22nd Parliament · 1st Session
Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.
– I desire to announce to the House that His Excellency the Governor-General has this day accepted my advice on the re-allocation of portfolios recently announced to the House by me, and has sworn in Senator Henty as Minister for Customs and Excise and the other Ministers affected by the re-allocation. Representation of Ministers will henceforth be as follows: -
In the House of Representatives, I shall represent the Attorney-General; the Minister for Immigration will represent the Minister for Shipping and Transport and Minister for Civil Aviation; the Minister for Supply will represent the Minister for National Development except with respect to the War Service Homes Division; the Minister for Social Services will represent the Minister for National Development in relation to the War Service Homes Division; the Minister for Health will represent the Minister for Repatriation; and the Minister for Air will represent the Minister for Customs and Excise.
– And the Opposition will represent the workers!
– Some Opposition members will, but one of them will not.
In the Senate, Senator O’sullivan will represent me, the Minister for External Affairs and Minister in charge of the Commonwealth Scientific and Industrial Research Organization, and the Minister for Defence; Senator Spooner will represent the Treasurer, the Minister for Labour and National Service, the Minister for Trade, the Minister for the Army, the Minister for Works, and the Minister for Social Services; Senator Cooper will represent the Minister for Territories, the Minister for Health and the Postmaster-General; Senator Paltridge will represent the Minister for Supply and Minister for Defence Production, the Minister for Primary Industry, and the Minister for Air; Senator Henty will represent the Minister for Immigration, the Minister for the Navy, and the Minister for the Interior.
I should add that quite inadvertently yesterday, associating two ideas wrongly in my mind, I indicated that the Minister for Defence would administer the Commonwealth Scientific and Industrial Research Organization in the absence of my colleague the Minister for External Affairs. I was in error there. I have arranged that the Commonwealth Scientific and Industrial Research Organization will be administered by the Minister for Primary Industry during the absence of my colleague.
– Will the Minister for Labour and National Service make available to the House the report of a committee which dealt with profits obtained in the stevedoring industry, by either stevedoring companies or shipping companies? This matter becomes urgent, because a measure proposing an increased stevedoring industry charge is before the Parliament, and honorable members are most eager to peruse this report, even in an incomplete form, if the Minister will be good enough to make it available.
– I appreciate the significance and importance of the matter raised by the right honorable gentleman, and, indeed, its urgency. I have not yet had an opportunity to study this report fully, but I have arranged for a summary of it to be prepared by the Department of Labour and National Service. That is being done at the present time, and I hope to have the summary available for honorable members before I ask them to resume discussion of the Stevedoring Industry Charge Bill.
– Can the Minister for the Interior tell the House whether the work of providing a cyclone warning radar network along the coast of eastern Australia hasbeen completed, and whether it is considered that adequate information and warning regarding future cyclones can now begiven to residents all along the coast?
– The radar network on the Queensland coast is not yet completed. There are radar storm warning centres at Eagle Farm and Townsville. Two others are planned for Gladstone and Mackay. It should be kept in mind that the radar system is used to spy out storm centres at some distance, and in order to provide a warning for residents of Cairns, for example, in which district I know the honorable member is interested, it is not necessary to have a radar centre located there. As a matter of fact, all these radar stations are very closely linked together. The information emanating from them is co-ordinated in Brisbane, together with information coming in from Willis Island and other Pacific islands. Therefore, in general terms we are able to give quite a reasonable storm warning for the whole of the Queensland coast. There are very special difficulties associated with the establishment of a radar storm warning centre at Cairns. They are mainly bound up with the mountainous topography of the area. It would be necessary lo provide a station at Green Island, and unfortunately this would cost £40,000 or £50,000. The money available for this kind of work, as I am sure honorable members will appreciate, is not unlimited. In order to indicate, however, the extent of our concern with this problem, I may tell the honorable member that during next December a tropical cyclone symposium will be held in Brisbane, and we have invited quite a number of overseas experts in this subject to attend. No fewer than eleven countries will be sending their top experts.
– I desire to ask a question of the Postmaster-General. During 1955 I asked him a question regarding the serious congestion in the mail branch at the General Post Office, Sydney, caused by lack of sufficient space. The Minister said at that time that in order to cope with the situation, which, he agreed, becomes more acute each year, the Government had acquired a large block of land at Redfern for the purpose of erecting a modern building for the mail branch, which would cost about £4.000,000. I now ask the Postmaster-General whether it is intended to proceed with this necessary project. Has the purchase of an old factory building in Hiles-street, Redfern, for £115,000 anything to do with the delay in the erection of a new building for the
Sydney mail branch? Will the PostmasterGeneral tell us the present position in regard to this important matter?
– The provision of adequate facilities for the Sydney mail branch has been recognized for some time as being a very urgent matter. I know that the Redfern project is practically at the top of the priority list of works planned for this year. 1 shall obtain more definite information and convey it to the honorable member.
– Can the Minister acting for the Minister for External Affairs tell the House whether the report on extradition, made in June last by the Joint Committee on Foreign Affairs, is to be tabled in this Parliament?
– I propose to present that report to the Parliament this afternoon.
– Did the Prime Minister discuss with the representatives of the trading banks at yesterday’s conference the present plight of local government bodies throughout Australia, brought about by the reluctance of Australian banking institutions to make credit available for vital street construction and works of a similar nature which are essentially the responsibility of local government authorities?
– The answer is that that matter was not discussed.
– I wish to preface my question, which is directed to the Minister for the Interior, by assuring the honorable member for the Australian Capital Territory that I do not propose to trespass on his preserves. My question is the result of a challenge that was made after my recent comment in this chamber on Canberra affairs. I ask the Minister: Are there any conditions attaching to the provision by the Government of play centres in Canberra? If so, is it a fact that those conditions have been complied with by the lo:al residents in regard to such centres as those at North O’Connor; MacGillivray-street. Yarralumla: and Deakin? Is there any substance in the suggestion that the Government has failed to honour an undertaking to provide those play centres, thus breaking faith with Canberra residents who have fulfilled their obligations?
– The Department of the Interior has always regarded play centres as being very important in the school life of Canberra children. The result is that a good deal of interest has developed in the subject, to the point where parents have, by their own efforts, raised sums amounting, I think, to £500 or £600 in three or four instances for the provision of furniture and fittings for play centres to be built ultimately by the department. Three centres to an aggregate value of £23,000 were included in the 1955-56 works programme, but the House will recall that that programme was cut by 10 per cent, in October of last year and what were considered to be the less essential items were excised from it. The fact is that in relation to a centre that will cost about £8,500, in some cases the people in the area concerned have got together and contributed £500 for furniture and fittings. Nowhere in the papers can 1 find any undertaking by the Commonwealth to build these play centres to a particular time-table, but the fact that provision was made for them in the Estimates would lead people - quite justifiably, I believe - to assume that they were to be built last year. They will be built as early as possible.
– Shortly after the Prime Minister returned from overseas, I asked him whether he had received any correspondence from the Western Australian Government pressing the need for a naval base on the western coast of Australia, either at Albany or at Cockburn Sound. The right honorable gentleman replied at that stage that he had not had time to go through his correspondence. I now ask him: Has he seen this correspondence? If so, what is his attitude to the request?
– I am not aware of having received any such correspondence.
– I direct a question to the Prime Minister concerning trade with South-East Asia. By way of preface. I wish to refer to arrangements which had been made for the right honorable gentleman, during his recent visit abroad, to make official calls on certain South-East Asian countries. It is to be regretted that circumstances diverted the right honorable gentleman to more malodorous regions and these visits did not take place. I now ask him whether, regardless of the outcome of the present trade talks in London, he will consider requesting the Minister for Trade to arrange his homeward journey so that it will include visits to certain South-East Asian countries, and thus enable him to learn at first-hand how trade may be developed between these countries and Australia.
