration Limited - this occurred in Brisbane, I think - addressing his shareholders, who, of course, were also shareholders in the new selling company, made a reference to the forthcoming contract and said that he regretted that he could not give the shareholders more details about assays, grades of ore and things of that sort, because of what he described as security regulations. The honorable member for Mitchell, because of his professional qualifications and his interest in the matter, picked that up. He also noted that, on the day before, the report of the Australian Atomic Energy Commission had been tabled in this House, and that in the report it was stated that the Australian Government no longer was imposing restrictions upon the disclosure of that sort of information. Therefore, he asked me, if I could, to reconcile those statements. In reply, I said that the Australian Government and the Australian Atomic Energy Commission had imposed no security restrictions on the disclosure of information relating to assays and grades of ore. I said that it was the parties themselves - namely, the vendor, Mary Kathleen Uranium Limited, and the purchaser, the United Kingdom Atomic Energy Authority - who, for their own reasons, had, in their contract, mutually agreed that this information should not be made public. If that statement has been misconstrued, I can say only that no reflection upon any one was intended. Indeed, I think the arrangement made by the two parties was a very sensible and proper one. It was entirely a matter for them. It was not forced upon them by the Australian Government. The contract was an ordinary commercial one, and, if they preferred, for their own reasons, not to disclose the details, it was wholly a matter for them, and it was quite proper for them to take that course. The Australian Government’s only interest in the matter was to ensure that Australia’s resources were safeguarded and that a good contract was obtained. We think we have achieved that object.
page 1411
– I direct a question to the Minister for Supply. Is it a fact that General Motors-Holden’s Limited has stored refrigerators in the Department of Supply stores at Bunnerong Park, Maroubra? How was the company able to obtain storage space for this purpose? Were public tenders called for the letting of this valuable space, or did General Motors-Holden’s Limited obtain it as a favour? What is the rent charged this wealthy monopoly for the valuable space that it uses?
– I am not aware of the circumstances alleged by the honorable gentleman, but I am quite sure that no one obtained any favour in this matter. I shall have the true circumstances investigated, and shall give the honorable member a reply later.
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– I desire to ask the Minister for Trade whether it is a. fact that the export of Australia’s wheat to overseas markets is being adversely affected by a shortage of shipping owing to an increased demand for charter ships to transport coal from the United States of America to Europe.
– It is a fact that the increased tempo of the carriage of coal, principally across the Atlantic Ocean, has imposed stress upon the shipping available for charter for the transport of bulk cargoes such as coal and wheat. There is, normally, an important transAtlantic trade in coal between the United States of America and various European countries. The United Kingdom, France, Germany, Portugal, Spain and Italy all are, normally, buyers of American coal. At the present time, owing to industrial circumstances in Europe and to certain economic and financial arrangements, there is tremendous pressure for the chartering of Ships equipped for bulk carrying. This has affected Australian charter rates for the transport of wheat. These rates are now very high indeed, and the ultimate result has been to reduce the net return to the Australian “Wheat Board and the wheat-growers of this country. The matter has caused some concern to the Department of Trade, the Australian Wheat Board, and my colleague, the Minister for Primary Industry. However, in the light of the facts that 1 have mentioned, it is almost entirely beyond the control of the Australian authorities.
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– Does the Prime Minister recall that, on the 3rd April, 1953, which, incidentally, was Good Friday, he gave me, through his then press secretary, a specific assurance that, before the Government made any decision to transfer the Royal Australian Naval College from Flinders to Jervis Bay, and to dispossess people of their premises, an opportunity would be given for a representative deputation from Jervis Bay to put its views before the Cabinet, or before a representative of the Cabinet? Does the announcement by the Minister for the Navy that the college will be re-established at Jervis Bay about the end of next January cut completely across the promise made by the Prime Minister? Does the right honorable gentleman know that residents of Jervis Bay who have occupied homes and conducted businesses there for the past 26 years, and who will have to vacate their premises, received no intimation of the decision announced by the Minister for the Navy, other than the news item in the press and on the radio? Will the Prime Minister have the decision reviewed and will he still give the residents of Jervis Bay the opportunity he promised three years ago to put their views by deputation to the Cabinet or toa representative of the Cabinet? Wilt the Prime Minister have particularregard to the human problems in this matter, giving particular consideration tothe fact that families that have lived at Jervis Bay for years, including some old men and women, living out their lives after 30 or 40 years at the bay, will beevicted from the homes in which they have raised their families?
– I am sure that thehonorable member is quite right in hia recollection of the answer he got from me. I was not present when this matter was discussed in Cabinet, but I will take up with my colleagues the point he hasraised because I am quite sure he is right in recalling that I said that opportunity would be given.
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– My question is directed to the Minister for Supply. Did the Auditor-General’s report on the Australian Aluminium Production Commission’s accounts as at June, 1954r indicate substantial discrepancies for preceding years? Has the plant yet reached its peak production? Is the Minister aware of any proposal to double the plant at Bell Bay?
– The answer to the honorable member’s first question is- “ No “. The Auditor-General’s report, tabled in this House the day before it rose for Easter, gave a complete certificate as to the correctness of the commission’s accounts for the year 1954, and in the course of his report pointed out that the balance-sheet which was before him included all the transactions for thepreceding four years, that is to say, 1950, 1951, 1952 and 1953, as well a* 1954. He specifically stated, both in his report and in a letter supplied to me under section 14 of the Audit Act, that he wassatisfied as to the correctness of the commission’s accounts for all of those four years as well as for the year under discussion. That gives the commission a clean bill of health for all of the years, including the two disputed years, 195.1 and 1952. The minimum one should do is point out that this very satisfactory result is the work of the new commission which was appointed early in 1953. In the face of much difficulty, including * Public Accounts Committee inquiry and other difficulties, it has brought the whole of the financial affairs of the commission into a completely satisfactory state. As to the question of whether there is any proposal for the doubling of the capacity of the Bell Bay plant, the answer is also “ No “. At the moment the capacity of the plant is 13,000 tons. We could produce 13,000 tons but at the moment we cannot get enough power to do so. We are now producing at the rate of 10,000 tons per annum, which is very satisfactory. We are producing a very high grade of ingot. I would say there is no proposal at present, at any rate, for doubling the capacity of the plant’ because, apart from other considerations, the prime consideration is one of sufficient electric power.
page 1413
– I ask the Minister for Supply whether it is a fact, as has been reported, that the forces of the Western world now have a stockpile of atom bombs sufficient to annihilate any potential enemy or combination of enemies. If this is so, what advantage ca.n possibly be gained by the explosion of further atomic weapons? Could wc not make a better contribution by concentrating further developments solely for peaceful purposes such as power production? What progress has been made in this field?
– One reads certain things in the press about the accumulation of atomic weapons. I do not know whether there is a sufficient stockpile. I do> not know what a sufficient stockpile is, and I venture to suggest that very few people do. What I do know is that in this uncertain world in which we live it would be very unwise for the forces of freedom to relax their efforts to protect themselves unless some satisfactory agreement has been reached for the cessation of these tests. Both Sir Anthony Eden and President Eisenhower have quite recently invited negotiations with the Soviet in order to reach such an agreement. So far, they have been unable to obtain any satisfactory response, and no agreement has been reached. In those circumstances, I think that those of us who favour freedom and our own way of life1 should continue to do what we can to- help to protect ourselves from any threat against our freedom.
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– Has the Minister for External Affairs any information which will, enable us to evaluate recent reports regarding the possible dissolution of the Cominform, the organ of Soviet propaganda? Secondly,, in view of the fact that the 1943 dissolution of the Comintern, its predecessor,, proved to be almost completely “ phony “, should we not regard with some scepticism, any ostensible move which purports to dissolve the succeeding Cominform?
Mi-. CASEY - Yes, there was a report yesterday from Moscow that the Cominform had been discontinued. I do not believe that this is a matter of very great importance-. However, it conflicts with statements that have been made by Marshal Bulganin and Mr. Khrushchev in quite recent months, in which each of those gentlemen supported the conception of the Cominform, its principles and continued existence. I think, from memory, that such statements were made by Marshal Bulganin in a press conference at New Delhi and by Mr. Khrushchev at a meeting of one of the high bodies of the Communist party in Moscow. I have no hope that the alleged going out of existence of the Cominform will have any real effect on the continuance of international Communist propaganda throughout the world, because I believe that the close contact between the authorities in Moscow and the Communist parties in other countries throughout the world will still continue. I do not believe that we can gather any hope from this alleged discontinuance of the Cominform. I believe that it is in line with the drive on the part of international communism for international respectability at this time, but I expect that a certain number of people will be misled by the manoeuvre. If Moscow would undertake to discontinue its contacts with Communist parties in other parts of the world, and if one could be sure that such an undertaking would be honoured, that would be a matter of very much greater consequence.
page 1414
– Could the PostmasterGeneral possibly tell me the approximate lag in the provision of telephones at the present time, and will the installation of television at an early date and the utilization of labour and materials for that purpose increase the lag rapidly and considerably t
– A few weeks ago I gave some information in the House regarding telephone installations. From memory, over 120,000 telephones were installed last year as against about 142,000 applications. I shall check those figures and give further information to the honorable member. In regard to the second part of his question, telephone installations are not being affected by any work which is being done in the development of television, as that comes under an entirely different vote and there is no connexion between the two projects as far as expenditure is concerned.
page 1414
– I direct to the Minister for Health a question that is supplementary to the question asked by the honorable member for Capricornia, and arises from the fact that Commercial Hospital and Medical Benefits Limited has contributors who are under the belief that they are protected in regard to benefits. The Minister will recall that I have already referred to him, in recent weeks, two cases along those lines. Will the Minister consider, (1) making a public statement in regard to this company, and (2) looking into the possibility of any such company being required to place certain funds in trust before being allowed to operate as a benefits society so that in the event of its going into liquida-tion members of the public who have paid contributions into its funds will not suffer ?
– Until I receive the report of the AttorneyGeneral, I do not believe that I am really able to make any definitive statement about this particular company, since the matter is at present under investigation. However, in answer to the second part of the honorable gentleman’s question, I inform him that before any society may be registered under the National Health Act it must fulfil various requirements of an actuarial nature, which, so far. have been found to be satisfactory.
page 1414
Mr. L. R. Johnson having addressed « question to the Prime Minister
– Order ‘. I have yet to learn that the Prime Minister is in charge of the subject-matter of the question. The question is out of order.
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– My question is addressed to the Minister for Trade, and concerns the discussions that have proceeded in connexion with an attempt to renew, or continue, the existing International Wheat Agreement. I understand that the direct representatives of the Australian wheat-growing industry whom the Minister was good enough to send to Geneva have returned to this country, and I ask the Minister whether he has yet received any report from them regarding the negotiations. Will he also say to what stage the negotiations are to continue or, at least, whether they are continuing, as a result of the failure to reach agreement in Geneva? In addition, has the Minister any idea of what the prospects of success in the negotiations may be? In view of the fact that the United Kingdom was not a party to the expiring agreement, and the fact that that country participated in the discussions in Geneva, was British participation in the negotiations of any assistance towards obtaining a new agreement? Is it possible that the British attitude adopted in connexion with the agreement, which has been so much publicized, did not assist us in any way to obtain an agreement, and might have actually jeopardized the reaching of a satisfactory agreement?
– The chairman of the Australian Wheat Board and the two grower representatives who attended the Geneva discussions on this matter of attempting to secure a new international wheat agreement have returned to Australia, but the leader of the Australian delegation, Sir Edwin McCarthy, is, of course, still in London, where his post of deputy high commissioner holds him. He is vice-chairman of the International Wheat Council. Broadly, the position ia that all of the important countries which were parties to the last agreement, as importers, have indicated their willingness to join a new agreement as importers, and all of the principal exporting countries, plus some additional countries, have indicated their willingness also to join a new agreement as exporters. The United Kingdom, which is the greatest importer of wheat in the world, indicated early that it was not prepared to enter an international wheat agreement of the character of the last one. I think I arn correct in saying that the United Kingdom alone took that particular stand, but it did indicate that, in its view, certain principles ought to attach to a new agreement - principles with which I find myself almost entirely in agreement and which, I think, would represent an advantage to the Australian wheat interests. However, it is a fact that the United Kingdom, having stated those principles, did not remain and engage actively in the discussions at Geneva. Those discussions at that level terminated inconclusively. It was agreed, however, that there would be a resumption on a much narrower basis of representation at London on the 16th April. I was advised just as I came into the House to-day that some cables had been received and were being decoded. I have no doubt that they will advise me of the latest position in respect of those discussions. All I can say is that it is the view of the Australian Government that, having regard to the importance of wheat in our economy and the tremendous number of individuals who are interested in the stability of the industry, and having regard also to the vast surplus of wheat that has been produced in the world as a result, to no small extent, of great producing countries setting out to produce enough food for the underdeveloped and under-nourished countries of the world, in total it would be very advantageous if the risk of collapse of world wheat prices could be removed by the establishment of a new international wheat agreement on terms that are fair to all the participating parties. This Government has continually striven towards that objective.
page 1415
– I lay on the table the following paper : -
Parliament of the Commonwealth - Salaries and Allowances of Members - Report of Committee of Inquiry, 1955.
The House will recall that I indicated in September that I would ask the committee to defer its report for a time, but as it had arrived at its report some six months ago, the chairman thought there was no particular advantage in it merely remaining in the hands of the committee for the intervening period, and he therefore delivered it to me. In view of the fact that speculative stories are beginning to appear on this matter, it seems very desirable that before the House resumes after the break of next week, honorable members and the public generally should have a full opportunity of considering the terms of this report, made as it is by an independent committee. Copies will be available for honorable members and for the press forthwith.
page 1415
Motion (by Dr. Evatt) agreed to -
That leave of absence for two months be given to the honorable member for Grayndler (Mr. Daly) owing to his absence from Australia.
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Motion (by Mr. McEwen) proposed -
That leave be given to bring in” a bill for an act to establish a Fisheries Development Trust Account and for purposes connected therewith.
.- The Opposition opposes the granting of leave to introduce a bill for an act to establish a fisheries development trust account and for purposes connected therewith. On the face of it, the proposal looks perfectly innocent, but it is quite obvious from press statements and statements that have been made by a variety of people, that it is the intention of the Government to introduce into this Parliament a bill for the purpose of hypothecating the proceeds, whatever they may be, from the pending sale of the assets of the Australian Whaling Commission at Carnarvon, in Western Australia. The Opposition is totally opposed to the sale of these valuable assets, particularly in view of the fact that the Australian Whaling Commission, during last year alone, made for the people of Australia the handsome net profit of £230,000 after all sorts of allowances had been made for depreciation and so on, and all the portents are, in view of the ready market for whale oil and byproducts of the whale, that in the forthcoming season a further handsome profit of £230,000 or more would be available, to the Consolidated Revenue of Australia.
From the moment that this sale was first mooted there has been evasion and a desire by the Government to cover up the manner and means by which it had made the decision to sell, and to withhold the names of the persons with whom it has conferred. From time to time over the last six months at least this Government has cast about for a suitable excuse to justify the sale of this profitable instrumentality. The Australian Labour party stated at the last elections that if the undertaking were sold to the Western Australian Government, that Government would have at its disposal annually approximately £230,000 which it could hypothecate for the further development of the sparsely settled areas in the northwest of Western Australia. The Government had been casting about for suggestions on how it could justify the disposal of this most profitable asset belonging to the people. That was one suggestion. A variety of others was forthcoming. Recently a “ kite “ was flown in the press; I suppose by a Cabinet Minister or a Government official. It was suggested that the Government intended to make a provision whereby any profits accruing from this sale would be hypothecated for the -development of the sparsely settled areas in the north-west of Western Australia. Evidently that proposition was considered to be not :quite suitable, possibly because it had originated in another form in the mind of the Labour Opposition. Now, the Government has a new idea : Australia has a coastline extending for 12,000 miles. Around that coast, and particularly in the territorial waters of the Commonwealth outside the 3-mile limit it is said - and some preliminary research supports the view - that there are vast fisheries ready for exploitation. The Commonwealth Scientific and Industrial Research Organization, State research organizations, private companies and various other people have already been busy in this field. The Government says, “ Here it is, we are now selling an instrumentality which is devoted to the extraction of wealth from the waters adjacent to Australia, not from fish, but from whales “ - which I understand are mammals. Then the Government says, “ Wouldn’t it go down well with the Australian people if we said, ‘ Well, it is true that this instrumentality which we are selling in Western Australia has served its purpose. It has indicated to private enterprise that it is profitable to process whales. But we want to get rid of it and let our friends who contribute to our party funds into this business, and let private industry make profits and let certain whaling industries build up their own small amounts of capital to a largely capitalized concern to make private profits for their few shareholders; but we do not intend that the capital assets which we sell should be lost to ‘the people of Australia ; we have another scheme. We are going to establish a developmental fisheries trust account, and into that trust account we are going to divert some of the proceeds of the sale of this whaling station and the accumulated profit of the Australian Whaling Commission to see if anything can be done more easily to exploit the fisheries wealth of the waters adjacent to Australia.’ “
Is not . that a plausible story ? But what are the facts about the availability of funds for research work for any sort of investigation into the further development of Australia’s wealth? I say to the Minister in charge of this bill, the Minister for Trade (Mr. McEwen), tha there aTe plenty of examples to show that the Government can hypothecate. money for certain purposes from Consolidated Revenue. After all, whatever the Government finally does with the whaling station in Western Australia, if the proceeds did not go to developmental work on our fisheries or to some developmental fisheries account, they would go into Consolidated Revenue and could quite easily be taken out of that account. There are examples of action taken by the Government, through the Treasury, to assist in research work carried out in regard to other Australian projects. For example, I call to mind something in which I had! a hand myself. Believing that there was scope in Australia for the development of more effective dairying, methods and a consequent increase of production, I made arrangements through the Chifley Labour Government to hypothecate annually for a period of five years a sum of £250,000 which was to be devoted to further investigation and research work into the dairying industry in Australia in order that it might become more efficient and more able to cope with competition in the overseas’ markets of the world as well as more able and equipped to provide an article to the Australian consuming public at a reasonable price.
I have no recollection of my having had to come to the Parliament to ask for leave to introduce a bill to establish a butter industry assistance trust account. All that was necessary to be done was, as the butter industry and the dairying industry and everything pertaining to those- industries was under the control of the then Department of Commerce and Agriculture, to put an item in the Estimates when the budget bills were being brought down making provision to set aside £250,000 a year for five years. That is all that there was to the matter. Does not that quite clearly highlight the fact that the matter at present being discussed is an endeavour by this Government to- put before the people a piece of hocus-pocus to cover up the fact that it is guilty of giving away the people’s assets and relinquishing a claim to a revenue of £250,000 a year which will be lost forever as far- as this Government is concerned, and from the accumulated’ profits already held” by this station and the proceeds of the whaling industry they are going to set up a fund for the development of our fisheries.
I suggest that the Australian public will not be convinced. This Government can come along at budget time, after next June, and- introduce its Estimates into the Parliament. In those Estimates any amount that the Government wishes can be included ; in fact, the Government can include a sum of £250,000, or even £1,000,000, if it so desires and sees fit, in the Estimates of the new Department of Trade, and then, after suitable debate, £250,000 or £1,000,000 will be made available within the Department of Trade for the further development of Australia’s fishing industry. Therefore, again I ask why it is necessary to establish the proposed trust fund. Does not the Government trust itself? Is it for that reason that it is bringing along a bill to bind itself to make available for investigation into the fishing industry an annual sum of money for five or ten years? But, even when it does that, I have no doubt that the Minister will say that if we pass this special, measure the fisheries industry isi assured that it will receive annually, for five or ten years, a specific sum of money, whereas if the sum of money is only provided annually in the Estimates, there may be some uncertainty about it. For example, there may be a change of government.
In answer to that argument which may be put forward, I point out to the Minister for Trade (Mr. McEwen) that changes of government do not necessarily and’, indeed, very seldom, mean that there will be an interference with the votes of sums of money for research to assist particular industries. That is best illustrated by the fact that the last Labour Government hypothecated in the Estimates, over a period of years, £250,000 annually to assist research in the dairy ing industry. The present Government did not alter that vote; it continued it. I have no doubt that when this- Government goes out of office there will con*tinue to be a- provision in the Estimates for any assistance that this Government might decide to give to any industry, or for any assistance that it has given to any industry in the past”. In those circumstances, there is noi justification for the Opposition to assist this Government to bring in a measure at this stage and in this form to help research work in the fisheries industry.
If this Government is determined to sell the splendid whaling industry, and it apparently is, it can sell it and put into Consolidated Revenue the capital sum realized, and then withdraw from Consolidated Revenue the capital sum and the accumulated profits and put them into a trust account. It can inform the public at budget time that from the Commonwealth revenues it is providing a sum equivalent to the amount already mentioned straight from the revenue. The whole purpose of this bill is designed to delay the business of this House, and to assure the Australian public that thu Government is not doing the wrong thing in selling this successful enterprise. The whole thing is a piece of hocus-pocus and deceit. This business precedes on the notice-paper a measure under which the Minister will seek leave to bring in a bill to deal with the Whaling Industry Act 1949-1952. The Government wants this measure out of the road first. ThiGovernment will explain its purpose and where the funds are to come from, and, having disposed of that, will bring down a measure to sell the whaling industry’s assets and from the proceeds to divert a sum of money to assist the fishing industry. The fact that the Opposition opposes this measure does not indicate in the slightest degree that we are hostile to the fishing industry or do not desire to support a measure properly introduced in conformity with ordinary practices, by budgetary provision or some other means, to allocate funds for the assistance of the fishing industry.
It is true that from time to time when I was a Minister I introduced measures to provide trust funds; to hypothecate funds from various sources, perhaps from the Australian Meat Board, or perhaps from the wool authority, to provide trust funds. But in those cases, the trust funds were associated with instrumentalities upon which the primary producers were represented. In that sense, they were in an entirely different category from the proposals that are implicit in this measure. We were not disposing of the assets of the people in the case of any of those instrumentalities. In this case, the Government proposes to sell an asset, and the desire of the Government is to obtain the leave of the Parliament for that purpose. The Opposition will oppose the granting of leave.
– in reply - I do not propose to reply in substance to the statements made by the honorable member for Lalor (Mr. Pollard), because that would be only anticipating a general debate on the subject-matter before the House. It is curious that the Australian Labour party should argue in opposition to the sale of the assets of the Australian Whaling Commission on a point of procedure which requires it to go on record as being opposed to the establishment of a trust account designed to further the development of the fishing industry. That will be a curious record for the Labour party to explain away in due course, but there it is.
The honorable member for Lalor has wandered far from the issue that has been placed before the chamber by way of notice of motion. He has referred to the dairying industry, in particular. The honorable member, by reminding the House of the record of the Labour Government in connexion with the dairying industry, could not have chosen a more classic example of the necessity to embody in legislation a permanent arrangement. He has reminded us that the Labour Government put £250,000 a year into a dairying industry efficiency grant. God knows tha.t the dairying industry needed to be efficient to survive on the low returns obtainable when the honorable member was in office.
The dairymen were paid on the basis of a 56-hour working week when the honorable member for East Sydney (Mr. Ward) was Minister for Labour and National Service. That is the record of the Labour party in connexion with the dairying industry. Payment was to be on the basis of the prevailing basic wage, with a margin for skill of 25s. a week, provided the dairyman worked a 56-hour week. Even then, he had to invest his own capital. The Labour Government provided him with the prospect of receiving Si per cent, interest on his own capital at risk. The pressure generated by the intolerable conditions set up by the Labour Government for the great Australian dairying industry finally forced that Government to provide £250,000 a year in an endeavour to advance the technical efficiency of the industry in some directions. It is unfortunate for the Labour party, and for the honorable member for Lalor, that he should have forced me to remind the House of those circumstances.
The honorable member has put it to us that, if funds come into the possession of the Government, they can go into Consolidated Revenue, and we do not need a trust account. He suggested ‘that, on the occasion of the annual budget, the Treasury could provide a vote from those funds. Again, the honorable member cited the dairying industry. It is true that, while the Labour Government was in office, it not only fixed an intolerably low price for butter used for local consumption, but when butter was exported at a decent price, it grabbed a proportion of the proceeds and put it into Consolidated Revenue. By the time this Government was elected to office, the previous Labour Government had grabbed £4,250,000 of the meagre profits made from the export of dairy produce.
I recall my earliest experience upon succeeding the honorable member for Lalor as Minister for Commerce and Agriculture. Representatives of the entire dairying industry came to me and said, in effect, “ Please protect us against the intolerable situation that has developed through the previous Minister grabbing our profits, putting them into Consolidated Revenue and telling us, by word of mouth, that we might get some of them back some day. Please regularize it, and establish a trust account so that we may know that our money is reserved for us under statute “. This Government did exactly that. What we are doing now merely serves to distinguish the gulf there is between the policy and administrative practices of the Labour Government and of this Government.
I have no intention of anticipating a second-reading debate during a discussion on a point of procedure. I make it quite clear that what we propose to do is to apply the sound, business-like and antisocialist policies of the present Govern ment. This move is related, of course, to our intention to sell the assets of the Australian Whaling Commission. There has never been any mystery about that. The honorable member has confessed that the demonstration he has made on this occasion is false. He has confessed that he proposes to vote against something of which he is in favour. It is a jolly silly situation, but that is the substance of what he has said. He proposes to vote against something that he favours, merely as a demonstration. Like the Bourbons, he has forgotten nothing and learned nothing. With his associates, he has nailed his colours to the mast of socialist doctrine. In accordance with that doctrine, the honorable member and his associates believe that the. Government, having entered the whaling enterprise as a demonstration, should continue its activities in that connexion as an ordinary production enterprise.
– Hear, hear!
– This Government does not believe in engaging in ordinary production activities in the industrial life of Australia. It does not believe that governments can engage in those activities to better advantage than can experienced private individuals. We make no bones about that. The whaling enterprise bas been splendidly successful. I give credit, as I have done before, to the initiative of the honorable member for Lalor in setting up this demonstration unit, but it has fulfilled its functions. Its techniques have been copied by private enterprise, so that a whaling industry is now established in Australia on a highly efficient basis. It is making great profits, giving employment and earning overseas funds for Australia. I see no reason why the Government should continue to engage in that enterprise. Indeed, we see every reason why the profits from the realization of the Australian Whaling Commission’s assets should be made available for the Government and private industry, separately or combined as may seem most opportune from time to time, to explore further opportunities that may exist for establishing, expanding or improving other industries connected with products of the sea. All that will be explained in more detail later. I ask the House to support the motion.
Motion (by Mr. McEwen) put -
That leave be given to bring in a bill for an act to establish a Fisheries Development Trust Account, and for purposes connected therewith.
The House divided. (Mb. Deputy Speaker - Mr. C. F. Adermann.)
AYES: 60
NOES: 39
Majority . . . . 21
AYES
NOES
Question so resolved in the affirmative.
Bill presented.
Motion (by Mr. McEwen) put -
That the bill be now read a first time.
The House divided. (Mb. Deputy Speaker - Mr. C. F. Adermann.)
AYES: 60
NOES: 39
Majority 21
AYES
NOES
Question so resolved in the affirmative.
Bill read a first time.
page 1420
Motion (by Mr. McEwen) proposed -
That leave be given to bring in a bill for an act to repeal the Whaling Industry Act 1949- 1952, and for purposes connected therewith.
.- Mr. Deputy Speaker–
Motion (by Sir Eric Harrison) put -
That the question be now put.
The House divided. (Mb. Deputy Speaker - Mr.c. F. Adermann.)
AYES: 60
NOES: 39
Majority . . . . 21
AYES
NOES
Question so resolved in the affirmative.
Original question resolved in. the affirmative.
Bill presented.
Firstreading.
Motion (by Mr. McEwen) put -
That the bill be now read a first time.
The House divided. (Mb. Deputy Speaker - Mr. C. F. Adermann.)
AYES: 60
NOES: 39
Majority . . . . 21
AYES
NOES
Question so resolved in the affirmative.
Bill read a first time.
page 1422
Debate resumed from the 17th April (vide page 1404), on motion by Sir Arthur Fadden -
That the bill be now read a second time.
.- 1 rise to support the Sales Tax (Exemptions and Classifications) Bill. In matters of taxation it is natural for every member of a government to endeavour to be a good fellow with all the electors, but, unfortunately, the measure under discussion is necessary, and the Government has made it abundantly clear that the emergency measures that it has introduced are for the purpose of dealing with the unbalance in our economy. We know that these measures have been introduced to assist to balance our budget. We know that they have been introduced to counter inflation. They also have an important bearing on our overseas balance of payments.
The Opposition commenced the debate on this bill yesterday. Unfortunately I was not present when the honorable member for Melbourne (Mr. Calwell), who is Deputy Leader of the Opposition, opened the debate, but I was interested to read what he said, because he does not scorn, to have made a very connected speech. We know that this measure has been, and will be, used by the Opposition for purely political purposes. After the recent elections in Western Australia, at which the Labour party in that State was able to win a couple of seats, we heard gibes from Opposition members in this House regarding the success of State Labour candidates. They claimed that the people had spoken, and, in so doing, had increased the majority of the G.>vernment party in Western Australia. The Labour faction in that election painted pictures of the Prime Minister (Mr. Menzies) and the Treasurer (Sir Arthur Fadden) as tax raiders, but we know that the taxes that are involved in this Government’s emergency measures are to be raised entirely to support the works programmes of the States. When one considers the use of such tactics by Labour supporters one wonders how low they can get. Very shortly, an election will be held in Queensland, and no doubt the same tactics will be used there.
When I was previously in this Parliament, some four or five years ago, the Leader of the Opposition was the Right Honorable Mr. Chifley. He was succeeded by the present leader of the Australian Labour party, the right honorable member for Barton (Dr. Evatt). Since then some very disturbing trends have been evident in the conduct of that party. I have noticed a trend towards a new technique in parliamentary debate, a technique generally known as dialectical materialism. A very ugly form of debate is being introduced into our parliamentary life by Opposition members. We know of various new techniques that have been developed in totalitarian countries, such as the Goebbels technique of the big lie, and now we see in this country the introduction of the technique of dialec- tical materialism, which is developed by socialists and those who follow socialist policies. The technique of dialectical materialism may not be readily understood by all people. Probably the best way to describe it is to tell the story of the Catholic priest who wanted to explain this method of debate to his parishioners. He said, “Suppose that a clean man and a dirty man were offered a bath. Which do you think would take it?” “The dirty man “, said the flock at once. “ No “, said the priest, “ The clean man would take the bath because he is used to being clean, and the other is used to being dirty. Now do you understand what dialectical materialism is?” The parishioners shook their heads, and the priest repeated his proposition, “Now, who took the bath ? “ “ The clean man “. answered the flock. “ No “, said the priest, “ The dirty man, because he needed it “. Once more the congregation shook their heads in some bewilderment. “ Well “, said the priest, “ a clean man and a dirty man were offered a bath. Now. who would take it? “ “ Ah ! “. said the flock with some inspiration, “ both would take it “. “ No, no “. said the priest, “ neither would take it “.
– I rise to order. I ask you, Mr. Acting Deputy Speaker, what this has to do with sales tax.
– I shall connect my remarks with the subject of the debate.
– Order! The honorable gentleman may proceed.
– To return to the story, once more the priest asked, “ Which man would take the bath ? “ “ Neither “. said the congregation as one man. “ You are wrong again “, said the priest. “ Both would take a bath because the clean man liked to bathe and the dirty man needed it. Now do you understand dialectical materialism? “ “ How can we understand it if you give a different answer each time?”, asked the congregation. “ Ah ! “, said the priest, “ That is dialectical materialism “.
If honorable members follow the parallel of that story they will see that the conduct of the Leader of the Opposition (Dr. Evatt) and other members of the Opposition is based on it. Only today we heard the honorable member for Lalor (Mr. Pollard) adopting exactly the same tactics. Ever since I have been a member of this Parliament, and also while I was out in the wilderness, honorable members opposite have followed the same tactics of dialectical materialism, which is a method of debating completely without principle. I tell honorable gentlemen opposite these things for their own benefit. If they doubt what I am saying, they have only to look at the condition of their party to-day. Let them consider what is going on in Sydney now - -
– I again rise to order. I ask you, sir, to order the honorable gentleman to come back to the bill. So far, Ave have heard not a single word about sales tax. We are not discussing the Australian Labour party.
– Order ! I think that the honorable member for Hume is getting rather away from the subject of the debate.
– I have mentioned the matter only to illustrate the methods adopted by honorable members opposite in dealing with, this very important bill to raise revenue by way of sales tax.
Yesterday, honorable members opposite tried to impress upon us that sales tax is an undemocratic tax. I say it is a demo.catic tax because it is a selective tax. If you do not want to pay the tax, you do noi have to do so. Exactly the same position applies in relation to the increased excise on beer which was applied recently. You do not have to drink beer if you find the tax objectionable. After all, this indirect form of taxation was introduced by the Australian Labour party. Each speaker from the opposite side of the House who has participated in this debate has had nostalgia for .the grand old days when the late Mr. Chifley was in office. Bui what was the true position in those days < The Labour Government introduced the sales tax. The honorable member for Melbourne, who is Deputy Leader of the Opposition, referred last night to the figure of £42,000,000 as the amount of sales tax collected in those days. I suggest that sales tax receipts were not greater than that sum because there were then no goods to be bought. For instance, there was no coal available in that golden age. We are increasing the tax on beer to-day because there is beer to be had, buin 1949 there was very little beer. In those wonderful days an occupational disease was brought about by the black market and the necessity for people to be ducking under the counter to produce goods kept there. Those were the socalled golden days of the Labour party. I want to dispel some of the illusions which honorable members opposite have attempted to create. When considering the actions of past and present governments, it is best to see things in their true perspective.
One of the reasons why honorable members opposite are opposing the increase of sales tax is obvious. For political purposes, they would much rather this Government had introduced a direct tax. An indirect tax, of course, is not felt po seriously as is a direct tax. Honorable members opposite are interested only in the political consequences of the Government’s action. They are not in the least interested in the effect of inflation on the economy or the uncertain position of our balance of payments, and so on. They are concerned only with winning vote?, and if they can make the Governmenunpopular because of its actions in relation to the economy, they will be very pleased to do so. They would prefer ti> see an increase of direct taxation because they know that direct taxation is extremely unpopular. The Government has adopted a selective method of taxation for very good reasons. It believes that, in this way, it will be possible to check some of the inflationary troubles which beset the country.
Normally, we tax luxury goods, but when we begin to analyse luxury goods we find that it is extremely hard to enumerate goods that are only luxuries, and when they are set down, it is found that the amount of income, they produce is negligible. It is, therefore, necessary to tax a certain number of commodities in daily use in order to raise revenue. The schedules to the bill refer to a number of items, including motor cars, with which I shall deal later on, jewellery, and so forth. Certain items of every-day use in the household such as knives, forks, spoons, scissors and so on are excluded. Generally speaking, the sales tax is to be increased on goods which can stand a reasonable amount of tax. The critics who have voiced their opinions in the press throughout the country will be found to be people who are personally interested in where the tax falls. “When people criticize the incidence of sales tax it is well to ascertain their trade. The honorable member for Melbourne Ports (Mr. Crean) defended the motor car industry because his electorate contains a number of motor factories. I mention that to indicate that there are a number of people who are vitally interested in this matter. Jewellers, for instance, will criticize the increase of the tax on jewellery. In every instance of criticism by the Opposition so far, unfortunately the same old bogy has come up : This will lead to unemployment and depression. Every speaker from the opposite side of the House, with one exception, has followed the same theme, AVe must raise additional funds and we have decided to use a selective tax which will not inflict hardship but which will assist by countering inflation.
I come now to a very important factor in countering inflation and one which also affects the balance of payments, f refer to motor cars, the sales tax on which lias gone from 16$ per cent, to 30 per cent. That is a very sad thing. Motor cars are useful and indeed invaluable in this country. Still, too much of a good thing can cause harm. The honorable member for Batman (Mr. Bird), who is regarded on this side of the House with considerable respect, though his utterances are always coloured by his socialist leanings, tried to make out a case last night in which he stated that at the present moment factories are moving to the outskirts of big cities, such as Melbourne and Sydney, and that there is a drift of workers from public transport to motor cars. He said that the workers are using motor cars to go to work. Is that not an extraordinary statement from a member of a party which has been saying consistently for the past five years that this Government is grinding the poor into the dust? Is it not extraordinary that, instead of using the ordinary public utilities, these workmen are able to purchase cars and use them to go to their work? Here is one aspect of the dialectical materialism about which I spoke earlier. People are buying cars to drive to work because they can afford to do so. So many of the attacks made on this Government are completely spurious. This matter of workers driving to work in their cars reminds me of a picture I saw recently in which a red.ragger was speaking outside a big factory where there was a huge car park for employees only. This man was saying, “ What can the capitalist system give you but chains? “
The honorable member for Melbourne Ports, who spoke so quietly and nicely yesterday, was speaking not to us but to the air. He discussed the effect of the increased sales tax on the motor industry and referred to unemployment. Let us look at the motor industry. While the Menzies Government has been in- office during the past six years, nearly 750,000 motor cars have been registered. That is a tremendous figure for a six-year period in a small country. We have had to import most of those cars, and that has cost money. It has had an effect on our balance of payments position. One of the purposes of this increase of sales tax is to try to rectify the balance of payments position. Do honorable members realize that Australia is the world’s sixth largest consumer of petrol ? Consequently, the petrol tax must affect the balance of payments. Two aspects’ of sales tax in relation to cars may be observed. One concerns the balance of payments, and the other the income from the increased petrol tax on the immense quantity of petrol used in the field of private motoring. Admittedly, a certain amount of the cost of petrol is involved in transport, particularly in primary industries. But if it is necessary to cut down the consumption of petrol, it is infinitely better to do so by imposing a tax than by reintroducing rationing - a course which the Labour party would very much like to follow.
Another point about sales tax on cars is in relation to the great number of new service stations and garages springing up throughout the country. Three-quarters of a million new cars require a great deal of servicing. From whence can the skilled artisans and workers be obtained to do this work? They are drawn from industries which already need all their workers to produce goods for export. That is an important reason why the importation of cars must be carefully watched. The loss of skilled labour from vital industries is a matter of grave importance. Another feature is the capital required to build service stations. This is being supplied by private investment. The Prime Minister pointed out that there is over-investment in the private sector of the Australian economy. Unfortunately, many people look only at the surface, and do not try to understand the deep implications or the reasons for imposing sales tax. It is one of the methods adopted by the Government to rectify the balance of payments position.
Members of the Opposition have referred to the days of “ Good old Chifley “, when, they allege, the balance of payments was greatly in Australia’s favour, but by current standards that balance was not enormous. It was only a little better than the present balance. “Why did the Labour Government have a favorable balance ? It was because the money could not be spent in Europe. Europe was rehabilitating itself from war damage and losses. The Labour party will not accept that as a reason, but one is entitled to ask why the Labour Government did not abandon the rationing of petrol. All imports were restricted. As a conse quence, there was an enormous pent-up purchasing power in Australia for consumer goods, and as soon as a good government took the reins, that purchasing power was released. As soon as rehabilitation became sufficiently advanced overseas, many of the troubles which the Menzies Government experienced in the early part of its regime concerning buying overseas to meet local demands, were solved. Certainly, because of that demand, import controls had to be reestablished since Australia could not afford to pay for all the goods coming into the country. That is the answer tocriticism which has been levelled at the Government, and the criticism is inspired, not by facts, but by a desire to win votes.
The honorable member for Batman spoke about the effect of sales tax on merchants. It is interesting to hear a socialist expressing concern for the welfare of merchants. He said that a merchant had told him that goods were accumulating on the shelves, and that unemployment must result. The wish is father to the thought, and the opponents of the Government obviously desire unemployment and depression so that the Government may become unpopular and be removed from office. But once the Labour party regained the treasury bench it would introduce the foul creed of materialist socialism.
If goods are accumulating on the shelves should not that have the effect of reducing prices? Why do honorable members opposite always look on the worst side? The Menzies Government has been in office during a most difficult period, when there was a threat of war and widespread fear of inflation. But the Governmenthas weathered the storm, and confounded its critics. Most of those critics have been individualists, paddling their own canoes, and not really interested in the national welfare. Naturally, the Opposition has tried to make the maximum use of the criticism.
The honorable . member for Port Adelaide (Mr. Thompson) - who is popular with Government supporters- - is a reasonable man, and the one member of the Opposition who can make a speech without introducing the dismal fear of depression or unemployment. Yesterday, he outlined the Labour party’s theory of taxation. He is opposed to sales tax, and said that the Labour party’s theory of taxation was to level all incomes. That is exactly the theory of Karl Marx, and is one of the fundamental principles of socialism and communism. If the Labour party could apply that theory, it would bring all the people within its grasp, and the country would be subject to socialist control. Has any member of the Opposition been able to point to one country where socialism has bee il a success? If socialism were applied to Australia it would completely destroy the Australian way of life.
The honorable member for Port Adelaide referred also to “ long-haired economists “. Members of the Opposition and the press have tried to tie the advisory committee of eight economists to the tail of this Government. Most honorable members on this side of the House realize that economists give invaluable service. They can advise on economic trends, and give a great deal of important information, but members of the Government, who have a common-sense understanding of these matters, can give weight to the human element in economic factors. They listen to the advice of the economists, but make their own decisions. The eight economists have had nothing whatever to do with the decisions of the Government concerning sales tax. The Government has the final responsibility to the people, and no sound government will rely entirely on the advice of economists. The remarks of the honorable member concerning long-haired economists, the difference between the capitalist system and the socialist system and the effect of those systems on the Australian way of life lead one to the conclusion that the Government’s policy is based on practical experience and understanding, whilst socialism is based on central, planning. The honorable member has derided the economists, and suggested that they are getting their long fingers into the national revenue. That is not true of Australia, but it is exactly what is happening in countries controlled by socialist regimes.
The attack by the Labour party and the press on the Government’s economic policy is destroying confidence in Australia. At no time has the Government said that the economy of Australia is unstable. The Prime Minister has pointed out that certain economic conditions are developing which have to be corrected, and the imposition of sales tax is one way of doing it. At no time in modern history has any country experienced economic conditions comparable with those in Australia now. Periods of depression and unemployment have created grave problems, but Australia has had to deal with equally difficult problems caused by over-full employment and unprecedented prosperity. A flexible policy is needed. Many years will pas.” before the problem of Australia’s overseas balances will be solved. This is a young country. In order to expand, we must import more. That is one of the big problems with which we shall have to deal in the future. We have a soundly based economy. It is an expanding economy, but we must apply the brake to it every now and again because it is expanding a little too fast.
At least a half of our problems would be solved if every one would do a little more work. In the agricultural industries, at any rate until recently - one class of man is not working so well nowevery one engaged gave a fair day’s work in return for a fair day’s pay. The men working in the timber mills are satisfying their employers completely. They and the men employed in many other industries are giving a fair day’s work in return for a fair day’s pay. But that is not so in all industries, particularly the waterfront industry. The state of affairs on the waterfront of this country is one of the reasons why the Government has had to bring in this sales tax bill. One of the main reasons why the price of the goods that we sell overseas is so high is that, due to conditions on the waterfront, handling charges and freight charges are heavy. The waterfront industry requires the closest scrutiny by the Government. We haw a fine country, which we want to develop still more. We have some people who are working solidly. If the Government would give more facilities to the men on the land, they would be able to produce more goods for export. That would help to solve our balance of payments problem. We must have more assistance from our secondary industries in solving that problem, and I believe that they can provide it.
In conclusion, I refer again to dialectical materialism, which is becoming a very serious problem in our midst. In that connexion, I ask honorable members to examine all that the members of the Opposition, under the leadership of the right honorable member for Barton, have said in debates in this House during the last five years. Dialectical materialism is an ugly thing which is coming into our national life. We should also examine very carefully what the Leader of the Opposition has said in this debate. We say that low interest rates are inflationary, but he says they are not inflationary. I do not know what school of thought he belongs to, but I think it would be fair to say that he learned his economics from a correspondence course - in much the same way as he has sought advice on other matters by correspondence. Now that I have cleared the air, I hope that the Labour party will support this measure strongly.
– I am pleased to follow the honorable member for Hume (Mr. Anderson) in this debate. I listened very attentively to his remarks and to the remarks of other honorable members on the Government side of the House. I believe conscientiously that not one supporter of the Government has said anything in the course of the debate that will convince t:he Australian people of the necessity for this measure. I enter my strong protest against it. I do so because I believe that the proposed increases of the sales tax, if implemented, .will be a very severe blow to the unfortunate people of Australia, particularly those on the basic wage and on fixed incomes.
Before I go any further, I want to say that I am strongly opposed to the principle of the sales tax. I regard it as a pernicious and vicious method of taxation. During the debate, a number of honorable members on the Government side of the House, by way of interjection, have asked members of the Opposition to state their attitude to the sales tax. T think I can say very truthfully that we believe that it should be abolished at the earliest opportunity. I go further and say that I am convinced that, if the Labour party had not been defeated in 1949, the sales tax would have been abolished long ago.
– Does the honorable member believe that?