– I cannot make a promise on this matter, because it would have to be discussed with my colleague, but I will certainly, convey the honorable member’s suggestion to the Minister and see what can be done about it. ,
– By way of preface to my question to the Prime Minister, may 1 say that some six years ago I requested the then Minister for Health to set up a committee of experts to study the best methods of preventing and treating poliomyelitis? This he did, but every one associated with the inquiry came from the eastern States. I then asked the Minister whether his selection of the committee meant that he thought all the brains were to be found in the eastern States. To this question he gave a political reply. I now desire to ask the Prime Minister on behalf of 848,526 persons in South Australia, and at the same time to congratulate-
-Order! The honorable member should come to the question.
– I am coming to it now, Mr. Speaker. 1 wish also to congratulate the honorable members from South Australia who have been chosen for the Ministry. Is the Prime Minister of the same opinion as the previous Minister for Health regarding the people of South Australia, or is he awaiting a favorable opportunity to elevate to ministerial rank members of his party who come from that State?
– I cannot say that I clearly comprehend the statement made by the honorable member for Grey but I gather that he wants to know whether I have a feeling of affection for South Australia. The answer is that I most certainly have.
– I ask the Acting Minister for Trade whether his attention has been drawn to certain statements to the effect that a committee of Federal Government members which is investigating the Government’s import restrictions has made certain recommendations? As certain of the statements purport to include actual quotations from the report, could he state whether a report has, in fact, been submitted and if so, whether the quotations are correct?
– My attention was drawn to certain allegations relating to an alleged report to me on central import licensing. I can well understand the attitude of mind of the honorable member for Hume. First, he desires that the reputation of honorable members of this House should be sustained at the highest possible level and, secondly, he wishes to prevent any thought that members of the committee to which he refers may have had unofficial discussions with people outside. The simple fact is that, up to a late hour last night, neither a report nor a draft report had been dictated. Therefore, there is no truth in the allegations, first, that there has been criticism of the administration of central import licensing by the department; secondly, that there has been criticism of high civil servants; and, finally, that recommendations have been made to the Government. It is to be regretted that there may have been an attempt to create the impression that some of the Statements appearing in inverted commas were from a verbatim report of the committee’s alleged findings. This is not correct because, as I have said, up to a late hour last night there had not been even a draft report.
– Is the Treasurer aware that the second largest company - I think - in Australia, whose main product is zinc, has made an issue of three 10s. shares for each one 5s. share held in the company, or a bonus issue of five to one? Is the right honorable gentleman further aware that this issue of bonus shares is a method of transferring excess profits to shareholders so as to avoid taxation? In view of the Government’s professed aims of restraining expenditure in order to check inflation and of obtaining funds to relieve, “ as far as the economy will permit “, the plight of age and invalid pensioners, will the Treasurer examine the possibility of levying a capital gains tax as a means of achieving those ends and of preventing this most flagrant type of tax avoidance?
– The honorable member for Yarra is alleged to be an economist, and should therefore know that whatever distribution is made by way of bonus shares is made from a fund consisting of delayed dividends. The Government has been concerned, for some time, about tax imposed on companies. We have canvassed the matter of an excess profits tax and considered it from every possible angle.
– Would the companies not give you permission to impose such a tax?
– Order! Interjections are entirely out of order.
– The honorable gentleman should not ask a question and then proceed to answer it himself. The Government has discovered, as the previous government discovered, that the best way to even out profits is by the imposition of taxes, and we have adopted that method.
– I direct a question to the Minister representing the Minister for Civil Aviation. In view of the announcement that Australian National Airways Proprietary Limited now holds the controlling interest in Butler Air Transport Proprietary Limited, has any advice to this effect been given to the Minister by the chairman of directors of Australian National Airways Proprietary Limited? Should the forthcoming annual general meeting of shareholders of Butler Air Transport Proprietary Limited indicate that Australian National Airways Proprietary Limited intends to implement its policy within the Butler organization, will Butler Air Transport Proprietary Limited be treated as a subsidiary of Australian National Airways Proprietary Limited so far as the Airlines Agreement Act is concerned?
– The question that the honorable member for Bowman has raised is one that has to do with the private affairs of two private airlines, and therefore does not really come under the jurisdiction of the Department of Civil Aviation as such. Insofar as it affects the general aviation policy of the Government and the implementation of the Airlines Agreement Act, Australian National Airways Proprietary Limited is specifically mentioned. The case that the honorable member has put in regard to Butler Air Transport Proprietary Limited is more or less hypothetical, and until such time as the eventuality mentioned occurs, and the position of the company concerned is cleared up, I cannot give him a precise answer, but 1 can assure him that the department is acutely aware of what is going on in respect of this matter, and that everything will be done to protect the interests of the travelling public.
– Is the Minister for Labour and National Service aware that Apprenticeship Week is now being celebrated? If so, will the Minister, on behalf of the Government, join those who wish well to our future tradesmen, by implementing the decision of the CommonwealthState Apprenticeship Committee in 1952 which recommended, first, that apprentices be paid the appropriate percentage of the tradesman rate weekly, instead of the proportion of basic wage rate which now operates; secondly, that time served at national service training be counted as time served for the purposes of apprenticeship, bearing in mind that those reforms are now four years overdue?
– I am certainly happy to join, on behalf of the Government, in an expression of good wishes to all those participating in Apprenticeship Week, and an expression of, perhaps, the best wish of all to-day, that they will be favoured with the type of government which will assure buoyancy in the economy, which will enable them to carry out their trade without interruption to the economy, and assure them of good wages in the years ahead. The honorable gentleman will be aware that it was this Government which first established a committee of inquiry into apprenticeship conditions throughout Australia. He will also be aware, because he had an opportunity of participating in a deputation to me on one occasion, that the Government has raised with the State governments a substantial body of matters which are of direct concern to them and has sought their views from them. I shall be glad to ascertain for the honorable gentleman the stage that our inquiries have reached. I assure him that there is no intentional delay on the part of this Government in attempting to do what we believe to be necessary to maintain the Australian apprenticeship system on a satisfactory basis.
– I preface a question to the Minister for Supply by stating that, following recent retrenchments at Avalon, near Geelong, several means have been suggested of maintaining and developing an undertaking on which a considerable amount of money has been expended and for which a skilled staff has been created. This undertaking is in relatively close proximity to both Melbourne and Geelong. Because of these factors, will the Minister give serious consideration to the suggestion that, before any further retrenchments are made, Avalon be investigated with a view to making it an alternative or additional airport to Mangalore for civilian aircraft?
– I should not like to give an offhand answer to the honorable member’s suggestion that Avalon might be used as an alternative airport to Mangalore. That seems to me to involve considerations which would require very careful thought. But I do say, with respect to the rest of the honorable member’s question, that there is no proposal that I know of involving any further retrenchment in connexion with the Avalon project.
– Does the PostmasterGeneral recall that, in answer to my question upon notice, he stated that the electorate of Hughes had the largest number of outstanding applications for telephones . of all electorates in Australia? Since many of the 4,000 applicants in the Hughes electorate have waited up to ten years for a telephone, and since the area is expanding rapidly, will the Minister undertake an immediate review of the department’s developmental programme with a view to granting priorities so as to alleviate the record telephone shortage in the Hughes electorate?
– It is correct that, some time ago, the honorable member for Hughes directed a question upon notice to rae concerning the number of outstanding applications for telephones in his electorate, and that the information which he has just given was supplied to him. He has now asked me whether I will order an investigation into the matter of outstanding applications for the purpose of preparing, 1. understand, some form of developmental programme within the department. Of course, that is going on all the time in the department. The department is constantly keeping abreast of demands from various areas in Australia, and it now has a programme in operation which will at bast deal with all the applications for telephones. I suggest to the honorable member that the department can be relied upon to pay attention to the needs of his electorate, just as it pays attention to the needs of all other electorates in Australia.
– In order to preserve the interests of the people who are most vitally concerned in the overseas marketing of dairy products, will the Minister for Primary Industry examine the question of allowing the industry as a whole to elect at least one member of the Australian Dairy Produce Board?
– I have examined this problem, as has my predecessor, and as yet T have not been able to decide finally whether a member of the Australian Primary Producers Union should be represented on the boards mentioned by the honorable member. However, the matter is of great importance, and I assure the honorable gentleman that it will receive further consideration when the opportunity presents itself.
– I ask the Prime Minister whether he was correctly reported as having said, earlier this week, that Australia must spend far more on research, and that the United States of America had gained industrial supremacy because of its understanding of the value of research? Will the right honorable gentleman say how he reconciles this statement with the failure of his Government to have exhaustively investigated the by-products which can be produced from the great coal deposits of Aus tralia? Does he consider that the production of oils, plastics, synthetic rubber, nylon and textiles is not sufficiently important for the Government to bother about conducting research, or was he only speaking politically when he made the statement to which I have referred?
– I appear to have been correctly reported for once. I am happy to say, and what I had to say was true. This Government has no occasion to apologize. If the honorable gentleman will be good enough to look back over the record of the Commonwealth Scientific and Industrial Research Organization, to take only one chief example, he will find thai this Government has laid out vast and increasing sums of money on this matter. But research is not purely a matter for governments, as I went on to add at the lime I spoke. A great deal needs to be done by industry itself, and we hope that -more and more will be done. Naturally, proposals for research have to be regarded by the Government on their merits, within the limits of the large and increasing sum which we have provided for research.
– Supplementary to the question just answered by the Prime Minister, and also to that answered by the Minister in charge of the Commonwealth Scientific and Industrial Research Organization recently, 1 ask the Minister for Primary Industry a question about rural and other research in Australia. 1 preface my question by saying that, in spite of the fact that this Government is spending a great deal more on research than have other governments, the amount being spent is less than that expended in other countries, and that efforts to stimulate private industrial research have failed lamentably, ls it a fact that the Commonwealth Scientific and Industrial Research Organization is losing more scientists than it is gaining, and that 60 per cent, of all new recruits arc coming from overseas? Can the Minister state the number of studentships provided by the Commonwealth Scientific and Industrial Research Organization, or by the Commonwealth Government? Are these studentships at post-graduate and leaving certificate levels? Will the Minister consider granting scholarships at the intermediate level to prevent wastage of talented students, due to family hardship and other reasons?
– I can but confirm the Prime Minister’s assurance that this Government is greatly interested in the problem of scientific research. 1 mention, as an example, that between 63 per cent, and 65 per cent, of the to:al amount of funds of the Commonwealth Scientific and Industrial Research Organization, amounting to £5,750,000, is applied to scientific research in the primary industries. Secondly, I think that an amount of approximately £600,000 is applied for extension services in the dairying industry and other sections of primary industry. I cannot give the honorable gentleman a specific answer to the three questions he has raised, other than to say that 1 understand that the Prime Minister’s Department allots 3,000 scholarships per annum, whilst the Department of Primary Industry gives certain special scholarships for primary industry research, and the Commonwealth Scientific and Industrial Research Organization also gives certain research scholarships. I regard this matter as of such importance that I shall ask the various departments to prepare a statement for me. and I shall make it available to the honorable gentleman and to other honorable members who are interested.
– My question is addressed to the Minister for Primary Industry. In view of the excessive cost of potatoes and the resultant grave effects on the C series index and the cost of living generally, will the Minister investigate the reason why potatoes cost the housewife, in Sydney for example. £80 a ton more than the price received by the Tasmanian growers? Is not this £80 a ton, which is added to costs between grower and housewife, a vital factor in the high cost of potatoes? Will the Minister and the Government consider reintroducing, with State co-operation, a Commonwealth stabilization scheme, which is desired by the growers, and which would have the effect of stabilizing potato prices in the States concerned?
– The problem mentioned by the honorable gentleman has received the Government’s most urgent and long attention, but .1 think the main rise in price is due to a fall in supplies rather than to any other single factor, and that therefore those producers of potatoes who were lucky enough to be able to produce this year will have got the main benefit from the increase in prices; I do not think there is any doubt about that particular matter. As to the second point, whether a stabilization scheme can be introduced, at the instance of the Commonwealth Government this matter was fully discussed at the recent meeting of the Austraiian Agricultural Council, and I personally investigated about five or six separate schemes. If the honorable gentleman is very interested. 1 shall be only too happy to make the details of each scheme available to him, but it was agreed unanimously that a scheme for the stabilization of an industry, based upon such perishable articles as potatoes, was hardly a practicable proposition, unless the States were also prepared to bring in compulsory plantings and compulsory limitations of acreage.
– I direct a question to the Prime Minister. In view of the fact that Her Majesty the Queen recently presented to this country a set of colours for the Trooping of the Colour ceremony at Duntroon, and that Australia, as a member of the British Commonwealth of Nations, is gradually building up a tradition of its own, will the right honorable gentleman consider the formation within Australia of a branch of the College of Arms, which exercises control over the use of armorial bearings in England? Similar functions are discharged in Scotland and, I think, in Ulster by the Court of Lord Lyon. To-day. heralds superintend processions, coronations. State funerals, and other public ceremonies, and make proclamations under direction of the Earl Marshal of England, and I feel that, as Australia is growing up. the formation of a branch of this college within this country would assist us in the building of our own traditions.
– The honorable member tempts me very much by inviting me to follow the example of Scotland, but I really do think, quite seriously, that we have just about enough on our hands at present, and I do not see any urgency about the matter that he raises.
– Does the Prime Minister intend to fill the vacancy on the Joint Committee for Constitution
Review rendered vacant by the resignation of Senator Spicer during this sessional period? Can he say also what is the intention of the Government with regard to future meetings of the committee?
– I am obliged to the honorable member for the question. I should perhaps have said something about the matter before. The Attorney-General will be chairman of the committee, which can therefore proceed by arrangement internally among its members.
– I direct to the Prime Minister a question regarding the forthcoming Premiers conference. Has he made perfectly clear to the Premier of Western Australia, beyond any possibility of misunderstanding, the reasons for the Premiers conference, and is he satisfied that the Premier understands beyond any possibile doubt what is to be discussed and the great importance of a national outlook on the problem of wage uniformity? I ask this, because the Western Australian Government has before the State Parliament at this moment a bill to make it mandatory on the State Arbitration Court to apply cost of living adjustments, and the Western Australian Premier refused a request by the Opposition that the debate on that legislation should be postponed until after the Premiers conference. Does that attitude indicate a responsible and co-operative approach to the problems of wage uniformity?
– I have no reason to doubt that the Premier of Western Australia understands perfectly the reason for the calling together of this conference. I am also aware of his introduction of this proposed legislation to which, indeed, I referred in my letter to him. It seems to me to be rather remarkable that any such legislation should be pursued pending a conference of this kind. Whether my friend, the Premier of Western Australia, fully appreciates that, of course, I am in no position to say.
“THE PETROV CONSPIRACY UNMASKED “.
– Has the Prime Minister yet had an opportunity to read the book “The Petrov Conspiracy Unmasked”, of which a well-known Sydney journalist is the author? If the Prime Minister still contends that he has not even had a sly glimpse at the pages of this publication, will he take an early opportunity of perusing page 317, and particularly a short reference which I shall read? It is as follows: -
The truth is that Mr. Menzies, as the Prime Minister and Ministerial Head of Security Police, did know about and did take part in organizing the Petrov conspiracy.