– I believe that conscientiously. As the honorable member for Hume said, the sales tax was first introduced into this country by the Labour party. It was introduced during the regime of the Scullin Labour Government, and was based on a system in force in our sister dominion of Canada. The Canadians had sales tax legislation on their statute-book many years before the tax was introduced into .this country by a Labour government. But I point out that the Scullin Government had good reasons for introducing the system. As I have said on the floor of this House on many occasions, no other government of this country that I can recollect - my recollection goes back over a long period of years - took office under such extraordinarily difficult circumstances as did the Scullin Government. When the BrucePage Government was defeated and the Scullin Government took over, there was no money in the Treasury, or not enough to pay public servants and age and invalid pensioners their current fortnightly payments. In addition, the Scullin Government was faced with a hostile Senate. All the legislation that it endeavoured to put through the Parliament was cither amended or rejected by the Senate.
The Scullin Government introduced sales tax legislation for the purpose of raising revenue, but the intention was that the tax should be imposed only during the depression years. It was never the intention of the Scullin Government that sales tax should be imposed for any longer than the duration of the depression. But we know that, after the defeat of the Scullin Government, antiLabour governments continued to impose this pernicious tax. Not content with the rate at which it was imposed by the Scullin Government, they increased the rate. It has been said that the sales tax was most heavy during the term of office of the Chifley Government, but that is absolutely untrue. When this legislation comes into force the tax will be heavier than ever before in the history of Australia.
The Prime Minister (Mr. Menzies) and the Treasurer (Sir Arthur Fadden) had quite a lot to say about the sales tax during the time they were in opposition, particularly during the 1949 general election campaign. They continually complained that the Labour Government had increased the sales tax during World War II. I am sure every one agrees that it was absolutely necessary to increase not only direct taxation but also the sales tax in order to finance the war. Immediately the war ended, the Labour Government proceeded gradually to reduce the sales tax and also direct taxation to the minimum. During the war, the present Prime Minister and the present Treasurer, as I have stated, continually criticized the Labour Government, which made a magnificent war effort, and they stated that the sales tax should not be increased. The present Prime Minister, in his policy speech for the 1949 general election, delivered at Canterbury, Victoria, made the following statement about the incidence of indirect taxation : -
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.
The right honorable gentleman, in his speeches in this House, and in his election policy speech, favoured a reduction of the sales tax. The present Treasurer, in his policy speech for the 1949 elections, delivered in his own electorate at Boonah, in Queensland, 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.
The present Prime Minister and the present Treasurer gave to the electors a solemn promise that they would reduce the sales tax. Yet, we find that it has increased by leaps and bounds ! In 1948-49, the Labour Government raised £39,029,000 by means of sales tax. In 1949-50, the revenue from the sales tax amounted to £42,424,000. In 1950-51, £57,173,000 was collected. In 1951-52, £95,459,000 was collected. In 1952-53, the sales tax revenue amounted to £89,067,000. In 1953-54, the sales tax raised £95,689,000. In 1954-55, £100,446,000 was collected. Last, but not least, the budget estimate for the current financial year, together with the additional amount to be raised in a full financial year by means of the increased rates, amounts to £136,000,000. The sales tax is an indirect tax which, as I have stated, bears more heavily on the unfortunate working man than on any one else.
Further comparison of the position under the administration of the Labour Government with the position under the administration of the present Government is interesting. In 1949, private motor cars were taxed at the rate of 8£ per cent. In 1950-51, the present Government increased the rate to 10 per cent. In 1951-52, it increased it to 20 per cent. The rate is now to be increased to 30 per cent. It has been said that there is good reason for the increased sales tax on motor vehicles, particularly private vehicles. The sales tax on motor cars designed primarily and principally for the transport of persons, including sedans, coupes, tourers, roadsters, taxi-cabs, station wagons, and the like, will be increased from 16f per cent, to 30 per cent., and the rate of tax on motor vehicles used for commercial purposes will be increased from 12i per cent, to 16$ per cent. It is interesting to note that motor cycles, auto cycles and motor scooters are, for sales tax purposes, included in the same schedule as commercial motor vehicles. How the Treasurer reconciles this grouping I cannot understand, because motor cycles, auto cycles and motor scooters are in no way commercial vehicles.
Yesterday afternoon, the honorable member for Melbourne (Mr. Calwell) stated that motor cars used by clergymen should be exempt from the sales tax. I agree with him. But I go even further. Motor vehicles used for many purposes should he entirely exempt from sales tax, or, at least, should be taxed at a considerably reduced rate. Most doctors, for example, use their motor cars principally in their work, especially for the visiting of patients. They should be able to buy motor cars subject to a much lower rate of sales tax. I say, too, that motor vehicles purchased by trade unions for m the use of organizers, particularly those who do country work, cannot be regarded as luxuries and should be exempt from sales tax, or at least should be subject to a considerable reduction in the sales tax compared with that which is to be imposed under this measure. I repeat that doctors, clergymen, trade union officials, professional men and commercial travellers who travel the country for their firms are in the same category. The tax on vehicles they use, if not totally removed, should be reduced to at least 15 per cent, or 10 per cent, instead of being fixed at 30 per cent, as is provided for in this bill.
It is proposed to increase sales tax on watches from 164 per cent, to 25 per cent. For the life of me, I cannot see why watches should be taxed so heavily, because in no way can a watch be claimed to be a luxury. A watch is absolutely essential to every section of the community. The same argument applies in respect of watch chains and bands. Clocks also come within the same category; they are an essential commodity in every home. Fountain pens have also attracted an increase in sales tax from 16$ per cent, to 25 per cent. I do not think anybody can claim that a fountain pen is a luxury. I venture to say that very few honorable members do not carry a fountain pen in their pockets. The majority of .people carry a fountain pen, not because they consider it a luxury, but because it is essential to the carrying out of their occupations. We find that beauty preparations, and other materials previously defined in the act, have been subjected to increased sales tax. These things are not luxury items. The tax on safety razors and safety razor blades has also been increased. I do not know how honorable members would look if it were not possible for them to purchase these articles. Fortunately, we are able to do so, but many workers cannot afford to procure these necessary things. Shaving brushes are also included. How the Treasurer can claim that these things are luxury items and should be taxed heavily is beyond my comprehension. Shaving sticks, shaving cream, soap and powder are also included in this category.
I pass to handbags, shopping bags, knitting bags, wallets, pouches, beach bags, cosmetic bags and cosmetic holdalls. Neither the Treasurer nor any other honorable member on the Government side will, lead womenfolk to believe that a handbag is a luxury. Yet sales tax on that .particular item has been increased from 16$ per cent, to 25 per cent., placing it in the same category as the other items I have mentioned. I have never known so much hostility to be manifested by the citizens of Australia than I have seen manifested against this particular bill and the subsequent legislation which will be brought down to carry out the proposals mentioned in the Prime Minister’s economic statement. This is one measure which the people of Australia will not forget for a long while to come.
I have met a number of my constituents during the past two or three weeks and every one of them is hostile towards this Government because no mention was made during the general election campaign that legislation such as this would be introduced. They say that if it had, there would have been a different tale to tell. As I mentioned in a previous speech, that has been proven by what happened in the Western Australian State election. The people of that State resented the Prime Minister’s visit, particularly in view of the economic statement he had made in this House. I am strongly opposed to these increases in sales tax. I am strongly opposed at all times to the system of sales tax and I hope that I will live to see the day when this class of tax will be abolished.
.- The honorable member for Brisbane (Mr. George Lawson) in his concluding remarks said that people he had spoken to in his electorate - I presume they were his close supporters and friends - had said that the Prime Minister (Mr. Menzies) would not have been returned if he had mentioned these proposals before the last general election. No doubt the people who spoke to the honorable member for Brisbane were his supporters who would have voted for him in any event. Apparently, they were unaware of the fact that the Prime Minister, speaking in this House in September last, warned that a
If I remember rightly, the Prime Minister said in his policy speech also that bigger difficulties were looming but that they were associated not with depression but with boom conditions. He said they were difficulties associated with overspending and the directing of funds into wrong channels, and that some remedial steps would have to be taken. The honorable member for Brisbane is leaving, the chamber, but I remind him that the Prime Minister’s warning was emphasized in the Governor-General’s Speech at the opening of the Parliament. In other words, the Government was forced to deal with the situation. It is untrue for anybody to suggest that the public did not know that certain action had to be taken. The Prime Minister described interference with the beer drinkers as a sensitive matter, and of course it ha1-! its effect, obviously, in Western Australia, [n other words, although the warnings were given, they were not heeded by all, and that very small majority of persons who can swing an election did swing the Western Australian election, and one of the penalties for being straight and courageous is being made to suffer in that way by the electorate.
Some of the other statements of the honorable member for Brisbane were most interesting. He said that he supposed he understood Labour’s policy in regard to this matter. He pointed out that sales tax was first introduced in Australia in a difficult time by the Scullin Labour Government, and then succeeding antiLabour governments continued to impose sales tax and continued to be returned to office. In other words, sales tax was accepted in those days by the electorate. We have heard from the doctrinaire people who delve into politics that sales tax is the weapon of this side of the Parliament. In other words, indirect taxation is often used by us to raise revenue, whereas the Labour party uses direct taxa-
We on this side of the House have the highest regard for the motor industry, as we can prove by our acts. The bill which is before the House selects this industry to be penalized. The rate of tax on motor cars has been raised from 16§ per cent, to 30 per cent. This is a fairly large increase and involves an addition of more than £100 to the cost of cars worth about £1,000, and that is quite a serious matter. What are the facts leading up to this position ? It is obvious that the motor industry is one of the most important, if not the most important industry in this country. The motor trade has taken a very great and vigorous part in the development of Australia. Petrol and oil driven vehicles, running on rubber tyres, have gone into the uncharted and untraversed parts of this very vast country, and into places where there are only very rough feeder roads along which primary produce is brought to rail heads. They have symbolized the tremendous vigour that is typical of Australia. There is no need for me to remind the House of the importance of the internal combustion engine, which has been used to revolutionize railways and has been used also in ships. About £1,500,000,000 of our national income of £4,000,000,000 is related to transport and about £1,350,000,000 is represented by the motor industry. The motor industry thus contributes in the vicinity pf 35 per cent, of our national income. The visible signs of the contribution revealed by these statistics are in the imports for the motor industry, which total in value about £150.000,000. Also, we have seen an incredible, fantastic expansion of petrol stations. Big oil companies have offered very large sums to owners of service stations to persuade them to sell their businesses or become single-brand stations. Everywhere we look we see evidence of the expansion of the motor industry during the last few years with the help and encouragement of the Menzies-Fadden Administration.
In considering the Labour party’s sudden championing and support of the motor industry, and lip-service to it, we remember that under .the Chifley Government sales tax applied to motor vehicles, but there was no need for that Government to restrict the motor industry by mere sales tax, because it was strangling the infant industry, or starving it by cutting off its milk supply. We remember a famous statement made by Mr. Chifley, when he was Prime Minister. I think that the present Treasurer (Sir Arthur Fadden) had said that there was no need to ration petrol because there was plenty of it. Mr. Chifley replied that anybody who said we could get plenty of petrol was either a liar or a knave. That was the famous “ liar or knave “ statement regarding petrol rationing. Mr. Chifley, as Prime. Minister, was wedded to the idea of petrol rationing. Under his Government’s regime the motor industry could not expand. It did not matter whether sales tax was imposed on motor vehicles or whatever other action was taken; the industry could not flourish or develop and it could not display the terrific drive which it has shown since this Government has been in office, because it could not get the necessary petrol.
It is idle for members of the Labour party to defend the motor industry and to say that some firms are discharging men, because if the Labour party had been in power those men would never have been employed by the motor industry. They would never have obtained the jobs which they now have. I refer to the men who are proud to work in the industry producing Holdens and other cars, the greater part of which is now being made in Australia because the Holden car has been so successful. I have heard the honorable member for East Sydney (Mr. Ward) in one district attack the profits of the Holden organiza tion, notwithstanding the fact that, if one company can, by its industry and vigour, make a profit, it attracts other organizations to Australia. The Chrysler and Volkswagen organizations and the Standard, and other British organizations, are providing the vigorous competition which is so necessary in order to have a flourishing industry in this country. We know that the Labour party, while pretending to support the motor industry, is, through its railway unions, trying to curb motor competition with the railways. State governments, particularly Labour governments, put heavy impositions upon interstate transport by heavy vehicles and made it difficult for them to operate. It is a tribute to the motor industry and to the men who run these big vehicles that they were able to keep going and pay the enormous taxes used to keep the railways functioning. We must never forget that in this country transport i3 vital to us. The figures I have cited as to the transport industry’s contribution of 37J per cent, to the national income illustrate its tremendous importance. We face a situation wherein shipping is severely hampered by the operations of waterside workers and railways have not received enough capital. The motor industry has to pull us out of the trouble because we have not in Australia the big inland waterways which exist in many other countries. I understand that last year Australia had the highest number of commercial vehicles, relative to population, of any country in the world. That shows how important the motor industry is to Australia. All of us, particularly those of us who represent primary producing electorates, realize the importance of the industry. It must be said at this point that any imposition of tax on the motor industry is reflected in the costs of bringing in the rural products, and we rely on them to provide* us with income from overseas. So the Government must realize that the increase of tax on motor vehicles produces an effect on the production costs of rural industry. I certainly am perfectly well aware of the fact that in some cases the costs of rural products are increased as a result of the higher cost of road transport. At the same time, the motor industry itself has, I believe, made people aware of the fact that the industry is determined that the imposition of a sales tax rate of 30 per cent, on vehicles, including private cars, will have no effect on the drive with which it has been conducting its business. The increase of the rate of tax will not diminish competition among motor car firms. Indeed, the motor companies, which are producing such very good vehicles in Australia, are spurred on by this legislation to provide even better service, in order that we shall have the best road transport possible. It is interesting to note, in considering such a measure as this, that already the increase of sales tax is having the desired effect, of forcing public expenditure into certain channels, because it has led to the cancellation of some orders for cars and, at the same time, will slow down the demand for imported cars.
The policies of other countries in this regard are interesting.’ I shall cite to the House what happened when the socialist government was in office in Great Britain. We are told that, in general, socialist parties adhere to the principle of taxing directly through the medium of income tax. When Mr. Gaitskell was Chancellor of the Exchequer in 1951 - a socialist Chancellor of the Exchequer - he increased purchase tax, as sales tax is known in Britain and America, on motor vehicles from 33^ per cent, to 66f per cent. Earlier than that, Dr. Dalton was a Labour Chancellor of the Exchequer. He imposed, on the 9th July, 1947, purchase tax of 66$ per cent, on cars costing £1,000 or more. In other words, under the British socialist government two-fifths of the cost of a motor car was represented by tax.
In 1953, the present British Conservative Government reduced purchase tax “ on motor cars to 50 per cent. However, in October, 1955, as a result of the then existing financial crisis in Great Britain, the Conservative Government was forced to increase the tax to 60 per cent. One of the interesting things that the British Conservative Government did - it was also done by the British socialist Government - was to tax the expensive makes of cars, for which Great Britain had become world famous, at a low rate only.
It did so because it wanted Great Britain to maintain the position that it had built up overseas for its expensive motor cars, which were bought by wealthy people all over the world. Those expensive cars, which are a by-word for mechanical perfection, had won Great Britain a high reputation as a producer of top-quality motor cars. For that reason, where possible, the tax on expensive cars was reduced in order to preserve Britain’s overseas markets for such cars-
It is obvious from my remarks that the Australian Government’s action in. increasing the rate of sales tax on motor cars to 30 per cent, is not an isolated case of such increases. Nor is it a principle initiated by this Government,, because the Chifley Labour Government introduced sales tax on motor cars in the first place, and succeeding governments have retained, the tax. Compared with tins Government’s imposition of a rate of 30 per cent, on motor cars, the British Government has imposed on motor car* a rate of 60 per cent., or double our rate.
All of us hope, sincerely, that this tax will not continue to be levied for very long ; but, obviously, any thinking person will realize that when we are unable, as a nation, to pay for our imports - and imported motor car components and motor cars constitute a very large part of our imports, and therefore represent a similarly large part of our expenditure overseas - it is essential for the Government to take some remedial action. Although the increase of the sales tax rate on cars to 30 per cent, has had some effect on some of our industries, it is, at the same time, lessening the demand for imported cars. That is important, because the fact is that we simply have not the money to pay for imported cars in unlimited numbers. This is not just a matter of using some ephemeral term like “ balance of payments “ or “ terms of trade “. The simple fact is, as I have said, that we have not enough money in our overseas balance to continue th* unrestricted purchase of imported cars. Wo cannot let our overseas balances fall further, because the effect of any marked decrease in our London reserves would be a lack of confidence overseas in Australia, which would lead to a diminution of overseas investment here.
Investors would become cautious . of placing their cash in a country which apparently was unable to pay its way overseas. So we could not allow the drain on our overseas reserves to continue unchecked.
The method that the Government has adopted to deal with this problem is a simple means of slowing down, temporarily, the intake of imported cars. We hope that the increase of the rate to 30 per cent., however, will prove to be a measure that is required only temporarily, and that as soon as we feel the effects of our drive for increased sales abroad, not only of our primary products, but also of our factory-produced goods, we shall be able to relax any artificial bar to the importation of overseas makes of motor cars, which so many Australians like to own. There is not the slightest doubt that motor cars are popular in Australia. In a country such as this, the possession of a motor car offers a great deal in the way of recreation, and people here really need cars.
One might almost think that the hirepurchase situation itself will be affected by the Government’s measures.. In other words, people who were formerly able to pay cash for motor cars may now be driven to buy their requirements on hire purchase, because of the increase of price, tt is pertinent to say now that excessive purchasing power was increased in this country as a result of hire-purchase transactions. When we see that a total of no less than £200,000,000 was owed under hire-purchase contracts we realize that, in effect, that extra amount of money was added to the purchasing power of the community. The bulk of that debt was represented by hire-purchase contracts in relation to motor cars.
We know that hire purchase is one of the greatest boomers of the motor car trade, because purchase of cars represents such a high proportion of hirepurchase contracts. We saw with satisfaction in January of this year that, for the first time, the total amount owed to hire-purchase companies fell. The decrease was to be expected, because January is a short business month. It comes after the busy Christmas period, and people are short of money. Although there was £12,000,000 worth of new goods bought under hire purchase, the total amount owing to hire-purchase corporations fell by £1,500,000. In other words, a total of £13,500,000 had been repaid on old hire-purchase contracts, and it became clear that the amount that people had contracted to .pay under hire-purchase contracts was itself having a deflationary effect, because they did not have the money to embark on the purchase of things that they would otherwise have purchased. I hope that that was also a result of the Prime Minister’s appeal to hire-purchase companies, banks and financial institutions generally not to overdo the availability of finance for hire purchase.
The Prime Minister’s appeal was, in effect, that, with excessive purchasing power increasing demand above supply, hire-purchase companies ought to be more careful about doing anything that would increase demand for unessential goods. They were asked to increase deposits required under hire-purchase contracts, the effect of which would be to lessen the demand for goods normally bought on hire purchase, thus avoiding a boom which might bring a recession or depression in its train. It is to the credit of the hire-purchase companies and the financial institutions that the total amount of money owing to hire-purchase companies fell in January. This decrease leads us to hope that more sanity and more responsibility have been brought to bear in relation to hire-purchase finance.
Although, as I said a moment or two ago, the increased price pf cars as a result of the increase of sales tax may compel a few more people to use hirepurchase finance, at the same time we must remember that hire purchase - and I was one of the first people in this House to criticize the effects of hire purchase - must have been a great stabilizer of the economy. People who have used the hirepurchase system so that they may enjoy the better things of life are reluctant to see their possession of those things jeopardized by a strike or some irresponsible lawless action by a militant trade union. Therefore, the hire-purchase system should curb the tendency to strike in Australia and so reduce the number of working days lost through this cause. Obviously, womenfolk who have bought some of the articles included in these sales tax schedules would not like to lose those articles merely because the wage packet ceases to come in each week. Therefore, the hire-purchase system is a stabilizer of employment, because people are determined to keep their payments going. It also creates a much-needed demand for the products of certain industries. I have ceased to be a critic of the hire-purchase system. I believe now that it does a great deal of good for Australia. Nevertheless, I am pleaded to see hire-purchase business slowing down although the sales tax increases may have the effect of driving more people towards hire-purchase because of the increased cost of goods.
I support the bill reluctantly. The motor industry, which is the heaviest sufferer by reason of increased sales tax, is a very important factor in Australia. It is probably our greatest industry after the export industries, which are our great stand-by. The products of the motor industry enable people to travel to all parts of this very wide and beautiful country, and facilitate the transportation of goods, which is so important. Figuratively, it is the life-blood of our arteries. Whenever it is necessary to place imposts on the motor industry, we do so, acknowledging that it is an extremely valuable industry. We regret the necessity to apply temporarily a small check on this occasion, but it is for the good of the country - to ensure that there shall not be too big a drain on our overseas trade balances. As I have said, I support the bill reluctantly, and I hope that these imposts will achieve that end as soon as possible and will be removed altogether.
.- The honorable member for Macarthur (Mr. Jeff Bate), who has just resumed his seat, is yet another of the reluctant Liberals who are forced, so it seems, to support measures that are introduced by the Government in an endeavour to control inflation - measures about which they are very unhappy. We are debating sales’ tax increases imposed by the Government for three reasons which have been made very clear. The first reason the Government has given for increasing sales tax isthat it will cut -expenditure. The second is that - it will reduce imports, and soassist to rectify the adverse balance of payments. The third reason is that the Government needs additional revenue in order to avoid using treasury-bills tofinance a budget deficit. I suggest that the measures proposed by the Government will be of doubtful value. They were not, in fact, mentioned to the electorate at any stage. Yesterday, the honorable member for Melbourne (Mr. Calwell) pointed out quite clearly that although the Prime Minister (Mr. Menzies) had an opportunity during the general election campaign last year to place before the people at least an outline of the measures that he thought would be necessary to control inflation, he did not do so. In answer to this telling and accurate criticism, we have, of course, been told that the right honorable gentleman did say in his policy speech that if the agreements that he had entered into with various sections of the business and financial community - about which he told us at great length last year - were not sufficient, other steps would have to be taken. But at no time did he indicate what those other measures would be. Although he was challenged, not only on the political platform but also by the press to say whether he intended to increase taxation in any way, he refused consistently throughout the election campaign to make any mention of proposed taxation increases. Apparently the agreements that the right honorable gentleman entered into with business leaders have broken down because, according to his presentation of the case during the December election campaign, it would only be necessary to take further steps if those agreements did not work. As further steps have now been taken, clearly we may conclude that the measures that were adopted by the Government last year in an endeavour to control inflation were unsuccessful. So, once more, there has been an addition to the six and a half years old record of lack of success by this Government in dealing with inflation.
I said at the outset that the sales tax proposals in the bill are of doubtful value. Of course, even certain supporters of the
Government think that that is so. Last night, the honorable member for Deakin (Mr. Davis) said during this debate -
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.