Does the Prime Minister agree that that statement constitutes a most grave and serious charge against the head of the present Government? If so, what action does he propose to take against the person making the charge, or is it his intention to leave unchallenged these allegations involving his personal integrity?
– I am sorry to disappoint the honorable member for East Sydney. I have not seen the book, nor do I propose to waste any time in reading it. If the sample that he has given us represents the bulk, then the book is not worth reading. My attitude towards charges against my integrity is perfectly simple. When they are made by responsible people, I shall pay attention to them; but when they are made by scribblers, I ignore them. For example, to take a homely case, if the honorable member for East Sydney made a charge against my integrity, I should regard it as to-day’s funny story, and for me totake it seriously would be to convince my friends that I was failing mentally. The truth is that the honorable member for East Sydney and his Communist friends and their other friends created before the royal commission the allegation that there was a conspiracy. Goodness knows whowas in it, but I certainly was, according to the charge. That allegation was examined by three judges. I know the honorable member for East Sydney hates judges, but this was examined by three judges. They said that the allegations of conspiracy were utterly without foundation. I do not care whether it is the “Tribune “-
Mr. Ward interjecting,
– Order! The honorable member for East Sydney will refrain from interjecting.
– I would be sorry if he did, sir.
– I do not care whether it is the “ Tribune “ or another Communist organ, including the honorable member for East Sydney; those allegations have been investigated-
– He is not an organ.
– I cannot agree with that interjection. If they continue to make allegations already investigated and rejected, denounced as utterly childish and without foundation, then that is their pigeon, not mine. So I propose to pursue the unruffled tenor of my life.
– Can the Minister acting for the Minister for Trade inform the House whether Australia has been consulted by the United Kingdom Government concerning the projected trade negotiations between Britain and western European countries for a western economic union? Does the Minister feel that the volume of Australia’s primary exports can be adequately safeguarded if Britain enters into such an arrangement?
– The Government is. of course, very interested in the problem of a common trade area for Western Europe, including the United Kingdom. 1 am glad to be able to inform the honorable member that the United Kingdom Government has already furnished the Australian Government with an outline of the basis of the plan. Certain questions have been referred by Australia to the Australian representatives abroad and they must be answered before we can make up our minds as to the full effect of the proposed agreement. I can tell the honorable gentleman that it is proposed to eliminate or reduce customs duties. Since wool enters the United Kingdom free of duty it is not involved in the proposed agreement. 1 undersand that foodstuffs also will be excluded. As these two items form the bulk of Australia’s exports to the United Kingdom it is hoped they will be protected. Minerals such as lead and zinc may be affected. Additional details are being obtained, and the Government will make up its mind when it has all the facts. We have complete confidence that the United Kingdom Government will keep Us fully informed of the progress of the negotiations.
– I lay on the table the following paper: -
Commonwealth Grants Commission Act - Commonwealth Grants Commission - Twenty-third Report, 1956.
The recommendations contained in the report will be adopted by the Government, and the enabling legislation will be introduced to-day. Copies of the report will be available to honorable members.
– I lay on the table the following paper: -
Foreign Affairs - Joint Committee - Report to the Minister for External Affairs, relating to Extradition.
For the information of the House I want to say that the Government will give earl*” consideration to the matters contained in the report.
– As Chairman, I present the report of the Public Works Committee on the following subject: -
Erection of food research laboratory building at North Ryde, New South Wales.
Ordered to be printed.
– As Chairman, I present the fourth report of the Printing Committee.
Report read by the Clerk, and - by leave - adopted.
Motion (by Mr. Menzies) agreed to-
That leave be given to bring in a bill for an act relating to the Australian Security Intelligence Organization.
Bill presented, and read a first time.
– by leave - I move -
That the bill be now read a second time.
The object of this bill is to put the Australian Security Intelligence Organization on a statutory basis instead of the purely executive basis on which it at present stands. The reason for putting the security service on a statutory basis is that this course will give the officers of the service contractual rights as against the Commonwealth, subject only to me Parliament, and will protect them from the otherwise possible exercise of the Crown’s right to terminate at pleasure the services of officers who do not serve in pursuance of statutes. No statutory basis has been provided for the security services of the United Kingdom, but in the United States legislative authority has been given by Congress for both the internal and the external security services. The attacks made on our own security service in the course of the Royal Commission on Espionage in Australia have convinced the Government that it is necessary for the protection, and therefore also for the efficiency, of the security service to take a similar step in Australia, and to give the service statutory authority and protection.
The bill does not make any changes in the constitution, organization, or functions of the Australian Security Intelligence Organization. Honorable members will recall that the organization was set up by the late Mr. Chifley, my predecessor in office, on 16th March, 1949, in pursuance of a charter or directive given by him to the first Director-General of Security, Mr. Justice G. S. Reed, of the Supreme Court of South Australia. With only minor changes of no significance made by myself on the appointment of the present DirectorGeneral, Brigadier C. C. F. Spry, in July, 1950, this charter is still the basis of the organization. For obvious reasons, the security service must operate outside the framework of the Public Service Act. The Director-General holds a delegation from the Governor-General, under section 67 of the Constitution, to appoint and dismiss officers of the organization, and officers so appointed are declared to be exempt employees for the purposes of the Public Service Act. The Director-General of Security has, in the name and on behalf of the Commonwealth, entered into a series of agreements for service with the staff of the organization, to many cf whom he has purported to give permanent appointment. The terms and conditions set out in the agreements were not made by him on a frolic of his own, but were fixed by a com mittee consisting of the chairman of the Public Service Board, the Solicitor-General, and the Director-General of Security. Through that committee, the terms and conditions of service, including the salaries paid, are kept broadly in line with those obtaining in the Public Service of the Commonweatlh.
It is an ancient and established rule of law, however, that in the absence of statutory provision to the contrary, a contract of service under the Crown is terminable at pleasure, notwithstanding that it may provide for the service to continue for a period of years. In relation to the Public Service of the Commonwealth, the Public Service Act, a statutory provision, by implication, abrogates that prerogative right of the Crown.
I shall not dilate upon the necessity for an efficient security service, or upon the importance, in maintaining such a service, of being able to provide real security of tenure for its officers. They have a most exacting and onerous task, and Australia has good reason to be both grateful for, and proud of. the achievement and reputation of the service. In my own visits abroad, 1 have been much impressed by the uninvited testimony 1 have received, from governments with which Australia is associated, to the efficiency of our security service, and to the value which other governments have derived from co-operation between their own security services and ours. Therefore, I want to pay a well-deserved tribute to the Director-General of Security and to his staff.
The officers of the security service have been drawn from various walks of life - from the Public Service of the Commonwealth, from the legal profession, from the police forces of the States, and so on. They are serving loyally and effectively. It is clearly necessary not only to have a properly constituted security organization, but also that its staff should be drawn from the best men available. Men of ability and integrity, with high qualifications, must be attracted to its service, and that will not happen unless they can be made to feel secure in their careers in this organization. To ensure this is the main object of the bill.
The bill itself is a short one. It does no more than is necessary to give statutory authority for the existence and operation of the Australian Security Intelligence Organization, to define its functions in terms which, though broad, are sufficient to exclude activities in which such a service should not be engaged, and to secure the proper rights of officers and employees of the service as officers of the Commonwealth.
I emphasize what, indeed, the bill itself makes clear: That the Australian security service is an organization devoted to the obtaining of intelligence relating to espionage, sabotage and subversion, and to advising the several departments of State on the measures for security which ought to be adopted and maintained within those departments. The organization has no police function. It is not concerned with matters which are the province of a law enforcement body. I want to emphasize this, because there has been a great deal of misunderstanding. lt has no police powers. It cannot itself take or institute any executive action which is not of a purely advisory nature. It cannot direct any department of Stale as to the measures for security which it ought to adopt, lt cannot interfere in the administration of a department. The security service does not trespass upon the field of the three armed services, but it cooperates with them and particularly with their intelligence organizations and, in a real sense, constitutes a fourth branch of i he Defence Force.
The Attorney-General is the Minister ordinarily responsible for the security service, and he will administer the act. The Director-General, however, has, and has had, from the inauguration of the service in 1949, direct access to the Prime Minister in security matters affecting the Government as a whole.
The bill makes no attempt to specify the manner in which, or the degree to which, ministerial authority should be exercised in relation to the service. It is clearly impossible, and in any event undesirable, for a Minister to exercise in this field the same degree of supervision and authority that he exercises in his own department. The proper course, in the Government’s view, is to make the Director-General responsible tor the due control of his service, and to allow the measure of authority of the responsible Minister to he worked out. as in i he past, by convention and in the light of the circumstances of the time. This is a short bill. 1 regard it as very important, and I commend it to the House.
Debate (on motion by Dr. Evatt) adjourned.
Message recommending appropriation reported.
In committee (Consideration of GovernorGeneral’s message):
Motion (by Sir Arthur Fadden) agreed to -
That it is expedient that an appropriation ot revenue bc made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund sums for the purpose of financial assistance to the States of South Australia, Western Australia and Tasmania.
Standing Orders suspended; resolution adopted.
That Sir Arthur Fadden and Mr. Beale do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by S5r Arthur Fadden, and read a first time.
– I move -
That the bill be now read a second time.
The purpose of this bill is to authorize the payment, during the current financial year, of special grants amounting to £18,500,000 to South Australia, Western Australia and Tasmania. The payment of these grants was recommended by the Commonwealth Grants Commission in its twenty-third report, which has now been tabled.
In its twenty-third report the commission has continued to base its recommendations upon the general principle of financial need. The commission has interpreted this principle to mean that provided the efforts made by a claimant State to raise revenue and to control expenditure are reasonable by comparison with the efforts made by the non-claimant States, its special grant should bc sufficient to enable it to function at a standard not appreciably below that of the non-claimant States. In applying this principle the commission makes a detailed comparison of the budget results of the claimant
States with those of the non-claimant States. When making this comparison the commission takes particular account of differences in levels of expenditure and of efforts to raise revenue.
The special grants recommended each year are divided into two parts. One part represents the commission’s estimate of the State’s financial needs for the current financial year. This part is regarded by the commission as an advance payment which will be the subject of an adjustment two years later when the commission has examined in detail the audited budget results of the States for that year. The other part of the grant represents a final adjustment of the special grant paid two years earlier. The grants recommended for payment this year are therefore made up as follows: -
In total, the special grants recommended for payment in 1956-57 are the same as last year. It is estimated, however, that the tax reimbursement payments to the claimant States will increase by £3,711,000 in 1956-57. The net effect, therefore, is that the total revenue grants to the claimant States will rise by about £3,711,000 in 1956-57, of which South Australia will receive £2,077,000, Western Australia £1,627,000 and Tasmania £7,000 more than in 1955-56.
On the basis of the preliminary estimates submitted to the commission last July by the claimant States, the commission’s recommendations would leave South Australia with a prospective budget deficit of £822,000, Western Australia with a deficit of £1,648,000 and Tasmania with a deficit of £843,000. These estimates, however, were highly tentative and, in any event, the special grants paid this year will be reviewed by the commission in two years’ time in the light of the States’ audited budget results for 1956-57.
The special grants recommended by the Commonwealth Grants Commission have been adopted each year by the Australian government of the day and the Government considers that the commission’s recommendations should be adopted again this year. I commend the bill to honorable members.
Debate (on motion by Mr. Calwell) adjourned.
Motion (by Sir Arthur Fadden) - by leave - agreed to -
That leave be given to bring in a bill for an act to amend the Land Tax Abolition Act 1953.
Bill presented, and read a first time.
– by leave - I move -
That the bill be now read a second time.
The purpose of this bill is to put an end to inquiries by intending purchasers of land to ascertain whether or not any Commonwealth land tax is owing on land which is being purchased. Honorable members will recall that the land tax was abolished by legislation passed by the Parliament during 1953. The last financial year for which the land tax was imposed was the financial year 1951-52, the assessments being based on the value of land owned at 30th June, 1951. However, when the legislation relating to the land tax was repealed, provision was made for its continued operation insofar as it concerned assessments of land tax for the financial year 1951-52 and prior years. This saving provision was necessary in order to ensure the collection of outstanding land tax in respect of those years.
One of the provisions of the Land Tax Assessment Act which has a continued application makes unpaid land tax a first charge on the land subject to tax. The charge may be registered with the appropriate authority in the State or Territory where the land is situated. Alternatively, a caveat may be lodged in respect of the unpaid land tax. By the same provision in the Land Tax Assessment Act, a purchaser of land is made liable for any tax owing by the previous owner in respect of the land unless, at the time of purchase, the purchaser made due inquiry from the taxation office whether land tax was owing. Having regard to this requirement, it is an almost invariable practice for an intending purchaser or his legal adviser to institute such inquiries.
Since the imposition of land tax was discontinued, practically all arrears of tax have been collected and a relatively small amount is now outstanding. Nevertheless, inquiries by and on behalf of intending purchasers continue, and the administrative and other costs are out of all proportion to the tax that remains to be collected. In order to obviate these inquiries and the consequential administrative and other expenses, it is proposed, in this bill, to provide immunity from the land tax charge to bona fide purchasers for value even although due inquiry is not made of the taxation office. This immunity will apply in respect of land purchased on and after the date on which the bill receives the Royal Assent. It will not extend, however, to those lands in respect of which, at the time of purchase, a charge has been registered or a caveat has been lodged on account of any unpaid land tax.
Debate (on motion by Mr. Calwell) adjourned.
Motion (by Mr. Beale) - by leave - agreed to -
That leave be given to bring in a bill for an act to amend the Northern Territory (Administration) Act 1910-1955. as amended by the Northern Territory (Administration) Act 1956.
Bill presented, and read a first time.
– by leave - I move -
That the bill be now read a second time.
About three weeks ago my colleague, the Minister for Territories (Mr. Hasluck), mentioned to the House that the resignation of an elected member of the Legislative Council for the Northern Territory, because be had decided to take employment in the Commonwealth Public Service, had drawn attention to the provisions of the Northern Territory (Administration) Act 1910-1956 providing for disqualifications for elected members of the Legislative Council. The Minister indicated briefly some of the aspects of this matter which were then under consideration.
The purpose of this bill is to give effect to the changes which have been decided upon following the completion of a review of the existing provisions of the act. As well as disqualification of a person who is an undischarged bankrupt or who has been convicted and is under sentence, or .subject to be sentenced, for an offence punishable by imprisonment for one year or longer, the act at present disqualifies from election to the council persons who are employed in the Public Service of the Territory or of the Commonwealth and persons who have interests - otherwise than as a member, and in common with the other members, of an incorporated company consisting of not less than 25 persons - in any contract or agreement made by or on behalf of the Commonwealth.
There is room for some difference of opinion as to the precise extent of the disqualification arising out of an interest in a contract or agreement with the Commonwealth, but it is clear that in the circumstances of the Northern Territory, it could have an effect much wider than is desirable. As honorable members know, a large proportion of the activity in the Northern Territory is activity in which the Government directly participates. To exclude from participation in the council as elected members, all persons who come into any kind of contractual relationship with the Commonwealth would exclude a large proportion of the residents of the Territory and leave a very limited field of possible candidates from which the electors could make their choice.