I emphasize, that a supporter of the Government said in this House last night that he believed the sales tax to be essentially an inflationary tax. Yet, doubtless when the vote is eventually taken on this measure - a measure to cure inflation by means of a tax which the honorable member for Deakin admitted last night to be essentially an inflationary tax - he will support the Government. Of course, this is precisely the characteristic of those reluctant Liberals on the back benches who stand up in almost open defiance of other Liberals, including those who comprise both the upper and the lower sections of the Cabinet. This is the measure of independence that they so proudly demonstrate ! They come into the House and say that a measure proposed by the Government is basically wrong, and then they vote for it. That is how the Liberal supporters show their independence. We remember the reluctant support which was forthcoming for this measure only a few minutes ago from the honorable member for Macarthur. But criticism of these measures is not confined to the back benches. Recently, after the Prime Minister made his statement on the Australian economy and the details of his remarks were well known, the Treasurer (Sir Arthur Fadden) was reported to have said at an Australian Country party conference in Brisbane on the 11th April - presumably at such conferences he tells the truth - that it was still doubtful whether the balance . of payments could be maintained. The right honorable gentleman went on to say that there could bc an accelerated spiralling of costs and a weakening of confidence in Australia abroad, increased difficulties for exports and a greater demand for imports. That is what the Treasurer of this Government, which makes proposals to deal with inflation, said about the possible effects of those proposals, after they had been outlined. If that is the Treasurer’s opinion of these proposals, what opinion of them should the Opposition have, and what opinion should the general community have?
Whilst these proposals are intended to deal with inflation, it is obvious that there is in the minds of the Treasurer and of other Government supporters a serious doubt whether they will achieve that, objective. And this is after six and a half years in which this Government has attempted to deal with inflation. It has now introduced proposals which in the mind of its own Treasurer are of doubtful value. Let me remind the House of the possible consequences of the continued failure of the Government to deal with inflation. First, there is the consequence of inflation itself; and in the Speech of the Governor-General delivered at the beginning of this session of the Parliament we were told that inflation threatens to inflict deep injury upon our true prosperity.
It was announced to-day, I understand, that the cost of living has again increased. It has increased by 3s. a week in each of the 30 towns, by 5s. a week in Melbourne and 9s. a week in Hobart. Truly, those figures make it quite clear that inflation is continuing unchecked, and, as was indicated in the GovernorGeneral’s Speech, it is inflicting deep injury upon our prosperity. That i? not the only possible consequence of the continuation of inflation. Another consequence, of course, is that sooner or later there will be a sudden end of this inflationary boom, and as long as that end sweeps the present Government out of office perhaps it would be worth while : but I think - and I am not putting this in my own language - that continued inflation will seriously damage our economy. In that regard, I refer to the most recent publication of the Institute of Public Affairs. That is its Review for the period January to March, 1956. Of course, this review is not a socialist publication, because the Institute of Public Affairs has on its council Mr. G. J. Coles, who is very well known in the business world, Mr. C. A. M. Derham, another gentleman who has never been associated - even by the honorable member for Mackellar (Mr. Wentworth)” - with socialism or Communist sympathizers. Then there is Mr. H. R. Harper and also Mr. W. I. Potter, who is a very well known member of the Stock Exchange; not to mention Mr. F. E. Lampe, one of the fourteen officers in ,the present Government’s group of advisers who never make any recommendations. Finally, there is the great gentleman from Victoria, the honorable A. G. Warner, M.L.C. I now refer to page 20 of this report, made by these distinguished opponents of socialism, where they state-
Sooner or later the overall full employment economy will burst its seams and culminate in the catastrophe of deflation and unemployment.
That is one of the other possible consequences of the mismanagement of this Government, and of its unsuccessful attempts over six and a half years to deal with the problem of inflation. The consequences, generally, of a failure to deal with inflation were very well described in a speech delivered in this House recently by the honorable member for Wannon (Mr. Malcolm Fraser). I suggest that that speech ought to be read by all honorable members from the Government side who have spoken in this debate. The honorable member for Wannon - who seems to know a little more about economic history and economics than most of his colleagues - pointed out quite clearly the consequences of inflation. He said that inflation would bring Australia’s immigration programme to an end. If we do have unemployment again in Australia it will bring our immigration programme to an end as certainly as night brings an end to day. The honorable member said that it would also hold back most severely our economic development.
Now let us examine some of the reasons why the Treasurer and other supporters of the Government, as well as hundreds of thousands of people outside this House, have doubts about the validity of the Government’s measures. Let us take the first reason for the imposition of the measures - to reduce expenditure. The method adopted is that of indirect taxes. That is, the imposition of a tax on the community, to reduce its expenditure, which is imposed in inverse propor tion to the community’s ability to stand such a reduction of expenditure. We all know the approach that the Prime Minister has taken to this matter. In recent years the Prime Minister has been undergoing a process of education in economics according to the Keynesian economists, and he has learned his Keynesian art of economics very well.
– He knows more than the honorable member is ever likely to know.
– -That remains to be seen. The Keynesian approach is to think in terms of aggregates or totals,, and if we have an inflationary situation it is the belief of those economists that total expenditure should be reduced. One of the proposals that these eight economists put forward was that there should be increased direct taxation, and yesterday the honorable member for Melbourne (Mr. Calwell) quoted a statement by one of them, Professor Arndt, who has recently written to the effect that by omitting to increase personal taxes the Government made a major departure from the recommendations of the eight university economists. Not only did it do that, but it also imposed a tax which has a sectional influence on expenditure. Yesterday, in an endeavour to get the Government out of its insidious position by making an explanation, the honorable member for Petrie (Mr. Hulme) argued that this is really a tax upon luxuries. He said that a tax upon tobacco, beer and motor cars is a tax upon luxuries. In other words, the tobacco that the age pensioner smokes is a luxury, and the bee that a worker - whose wage is 21s. a week less than the cost of living - drinks, is a luxury.
If the Government were genuine in its desire to tax luxuries through sales tax and not essentials, it could have done the very thing that the honorable member for Macarthur said that. Mr. Dalton, when Chancellor of the Exchequer in England, had done. When the honorable member for Macarthur said that he was doing his best to build up an argument against the Labour party, because Mr. Dalton is a member of the Labour party in Great Britain. If the Government had desired to tax only luxuries, it could have increased the sales tax on motor cars that cost more than £1,000 or £1,250, as Mr. Dalton did. However, the Government did not do that. It imposed sales tax at the rate on all motor cars, irrespective of the incomes of those who buy them. The taxes on motor cars were imposed at the same rate on small cars as they were on the cars mentioned yesterday, such as the MercedesBenz and the Bentley, which are nowadays only found in the country or in places like Toorak, in Victoria.
Now, what is the alternative to the Government’s taxation proposals? The alternative put forward by the Labour party is that of direct taxation. Testerday, the honorable member for Petrie took the Labour party to task, and said, “Are you game to say that you will reduce the contents of the workers’ pay envelopes by direct taxation?” I say, of course, we are game to say that. There is no other way to deal with inflation with justice to the community. I believe that the challenge of the honorable member for Petrie, which occupied about a full column of Hansard, has been answered on that ground. The policy of the Australian Labour party is that governments should rely on direct taxation, and we have made that clear throughout this session of the Parliament. That has been the policy of the Labour party for 50 or 60 years.
– Is the honorable member really serious?
– Perhaps the honorable member for Phillip does not know the policy of the Labour party. If this Government remains in office much longer, it will become a serious matter for the community. The honorable member for Melbourne cited some statistics yesterday which demonstrated the merits of the Labour party’s policy. In 1939, 65 per cent, of the total Commonwealth revenue was raised by indirect taxation. The Government in office in those days was the lImited Australia party - the name then of the present Liberal party. When the Labour Government went out of office in 1949, as a result of one of the most serious political mistakes in the history of federation, only 35 per cent. of. Commonwealth revenue was raised by indirect taxation.
This Government has done its best toturn the clock back. At present, the proportion raised by indirect taxation isbetween 38 per cent, and 40 per cent. The Government has not turned the clock back all the way because it still wants toremain in office.
I wish to refer to another sectional effect of the sales tax; that is, the effect upon consumers. I have already mentioned the sectional effect upon the motor car industry over which the honorable member for Macarthur shed so many crocodile tears. We propose, as an alternative, a general reduction of expenditure which would not have a sectional application, as have the Government’s proposals to the motor car industry, but would apply generally. The proposal before the House applies directly to the motor car industry. Why should that industry be singled out? Of course, we know that the industry is tremendously important to Australia, as the honorable member for Macarthur has pointed out. He reverted to petrol rationing under the Chifley Government ki order to distract attention from the way in which this measure will hit, not only the motor car industry in Australia, but also its counterpart in Great Britain.. The motor car industry in Great Britain is subject to serious competition. The incidence of this sales tax will cause unemployment in many English counties.
– The Labour party has been saying that for ten years.
– Unfortunately, the Treasurer was not in the House when I quoted from the review of the Institute of Public Affairs which made precisely the same point. I recommend it to the Treasurer. The fact is that the impact of this tax on the motor industry will cause considerable distress in Great Britain. When the Minister for Trade (Mr. McEwen) goes to England in the near future to endeavour to bargain for a better market for Australian wheat, what effect will this measure have ? Is it likely to make the British people any more sympathetic?
Let me turn to the second reason for the imposition of this tax. As the honorable member for Balaclava (Mr. Joske) stated last night, the importation of motor cars is throwing the economy out of balance. That might be correct; I do not know that it is. Could not a balance have been achieved by other methods? The Australian Government has been using import controls for a considerable time to assist in the balance of payments. Those controls should reduce the volume of imports, not only in total but also in particular sections to achieve the level that we want. If import controls have not done that, they should be made to do so. The argument that sales tax increases are necessary to check the importation of motor cars is an open admission that import controls are not doing the job they were designed to do. We have suspected that, and asserted as much, in this House and in other places for a long time.
The increase of sales tax will have the effect of reducing competition for the number of motor cars that are being imported, but there is no special reason why sales tax should be needed for that purpose if import controls were doing their job. The Government should deal with the problem in some way that would not have an unfavorable impact upon the motor car industry, the transport industry or any particular section of the community.
The Government has tried to control inflation the easy way. It has recognized some of the difficulties of the job and, invariably, it has tried the easy method. That is why the Government has failed, for six and a half years, to control inflation. All the time, it has been looking for the easy way out, but it has not succeeded, and the only easy way out is for it to be defeated at the next general elections.
The third reason for the increase of the sales tax is to secure revenue so as to avoid a deficit. What can be said of this proposal? First,., it can be said that the Government has £30,000,000 of revenue hidden away in trust funds, particularly in the defence sector, which could be called upon to meet any deficiency without increasing taxation. We know that, over -the past few years, the defence services have budgeted for more than they have been able to spend. We know, from the reports of the Public Accounts Committee, that the way in which the defence
Estimates have been drawn up and accepted has been a public disgrace. If, instead of endeavouring to raise money by a tax which is sectional in incidence, the Government had made the proper budgetary arrangements, no doubt its problems could have been solved.
Finally, let me point out that the Government’s expectation that the effect of sales tax will be to reduce total expenditure is not likely to be fully realized. The sales tax is a uniform tax which is applied to many commodities and, therefore, it can easily be passed on. It is the practice of retailers to add sales tax on to prices automatically. Therefore, the imposition of sales tax is likely to increase prices. Will those prices be paid? Some people will pay them and some will not. Those who are sufficiently well off to pay the increased sales tax on motor cars, watches and similar goods will be well able to buy those goods, but the people on wages, which have not risen, and on pensions, may have to cut consumption on those goods.
The method of fighting inflation by sales tax is one that I should like to compare with the proposals contained in the economic statement of the Prime Minister. This measure is designed to force goods beyond the reach of consumers, and so force down consumption. That method bears unjustly and unfairly upon the community and, finally, will cause unemployment, about which the Institute of Public Affairs has spoken. The alternative is to reduce expenditure by a method other than bv forcing up prices. The Government has an alternative open to it. It can control inflation by forcing up prices, or it can reduce expenditure, in the first instance. Tha’ method has, in fact, been recommended in the Prime Minister’s economic statement. These proposals are the direct opposite.
– Who introduced sales tax into Australia? The Scullin Labour Government.
– If it did, it had greater difficulties to meet than the present Government has had.
In conclusion, I want to say that these proposals to increase sales tax are bad, and that sales taxes were bad when they were introduced in 1930. I am not one of those people who believe that the fact that something is done by my side makes it good. I have endeavoured to point out that these proposals are not likely to be anti-inflationary. Sales tax is a sectional tax upon the consumer in inverse relation to his ability to pay. It is a sectional tax upon industry not only here but also in England, and this impost will do our international trade relations a considerable amount of harm.
– Sales tax was introduced by Labour.
– If the Vice-President, of the Executive Council (Sir Eric Harrison) had been in the House five minutes ago, he would know that his interjection had been answered. Sales tax increases are not needed to reduce imports, because that can be done by import controls. If import controls are not being used for this purpose, they should be. I have also said that the sales tax increases are not needed for revenue purposes, as much more than £30,000,000 is concealed as surpluses in various sections of the Government’s accounts, and cannot be spent. I put it to the House that these proposals are typical of the methods of the Government in its unsuccessful attempts, for six and a half years, to deal with inflation. The Government always turns to the simple method. The control of inflation necessitates the adoption of a difficult method, which leaves no room for simple ways out. It is because of this continuous tendency to turn to the easy way that the Government has failed so completely for six and a half years.
Sitting suspended from 5.57 to 8 p.m.
Mr. MACKINNON (Corangamite) T8.0]. - Mr. Deputy Streaker, the Chair lias allowed fairly wide latitude in the discussion of this measure, which provides for certain increases of sales tax on items that the Government regards as not being essential to the normal requirements of the public. Before the suspension for dinner, my colleague, the honorable member for Hume (Mr. Anderson), made a very eloquent dissertation on the old theory of dialectic materialism, and he pointed out that the principle underlying the art was that of using a certain series of facts to prove any point that suits one’s argument. Later, the honorable member for Yarra (Mr. Cairns), who probably is one of the keenest exponents of the art, carried it into practice in his discussion of this measure. He made two points in relation to the matter before the House. The first point, which has been made also by other Opposition members, was that the Prime Minister (Mr. Menzies) had been guilty of some form of deceit in not explaining to the Australian public during his policy speech prior to the general election in December last the specific measures that he proposed to adopt. I think, sir, that you and any other reasonable member of the House will agree that to expect one to determine the nature of the measures that he will adopt in the future, before he knows the nature of the problem with which he will be faced, would be unreasonable. If the honorable member for Yarra intends to persist with that line of argument, I suggest that he should cast his mind back to events that preceded the general election of 1946 when the then Prime Minister, Mr. Chifley, made no reference to the bank nationalization legislation, which is probably one of the most extravagant measures that has ever been foisted or attempted to be foisted on the Australian public. The honorable member, together with other Opposition members, has mentioned the sectional nature of sales taxation. I propose to deal with that matter at greater length later.
The discussion of a sales tax schedule always lends itself to a certain amount of clowning, and on this occasion we have heard the kind of speech that is usually made by the honorable member for Melbourne (Mr. Calwell). The honorable member gave play to his great natural wit when referring to such items as baby powder and ice cream. “We have also heard the rather pathetic remarks of the honorable member for Batman (Mr. Bird) in relation to shaving tackle. I suggest that his problem would be very small when compared with that of his colleague, the honorable member for West, Sydney (Mr. Minogue). As one who believes in low taxation in keeping with the demands of the public, I have no great pleasure in supporting any measure that is designed to increase taxes; but I Jim glad to be associated with a Government that has removed from the federal statute-books such imposts as entertainment tax and land tax, and which has very greatly reduced the incidence of the pay-roll tax. I do . not think that any member of this House likes the sales tax or is keen about the imposition of any form of indirect taxation; but, unfortunately, when we analyse the alternatives we realize that the proposition advanced by the Australian Labour party, which involves an increase of direct taxation, would definitely prejudice Australia’s output at a time when it is faced with demands for production, for development, for the establishment of markets overseas, and for goods of the quality that we require for normal everyday use. I suggest, if we analyse the effect of increased direct taxes on those who would have to pay them, we are forced to form the opinion that to increase direct taxes would have only one effect - reduced production. Let me refer in particular to the success that has been achieved in industries in which incentive payments are made, because I believe that they are the industries in which the greatest degree of efficiency is to be seen. If we look at some of the large governmental services in which, because of the nature of the employment, it is extremely difficult to introduce any form of incentive payments, we note, unfortunately, that they are probably the most inefficient.
It should be remembered at the outset that there has been no ‘increase of sales tax on the wide range of household goods that attract a rate of 10 per cent, or on the large field of utilitarian goods that attract a rate of 124 per cent. I believe, however, that there are two basic reasons for the proposed additional sales tax imposts. First, in view of the existing inflationary pressures and our reduced overseas balances, we must reduce the demand for imported and non-essential goods. I think that is obvious. Secondly - and it is of no use to disguise the fact that there is a revenue angle to the proposed new taxes - we must obtain additional revenue to supplement our loan raisings for State projects and developmental works that will make Australia a greater country in the future, and to provide such facilities as schools and hospitals that are demanded in a modem State.
I shall now refer briefly to a few of the items that are involved in the increase of tax from 16$ per cent, to 25 per cent., because I believe that the increase is not as severe as many people imagine it is. On a fountain pen costing 10s., the increase is between 6d. and 9d. If one were to give somebody an elaborate presentation set consisting of a high-class fountain pen and pencil that formerly cost £7, the increase of tax would be approximately 10s. or lis. As a keen student of the pulchritude of the Australian female, I should like to make a few comments about cosmetics. Whatever the economic angle may be, I, who perhaps arn slightly conservative in my views, would like to express the thought that anything that would make our Australian female beauties use slightly fewer cosmetics would be in the interests of the beauty of our race. May I say, sir, in passing that a little more taste and a more sparing use of cosmetics would produce a far more beautiful effect. I am reminded of the occasions when I have my car serviced and it is returned to me covered with grease at every greasing point. The additional impost on a camera costing, say, £20, would be between £1 5s. and £1 10s. If one wishes to travel, and decides to buy a suitcase for, say, £6, the additional cost will be between Ss. .and 10s. If you, Mr. Deputy Speaker, want to make a really good present to your wife, for instance of a mink coat costing about £1,000, the additional cost attributable to the increased sales tax will be about £70 or £80. I suggest that you, as a most generous husband, would be prepared to pay that extra amount. In the case of a silver fox stole costing in the vicinity of £150, the additional impost will be between £10 and £12, and I do not think that any man who had real affection for his wife, would begrudge such an expenditure.
I refer now to the subject, of slot machines. I have never favoured the type of exercise indulged in by those who play slot machines, and I believe that any additional impost on the price of the one-armed pirate would be for the benefit of the country as a whole.
I come now to the motor vehicle trade. I was most impressed by the remarks of my colleague, the honorable member for Balaclava (Mr. Joske), in connexion with the general impost on motor cars. I must say that I feel it. is unfortunate that the industry should be singled out to pay excessive sales tax but the reasons for it have been fairly well canvassed during this discussion, and the crocodile tears that have been shed by some of the honorable members opposite would lead one to believe that they are practically supporters of the motor trade. 1 remember that in this House recently the Leader of the Opposition (Dr. Evatt) and the honorable member for East Sydney (Mr. Ward) made a most violent attack on the motor industry, during the course of which, if my memory serves me aright, they put forward the proposition that an excess profits tax should be levied on the motor industry. If those engaged in the motor industry look at this proposition on purely party lines, as I imagine they would, because they are shrewd people, they would realize that the amount involved in the additional sales tax which, I suggest, has been imposed as a temporary measure only, is very small compared with that which would be involved if the proposition of the Leader of the Opposition regarding excess profits tax were accepted.
Now I propose to make reference to my friend, the honorable member for Batman, the self-appointed Don Quixote of the motor industry, who has been endeavouring to interject. He has been at some pains to denounce the so-called iniquity involved in the increase of sales tax on private motor vehicles to 30 per cent. I would, however, remind that large section of the motor industry which uses diesel-fuelled trucks on long hauls, whether they operate in fleets or are owned singly by owner-drivers, that the honorable member for Batman has on many occasions in this House recommended a crippling excise on distillate. I think that those- people should carefully consider that fact before they accept the honorable member as their selfJJ. [5G appointed champion in this place. I might say, in passing, that the effect of the increase of sales tax on motor vehicles to 30 per cent, has already been reflected in an increase in second-hand car values. Therefore, I contend that the overall effect of the increase in sales tax is not so severe on those who must continually replace vehicles used in their businesses as it is on those making original purchases.
In the speeches of honorable members opposite much has been made of the. specialized or sectional nature of the sales tax. Several honorable members have contended that it is unjust in that its effects are more severe on those who receive the lowest rates of income. Fo, the edification of honorable members who have made those statements, I propose to cite remarks on this subject by a well-known and celebrated . political leader. This gentleman said -
Statements have been repeatedly made during this debate that indirect taxation falls most heavily upon families and the poor section of the people. A careful scrutiny of the sales tax schedules entirely fails to reveal any justification for such a sweeping generalization, for the items which appear in the schedules covering the more highly taxed goods show clearly that the tax does not bear with undue hardship upon poor people ‘ or large families. Indirect taxation does not necessarily impose heavier burdens on the poorer classes of the community. In support of this statement, I invite honorable gentlemen to consider the division headings of the Third Schedule. Division I. covers jewellery, precious stones, crystal, pottery, cutlery, and travelling and fancy goods. With the possible exception of cutlery-
Here I interpose that cutlery is excluded from the increase, as the schedule is now framed. The gentleman continued - not any of those items are of very great consequence to poor people, and cutlery does not need to be replenished frequently. Division II. of the Third Schedule includes beauty and toilet preparations, and hair-waving apparatus.
Later in the course of his remarks the gentleman said -
My argument is directed particularly to the sweeping assertion that indirect taxation such as the sales tax imposes a specially heavy burden upon basic wage workers and men with families. That submission will not bear examination. Basic foods, I repeat, donot fall within the ambit of the tax.
I suggest to honorable members opposite that that speech might have been made by somebody on this side of the House, but in actual fact the speaker was the celebrated Labour leader, Mr. Scullin, and the report appears at page 452 of volume 169 of Parliamentary Debates of the 14th November, 1941. Funnily enough, those arguments were sufficiently convincing to attract the attention of the honorable member for Lalor (Mr. Pollard), and no one in this House would suggest that the honorable member for Lalor is easily convinced. However, at page 495 of the same volume the honorable member is reported as having said -
The right honorable member for Yarra-
I remind honorable members that the reference is not to the gentleman who at present represents the electorate of Yarra, but to the late Mr. Scullin - pointed out clearly last week that the sales tax did not fall with undue harshness on the poorer sections of the community, foi the commodities they require are, speaking generally, either exempt from the tax or subject only to the lowest rates of tax-.