The Minister for Territories, on a previous occasion, gave as an example the pastoralist who undertakes, for a nominal sum - perhaps £50 or £60 a year - to maintain an aerodrome on his property for the Commonwealth. In the Government’s view, there is no reason to suppose that in any circumstances a contract of this kind would be likely to influence in an undesirable way, the conduct of an elected member of the council. On one view, the existing disqualification goes so far as to exclude .a person who holds a Crown lease of land or a mining lease. Since the practice for many years has been to grant land on leasehold tenure only, the consequences of the acceptance of this view would be very wide indeed.
The bill therefore contains provision to alter the disqualification for elected members of the council arising out of contracts or agreements with the Commonwealth. Under the new provision, there will not be a complete disqualification, but an elected member who participates in, or has a direct or indirect interest in, a contract made by or on behalf of the Commonwealth for the supply of goods or services to the Commonwealth will not be entitled to take part in a discussion before the council, or vote on any question before the council, if that discussion or question is directly or indirectly related to the contract.
The council has only legislative, and no executive, functions. The only situation to be guarded against is where a member approaches a matter before the council with a view strongly biased because of dealings he may have with the Commonwealth. 1 think that such a situation could not arise on any matter of significance without the interests of the member being well known to other members of the council. It is proposed that questions concerning the application of this provision should be decided by the council on the motion of any member.
An alteration is also proposed to the disqualification of persons employed in the Public Service of the Commonwealth or of the Territory. This amendment, however, does not seek to change the existing law. It seeks to make the existing position under the law clearer to intending candidates and electors than it is at present.
The review which has been made included an examination of the existing provisions for determining disputes as to election or qualifications of members of the council. It was found that the provisions were incomplete and unsatisfactory. The bill therefore contains provisions to enable satisfactory machinery to be established. It is proposed that the Supreme Court of the Northern Territory shall be the Court of Disputed Returns. Provision will be made by regulation for a defeated candidate or an elector to have the right to petition the court within 40 days after an election, for a determination on any alleged irregularities in an election or alleged disqualification of a successful candidate. After the period allowed for lodging petitions has expired and after any petitions which have been lodged have been determined by the court, it is proposed that the council will itself have the power to decide any questions relating to its membership or to refer such questions to the Supreme Court for determination.
The House will perhaps realize from the references made earlier to the effect of the existing provisions relating to disqualification of members as a result of contracts or agreements with the Commonwealth, that there may be some uncertainty about the position of some members who have been elected to the council in the past. As a member who becomes disqualified automatically vacates his seat upon the disqualification arising, and as the act requires the presence of at least seven members in the council to constitute a meeting of the council for the exercise and performance of its powers and functions, it cannot be said with complete confidence that all acts of the council and all ordinances passed by it are valid.
The possibility of a successful challenge to any ordinances passed by the council is extremely remote, as even on the widest meaning which could be given to the disqualifications, it is most unlikely that any decision of the council has been taken by other than a majority of at least seven properly constituted members of the council. However, since certainty of the law is of such high importance, and since it was decided that it was necessary for the act to be amended, a provision has been included to put beyond any possible doubt the validity of all actions taken by the council, or which may be taken in the future, notwithstanding that there may have been or there may be a vacancy in membership caused by a disqualification of a member, and notwithstanding that it may be subsequently -discovered that an elected member, through inadvertence or otherwise, has voted on a matter related to a contract in respect of which he had a direct or indirect interest.
The bill also contains another amendment - one that is of a formal nature only. The opportunity has been taken to remedy an existing omission and provide specifically that the Administrator has power to issue writs for elections for the council. The maximum term of the present council expires in May. 1957, but because the matters which I have mentioned may give rise to some uncertainty as to the position of some of the elected members of the council, arrangements have been made with the Administrator that the council will not be called together until after a general election has been held. The election will be held as soon as can conveniently be arranged after the proposed new amendments become effective.
I should like to emphasize the limited purposes of this bill, lt does not represent the results of a complete review of the provisions of the act constituting the Legislative Council. It came under notice that provisions incidental to the election of members had produced an unsatisfactory situation. It was desirable that this be remedied as early as possible. There has been no occasion for a wider review of the constitution of the council, and no such wider review has been made. I commend the bill to the House.
Debate (on motion by Mr. Nelson) adjourned.
Message recommending appropriation reported.
In committee (Consideration of GovernorGeneral’s message):
Motion (by Mr. Osborne) agreed to -
That it is expedient that an appropriation of revenue be made for the purpose of a bill for an act to amend the Tractor Bounty Act 1939-1953, as amended by the Tractor Bounty Act 1956.
Standing Orders suspended; resolution adopted.
That Mr. Osborne and Mr. Beale do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Osborne, and read a first time.
– I move -
That the bill be now read a second time.
The purpose of this brief and simple bill is to raise the existing maximum limit of horse-power of tractors on which bounty is payable under the Tractor Bounty Act. This act at present provides for the payment of bounty on tractors, other than crawler tractors, produced in accordance with certain prescribed conditions for sale, for use. in the Commonwealth or a Territory of the Commonwealth, during the threeyear period which commenced on 24th October, 1955.
– Would not a tariff be better?
– The Government has decided, on the advice of the Tariff Board, that the proper way to deal with this is by way of bounty.
– For three years? That is nonsense.
– It is not nonsense to the receivers of the bounty, I can assure the honorable gentleman. The existing rates of bounty rise from £80 to £240 according to the horse-power of the engine. The maximum rate of £240 applies to tractors with a belt pulley horse-power exceeding 40 but not exceeding 55. The bill under discussion proposes the extension of the range of tractors to which the maximum rate applies to cover those having a belt pulley horse-power exceeding 40 but not exceeding 70.
The only manufacturer receiving payment of bounty is Chamberlain Industries Proprietary Limited, Western Australia. This company produces tractors which come within the maximum bounty scale, but has had to restrain the power of the engines used in order to qualify for bounty. It appears better not to limit the power of a tractor when farmers and other users could doubtless, on occasions, take advantage of the extra power which could be made available. The amendment proposed therefore appears both logical and desirable. It has been decided that this amendment should have application to tractors produced from 24th October, 1955 - that is, the date from which provisions of the act were extended for three years by legislation passed earlier this year. I commend the bill for favorable consideration.
Debate (on motion by Mr. Calwell) adjourned.
Motion (by Mr. Osborne) - by leaver - agreed to -
That leave be given to bring in a bill for an act to amend the Cocos (Keeling) Islands Act 1955.
Bill presented, and read a first time.
– by leave - I move -
That the bill be now read a second time.
The purpose of this bill is to amend the Cocos (Keeling) Islands Act 1955 to make provision for freedom from Customs duties of goods imported into Australia from the Cocos Islands, provided that the goods are the produce or manufacture of the Cocos Islands, that the goods were shipped in the islands for export to Australia - that is, that at the time of export the intended destination of the goods was Australia - and that the goods are not of such a nature as would be subject to excise duty if manufactured in Australia.
It will be recalled that the Cocos Islands became a Territory of the Commonwealth on 23rd November, 1955. This amending bill has been designed to operate from that date. Under the existing law, any goods which might happen to be imported from the Cocos Islands would be subject to general tariff treatment, which would be less favorable treatment than applied before the islands became a Territory. Although importations into Australia of goods produced or manufactured in the Territory of Cocos Islands have been insignificant and, in view of the limited scope for economic development of the Territory, are likely to remain so, it appears desirable to make provision for their entry free of customs duty.
Similar provisions to those now proposed have applied for many years in regard to goods imported into Australia from Norfolk Island. I commend the bill for favorable consideration.
Debate (on motion by Mr. Calwell) adjourned.
– I move -
That duties of customs be imposed in accordance with the following provisions: -
If the Minister is satisfied that any goods produced or manufactured in a par ticular country are being imported into Australia under such conditions as to cause or threaten serious injury -
to producers in Australia of like or directly competitive goods; or
to producers in a third country of like or directly competitive goods which are dutiable at a rate applicable under the British Preferential Tariff or at a rate lower than the rate that would be applicable under that tariff, he may publish a notice in the “Commonwealth of Australia Gazette “ specifying the goods as to which he is so satisfied.
The Minister shall not publish a notice in accordance with thelast preceding paragraph unless he is satisfied that the publication of the notice is not inconsistent with the obligations of Australia to another country under an international agreement relating to tariffs or trade.
Upon publication of a notice in accordance with this Proposal, there shall be charged, collected and paid to the use of the Queen, for the purposes of the Commonwealth, on goods specified in the notice imported into Australia a special duty (in this Proposal referred to as “the emergency duty”).
The amount of the emergency duty in each case shall be a sum equal to the amount, if any, by which the landed duty-paid cost of the goods is less than a reasonably competitive landed duty-paid cost ascertained as determined by the Minister.
In making a determination in accordance with the last preceding paragraph in relation to goods produced or manufactured in a particular country, the Minister shall, if like or directly competitive goods produced or manufactured in another country are being imported into Australia, have regard to the landed duty-paid costs of the lastmentioned goods.
In this Proposal, “the landed duty-paid cost “ means -
in relation to goods that have been purchased by the importer - the amount, expressed in Australian currency, that is equivalent to the cost to the importer (including the amount of any duty of customs other than the emergency duty) of the goods landed in Australia; or
in relation to any other goods (including goods consigned by the producer or manufacturer of the goods for sale in Australia) - the amount, expressed in Australian currency, that would have been the landed duty-paid cost, in accordance with the last preceding sub-paragraph, if the person who owned the goods at the time of their importation into Australia had, before the goods were imported, sold them to a person in Australia and that last-mentioned person had imported them into Australia.
Where, in relation to any goods, the Minister is of opinion that -
it is difficult to ascertain the landed duty-paid cost; or
the purchase price or any other item of cost to be included in the landed duty-paid cost was not fixed on a bona fide commercial basis, the Minister may determine the landed duty-paid cost, having regard to costs of production and manufacture in the country in which the goods were produced or manufactured and other relevant matters.
The provisions of sections 12, 13, 14, 15 and 16 of the Customs Tariff (Industries Preservation) Act 1921-1936 shall apply to and in relation to the emergency duty in like manner as they apply to and in relation to the duties imposed by that Act.
In this Proposal, “the Minister” means the Minister administering the Customs Tariff (Industries Preservation) Act 1921-1936, as amended from time to time.
The General Agreement on Tariffs and Trade, to which Australia is a party, permits a member country to take emergency action against imports entering the country under conditions which cause, or threaten, serious injury to domestic producers or to producers in a third country whose exports are entitled to entry under a preferential tariff. The principal trading nations of the world have therefore decided that it is necessary for a country to have this power and, by international agreement, have recognized the right of countries to take emergency action against imports in certain circumstances.
Clearly it is necessary that Australia should be in a position to exercise an emergency power which she has been conceded by international agreement. There is not, however, any appropriate existing Australian legislation which would permit the exercise of the emergency power envisaged by the General Agreement on Tariffs and Trade. The purpose of this proposal is to amend the Customs Tariff (Industries Preservation) Act 1921-1936 to provide the Minister for Customs and Excise with the legislative authority necessary to take emergency action against imports which enter Australia under conditions, such as at very low prices, which cause, or threaten, serious injury to our industries or to industries in other countries whose exports enter Australia under a preferential tariff. The action would take the form of the imposition of an emergency duty.
Debate resumed from 23rd October (vide page 1734), on motion by Sir Arthur Fadden -
That the bill be now read a second time.
– The Treasurer (Sir Arthur Fadden) has told us that the purpose of this bill is to authorize the payment to the States in the financial year 1956-57 of special financial assistance grants amounting to approximately £20,450,000. I think that this is an opportune time to give consideration to the reason for this grant and the reason for payments to the States generally. Honorable members will recollect that the States, before the introduction of uniform taxation, were in a position to impose and collect the taxes that they considered necessary to enable them to carry out their financial obligations through the year. This enabled them to put on the income side of their budgets the amount of money that would enable them to finance the activities during the coming twelve months.
I recall also the great differences that occurred in the rates of tax levied in the various States. At that time the Labour government of a State, particularly a government which had a majority in both Houses, would introduce a system of taxation which it considered would be equitable to the people as a whole. Such a government would very often levy a higher rate of taxation than that which was levied in another State which had a conservative government, probably with a majority in the upper house of its State. The conservative government would take a different viewpoint in raising the finance necessary to carry on the administration of the State. That has happened to be my experience for many years as a member of the South Australian Parliament.
I entered the South Australian Parliament in 1930, at which period we had a Labour government. In fact, we had 30 Labour members in a house of 42. I think that honorable members will recollect that in 19.30 Australia was in the midst of the greatest depression that it has ever known.
I had the experience, then, of a government endeavouring to raise sufficient finance for the needs of the State. In opposition to that government was an upper house which was distinctly looking after what we may called the moneyed interests or big business interests of the State. The Labour government had great difficulty in securing the passage of legislation which would bring in sufficient taxation to enable it to carry on,, in a very poor way.
Upon the introduction of one budget, when we had to raise a certain sum of money to be able to carry on the administration of the State, the conservative Leader of the Opposition in the Parliament proposed to the Premier-Treasurer of the day that a committee should be set up, which would be representative of both sides of the House, to bring in, if possible, proposals for the budget that would meet with the approval of both parties. The Labour Premier agreed to appoint such a committee.
I happened to be one of the three members from the Government side who, with three members from the Opposition side, were chosen to examine the Estimates before their presentation to the Parliament. We were endeavouring to give effect to the request of the then Leader of the Opposition to arrange Estimates that would be passed by the Parliament without acrimonious debate, but I found, even in the committee, the same irreconcilable views as had existed in the House. Representatives of the Opposition, whose politics were similar to those of the Menzies Government, were eager to reduce taxation and expenditure in such a way that we Labour members could not accept. The outcome was that, after a few meetings, the Leader of the Opposition said, “ Mr. Treasurer, I do not think it is any good going on with this discussion, as we cannot come to a conclusion”. He mentioned that I had not been prepared to accept a reduction in the rate of assistance being given to the unemployed and that I had been opposed to reducing the wages and salaries of the school teachers in our State.
I have recited those facts because I believe that we should understand why it was, and still is, in the interests of Australia as a whole to have a system of uniform taxa tion. If we were to break away from uniform taxation and restore to the States their taxing rights, we would not need this bill. During the regime of the Curtin Government, when uniform taxation was introduced, it was necessary to arrange a formula whereby, out of the taxes collected by the Commonwealth, sufficient would be paid to the States to enable them to function. Unless that had been done, the States would not have agreed to the introduction of uniform taxation. We know that there was opposition to the proposal from some sides, even then, but ultimately uniform taxation came into operation. I suppose that, had it not been for the war and the existence of the defence power in the Constitution, uniform taxation would not have been introduced at that time. However, when that system was introduced, the States were granted an amount out of the federal collections which was equal to their collections before the commencement of uniform taxation. There was a lot of feeling in connexion with this matter at the time, and it continues until this day.
I understand that the Victorian Government intends to proceed with its case in the High Court with the object of having uniform taxation abolished. That action is a result of the differences, which I have described, between the methods of taxation which obtained in the various States. The Victorian Government considers that it has not received from the Commonwealth the reimbursement to which it is entitled. It considers that its reimbursement under the formula has been less than is due to it from the taxes collected by the Commonwealth. The Treasurer stated, in his second-reading speech, that in each of the last seven years it has been necessary for the Commonwealth to supplement the amounts payable to the States under the tax reimbursement formula. Although the formula has been varied from time to time since the introduction of uniform taxation, the amounts payable to the States are still not sufficient. As the right honorable gentleman has stated, the Government has introduced bills similar to this on several occasions to supplement the formula payments to the States.