Going back a little further, in volume 126, at page 5308, of Parliamentary Debates, the following remarks of the late Mr. Chifley are reported: - f do not deny that a large portion of this tax will finally he borne by the great mass of the people; but the proportion that will fall upon the very poor people, whose expenditure is mainly upon foodstuffs and the. other necessaries of life, will not be so great as that which will be paid by the people with big incomes, who have a great deal to spend upon luxuries and high-priced clothes.
– When was that?
– That was in 1930. when legislation of this nature was first placed on the statute book by the Australian Labour party. It is obvious that honorable members opposite do not like to have quoted to them the words of some ‘of the leaders of their own political thought of the past. It all comes back to the remarks of my friend the honorable member for Hume in reference to dialetical materialism.
These measures may be unpalatable, but I do not think anybody in this place has much enjoyment in imposing additional taxation. We believe in reducing taxes where it is possible and profitable to do so, but at the same time, in view of the commitments that face the country, and having regard to the fact that the incidence of these increases will not really, with the possible exception of a certain section of .the motor industry, fall with any severity on the purchasers of essential goods, I think that the people of Australia will accept them if they appreciate that they will help to stabilize the economy of the country. When these measures are considered as part of an overall scheme to damp down expenditure on non-essentials, to weaken the demand which at present is straining our overseas balances, to make a contribution towards the continuance of many great State developmental projects, and to assist with essential social and cultural projects which we have in hand, I think that the public of Australia will accept them. The people will accept them, perhaps with a bad grace, but I believe that they will do so in the hope that the measures will not last for long.
The nature of these proposals, in the words of the Minister for Trade (Mr. McEwen), is a passing one. We do not know for how long they will have to be continued, but I, for one, sincerely trust, and believe that they will be effective intheir action in the short term, and that we shall be able to get back to a more realistic and reduced basis at the earliest opportunity.
.- The honorable member for Corangamite (Mr. Mackinnon) brought forth a very interesting survey of the sales tax position. Like the rest of the Government side, he has been searching the archives to give some sort of support to the fact that they are increasing sales tax and to try to prove that the sales tax schedules before the House represent good government and good taxation. Yet, while they propound this as a situation with which we must deal, in every case they have prefaced their remarks by saying, “We don’t like it “. The honorable member for Corangamite said. “ This is a tax that I do not entirely agree with. Indirect taxation is always one of those things that you should look at very closely”. The honorable member for Deakin (Mr. Davis), temporarily with the mantle of greatness on him from the name which he has acquired from his seat, also said that be did not believe in it at all, and that the sales tax was inflationary and ought to be abolished. Everywhere you go you get a sort of running away from the Government’s own proposal to impose these new rates in regard to sales tax.
The Leader of the Australian Country party, the Treasurer (Sir Arthur Fadden), on one of his whirlwind visits to the front bench, and in pursuance of his government by interjection, said, “ Scullin imposed these first “. What does that prove except that we have learned by experience that these taxes are not good taxes and that any indirect or in-the-dark taxation is bad for the community? The Government would not be imposing these taxes at all were it not distraught as to how to raise money because of its inefficiency for the past six years. Government back-benchers have admitted willy-nilly - they being more honest and perhaps more courageous than are the Ministers on the front benches - that they do not like indirect taxation, that the sales tax is not good and that the fact that it has grown to extraordinary proportions in regard to amount has filled them with great anxiety and dismay.
The short answer to the accusations or the quotations about what the late Mr. Scullin said is the fact that in those days, whether it was a good or a bad tax, its incidence was slight compared with what it is to-day. The honorable member for Batman (Mr. Bird) interjected, and correctly so, that in those days, and in the days of the Chifley Government, the total receipts from sales tax amounted to only £39,000,000, whereas on the schedules of tax it will be £136,000,000 next year. There is something radically wrong with the situation when these indirect taxes have reached such a high proportion.
– How high did Labour taxes go?
– They never went as high as that, in any case, and if the honorable gentleman will listen and bear with me patiently I shall explain to him, as has been done already by the honorable member for Melbourne Ports (Mr. Crean), the honorable member for Melbourne (Mr. Calwell), the honorable member for Batman, and the honorable member for Yarra (Mr. Cairns), that there were two rates, a general rate of 10 per cent, and a rate of 25 per cent., under the Chifley Government, whereas under the Menzies Government there are six schedules with, at one stage, the highest all-time record of 66$ per cent. A motor car to-day, of course, carries the 30 per cent. rate.
The Australian Country party leader, by interjection again, asked, “ Well, what would you take out of these things ? “ The Australian Country party is very unhappy in relation to the question of sales tax. The Treasurer, particularly, was assailed on the matter of cosmetics when the sales tax proposals in the horror budget were brought down. Incidentally, I congratulate the honorable member for Corangamite for his courage in referring to the cosmetics that women should apply. Although he is a man of conservative tastes and some dignity and age, I admire his courage in going into a field which all of us should approach with great caution. The Australian Country party leader made the same mistake when the Government put 66$ per cent, on the lipsticks of the ladies. He was assailed at his own Australian Country party conference and was ungallant enough to say to the lady attacking him, “ Well. I would rather throw new paint on an old fence than an old face “. That was a shocking thing and I do not think he realized how really terrific it was. I am sure it earned him a lot of popularity amongst the ladies! But it could not have been as unpopular as is this recent sales tax increase. 1 was amazed by the weakness of the case put forward by honorable members opposite, who, at least in most things, can trade punches with the Opposition. They have not been able to make out a satisfactory case in this respect at all. The honorable member for Balaclava (Mr. Joske), of whose speech I made very brief notes, seemed completely at a loss about this matter. He spoke as though it were a regrettable thing that it should happen, but since it had been imposed, the justification of its imposition was that it was imposed by a government of which he was a firm supporter. He said, rather naively, that perhaps the motor car industry could absorb this amount and not pass it on. If that is forensic wit and logic, no wonder the country gaols are full. I cannot think of anything more lame than that.
Then we come to the honorable member for Deakin, who categorically denounced the sales tax and finished up lamely by saying, “But, because of the position, we have to impose these taxes “. We on this side of the House want to know, as was asked with great clarity by the honorable member for Melbourne Ports, “ What are the Government’s intentions in regard to this tax ? What does it want to do ? “ It has been completely evasive about the matter, and there has been no firm statement made. The honorable member for Melbourne Ports suggested that the purpose of the increase is to raise revenue, to reduce imports, to apply some curb to hire purchase, or to divert labour. I remind the honorable member for Hume (Mr. Anderson), who spoke about dialectical materialism, that whenever this tory Government is in trouble it always attempts to apply a socialist formula to its difficulties. For the edification of the House, I may say that in most cases, if it applies such a. formula hot enough and heavy enough, it is successful, and therefore our case in regard to these, matters is made all the stronger.
The honorable member for Batman, the honorable member for Melbourne, the honorable member for Melbourne Ports, and the honorable member for Yarra went through a list of figures which I need not repeat, but they are full of interest for all of us here because they completely destroy the case’ of the Government that the imposition of additional taxes is necessary at this time. One of those honorable members referred to our various trust funds. No doubt they have been used, but there are methods of economy other than the imposition of these indirect taxes on the people. If we take taxes down to where they bear most heavily, we find that it is on the woman shopping for her household goods and on the workers generally. This hidden taxation is rather a mean thing. People talk generally of goods being dear, but do they realize that the amount they are paying to the Government because of the rate of sales tax is out of all proportion to the price of the goods? Somebody runs through a schedule, and it is a most difficult thing to allocate what should be the right amount of tax to put on certain articles. I take it that .the rough rule of thumb is whether or not the article is a luxury, and in that respect they get into very deep water indeed. ThePrime Minister (Mr. Menzies) also indicated that he did not care for sales tax.. I agree with what the honorable member for Melbourne (Mr. Calwell) said in this connexion when he quoted from the 1949 policy speech of the Prime Minister as follows: -
We will review the incidence of indirect taxes (which are a huge though sometimesunrecognized item in Australia) upon basic wage and cost-of-living items and housing costs.
If the honorable member for Corangamite thinks that the late Mr. Soullin had different ideas, he may be quite certain that his leader believes, as is evident from the extract I have given, that sales tax does bear heavily on cost of living, on housing and all the requirements of the people. To make doubly sure that both sections of the coalition agree - which, is rare these days - the Deputy Leader of the Opposition (Mr. Calwell) referred to the debate on the Sales Tax (Exemptions and Classifications) Bill in 1948, in which the right honorable member foi McPherson (Sir Arthur Fadden), now the Treasurer, 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.
If that is not economic double-talk, or just something that has been put up ir> order to get an amendment of the sales tax legislation, it means exactly what the Prime Minister said - that sales tax is uneconomic, it is wasteful, it is taxation in the dark, it frustrates the true sense of democracy and it is a tax which cannot be measured. That is one of the main reasons why sales tax has been outlawed by the Labour party at conferences and in policy speeches. The policy of the Labour party is to eliminate sales tax, and to be courageous enough to let the people know, when they are taxed directly, how much they have to pay. Nobody cares to be heavily taxed. In most cases, taxation is an impost on the people. If a government must tax - and it is necessary to do so to survive and carry on the services of the community - it ought to be honest and courageous and forthright enough to say what the tax is, and let everybody who runs, read ; but to heap on taxation, and to say that all the commodities required in the home are not covered by sales tax - only luxuries - is dishonest.
Although this has been pointed out before, it will bear repetition. Here are some of the luxuries that will bear heavy sales tax: Cakes, chocolates, children’s ice-cream and biscuits - except milk arrowroot biscuits. I suggest that the young taxpayer must be allowed to reach two years of ago before his biscuit is proscribed. When he is six or seven, his ice-cream will be cut off, and a little later the chocolate drink, which carries an impost, will go also. Cakes carry a sales tax of 12$ per cent., and when he reaches man’s estate and is allowed to go to work, I notice that although there is a sales tax on watches and clocks, there is none on alarm clocks. So that the worker may wake with the lark and hurry to his work, and so that the happy combination of the alarm clock and the bundy clock may remain in complete sympathy and unison, there is no tax on the alarm clock. There is a wonderful, almost majestic, thought behind these things. From the milk arrowroot stage - at which I suggest the Treasurer is still - through to the alarm clock stage when the taxpayer must go to work, we see the beneficence and paternalism of the Government.
But suppose, on some cloudy morning, the worker rises late and has to hurry to work before his lunch can be cut. If he goes to the cafeteria to buy a succulent meat pie, the price he pays for it is loaded with 12$ per cent, sales tax. But according to the protagonists on the Government side there is no sales tax except on luxury goods and foods. This measure is bristling with anomalies and absurdities because it provides for a bad tax, and for that reason it has features of a most ridiculous nature.
The honorable member for Melbourne, who made an excellent speech on this matter, and whose remarks I have quoted freely for that reason, referred to notices displayed outside churches. The drive for church attendance is always on, and those progressive clergy men who advertise by this means either the subject of next Sunday’s sermon or some arresting phraseology which has a religious significance, may address themselves to the passing throng in this manner only if they pay 12$ per cent, for the privilege of doing so. They may be thinking of the Treasurer, and print on their sign, “ Barabbas was a robber “ but they will have to pay 12$ per cent, for doing so. I do not want to dicker with Holy Writ, and I shall say no more on that matter. But honorable members can appreciate what a foolish impost this is.
Honorable members are naturally interested in their future existence in this honorable and august House - and I understand that existence here will be improved within the foreseeable future - but if they decide to display propaganda telling the public in simple, terse English of their virtues, it will cost them 12$ per cent. If, however, they publish their appeal in the local newspaper they will not have to pay tax, because it is an advertisement, and apparently the 124 per cent, is absorbed in other charges. All printers’ matter, however, carries a sales tax of 12$ per cent.
I regret that the honorable member for Mallee (Mr. Turnbull) is not in the House because the plights from which he suffers always move me. I recall, before the days of myxomatosis, his anguish for the rabbit, and also his great advocacy of the dried fruits industry and his attempts to obtain better markets for it. He has been notable in this House, but his great cry from the heart, last week was something that the author of Alice in Wonderland would have loved, when he pointed out that an un-currant bun does not carry sales tax, but that if you shoot one currant into it, it does. So, up with the currant buns! Yet the Government supporters -say there is no tax on food. I understand that it has been discovered that even railway refreshment room buns do, at decent intervals, have a raisin or a currant in them. If a traveller should happen to purchase one of these he will have to pay 12$ per cent, sales tax on it. He can escape only by carefully keeping to the rare and purified un-currant variety. The Prime Minister is a great patriot, and pontificates on the horrors of communism and exhorts us to be more loyal, but what will he say on the 24th May - Empire Day - when the children let off their double hungers to the glory of Queen Victoria and the future of the Commonwealth of Nations, and have to pay 12£ per cent, tax for the privilege of doing so?
– What would happen if the Labour party brought Khrushchev here?
– If he brought with aim his colleague, the Minister for Power Houses, Mr. Malenkov, he would probably blow up the Vice-President of the Executive Council (.Sir Eric Harrison ) first. But I am discussing matters of importance, and it is not appropriate to be clowning about them.
– They are not in the bill.
– The items I have mentioned are all subject to sales tax, and they are all in the schedule.
– They are not in this bill.
– They are subject to alteration, and they are items which have been specified. I have the schedule before me.
– They have not been altered; that statement is entirely wrong.
– In some instances they have been altered.
– They have not been altered. _ Mr. HAYLEN.- That makes the position worse. The Government argues that it is fashionable for the Opposition to denounce sales tax, but the Government has clearly shown its intention not to remove items from the schedule, but to increase sales tax on them. I wish to turn to something profoundly serious, and remind honorable members of the tragic way in which the motor car industry has been singled out for attack under this legislation. The Minister for Territories (Mr. Hasluck) cannot say that they are not included in the bill, because sales tax on motor cars is to provide £22,000,000 of the £30,000,000 to be grained from increased sales tax.
– It has taken the honorable member twenty minutes to come to the point.
– It would take the Minister for Territories a long time to do anything, even to write a book on how to look after the aborigines in the north. The increased sales tax imposed on the motor oar industry will not have the effect that the Government expects. I wonder whether the Government realizes who actually will benefit from these increases. The Government will get its money in dur course and the man who purchases a car will pay, on a rough average, about £130 more for it, but all the second-hand car dealers, with their car parks around every city of the Commonwealth, will get a rake-off upon which they will pay no sales tax.
The Government talks in a general way about having its eye glued to every avenue of expenditure in order to prevent inflation, but it is attacking a progressive industry - the motor car industry. We on this side of the House make no apology for talking about the abnormally high profits made by some motor car companies. We believe that those profits are not fair. We believe that if an excess profits tax were imposed, the result would be either to reduce the cost of motor cars to purchasers or to tidy up the economy of a side of the industry that has gone completely haywire. But what the Government has done has been to impose this additional tax upon the motor car industry and let people who are on the edge of the industry - sometimes on the racketeering edge of it - get a rake-off without paying anything. That, of course, is completely inflationary.
The Government talks about the balance of payments overseas, but that does not come into this matter at all. The Government talks also about controlling inflation by this means, but it is not honest enough to tell the public that the object of these increased taxes is to raise additional revenue for the purpose of getting the Government out of the mess into which it has got itself. The situation has been dealt with very poorly by the Government. It is not in accordance with the ordinary liberalism, at least of the past, to impose taxes of this kind and to keep on increasing them. It has become necessary for the Government to do so ‘because it is on the horns of a dilemma. It is not sure which way to turn. The Treasurer, if not the Prime Minister himself, has already acknowledged that the problem of the balance of payments has not been solved. In fact, the position is becoming worse. We must maintain our credit overseas in order to carry out the ordinary exchanges of goods and services between nations, but in that connexion we are in a perilous plight.
The inflation at home is of such a nature that it will not be checked by legislation of this kind. Almost everybody on the Government side of the House is beginning to realize that, but the Government speaks with many voices on this matter. A backbencher is honest enough io say that he does not believe in this sort of taxation, but the leaders of the Government say, “ This is not the best that could be done, but it is the best that we can do at the moment”. Is not that a confession of the Government’s failure to find a formula for the solution of the problem?
Very frequently a gibe is levelled at the Opposition. Government members ask, “What would you do if you were in our position ? “ It is not necessary to answer that question, because the Opposition does not have to submit an alternative to the Government’s proposals, except when putting its policy to the people. However, during the last couple of days, alternatives have been coming thick and fast from this side of the House.
One of the most useful comments that I heard in relation to the sales tax was, “ If you want another £30,000,000, why df> you not practise more economy in governmental activities, where everybody can see that there is extravagance of an outrageous kind ? “ We read in the press almost every day that this department or that department is racing against time to spend so many millions of pounds. Has not the public every right to be dismayed at such frenzied finance? We are told that there are governmental trust funds with hundreds of millions of pounds standing to their credit. Although some of those credits may exist only in the minds of Treasury accountants, surely some of the money could have been used by the Government temporarily to finance a part of its loan programmes. But instead of that, we go back to the dark ages of a sales tax - a tax which imposes1 very heavy penalties on, not so much a vulnerable as a progressive industry which can be destroyed by open assault. I refer to the motor-car industry. Great Britain is waging a terrific fight to maintain its export markets, particularly markets for its motor cars. Has the Government fully realized the effect that this increased taxation will have upon the sale of British motor cars in this country ? Or is it, as usual, only paying lip service to the desirability of trade between Commonwealth countries ?
The gibe that the Labour party, when in office, introduced the sales tax into this country has no validity. The circumstances then were circumstances, not of inflation, but of very much the reverse of inflation. Under the Chifley Government, the largest amount raised in a year by the sales tax was £39,000,000. In those days, the tax covered a great many more articles than at present, and it was imposed for reasons very different from those for which it is being imposed now. After this legislation has become operative within a few weeks, the Menzies Government will collect £136,000,000 a year in sales tax. In those circumstances, we begin to see why the Government is silent about these things. During the war and the days of reconstruction, with all the difficulties associated with them, only two rates were considered necessary, 10 per cent, and 25 per cent., but now six schedules are required, and there are more to come. So we begin to realize that the Government has got into very deep water indeed in connexion with the sales tax.
Now I want to say something about the ordinary electors - the man in the street and the woman who does the shopping. The sales tax is a cruel, hidden and vicious form of assault upon the basic wage, the standard wage of the Australian people. Those are not my words. The present Prime Minister of this country said that in 1949 when, as the Leader of the Opposition, he had no responsibility for managing the finances of the country.
He said that the sales tax had an adverse effect upon housing and upon all the other things that affect the standard of living of the Australian people. If we are to continue the sales tax in common honesty we should do what the Americans do with their purchase tax - that is, declare it on the invoice, if that can be done. The American, who is subject to heavy taxation, knows what he pays in purchase tax. He knows the price of the article that he is buying and he knows how much tax he has to pay on it. If the Government were to let the people have visible evidence of how they are being mulct by this tax, the results of future elections would be very different from recent results.
The final point in regard to taxation under the general title of the sales tax is that it is footling and stupid. I have already pointed out some of the anomalies to which it gives rise. It deprives children of some of the things they should have. Some articles are singled out as luxuries but others escape notice. As a means of stabilizing the economy, the sales tax has for long been passed over by economists as not being modern enough to meet the needs of a new and more progressive economy. Therefore, the Government, in desperation, has gone back to a formula from the past, and it has done so only to grab a few fleeting millions of pounds to balance the budget as it runs away from the anger of the people. Only three short months ago, the people were told that the economy was in a most prosperous condition, but now they see from week to week that the sales are trimmed, new adjustments are made and new taxes are imposed.
We should like to know the firm policy of the Government in regard to these matters. The Minister for Trade (“Mr. McEwen) let the cat out of the bag the other day in a most delightful speech, in the course of which he said that the Government’s policy was geared for immediate change. To use the words of Finnegan, it is on again, off again, gone again - exactly as the Government wants, so long as it can stay in office. The Prime Minister gave one description of the situation, but the Treasurer denied it. The Treasurer made a statement in the House and then, speaking to members of his party in his electorate, he made another statement diametrically opposed to it.
In ‘ the difficulties with which the Government is faced, the sales tax highlights more than does anything else the fact that there must be some dynamic thinking if we are to preserve the stability of our economy. We on this side of the House, who are helpless except to give advice, want some indication from the Government that it is making a genuine attempt to deal with inflation. Everybody who has studied the matter realizes that an increase of the sales tax can do nothing but increase inflation. It can do nothing but increase the cost of living. It has been announced to-day that in all the capital cities and the 30 towns, with the exception of one, the cost of living has gone up sharply. As we all know, the basic wage is no longer adjusted quarterly in accordance with fluctuations of the cost of living. It is tragic to think that the basic wage is losing its value because it is no longer adjusted automatically. The imposition of these crazy increases of the sales tax will do nothing to make wages adequate to meet the demands of people in receipt of the basic wage or a wage slightly in excess of it. The increases will do nothing to prevent the disastrous trend of inflation, begun by this Government with mad and extravagent spending of hundreds of millions of pounds overseas on the most ridiculous kinds of luxuries. The remnants of those imported luxuries still haunt the bargain basements of our cities. This Government has not improved its prestige with either the Opposition or the general public by these sales tax increases, which are known by every one for what they are - the instrument of a crazy and hurried attempt to get money at any price. The Government’s attitude is “ The devil take the hindmost “. It has no concern for those whom it hurts and the people whom it hurts most of all are the workers, who deserve a better deal from the Government in view of the earlier protestations of its leaders about the sales tax.
– We have listened to a speech by the honorable member for Parkes (Mr. Haylen) about half of which had very little relation to the sales tax, although it may have been extremely amusing to the House. I believe that all the relevant considerations with regard to this question of the sales tax can be discussed in a comparatively short time. It is not really a long and complicated subject. During its term of office, sir, this Government has varied its handling of the sales tax according to the economic circumstances, and I believe that the attitude we should adopt is that there should be flexibility in measures such as this according to changing economic circumstances. During its term of office, the Government has, on the whole, greatly reduced taxation. At times, it has increased the sales tax, and, at times, it has reduced it. On the whole, it has nor, only reduced it but also simplified it. In the present circumstances, it has decided that it is appropriate to increase it. Taxes, as I say, should be regarded not as completely unchangeable, like the laws of the Medes and the Persians, but as capable of being adjusted to the economic circumstances of the time.
I want to refer now, sir, to the speech of the honorable member for Port Adelaide (Mr. Thompson), which, I believe, expresses pretty well the thinking of the Australian Labour party on this subject, and also to the speech of the honorable member for Deakin (Mr. Davis), and to say, with respect, that I disagree with both of those honorable gentlemen, who denounced the increase of the sales tax aa, in essence, an inflationary measure. Let me put this to the House: I believe that this statement, which they both made, and which the honorable member for Parkes has just done his best to substantiate, is based on a misconception, because they imagine that, as the sales tax raises the price of goods, it is, therefore, inflationary. But it is not the price that is inflationary; it is the demand. In other words, it is not the level of prices which creates inflation. Prices are only a symptom of inflation. They do not create inflation, but demand does. In other words, taxes are not necessarily inflationary in themselves.
What has happened to the Australian economy is that, after a period of very high prices for exports, which, in turn, led to a very high level of imports and a very high level of demand for goods, and which generated a great spending power in thu country, the terms of trade have turned against us, and our ability to pay for imports has markedly declined. This has led, of course, to the imposition of import licensing to reduce the actual volume of goods imported, which we no longer have the resources to pay for. I believe that no honorable member on either side of the House seriously questions import licensing. But, with tha reduction of imports, a high level of demand has remained banked up in Australia. It has, therefore, become necessary for the Government to take some: measures to restrain this level of demand. The increase of the sales tax is one of them. It is true, of course, that the- increase of the sales tax will raise the prices of some goods. Let me say, quite frankly, that it is intended to do so, primarily to restrain the demand for those goods, especially those of a nature which promotes a high rate of imports.
Let me say here, sir, something about the strictures on eight prominent economists that have been passed by the Opposition during this debate. Those gentlemen are professional men of high standing and competence who felt impelled to make a statement in what they regarded as the national interest. It is useless for the Opposition to abuse those gentlemen, as it has done. I would say to Opposition members that abuse is not argument. In any case, the statement that those gentlemen made was made quite freely, and on their own initiative, and they were perfectly entitled to make it. Let me say, further, that the Government, as will be apparent to any one who has read the statement made by the eight economists, has not followed it slavishly. In fact, it has formed its own judgment as to what action was appropriate in the circumstances. So, I say that the Government considers - and it is, in fact, beyond question - that, in the present economic circumstances, the sales tax is a weapon which, although it may be unpleasant, must be used, and which, in fact, inflicts less hardship than some other types of taxes do. In fact, sir, as the honorable member for Petrie (Mr. Hulme) pointed out in this debate last evening, the sales tax is, to a large extent, a tax of self-assessment. A man who buys articles on which the sales tax is imposed has a considerable measure of choice as to how many of them he will buy, and, in fact, whether he will buy any.
There is, of course, no painless way of curing inflation, and the Australian Labour party has produced no alternative except higher direct taxation and some vague type of excess profits tax. In other words, Labour members have not advocated, in this debate, a higher sales tax, which is, in large measure, as I have pointed out, a tax of selfassessment and not a tax which bears on people with unnecessary hardship. Opposition members have advocated, as the honorable member for Petrie rightly pointed out last evening, smaller pay envelopes for every one - in other words, steep direct taxation. It is a remarkable thing that Opposition members should advocate smaller pay envelopes. It is no wonder Labour remains in opposition.
– Labour members have advocated smaller pay envelopes. The honorable member for Yarra did that to-day.
– Quite a number of Opposition members have done so. It cannot be pointed out too strongly that, although the Australian Labour party has had a great deal to say about the sales tax, it has, in fact, produced no real alternative. All it suggests is smaller payment for every wageearner in the country.
– That is stupid.
– Then Opposition members should stop advocating it. The sales tax increases have been imposed for two reasons - first, to curb demand, and, secondly, to raise revenue. May I point out that the chief reason for which this revenue is required is to support the State public works programmes, on which so much of the employment and the prosperity of Australia depends. We have heard the honorable member for Parkes denounce, in vague and extravagant terms, all sorts of government expenditure. Let me just ask Opposition members’ why they do not come down to facts and concrete terms, and acknowledge, as they must, that any real curtailment of Government expenditure would mean unemployment and less prosperity. If they want it that way, let them continue to advocate so-called cures for inflation of the kind that they have proposed.
It may well be asked why the sales tax increases must fall with special severity on the motor industry. The simple reason is that while this is a great and flourishing industry and, in fact, is a measure of the prosperity of the country, it is, at the same time, one of the chief sources of demand in the economy owing to its rapid expansion, and is creating, not only a great demand for resources produced in the country, but also a huge demand for imports at a time when our ability to pay for those imports is greatly reduced. Secondly, this industry is the chief cause of the great expansion of hire purchase. Can I give one instance of this? It is estimated that out of the total hire-purchase payments in the country, from 65 per cent, to 75 per cent, is in respect of motor vehicles, and that during the month of January alone, out of new hire-purchase business amounting to about £12,000,000, approximately £8,000,000 was for the motor industry.
While hire purchase may have many desirable features, and, of course, nobody wishes to see it brought to an end, none of us imagines that it is not inflationary. May I give the House one small example of this. A man can buy a refrigerator for cash at £150. He can buy the same refrigerator under hire purchase, but if he does so, he will pay about £210 for it.
– Why does not the Government do something about that?
– I will tell the honorable member in a moment. By paying £210 for his refrigerator he will be paying £60 more for it. That is merely one instance of the inflationary effect of hire purchase. So, if the Government imposes a sales tax in order to reduce some of this inflationary hirepurchase pressure, it is, quite obviously, appropriate for it to impose it on the chief source of that pressure in the country, namely the motor industry. In reply to the honorable member for Herbert (Mr. Edmonds), it is quite useless to say, as he has just said, “Why does not the Government do something to restrain hire purchase ? “
– I said: Why does not the Government contact the States and give them power?
– The honorable member knows that the Federal Government has no power to take action in this matter. In fact, when approaches have been made to the States to do something about it, they have been singularly unco-operative. The other items ou which the sales tax falls are, in the main, items in the so-called luxury class. It has been well pointed out by other speakers in this debate, and I do not propose to traverse the ground again, that in the case of these items it must be obvious to most of us that the tax imposes no real hardship on the community at all.
I shall sum up by saying: We have an inflationary situation ; one .of the great causes of that situation is demand in relation to available goods; that there is no painless method of attack in the situation; and that this measure will exert its beneficial effects in restraining demand with, I believe, a minimum of harm. Do not let, us imagine that we are in the throes of a crisis, or dealing, as the Opposition would like people to think, with an imminent depression. What we are dealing with are the problems of prosperity even of an exuberant prosperity, and there can be no doubt that prosperity has its problems just the same as depression has, and that they must be faced and dealt with by responsible governments. Great harm oan be done by doing what the Opposition is attempting, that is to create lack of confidence and anxiety in the labour market and in the business world.
It is not the first time, I remind the House, that this Government has had to deal with the problems of prosperity. It has in the past handled them in a manner which has brought the country higher standards of living and higher levels of prosperity. They were unwelcome at the time. They have, by common accord, been approved of since then, and I have no doubt that our handling of the problems of prosperity, even by the most unwelcome imposition of sales tax we are now imposing, will be approved of again. I believe that the opposition to this tax will be a passing opposition, that it will be no long time before it is universally recognized that this is one of the measures which will maintain the prosperity of the country which it has achieved under the other economic measures that this Government has brought in.
.- As I rise to take part in this debate after hearing the arguments of the Minister for Health (Dr. Donald Cameron), that this tax will defeat inflation, on this the great silver anniversary of the sales tax serial, I am impelled to quote the words of the master himself who, when faced with a similar amazing proposition, said, “ Well, well, well ! “. The situation is1 that the Government has given two rather odd reasons for introducing these proposals which, a few months ago, it was very eager to conceal from the waiting Australian public. The Government says that it is out to defeat inflation and that it will reduce consumption because consumption is too high. The Labour party’s position is rapidly becoming clearer. We see more clearly the degree to which we are opposed to the philosophy and social outlook of the Government parties. I have in my hand a copy of the Constitution and Platform of the Australian Labour Party, which honorable members may obtain for 2s. 6d. In that booklet Labour’s taxation policy is stated to be that taxes should be levied on a graduated scale on income from personal exertion, and that sales tax should be repealed. Labour does not like sales tax. I think that such a tax is invalid.
The Minister for Health and other pundits on the Government side referred to the introduction of sales tax 25 years ago. I. remind them that the Prime Minister of the day, Mr. Scullin, was “ fair dinkum “ when he gave his reasons for introducing sales tax. He said it was a means of tapping added sources of revenue. It is obvious that supporters of this Government regard the tax in a similar light, but they will not admit that fact. The Scullin Government had to replace a fall in customs revenue and deal with the collapse of incomes throughout the whole community because of unemployment. I remind honorable members that the reason why that Government could not use orthodox Labour methods to deal with those problems was. because the banks were dictating to thu Government and a hostile Senate was preventing it from administering the country in an effective, socialist, Labour way. That is where we stand in this matter.
The history of sales tax in this country is slightly different from the outline given in this debate by Government supporters. Sales tax is nearly as old as civilization itself. .The Romans- had it. People, when faced with the problem of raising revenue, have always looked around for the oddest ways of achieving that end. Sales tax was introduced in this country in 1930. The interesting point is that it was introduced at the rate of 2^ per cent. It was increased the following year to 6 per cent. The total revenue from sales tax represented from 6 per cent, to 7 per cent, of the total taxation revenue, but by 193S-39, when an anti-Labour government was in office, sales tax collections represented 12.9 per cent, of total taxation revenue. .AntiLabour governments believe in indirect taxation. In 1940-41, the year the Curtin Government assumed office, total sales tax collections represented 15.8 per cent, of total taxation revenue. In that year it fell to 14.9 per cent., and by 1949, when Labour handed over to the present Government, it had decreased to 8.2 pei cent. However, revenue from sales tax is increasing in an insidious way because, in the final analysis, it places the greatest burden on those who are least able to bear it, that is upon people who do not generally support anti-Labour governments.
This year, revenue from this source will again rise to 12 per cent, of total taxation revenue. Labour strongly opposes sales- tax, and.- when we again assume office, although we shall not he able to abolish it immediately, we shall do so gradually. Labour is not a revolutionary, but an evolutionary party.
– A socialist party.
– I am not ashamed to be a socialist, and I will explain socialism .to the honorable member when he has time to listen. Our position is simply that when we are returned to the Government of this country in due course, we will be unable to remove sales tax immediately. We will adopt the same process as we adopted before, and so by evolution at last we will repeal the sales tax and implement that plank of the platform of the Labour party which has been in existence for many years. It would not be a bad idea if honorable members opposite read the Australian Labour party’s constitution now and again.
We oppose this tax for a number of reasons. First. it attacks the motor industry which has become increasingly important in this community. The funds at present employed in the automotive industry, according to the Financial Review, a friend of the Government, excluding investment on capital equipment, total £144,000,000, and employees number 125,000. At a conservative valuation investment in land, buildings, plant, and machinery by extra-metropolitan distributors totals £144,000,000 and 60,000 persons are employed, making a total investment of £288,000,000 and a total number of 185,000 employees. Honorable members opposite say that it is their aim to reduce the consumption and use of motor vehicles. They want to see fewer motor vehicles. They want some of those 185,000 people to be facing the spectre of unemployment. They may deny that assertion in public but they will admit it in their hearts. Inexorably and inevitably the measure that the Government has introduced will carry that prospect into the life of the country. The Minister for Health said that sales tax could be removed to-morrow. It might happen that if one buys a car next week he will pay an extra £100 for it, but this Government, acting in its temporary way - off again, on again - may have so reduced the tax that a fellow buying a car in a couple of months’ time will pay less. The tax is arbitrary in its effect. Depending upon the time one buys, one may pay more and more as a contribution towards the management of the country. We admit that the country’s management ought to be paid for, but we believe that this action is capricious. Honorable members, particularly on this side of the House, have cited example after example of the way in which the tax falls on all sorts of goods. On buns containing so many currants the tax is payable; on buns without currants, no tax is payable.
We believe that the tax is unjust, that it falls on people who are least able to bear it. We oppose injustice in taxation just as we oppose injustice in any other form, legal or otherwise. We say that this measure cannot defeat inflation. One has only to look at the daily newspapers during the last week or so to see increasing reports of rising prices. Petrol is such an important item in the community’s consumption that its price cannot be raised without an eventual rise in the price of every consumption article in the community. It is estimated that, in Victoria the cost of timber in a house will be increased by about £30 for this reason. We say that the proposition of honorable members opposite in regard to consumption goods has no validity whatsoever. Who are they to say that consumption is excessive? None of them lias set out to say what are the just and right needs of ordinary Australians. What is a luxury? Honorable members opposite have used the term “ excessive “ a great deal. They have cited all sorts of things to show that the people are enjoying too high a standard of living. We deny that. Is there any reason why the average Australian should not be able to have a motor car or carpets on the floor of his house? Is there any reason why the average Australian worker, who provides the production of which the Government wants more, should not have standards of that kind? These are natural deductions from an analysis of the technological ability of the community.
We oppose this tax. It is invalid to say that we should reduce consumption when Australian newspapers are filled with advertisements for refrigerators, carpets, motor cars and all sorts of desirable commodities. There is no suggestion from honorable members opposite for the imposition of a tax on the advertising which whets the appetites of the simple citizen for these commodities. Most of the advertising contributes absolutely nothing to the country’s productivity.
There is no suggestion that we should tax that advertising in some special way and so reduce the desires of the people. After all, persons engaged in advertising claim that they are able to create demand. If they cannot create demand, then they have sold their story very well to nearly everbody in the community. What are some of the deductions to be made from this legislation? A few weeks ago, if one bought a new motor car he was required to pay, say, £150 to the total revenue of the community. Now he is supposed to contribute £250. By some mysterious monetary method he has to contribute an extra amount. Some greater burden is put upon him. If a person has been saving up to purchase some of the goods on which an extra tax is being imposed, a tax is imposed upon his savings. If he is a worker in one of the industries which produces these goods, or in one of the industries which sells them and passes them on, he has to make a sacrifice. If the Government is to reduce consumption, it must reduce employment at some level. If employment is reduced, a sacrifice is forced upon some individual, and we say that to do that is not the duty of the Government. A remarkable analogy can be developed between the Government’s attitude to taxation on consumption goods to finance the country’s development, and so imposing a greater portion of the burden on the ordinary wage-earner in the community, and the manner in which honorable members opposite continually oppose any suggestion of a greater tax on profits. A single company engaged in the motor industry was able to make a profit of £10,000,000. A suggestion that that profit should be taken from the company was described by honorable members opposite as wicked and iniquitous. They said that the £10,000,000 had been ploughed back into the country’s development by private enterprise. In other words, the consumer, the customer, the person paying for the goods, is paying for the capital investment and development of that industry. Ordinarily one would expect this payment to come from persons who have money .to invest, but according to this Government’s philosophy, its method of finance, and its attitude to private enterprise, it is the customer, the consumer, who always pays.
It is not a bad idea at times like this to turn to what we consider to be the basic principles of taxation. I have with me a book written in 1776, The Wealth of Nations, by Adam Smith. I take the year 1776 because it is about contemporaneous with most of the political and social philosophy of honorable members opposite. Also, it happens to be coincidental with the last revolution which most of them are prepared to recognize These are some of the principles which were enunciated so long ago by Adam Smith on the way in which taxation ought to be levied. He said, first -
The subjects of every State ought to contribute towards the support of the Government, us nearly as possible, in proportion to their respective abilities.
Secondly -
The tax which each individual is bound i>> pay ought to be certain, and not arbitrary.
Thirdly- 15 very tax ought to be levied at the time, or in the manner, in which it is most likely to bc convenient for the contributor to pay it.
Fourthly - and this is rather involved: it is almost as if it was an economic statement by the Government, but it is actually quite simple in meaning -
Every tax ought to be so contrived as both lo take out and to keep out of the pockets of /11e people as little as possible, over and above hat it brings into the public Treasury of the State.
The right honorable member for Cowper (Sir Earle Page) said, on the 5th April, 1930- prima;re duty ando sales tax oppress the poor much more than the well-to-do.
So that even Adam Smith’s first principle is denied in this measure. “ The tax which each individual is bound to pay ought to be certain and not arbitrary “. I Iia ve pointed out how this taxation can fall on a person to-day and be gone from him to-morrow.
Sir John Latham, who was a member of this House at that time, said about this particular tax, which was introduced then -
This legislation introduces a new and complicated system of taxation.
Of course, that is the case with sales tax. The minute the Government’s proposals are made public and the bills are introduced in the House every person engaged in the selling of the goods affected by sales tax gets busy with pencil and calculating machine trying to catch up with the tax and the method of collection. The whole system is not economic in the way it is applied. It is also complicated. It is hard for the average citizen to know what is happening about it. Of course, that is part of the system. It is the duty of the Government to let the people know what contributions in tax they are expected to pay. We, of course, believe in the principle of direct taxation, and I support honorable members on this side of the chamber who say that taxation should be based principally on income and be levied on a graduated scale based on ability to pay.
There were a few points made during the debate with which I wish to deal before I conclude. It has been pointed out that the leader of the Australian Country party, who is also the Treasurer, in a public announcement to the Australian Country party conference in Brisbane, has shown that in all probability the Government will have to take further measures. Before the taxation proposals of the Government have had a chance to be really tested, he admits defeat. The Deputy Leader of the Australian Country party, who is the Minister for Trade (Mr. McEwen), has said of the Government’s economic policy - lt is a temporary measure. It can be withdrawn in an instant.
That will be the day, when this Government does something in an instant! We oppose this measure because it is financial policy dictating social policy. We believe this is not a human approach to the problems of a nation. We oppose it because it does not fall on the rich and poor according to their ability to pay. We oppose it because it creates great anomalies, and because it is unfair. It is only necessary to consider some of the returns to people in the community. In to-night’s newspaper we find the following interesting item about lotteries -
Since January, when the first £250,000 first prize sweep was drawn, a total of £095,000 in first prizes in Tasmanian Lotteries sweeps has been won by New South Wales’ subscribers.
Opposition Members. - Good on them !
– Good on them! It will help them to survive. It is interesting that there is no suggestion from honorable members opposite that the Government should tax lottery prizes. I do not suppose we should be surprised at that, because, after all, a lottery, based on greed, on the taking from the many to give to the few, completely unproductive and based on chance, is pretty close to the fundamentals of the capitalist philosophy of honorable members on the Government side. But I suppose it is fair enough, if the Government wants to tax luxuries, that it should not single out lottery tickets, because the last refuge of hope that people will have if the Government stays in office will be a ticket in Tatt’s.
.- To the man in the street all taxes are bad. I have heard it said that taxation is a method of so plucking the goose as to get the maximum amount of feathers with the minimum amount of squealing. But, at the same time, I believe the Australian man in the street is essentially fair and just, and realizes that no government can carry on unless it has adequate revenues for its essential purposes. Therefore, in examining this bill, we must first satisfy ourselves that thu revenue to be derived from the increase of sales tax is necessary.
The situation is that the Australian Loan Council, on which the Commonwealth has two votes as against the six votes held by the States, has decided that £190,000,000 is necessary this year for essential public works - for schools, hospitals, roads, electricity undertakings and so on. That total of £190,000,000 has, been financed by the Commonwealth on a monthly basis, so as to enable the States to carry on these essential works. Now, does the Australian Labour party contend that those works should stop ? That would be the result of failure to raise the revenue that this bill is designed to raise. The hard cold facts of the situation are that unless this money is provided for the States out of loans - and we know how the loan market stands now - it will either have to be found through the issue- of treasury-bills - a most inflationary method of finance - or, alternatively, will have to be raised from the public by one form of tax or another. I believe that when the Australian people know the real facts, and realize that if they are not prepared to pay this tax the result will be the closing down of work on new schools and other essential public works, they will say that they are prepared willingly, to pay a few extra pence in tax on the various luxury goods on which this tax mainly falls.
– The people of Western Australia did not think so.
– If the people of Western Australia did not think so, it was because they were misled by the honorable member and his colleagues. The people of Western Australia are as fine as any people in the world, and are quite prepared to do the right thing when they fully understand the position. The truth of the matter is that out of this revenue which is to be collected, the Commonwealth will not get one penny. Every penny of the proceeds of this increase of tax will be paid over in order to fulfil the loan works commitments of the States.
In a previous speech I referred to the deplorable condition of the loan market, and 1 put forward several suggestions for increasing the savings of the community so that this situation would not recur. But the actual position with which we are faced, is that cither £100,000,000 must be got, and got quickly, or there will be a closing down of all State public works. The revenue to be raised by this tax is not for Commonwealth purposes, but so as to enable us to lend the money to the States so that they can carry on with their essential public works. We have heard a lot of entirely superficial economics and so-called principles of taxation from various members of the Labour party. In each case honorable members opposite who have spoken in this debate have told only half the truth. There are, of course, principles of taxation, which are fairly well known. Taxation in all advanced and civilized countries is raised mainly bv two methods - partly by the direct method and partly by the indirect method. Under sound principles of public finance, insofar as money is raised by direct taxation it is, of course, levied on the ability of people to pay. That is the system of taxation in Australia which has been applied by both Labour and Liberal governments for many years past. Not for a great many years has taxation been confined to direct taxation. Governments of various political colours have levied indirect taxation. The very tax that we are considering to-night was, in fact, instituted by a Labour government, and Labour applied it quite successfully in raising a large amount of revenue. It is absurd to say that indirect taxation is necessarily regressive. The principles of taxation enunciated by Adam Smith, to which the honorable member for Wills (Mr. Bryant) referred, are completely sound. For example, in a country where the same wage is payable to both married and single men, a tax on bread would be regressive, because obviously a ..family eats .more bread than does a single person. But a tax on luxury items is not necessarily regressive; on the contrary it is very often the most desirable of all forms of taxation.
The policy that Labour would have applied in the present circumstances has been stated in speeches by two members of the Opposition - the honorable member for Melbourne (Mr. Calwell), who is the. Deputy Leader of the Opposition, and the honorable member for Yarra (Mr. Cairns). They did not deny the necessity that exists to raise an additional £100,000,000 of revenue, but they said that if a Labour government were in office it would have obtained the money by means of income taxation.
– Hear, hear!
– I hear loud “Hear, hears ! “ from the other side of the House. In order to raise an additional £100,000,000 of revenue by this means, it would have been necessary to increase income tax by 25 per cent. I regard this as the real issue in this matter. Honorable members opposite say that the Government should have obtained the additional amount of revenue required by increasing income tax. I am quite prepared to be judged on my attitude in this matter by people in all parts of Australia. T should be quite prepared to ask tin: people whether they would prefer to pay 25 per cent, additional income tax, or a little ox tra for beer, spirits, cigarettes and luxury goods, and I should be quite prepared to stand or fall by their decision. As I have said, this is the real issue. It matters not what somebody said in 1940 or 1950, nor does it matter what was the political colour of the government that introduced sales taxation in this country or what governments have raised or lowered the rates of sales tax ‘from time to time.
The real issue between Liberal and Labour on this matter is this : Both sides say, in effect, that it is necessary to raise additional revenue. The Labour party says that it should be raised by income taxation, and the Government parties say that it should be raised, in the main, by taxation on luxury items, which is being done by the bill now before the House. Additional revenue of £100,000,000 will be raised according to sound canons of taxation. It will be raised mainly by means of increased sales tax ‘ and excise on luxury items. It will be raised by means of taxation imposed on people who can afford to pay additional tax, because nobody is bound to buy luxury goods. I believe that persons who do buy such goods are in a position to pay a small amount of additional tax on them.
Let us imagine that a Labour government was in office and decided to obtain the additional revenue required by increasing income tax by 25 per cent. What effect would that have on production? At a time when we are trying to increase the production, when we want to increase our exports, and when we are asking the people to produce more. Labour would impose income taxation aT rates which would take away from the people the fruits of their production. If Labour were in office, it would do as it has done in the past. It would apply a policy that would bring about a. depression. For the past six years, members of the Labour party have been talking depression, depression, depression, and because this Liberal party-Country party Government has produced prosperity, prosperity, prosperity, honorable members opposite say that the Government’s policy is wrong because we tax spending, and that the policy which they advocate is the right one because it would tax production. What is wrong with the conditions in Australia to-day has been clearly stated repeatedly by the Prime Minister (Mr. Menzies) and others : In this time of great prosperity, there is too much spending, too little saving and too little production. The short-term steps that the Government has taken were necessary in order to obtain money for State public works. In addition, they will curb excessive spending in the community. I venture to say that not one person in Australia will bc really hurt by the increase of sales tax. It is true that some persons might have to forego a beer or a few cigarettes a week, or perhaps curtail their motorcar mileage, or defer buying a new motor car for a while, but the increased sales tax will not really hurt them, and it will enable school and hospital building to be carried on. The additional revenue from sales tax will enable the Government to maintain the present prosperous conditions.
Although every one of us could attack individual items in the Government’s programme. I think that in the main the
Government has done a masterly job in combating the present short-term situation. In order to make my attitude perfectly clear, I should say that I do not, think that the present measures will deal adequately with the long-term problem that we have to face, which is the problem of saving. I am convinced that this problem has arisen solely because this year the public has not subscribed sufficient money to Commonwealth loans. As this problem is likely to recur, we should adopt a long-term policy and I nm confident that before very long the Government will announce its long-term policy.
– -The honorable member is ever an optimist.
– Perhaps it is because of its optimism that the Government has been able to produce to the people of Australia the greatest period of prosperity in the history of this country. It will go on optimistically, with faith in the country. It will encourage the people of Australia to have continued faith in their country, and so go from strength to strength. Now, this present policy has a twofold effect. First, it is designed to meet the emergency which has arisen only because £190,000,000, which the Australian Loan Council decided wa3 necessary for State works, has not been subscribed by the general public. Secondly, it has been put forward because Australia, in common with all progressive countries of the world, is going through an inflationary period which has been brought about by prosperity, and which has caused the people to spend rather more freely than our situation permits.
Therefore, this legislation will have a dual effect. It will not only meet the emergency situation, but will also have the effect of placing a curb on excessive spending. If honorable members opposite would turn their minds to the real economic problem of Australia and give us some constructive suggestions for increasing the prosperity of the country and for raising the standard of living, that attitude would be far more welcome to us that the kind of speeches that we have heard from them during this debate. In those speeches they have merely referred to what happened ten, fifteen or twenty years ago, or they have talked about so-called principles of taxation which do not apply to our present economic situation.
.- A regrettable feature about the attitude of the Opposition towards the measure before the House, and in fact about its attitude towards the whole of the Government’s proposals, is that it is quite unrealistic. Instead of getting down to the fundamental problems of our current economic situation, honorable members, opposite have merely beaten the air with platitudes which are designed to appeal to the unthinking section of the public. Itis very easy to tear down instead of building up, and to say that’, at a time like the present, the Government should not tax the people. If we do not raise the required money by taxes, how are we to raise it? The honorable member for Kingsford-Smith (Mr. Curtin), has stated that we should not impose an> further taxes; but neither he nor his colleagues have told us what should be done to meet our present economic position.
As the Prime Minister (Mr. Menzies) said in his economic statement - although the Opposition seems to overlook that matter - it is expected that the Government will end the year with a surplus of revenue over expenditure, but, because of the public response to loan appeals during the financial year, the amounts raised by way of loans are so small that we shall actually end the year with a cash deficit. Of course, this Government will face a deficit because of its undertaking to find the loan requirements of the States. The Australian Loan Council is dominated by the States, because, on that council, they have six votes to the Commonwealth’s two. At the commencement of the present financial year, the Australian Loan Council proposed a loan programme regardless of the wishes of the Commonwealth and its advisers. This Government, because of its desire not to cramp the style of any of the States, ultimately agreed to underwrite the programme that the States had drawn up. Now, we have to keep faith with the States, and the Government has to find the amount that it has guaranteed to them. The measure before the House at present is one of the instruments that the Government has designed in order to keep faith with the States. The alternative to the Government’s proposal is to tell the State governments that they cannot carry on with their present loan programmes and must reduce their expenditure. Honorable members opposite who object to the Australian Government keeping faith with the States, indicate by that very objection that the States should cut down their works programmes. It would be very interesting to hear a suggestion from the Opposition about just what items they believe the States should remove from their works programmes.
– Surely, there are ways of raising money other than those proposed by the Government?
– Of course, there are. Somebody is at present adopting one of those methods of raising money, by printing counterfeit £5 notes. Apparently, the honorable member for Macquarie (Mr. Luchetti) believes that this Government should print fictitious £5 notes in order to raise money for State and Commonwealth purposes. Honorable members should note that that is one of the sound economic proposals of the Opposition. As opposed to the Opposition’s plans, the policy of this Government is to maintain a system of sound finance, and its aim is to reach economic stability. The suggestion just made by the honorable member for Macquarie is in keeping with the usual run of irresponsible and thoughtless remarks made by the Opposition.
The Opposition wants to reduce taxation, but, at the same time, it wants to increase all pensions and social services payments. How is it to do that? It is easy to tell the Government that more money is wanted for this, that and the other ; but when we desire to find out whence we are to get all the money so required, the Opposition can make no useful suggestions. Does the Opposition suggest that the taxpayers will cheerfully accept the imposition of increased taxes to provide increased social services? No, the Opposition does not say that, it just says, “ Let us tear everything down. That appeals to the man in the street, and he will think that we are fine fellows if we put up such propositions ‘’. Indeed, all the arguments of honorable members opposite have lacked both realism and reason. The next point raised by the Opposition is that direct taxes are preferable to indirect taxes. As a taxpayer, I am sure that indirect taxes fall far less heavily on me and affect my income much less than do direct taxes.
– That is all right, for the honorable member, but what about the people in general?
– I offer the honorable member my bank balance in return for his parliamentary salary for the next twelve months. In fact, I offer him my bank balance for a fiver.
Honorable members interjecting,
– Order! There is far too much noise in the chamber. The House will come to order.
– Looking at this matter from the viewpoint of an ordinary taxpayer, I feel that I can control the amount of indirect tax that I pay by resisting the temptation to spend money on goods which carry heavy taxes. But as far as direct taxes are concerned, I find it hard to attempt to improve my financial position and earn more, because no matter what I do I cannot escape paying direct taxes. Therefore, direct taxation discourages the individual from improving his own position, increasing his earnings and producing more for the country. Direct taxes should be reduced as much as possible in order to give individuals every encouragement to increase their production. If I do not wish to pay an extra twopence tax for a glass of beer, I do not have that glass of beer. If I do not wish to pay the increased taxes on cigarettes, I reduce my consumption of cigarettes. Therefore, indirect taxes can be controlled to a certain extent by the individual.
– -What about soap?
– I suggest that the honorable member for Kingsford-Smith (Mr. Curtin) is urgently in need of a cake of soap; he needs his head washed out so that he can understand what I am saying. I remind honorable members that, with one or two exceptions, including one to which the honorable member for Mallee (Mr. Turnbull) has referred, necessaries of life are not subject to sales tax. Therefore, in that connexion, sales rax has no effect upon our ordinary living.
– Oh, yes it does.
– I expected an interjection of that sort. There is no sales tax on a loaf of bread. Do honorable members on the Opposition side suggest that families huy cakes as a necessary of life, in place of a loaf of bread? Examine the things on a breakfast table, and tell me how many of those items bear sales tax. None of them!
– What about some bread ?
– It does not carry sales tax.
– What about the breakfast table itself?
– I was referring to the things on the table. The table itself carries the minimum sales tax. It is a negligible amount. If honorable members on the Opposition side really want to help those persons whom they claim still exist in Australia, although I do not know where they are - I mean the poor, downtrodden chaps living on bread and water - they should fight for a rearrangement of the sales tax so that it will apply, not to articles, but to prices. I do not suggest that a wireless receiver is a luxury. I think it is necessary, but I believe that a £200 radiogram is n luxury.
– Who has them?
– Many people have them. I say that the type of article should be taken into consideration, and that sales tax should he applied according to the price of the article.
– The honorable member would tax quality.
– The honorable member for Wills should not think that, because he pays a high price, he is getting quality. I might cite the honorable member himself. His electors are paying a big price for him to represent them here, but they might well doubt the quality they are getting for their money. Price is not always an indication of quality. Many people pay a high price for a little bit of ornamentation on an article. If sales tax were applied to the price of goods, the heedless expenditure of money by those who cannot afford to pay for frills would be discouraged. Their money would be directed into proper channels.
I revert to a statement that I made in this chamber recently, and remind honorable members on the Opposition side that they could profitably change their attitude, and assist the Government to fulfil its obligations. Throughout the length and breadth of the country, the peoplwant a reduction of sales tax. My supporters tell me that, and I know that Opposition members hear the same cry from their supporters. If honorable members examine the financial proposals contained in the budgets for many years past, they will see that most of the capital works which were carried out formerly with loan money, are now financed from revenue raised by taxation. That has become, the general practice, because insufficient loan money has been available. State works have been financed from Commonwealth revenue.
-Order! The. honorable member for Moore appears 10 have an attentive audience in the Opposition corner near him. I suggest that he address the Chair.
– I was addressing you, Mr. Deputy Speaker, but you are so well informed on these matters that I could get no direct response from you. The honorable members who have been interjecting have indicated clearly their lack of knowledge, and I addressed myself particularly to them. The obvious way to bring about a reduction of taxation, sir, is to persuade the people to relieve the Government of the necessity of using revenue for capital works. In other words, if the people would subscribe fully to loans, taxes must be reduced substantially. In the present financial year, the Government has to find about £200,000,000 from revenue to offset the deficiency in loan raisings. Taxation could be reduced substantially if the people did something to help themselves. They should put their money into national loans instead of frittering it away on trumperies.
– What about interest rates ?
– I should like to address honorable members on interest rates and, in particular, I could educate the honorable member for Kingsford-Smith on that subject, but I know, Mr. Deputy Speaker, that you would not allow me to touch upon interest rates in this debate. I should like to see the Opposition adopt a realistic attitude to the proposal I have advanced.
– The honorable member is an optimist.
– I was born that way, and I cannot help it. Honorable members on the Opposition side should step into the picture, because they are a responsible part of this Parliament. The Opposition should realize that it has some responsibility in this matter. If Opposition members would approach this measure in a proper way, they would agree that what the Government proposes is the least that can be done to enable it to meet the obligations it has undertaken. This is the least the Government can do, because its proposals will impose a burden only where it can be carried.
– On the pensioners.
– Of course it does not impose a burden on them. Does the honorable member suggest that a pensioner is able to buy three or four pots of beer a day, and so contribute substantially to Commonwealth revenue? At one moment, the honorable member will say that . the pensioners are spending money on luxurious living, but no doubt next week we will hear him pleading for the poor pensioners. The honorable member should be consistent.
– Order ! I suggest that the honorable member for Moore should direct his attention more closely to sales tax.
– Because the bill will not impose any burden where it cannot be carried, because it definitely will effect remedies in those directions in which the Government wants to see them effected, the Opposition, if it reasons the matter out, has no option but to support the measure. I said earlier that I am a born optimist. Therefore, I say, too, that the Opposition should, even go to the extent of commending the Government upon its restraint in not taking advantage of the opportunity to take more money in order to make a big fellow of itself. When all is said and done, it seems to-day that a government’s popularity depends to a large degree upon the amount of assistance that it can hand out. That is what the States are relying upon.
For instance, the Labour Government of Western Australia went to the people relying upon what it had done. Never at any time did it admit that the Commonwealth had provided it with the money that enabled it to build schools and hospitals and to do those things which enabled it to establish a good record during its three years of office and so justify the confidence the people had reposed in it. The Western Australian Government did not say, “ We pay a tribute to the Commonwealth Government for the measures it now proposes to undertake in order to fulfil the guarantee which it has given to us that we can safely go on with our works programmes for the rest of the year, knowing that at the end of the year, when the bill comes in, the money will be there to meet it “. I admit that the Western Australian Government never at any time raised any doubt about the money being available, but, unfortunately, it neglected to give credit where it was definitely due. The same criticism may be directed at the Opposition here; Opposition members oppose merely for the sake of doing so. I should not mind that so much if they advanced arguments that contained some reason, but I submit that there has been no reason in the case put forward by them.
Question put -
That the bill be now read a second time.
The House divided. (Mr. Deputy Speaker - Mr. C. F. Adermann.)
AYES: 61
NOES: 35
Majority . . . . 26
AYES
NOES
Question so resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
SALES TAX BILLS (Nos. 1 to 9) 1956.
In Committee of Ways and Means: Consideration resumed from the 14th March (vide page 798), on motion by Sir Arthur Fadden -
Question resolved in the affirmative.
Resolution reported.
Standing Orders suspended; resolution adopted.
Ordered- -
That Sir Arthur Fadden and Sir Eric Harrison do prepare and bring in billsto carry out the foregoing resolution.
Motion (by Sir Arthur Fadden) agreed to -
That so much of the Standing Orders be suspended as would prevent the questions in regard to the first and second readings, committee’s report stage, and third readings being put in one motion covering several or all of the Sales Tax Bills Nos.1 to 9, and the consideration of several or all of such bills together in a committee of the whole.
Bills (Nos. 1 to 9) presented by, Sir Arthur Fadden, and passed through all stages without amendment or debate.
page 1461
Motion (by Sir Eric Harrison) proposed -
That the House do now adjourn.
.- I desire to raise two matters, the first of which relates to the manner in which leases are arranged in Canberra and the manner in which the lessees exploit persons who rent or sub-lease their properties.
I apologize to the Minister for the Interior (Mr. Fairhall) for not having notified him that I intended to raise this matter to-night.
Lt seems that on the 21st March, 1953, a Sydney company called Chic Salon Properties Limited, of which Mr. L. O. Bailey is the managing director, obtained, at public auction, a lease of a site at Civic Centre. The rental, until reappraisement. is £430 a year. The lease required that a two-storey building be erected, and that the ground floor be used for a shop or shops. The upper floor may be used for shops, offices, consulting rooms, sample rooms and the like. There are no lease restrictions on the basement. The design of the proposed building was approve: I by the National Capital Planning and Development Committee. The ordinances of the Australian Capital Territory place no restrictions on the sub-letting of shops or rooms. To that extent, everything is in order.
This company, having experienced difficulty in obtaining tenants for all available space, wrote, on the 20th January, 1956, to a Melbourne restaurant firm, stating that the building had an area of 7,273 square feet, that that area had been divided, and that there worn at least 23 ground floor shops, ten of which were already occupied, the others to be occupied as soon as they were completed within the following few months. [ shall hand the file to the Minister when [ have finished my remarks. The letter also stated that much of the first floor space had been taken up. My complaint, relates to the following paragraph of the letter : -
Instead of charging a premium for a lease we require tenants-
I have already stated that they have. 23 actual or prospective tenants on the ground floor - to assist in financing of the building by investing in 5 per cent, negotiable debentures which are repayable in ten years. £12,000 is the appropriate investment to cover this area-
The area offered to the Melbourne firm of restaurateurs - and the rental would be £77 per week foi live years with an option of a further five years nt £80.
If this company is getting the lease for £430 a year, with an obligation on it to erect a building on the property, and if it lets the building subsequently to 2.’$ firms or companies, it is doing pretty well if it gets £77 a week rent from thos** 23 firms. The further requirement that, in the case of this particular company* a sum of £12,000 is also to he lent to Chic Salon Properties Limited for ten years, this amount being invested in IV per cent, negotiable debentures, shows, first, that the company is doing very well out of the arrangement in regard to therent, and that it is getting the money for its building programme which it cannot borrow from the banks. 1 suggest that a good deal of exploitation is going on in connexion with the lease, and T think the Minister might very Well look at the matter and decide whether theterms should not be varied to provide againSt exploitation by successful lessees. I am certain, and I think most honorable members will agree, that if too high a rent has to be paid, it will be reflected in the cost of living, making it more difficult for the people of Canberra to meet living costs. It will also result in exploitation of the people who are being attracted to this city.
I wish now to make some remarks regarding observations that I made last week in reference to the English Scottish and Australian Bank Limited, when T said that that bank had formed a company, called Esanda Proprietary Limited, to which it had transferred all its hirepurchase business. I said also that in future the hire-purchase business of the English, Scottish and Australian Bank Limited would be conducted by this new company, in association with the Mutual Life and Citizens Assurance Company Limited. The bank denied the statement that I had made, that, by this arrangement, it was trying to evade an agreement that it had made with the Prime Minister, in association with other hire-purchase companies, not to increase the volume of hire-purchase business. The denial of the bank related entirely to my allegation that it wished to evade its responsibility in connexion with the promise that had been made. What the bank did not deny is, first, that it formed a new hire-purchase company, after having made an agreement with the Prime Minister that it would not form a hire-purchase company. When, the conference was held on this matter it was understood by all concerned that no new hire-purchase companies would be formed ; certainly it was understood that no additional business would be undertaken. Secondly, the bank did not deny that it . had transferred its hirepurchase business then being conducted to the company called Esanda Proprietary Limited. It did not deny, thirdly, that a link has been established between that company and the Mutual Life and Citizens Assurance Company Limited to channel millions of pounds of assurance company money into hire purchase. An amount of £1,000,400 has already been paid to the company and the sixth debenture issue is for an unlimited amount. This seems strongly to indicate increased hire-purchase business. Finally, Esanda Proprietary Limited is on a proprietary basis, and therefore its accounts will probably not be published at any time, so that the people will never be able to learn just how large are the profits being made by that company, which, as I have said, and as is admitted, is a subsidiary of the English, Scottish and Australian Bank Limited.
.- I rise to discuss an .attack that was made upon me in this House last week. The attack was initiated by the honorable member for Mallee (Mr. Turnbull), and was carried on by the honorable member for Hume (Mr. Anderson) and the honorable member for Flinders (Mr. Lindsay). The attack, it seemed, was based on a newspaper report, which was completely unknown to me and is not accurate. I raise the matter because this is not an isolated instance of this kind of attack, based on hearsay evidence at best, and because j in answer to a question asked by the honorable member for Flinders, the Minister for External Affairs (Mr. Casey) said, on the 12th April -
I am not aware of the precise terms of the speech to which the honorable gentleman refers-
Which is the speech that I am alleged to have made - but .1 should be grateful to him if he woul’d let me have a report of it so that I can give him and the people of Australia the denial that is obviously called for.
I do not know whether the Minister has tried to obtain from the honorable member for Flinders any report of that speech. I suggested at question-time to-day that should the right honorable gentleman require such information 1 should be only too pleased to give it to him, but he has1 made no attempt to discover from me what the contents of the speech were. Therefore, it seems to me that these allegations were made not for the purpose of discovering the truth, but merely for their political effect.
What I said in relation to this matter was said, in fact, in regard to an answer to a question asked by a Malayan student. The student had said that Malaya did want to get rid of foreign troops, that it did want a national force of its own, and that unless Malaya did get rid of foreign troops and obtain a national force of its own it could never be said to be independent. In reply I said that the Malayan Government had been equivocal on the matter, that it had not said whether it favored the presence of foreign troops or opposed it. I referred in that connexion to the government of which Tengku Abdul Rahman is the Chief Minister. But now, I suggested, it appeared that Tengku Abdul Rahman’s Government had, in fact, favored the presence in Malaya of foreign troops. Indeed, I quoted passages from the speech of the Minister for External Affairs which was delivered in this House on the 22nd February, 1956. I also referred to that speech in a question that I asked in the House this morning. It seems to me that in’ that speech the Minister indicated quite clearly that an agreement had already been reached at the conference in London with the present Malayan Government for troops to be retained in Malaya after that country gains its independence in August of 1957. In this connexion I shall read to the House some remarks made by the Minister in the speech to which I have referred, the report of which appears at page 115 of Hansard. The Minister said -
It has been agreed that after independence there will be u treaty of defence and mutual assistance which will cover the continued presence of United Kingdom forces and the Commonwealth Strategic Reserve and the provision of necessary facilities for them.
That seems to me to indicate, as clearly as the English language can, that an agreement- has been reached with the Government of Malaya for the retention of troops in Malaya after August, 1957. This came as quite a surprise, and I think that the Minister saw fit this morning to deny that his words had that meaning. However, I pointed out that I agreed with the Malayan student, and I should like r,o indicate to the House that I agree with that student, and that he was probably right when he said that the Malayan people did not want foreign troops of any kind in their country. I think that all people take that view. I also point out that I agreed with him when he said that it would be necessary for Malaya to be free of foreign troops before it could be said that Malaya was really independent, and that I thought a move more consistent with Malayan independence than that apparent agreement made already, would be for the powers which are concerned to defend Malaya to wait until after August, 1957, for such an agreement. But despite the fact that the honorable member for Malley was using nothing but a newspaper report, which now turns out to have given an inaccurate impression, he chose to go on to say -
Do honorable members consider it right for an accredited member of this National Parliament to tell a conference of Asian students that they want to get rid of foreign troops, including Australians . . .
I did not tell them that; a student told me that. Then, the honorable member for Mallee went on to say, and it is remarkable that he did so -
If thu Malayans had told the honorable member that that was their view, the remarks, if true, would have been in order . . .
Precisely in order. The Malayans did say that. It is a matter of debate whether it is true. All I said was that T thought there was a good deal in what the Malayan students said, and I am quite happy to say that now.
– May I ask the honorablegentleman what the Malayan student said* about the attitude of the Malayan leader to the retention of troops in Malaya?
– Yes. This student did not agree with the attitude .of theMalayan leader.
– Did you remind binh that they had won every seat but one in the Malayan elections?
– He knows all abour that. Indeed, he knows a good deal moreabout it than does the Minister for Customs and Excise (Mr. Osborne)Then, the honorable and gallant member’ for Hume (Mr. Anderson), in my absencefrom the House, came along the next day and asked a question which went a little further than that of the honorable member for Mallee. The honorable member for Hume said that I had urged Malaya to set up its own national defence force and eject all foreign troops. That was quite untrue, even if the honorable member was basing his question on the statement made two days before by the honorable member for Mallee. I had not urged the matter at all and had not been concerned to urge it. I was discussing the situation and endeavouring to show what factors might be present in it and what might be likely to happen. There was nothing whatever, I suggest, to justify this meaning, either in the report or in the interpretation given to it by members of this House.
But this was not to be the end of it. The day after, the honorable member for Flinders (Mr. Lindsay) raised it again with the assumption that this developed interpretation of the meaning was accurate. It is difficult to say what the honorable member for Flinders intended by his question, when one read’s it, but he asked the Minister to make sure that a method was adopted to prevent our friends, the Malayan students “from being indoctrinated in the future “. I do not know whether the honorable member wants to see restrictions placed on members of this House in regard to what they may say outside the House.
– No. He wants some responsibility to be exercised by honorable members, that is all.
– I am endeavouring to -show that I tried to exercise some responsibility, and I fail to see why the Minister cannot see the point.
Perhaps, even the honorable member for Flinders may be invited one of these days to address Asian students, if they should be interested in Jersey heifers or the size of an 8-in. gun; but I suggest that the best thing we can do in this matter, as in all others, is to see to it that people get both sides and all sides -of the case, not just that side which might be acceptable to members of the Australian Country party.
– Order ! The honorable member’s time has expired.
.- 1 think that, as I brought this matter up, t should reply to what has been said by the honorable member for Yarra (Mr. Cairns). The honorable member should have said, first, that he had been misreported. If he had said that, I should certainly have accepted his apology.
– J said that the report was inaccurate.
– I have a cutting of the newspaper report on which I based my speech. The heading of that report is, “ Malaya wants national force “. It :goes on -
Malaya wanted to get rid of foreign troops - including Australians - quickly, Mr. Cairns, M.H.R., said to-day. It wanted to replace them with a force of nationals, he said. This was one step in Malaya’s march towards independence. Mr. Cairns was addressing a week-end conference of the Asian Students’ federation at Cowes.
– What newspaper is that?
– The Melbourne Herald. I took exception to the fact that Malayan students in this country, who, apparently, had held a conference at Cowes, should have been told that Malaya should get rid of foreign troops including Australians.
– They were not told that.
– We shall come to that. The honorable member for Yarra stated that he did not tell them that, but that he confirmed an opinion expressed by a Malayan student. If honorable mem bers look at my remarks they will see that, first, I referred to the newspaper article and that I then said -
It is beyond my comprehension that a loyal Australian-
– Is the honorable member quoting from Hansard of this session ?
– Yes, and I am allowed to do so. I said -
It is beyond my comprehension that a loyal Australian would make such remarks.
Then, I went on to say that any man who made such a statement to Asian students was not fit to hold a place in the National Parliament. The real point about it is that on the first chance that 1 had, after the report was printed, I got, up in this Parliament and said what I did, because I am always vigilant to safeguard against the enemy within.
Now, the honorable member for Yarra says that he did not make the statement. As far as I am concerned, if he says that he did not announce at the conference that the Malayans should get rid of foreigners including Australians, I am prepared to let the matter rest there. I know that sometimes newspaper reports are inaccurate. I meant what I said when I stated that any man who made such a statement was not fit to sit in this Parliament.. Therefore, it is right that the honorable member for Yarra, should get up at once-
– I was not here then.
– I know that, but he should have got up at the first opportunity and said that it was an inaccurate report. The honorable member has pointed out that he was not in the House then and has taken the first opportunity, as I understand it, to inform the House that he did not make the statement. T think honorable members will agree that, generally, .reports printed in this newspaper are accurate, but, apparently, that was not the case on this occasion. Incidentally, the newspaper has been most accurate regarding the contents of the Richardson report. How it got the information, I do not know. However, I based my statement on a report in a newspaper which usually is accurate, but which, apparently, on occasion ‘ “is inaccurate. I suggest that, after seeing such a statement, I should be remiss in my duty as an Australian if I were not to get up in this House and say what I thought about it. It is the privilege of the honorable member for Yarra to rise in his place and say, “ I did not say those things “, and it is my privilege now to accept his explanation.
.- My name also has been brought into this matter by the honorable member for Yarra (Mr. Cairns). I see nothing improper in the question that I asked. In it, I asked the Minister for External Affairs (Mr. Casey) whether he had seen an alleged statement made by a member of this House. I see nothing improper in that question. I have not heard the whole of the speech of the honorable member for Yarra on this subject, but I gather that a student did ask that question and that the honorable member agreed with it. If that is so, my question cannot be regarded as improper. Honorable members will agree that it is highly improper for any member of the House of Representatives to accept a suggestion such as was made by the Malayan student.
– I am grateful to the honorable member for Yarra (Mr. Cairns) for reviving this matter. Although it is a very small one, the honorable member is right in bringing it up again so that it may be disposed of one way or the other. It was not right for Australia’s reputation that a matter of this sort should be allowed to swing in the air. As I understand the various permutations of this matter, the honorable member for Yarra was, as he alleges - and, of course, I accept his statement - misquoted in a newspaper article in respect of something he is supposed to have said. I have not been present during the whole of this debate to hear all the honorable member’s remarks, but I think [ heard sufficient to understand the import of what he said. The honorable member to-night said that a young Malayan student had made a remark to the general effect that Malaya did not want Australian troops there any longer. If I heard the honorable member aright on whether Australian troops should be allowed in Malaya, the honorable member attempted to balance the statement of this young Malayan student against a. statement of the Chief Minister of Malaya, Tengku Abdul Rahman, which; I quoted in this House in detail. When the honorable member was confronted with the fact that he had been referring to what was only a Malayan student’sopinion, he replied, “ Yes, but the meritsand the truth of the statement are matters*for debate “. To use the words of themarket place, and with great respect tothe honorable member, I say that it is not common sense to argue that it is a matter of debate whether what a young, immature, Malayan student said, or what the Chief Minister of Malaya said, expressed! the opinion of the 6,000,000 or 7,000,000 people of the Federation of Malaya.
That is really the nub of this question, and if the honorable member for Yarra pins his political reputation to the fact that he would just as soon accept, the opinion of a young, immature, Malayan student as the opinion of Abdul Rahmin, the Chief Minister of Malaya - and that is the inference to be drawn - I hesitate to predict the honorable member’s political future. We must clear up beyond all semblance of doubt what is the opinion of the people of Malaya, as expressed through the mouth of their Chief Minister on two recent, formal occasions, in respect of what the honorable member for Yarra has described as “foreign” troops in Malaya. I call them Australian, United Kingdom and Commonwealth troops. I shall not weary the House by repeating the two formal statements of the Chief Minister of Malaya. I think honorable members will recollect the distinct and forceful terms in which he said that his country was in a very troubled area, that it could not defend itself with its own forces, and so it welcomed the presence of United Kingdom and Commonwealth troops. I have expressed in a few words what the Chief Minister of Malaya said in a great many forceful words.
I do not care at all what any young, immature, Malayan student may. have said. Any opinion on any subject under the sun - good, bad or indifferent - could be obtained from any one of the 3,500 young Asian students now in Australia. The truth of this matter is that none of us in his senses - and 1 direct my remarks particularly to the honorable member for Yarra - could give heed, offhand, to the remark of this young Asian student as against the studied remarks, on two formal occasions, of the Chief Minister of Malaya.
If anything more is to be said on the subject of whether or not Australian troops are welcome in Malaya I should like to hear it, but I am convinced that there is nothing more to be said. I accept the statement of my friend, the honorable member for Yarra, that he did not make the statement alleged, but remarks of that sort have been made, day in and day out, by various members of the Opposition, including my friend who bears the honoured title of “ honorable member for Melbourne “. Remarks to the effect that Australian troops are not welcome in Malaya have been used as whips with which to attempt to beat this Government, but with all respect I say that the lie has been cast back in the teeth of those who uttered it.
Has the honorable member for Yarra ever been to Kuala Lumpur? He has not. But I have been there time and again, and have had the benefit of many hours of discussion with the Chief Minister of Malaya, much of which has been on this very subject.
– Has the Minister been to Kashmir?
– Why divert from the subject which the honorable member for Hindmarsh (Mr. Clyde Cameron) obviously does not wish to discuss? We are talking about Malaya, not Kashmir. E hope that the honorable member for Hindmarsh knows one place from the other. For his information I will say that Kashmir is nowhere near Malaya.
– What troops should fight in India or Pakistan?
– The honorable member for Hindmarsh is liable to get into deep water if he tries to discuss questions of geography or international affairs.
– What about Cyprus ?
– That is further away still. Little more need be said on this subject. A few months ago, many mem bers of the Opposition expressed themselves on the subject of whether or not Australian troops were welcome m Malaya, and the lie that they are not welcome has been nailed to the wall. Such a statement is untrue, and I direct my remarks particularly to the honorable member for Yarra if he cares to accept them. Many members of the Opposition have expressed themselves in clear terms on this subject, knowing very little about what they were talking. It is perfectly simple to get some young, immature, Asian student in Australia, or some microscopic and quite unimportant political body in Malaya to make resounding statements on this subject. It is logical then to ask, “ What is the political backing or importance of the people or the body in Malaya whence the statement emanates ? “ Examination reveals that they are completely unimportant, and not even represented in the Assembly at Kuala Lumpur. Statements made by many members of the Opposition over the past six months or more in an endeavour to mislead the Australian public - I exclude the honorable member for Yarra, because he has said he did not make the remark alleged - have mo backing whatever in fact. So I think that we can let this subject drop, in the belief that the lie has been nailed to the wall. One of the principal gambits in the armoury of the Opposition on this general subject turns out to have no backing at all, as is proven by the formal words uttered on two separate and important occasions by the Chief Minister of Malaya. I leave my friend from Yarra and my other friends of the Opposition to chew that over.
– I rise to make a personal explanation. I have been grossly misrepresented by my friend the Minister for External Affairs (Mr. Casey). In the excitement of the moment, he made an observation which I think he should withdraw. He accepted a statement - which he admitted he did not hear - by the honorable member for Yarra (Mr. Cairns) in relation to a misrepresentation of the honorable member’s remarks that appeared in the press. Then the Minister proceeded to say, “ But the same lie has been repeated by. members of the Opposition “. When I asked, “ Which ones ? “, he said, “ My friend who has the great honour to represent the Melbourne electorate “. By the grace of God, I will bc there for a long time yet!
I am not guilty of a lie, and I never have been guilty of a lie in anything that I have said in respect of Malaya or in respect of anything else. I do not want to take up the time of the House for very long on this point. I thought the Minister would be at the Grace Kelly-Prince Rainier wedding tonight, because he is generally absent from Australia on some pretext. The view of the Opposition in respect of Malaya - my view and that of others - was simply this : The Malayan Federation of Labour, which is a responsible body, expressed an opinion, and we supported that opinion. It is not a question whether Prince Abdul somebody or a Malayan student really represents public opinion in Malaya. Any attitude that we adopt in respect of Malaya is based upon the facts as we know them and is in accordance with our interpretation, as good Australians, of what is right and proper for Australia. The accusation that I told a lie because I happened to disagree with a debunked Malayan prince, even if he is the Chief Minister of Malaya, is an affront that should not be offered in this Parliament.
– I intervene in the debate only to reply to a statement by the honorable member for Melbourne (Mr. Calwell) to the effect that the plethora of remarks made by members of the Opposition, alleging that Australian troops are not welcome in Malaya and that there is a responsible body of opinion in Malaya opposed to them being there, is based on the statements of responsible Malayan leaders. That is not true. The Malayan Federation of Labour, to which the honorable member for Melbourne has referred, is wholly unrepresented in the Malayan Parliament and does not amount to a row of beans in Malaya.
It is not to be expected that the Malayan people will exhibit unanimity on any political matter. Anybody who reflects for a moment will recall that even the Australian Labour party is unable to be unanimous about anything for very long. Is it surprising, then, that one or two voices should be heard in Malaya objecting to something with which the majority of the people agree? The real fact about the presence in Malaya of Australian troops, as well as British troops, New Zealanders, Fijians, South. Africans, Gurkhas and many others - Australians are not the only Commonwealth troops in Malaya - is that their presence has provoked exceedingly little opposition. I am not repeating something that I got from the mouth of an irresponsible student. I am basing my remarks on the observations that I madein Malaya less than a year ago. WhileI was there, I had the good fortune to spend some time with responsibleMalayan leaders, including the man who occupied, I think, the second position of importance in the Alliance party, which won the elections, and the man whooccupied a similar position in Party Negara. After a long discussion withthem, I came quite clearly to the conclusion that Commonwealth troops were welcome and were wanted in Malaya so long as the emergency persisted. 1 heard the honorable member for Yarra (Mr. Cairns) speak to-night. I am not quoting from a press report of something that he is supposed to havesaid. I heard him say that he agreed* with a Malayan student who had said’ to him that the Malayan people would not be truly free until they had got rid of foreign troops from their soil and replaced them with Malayan troops. That is a. completely ill-informed opinion. It overlooks entirely the enormous contribution which the Malayan people themselves are making to-day to the defence of their own country. The number of Commonwealth troops from other countries is matched, perhaps even exceeded by the number of Malayan troops. Certainly it is exceeded by the number of Malayan troops and home guards who are to-day engaged in the protection of Malaya.
Every responsible Malayan leader, bar one, whom I met while I was there was strongly in favour of retaining Commonwealth troops in Malaya so long as there was any danger from the Communist threat. That, of course, is likely to continue for as long as the cold war persists.
The one exception to whom I have referred is a pacifist. He objects to the presence of foreign troops on the soil of Malaya, not because they are noi Malayans, but because of his general and theoretical objection to war as such. While I was talking to him, his colleague said, “ But, of course, you are a pacifist “ - thereby rejecting his view. The man who had put the view forward agreed. There is no responsible body of opinion in Malaya which is opposed to the presence of Commonwealth troops.
I think there is an even more sinister aspect of this matter. This is not susceptible of proof, but I feel that the concentration of the Australian Labour parry on every passing remark made by some student or irresponsible politician in Malaya, with no backing in the politics of his country, and the way in which such remarks are seized upon, magnified, reported back to Malaya, commented on there by some left-winger and reported back to Australia again, indicate an attempt to build up in Australia and in Malaya a belief that it is wrong for Commonwealth troops to be in Malaya to assist in its defence. I interjected while the honorable member for Tarra was speaking and said that what we hoped for from Australian politicians was a sense of responsibility about these things, t suggest to him and to those of his colleagues who are inclined to take this line that it is high time that they exercised a sense of responsiblity and ceased to tr to build up in Australia and in Malaya an objection which does not at present exist among the people of Malaya, who know that their own security, the future of their country and the validity of their newly won independence depend upon the support by the whole df the Commonwealth of that independence against the Communist threat which is active and persistent within the boundaries of Malaya.
.- I do not think there is any need to become heated about this question. I think we should consider, first, the background of the two Ministers who have spoken in the debate to-night. I respect their opinions, but we must remember that the Minister for External Affairs (Mr. Casey) and the Minister for Customs and Excise (Mr. Osborne) are both gentleman who, becauseof their personal friendships and businessrelations with banks and other great commercial interests in this country, are likely, perhaps unconsciously, to present a case on behalf of the very large amount of Australian capital that is invested in Malaya. Every one knows; - it is no secret - that there are very large Australian investments in the Federation of Malaya. One can bet one’s life that thehonorable member for Mackellar (MrWen tworth), and the Minister for External Affairs and the Minister for Customs and Excise, who have just spoken,, will, sincerely, and almost unconscious of their interest, speak most forcibly in thisParliament in an effort to ensure that so long as they are in control, the people who have invested their capital in theFederation of Malaya will retain their investments. And the way to enable them to do so is to ensure that foreign troopsremain on Malayan soil as long as they can possibly be kept there. We recollect that, not so many years ago, the Minister for External Affairs was -Governor of, I think, Bombay.
– Bengal.
– Bengal, Bombay, or whatever it may be. I accept the correction and note the hilarity of Government supporters. The Minister was Governor of Bengal. Any Labour member of this Parliament who had prophesied, at that time, that it was likely the time would come when the Bengalis would not want, any more of the Minister, would havebeen laughed at by members of the Gcvernment parties. Any one who had said,, at the time, that the residents of Bengal wanted to get rid of the Bengal tigerwould have been ridiculed. To-day, because of the attitude of members of the Australian Labour party in this Parliament, and of members of the radical’ Labour party in the United Kingdom - we can leave the “ Corns.” out of it - there are no longer any Caseys or any other white people dominating the livesof the people of Bengal. It is because of this fact that Great Britain’s relations with India and other countries of theBritish Commonwealth of Nations have been strengthened. More recently, theMinister for External Affairs would have told us that we were firmly entrenched in Ceylon. He would have said that everything was all right, because Sir John Kotelawala represented truly the opinion of the rank-and-file people of Ceylon. But what do we find now? When the common people of Ceylon spoke only a few weeks ago, they dismissed Sir John Kotelawala from office, and acted in a manner completely contrary to what would have been prophesied by the Minister. If we believe in democracy at all, it is quite clear that the people of Ceylon no longer want the British naval base there; nor do they want British troops in Ceylon.
– Is the honorable member pleased about that?
– Tes, I am pleased about it, because I believe in the rights of freedom and of self-determination, for which I fought in World War I. between 1914 and 1918. The people of Ceylon have spoken in no uncertain voice, by the exercise of the manhood suffrage, and they have said that their country shall be freed from occupation by the British Navy and Army or any other foreign navy or army. In my opinion, they have spoken wisely. Whether their decision will adversely affect Australia’3 security is another matter altogether.
– The honorable member would sell us out to-morrow.
– I ask the roaring lunatic on my left what he would say if foreign troops came to Australia, against our personal wishes and against the wishes of other people, for the professed purpose of ensuring our security, as might well have been done by the Japanese. The honorable member for Moore (Mr. Leslie) would be the first to say to them, “ Get out ! We have not asked you to come here, and we do not want you “.
– So I should be, but the honorable member would welcome them.
– I ask the honorable member to be patient for a moment. I welcome the decision of the people of Ceylon. I have faith in the capacity and the good sense of those who have taken over the government there to continue, to the degree that they think wise - not to the degree that the honorable member for Moore thinks wise - any association they may have with the British Commonwealth of Nations, and we on this side of the House hope they will continue that association.
T turn now to Malaya. The Minister for Customs and Excise has been to Malaya. Do honorable members imagine that he associated with the ordinary people of Malaya? He was, no doubt, the guest of the princes and the rajahs who are kept in their positions of pomp and riches by those who reward them handsomely. Let us be reasonable. There are vast armed forces in Malaya. More than 1,000,000 men are kept under arms there to contain an estimated 3,000 or 4,000 Communists. Australia maintains troops in Malaya. I think it is a pity. The sooner they are brought home the better. Unfortunately, some of them have already lost their lives. The Rajah of Johore, or whoever it was that the Minister for Customs and Excise may have met, is, no doubt, a prince of the royal blood and a descendant of some branch of the Malay race that came to authority centuries before the Malayan people were enlightened by the lessons of the democratic countries, including the United Kingdom. Doubtless, he has been able to exact tribute from the unfortunate rank-and-file Malayans, and is anxious to keep the Australian troops there to protect his position. Probably he has interests in Malayan businesses that reap handsome profits from the Australian troops in Malaya who spend their good money on the services and products of the Malayan people. Why would such a person not want the Australian troops to remain in the country? By the very nature of things, he would want them to remain.
I hope this matter will ultimately be resolved sensibly for Malaya, and I have no hesitation in saying - honorable members may remind me of these words in a few months or a few years if they wish - that the Malayan people will have an opportunity - it may be soon, or not for some time, but I prophesy that it will be in my time - to make a decision to exclude from their soil all foreign nationals who have not some distinct racial link with Malaya. It is not even a century since the attitude of the people of Great Britain was that the Irish were too ignorant to govern themselves and that, if they were given home rule, the whole show would fall to .pieces. I am not an Irishman or a Roman Catholic. Southern Ireland enjoys home rule today, and it seems to get along fairly well. Let us think over all these things and realize that the intervention of foreign troops and foreign Powers on the soil of various people throughout the world has always resulted in ultimate disaster for the interventionists. That is i ho lesson of history, and it would be well tor Australia if the Government learnt it, even at this late stage.
M r. Osborne. - What has the honorable member to say about the Americans coming to Australia in 1942?
– The democratically elected Labour Government of the day asked the Americans to send troops to Australia. No democratically elected Malayan government, of either Labour or nonLabour political complexion has directly asked for Australian troops to be sent to Malaya. I leave it to Government supporters to think about that fact. They all are entitled to their opinions. It would be far better for the Australian troops in Malaya to be brought home. 1 1 is costing us much to maintain them in Malaya, and the Australian people are, in consequence, being asked to make greater sacrifices than would otherwise bc necessary.
– Order ! The honorable member’s time has expired.
gets up and makes derogatary references to the Minister for Customs and Excise (Mr. Osborne) and the Minister for External Affairs (Mr. Casey). He works himself into a frenzy about it. Every time anybody objects to the Communist party, that seems to be a signal for the Labour party to deliver personal attacks upon the individuals concerned.
The Malayan government has only recently been elected. It does have exactly that democratic backing which has been denied by the members of the Opposition. Why do they say these things? Why do they display their ignorance? Why do they always come in on the side on which the Communists want them? This is no mere coincidence. The personal record of the honorable member for Lalor is good in this regard. Surely, he should not be saying that he is attacking foreign troops on Malayan soil when all that is happening is that our troops and other troops of the British Commonwealth are there with the full backing of the Malayan people in order to protect them against their Communist enemies. What would the honorable member for Lalor have thought in 1916 or 1917 of the people who said, “ Let us withdraw our foreign Australian troops from French soil “. They were there protecting the French from their German enemies at that time.
Our troops in Malaya are protecting the Malayan people from aggressive communism which, in default of our help, would come down and overwhelm them. I say to members of the Opposition that if they want to show themselves to be honest they will not be seizing on every small pretext in order to develop a proCommunist case. I do not believe that in this case there is even the semblance of anything which could allow them honestly to deceive themselves. Why is it that they ignore entirely the obvious facts of history and seize on every small incident to magnify it and to echo it, as the Minister has well said, so that it can be echoed round the world for the purposes of Communist propaganda? The Communists may well dissolve the Cominform if they can have propagandists in the Labour party in this House.
– I wish to raise the case of a blind soldier who has been refused–
Motion (by Sir Eric Harrison) put -
That the question be now put.
The House divided. (Mr. Deputy Speaker - Mr. C. F. Adermann.)
AYES: 56
NOES: 24
Majority . . . . 32
AYES
NOES
Question so resolved in the affirmative.
Original question resolved in the affirmative.
House adjourned at 11.19 p.m.
page 1472
The following answers to questions were circulated: -
b asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows : - 1 and 2. Cases such as those described by the honorable member have not been brought to my notice but, no doubt, there are cases of this nature.
r asked the Minister representing the Minister for the Navy, upon notice -
– The Minister for the Navy has furnished the following replies to the honorable member’s questions: -
Cite as: Australia, House of Representatives, Debates, 18 April 1956, viewed 22 October 2017, <http://historichansard.net/hofreps/1956/19560418_reps_22_hor10/>.