At the end of the second-reading speech, the Treasurer asked leave to incorporate in “ Hansard “ a table in which the estimated payments to each State in 1956-57. including those authorized by the bill now before the House, are compared with the payments made last year. Last night, the honorable member for Bendigo (Mr. Clarey), on behalf of the Opposition, stated very clearly the financial position of the various States and referred to the deficits which they are likely to face in this financial year. According to the table incorporated in “ Hansard “, the total amount of ‘ tax grants in 1955-56 was £157,000,000. The estimated tax grants for the current financial year, based on the formula that has been adopted, amount to £153,600,000, which is less than the total tax grants last year. When the special financial assistance grants have been added, however, the total will be £174,050,000, a fact which I think we should keep in mind.
The Commonwealth is accused frequently by the States of not giving them sufficient money. I do not propose to argue the rights or wrongs of that matter, but I say most definitely that the States are not able to manage on the amount of money that they receive. From their point of view, the difficulty is that they are not able to obtain additional revenue, as can the Commonwealth. As the honorable member for Bendigo pointed out, if the States have not sufficient money from the tax reimbursement grants and special financial assistance grants from the Commonwealth, few methods of increasing their revenues are available to them. Of course, they cannot obtain, by way of loans, all the money they need to construct roads, schools and other public works. When honorable members appreciate that, in recent years, more than 1,000.000 immigrants have come to this country, they will readily understand that that increase of the population, together with the natural increase, has meant that our schools have been neither large enough nor numerous enough to meet the needs of the various States. In my own electorate there are schools with 500, 600 and, in some cases, more than 1,000 children attending them, but still more schools are required. In addition, the costs of teaching, cleaning, and so on. are increasing from year to year.
As I have said, there are very few ways for the States to raise the additional finance that they need. They may increase the charges for registration of motor vehicles, and that has been done in almost all States in an endeavour to meet the cost of repairing roads. In addition, they may increase stamp duty on cheques. At one time, that duty was Id.; then it was increased to 2d., and recently it was again increased to 3d. The rate of stamp duty on receipts also has been increased. Water and sewerage rates have been increased from time to time, although it has not been possible to provide improved services. Indeed, in many instances the services now being provided are not as good as they were previously. So, the States have done almost everything they possibly can to obtain more money for their activities.
But let us look at the position of the Commonwealth. This year, the Commonwealth proposes to make grants to the States totalling £174,050,000. I do not include in that sum grants to the claimant States recommended by the Commonwealth Grants Commission and provided for under legislation introduced earlier this afternoon. We must remember that the States are not able to impose direct taxation, or to levy customs duty or excise. The Commonwealth, by means of the budget provisions which are still before this Parliament, will be able to collect sufficient revenue, by means of taxation, to pay for all the services that it renders. It will be able to pay from taxation revenue the costs incurred by the Postal Department, for instance, and to finance the numerous other activities for which it is responsible under the Constitution. In addition, the Commonwealth expects to have a surplus of approximately £108,000,000, with which to underwrite, as it were, loan raisings for the States during the year. In my opinion, it is atrocious that the Commonwealth should be able to budget in this way. In effect, it is saying to the people of the various States, “We propose to take from you, by way of taxes, £108,000,000 more than we shall require to meet the cost of Commonwealth activities, to pay interest on the public debt, and so on, and we propose to lend this £108,000,000 back to you. With it you may build a road here, a school there, or a hospital somewhere else where it is needed. It is your money which we have taken from you. not our money. But you will pay interest on it, and then, later, you will repay it to us “. That procedure seems to me to be very wrong indeed, although it may be within the powers of the Commonwealth.
A serious complaint of South Australia, and I think of other States, is that the Commonwealth offers to their efficient officers higher salaries than they receive from the States and thus entice them away. The States cannot offer higher salaries because they have no way of collecting the additional revenue required. They are collecting the maximum amount available under the taxation methods of which I have spoken. They are not able to tax the people’s incomes directly, because the Commonwealth does that under the uniform income tax scheme. I think that in this respect we are doing a disservice to the States. Although my remarks may infringe upon another subject, let me discuss the £108,000,000 which we raise in taxes and lend to the States at interest. The States use that money for the provision of housing. They have to increase rents, because they have not sufficient other revenue of their own from which to pay the interest charges demanded by the Commonwealth. They are dependent on this Government for the loan of their money. Because the States have to pay interest, the people in housing commission homes in Victoria and New South Wales or housing trust homes in South Australia, have to pay increased rents. When I was in my home district last week I was speaking to a young fellow who said, “When I went into a South Australian housing trust home, the rent had been fixed, and we felt that we had a home and that that rent would continue, but it has risen continuously. From 26s. a week a few years ago, it has now risen to over £2 a week “. He is occupying a half portion of what the State housing trust calls a duplex house. That state of affairs has resulted from the high interest rates which the State government has to pay. In order to build more houses and keep rents as low as possible, it has to average the rents payable, which means that the rents charged to tenants of older houses have been increased.
Instead of lending from tax revenue £108,000,000, which the States have to repay, with interest, the Commonwealth should say, “ In addition to the £174,000,000 payable for the current financial year under the formula and in special financial assistance grants, we will lend you £108,000,000 interest free. If you have tq borrow money from other sources, by strik ing an average interest charge you will avoid the necessity to increase rents “. When rents are increased, the immediate result is a rise in the C series index. Immediately rents rise, the cost of living rises. The Commonwealth is making available to the States £174,000,000 from revenue derived from taxes. The money is not obtained by means of a Commonwealth loan, or by means of a short-dated loan from the Commonwealth Bank. It is obtained from the people by taxes payable in hard cash. In the circumstances, we as an Opposition are quite within our rights and doing the correct thing in claiming that sufficient money from income tax collections is not being paid to the States. We have not a formula which operates fairly and automatically. This year an extra £20,000,000 will be paid to the States in special financial assistance grants. Let us look at the figures. Under the formula, New South Wales receives £58,240,000. By way of special financial assistance grant it receives £7,356,000, making a total of £65,596,000. That is the amount that New South Wales will receive from the total tax collections of the Commonwealth this year. New South Wales is a huge State, and we read reports of the State Government’s inability to do many things because of lack of finance. It is all very well for us to say that the State Government has wasted money. If we compare the record of the States with that of the Commonwealth in the expenditure of money, we find that we are not able to pat ourselves on the back. From time to time it is said that State governments are not expending money in the way in which it should be expended, but that they are wasting it. I do not think that we should regard such statements seriously when honorable members on both sides complain of what they consider to be wasteful expenditure by the Commonwealth. Such a consideration should not affect the grant of money to the States. If the formula does not provide enough, and if the Parliament is prepared to agree to taxing measures that will bring in an extra £1,000,000, 1 should not object to that course, providing the money is used to help others. We have no right to say to the States, “ We shall take, not borrow, your money from you. We shall lend it back to you and make you pay a fairly high rate of interest. In addition, you will have to repay the money later “.
I do not know where the States will obtain the revenue to enable them to repay the loan. If the loan is made under a longterm liquidation scheme, the liability will be hanging round their necks for very many years indeed.
We do not oppose the bill, because we think it is only right and just that this money should be paid. I join with the honorable member for Bendigo (Mr. Clarey) in submitting that insufficient money from tax revenue is being paid to the States. We must remember that the States are comprised of the people of Australia, and that they are not receiving back sufficient of the money that their residents pay into Commonwealth revenue.’ They are not receiving their just entitlements. I support the bill and I hope that the remarks I have made, while making no impact on Government policy, will have some influence upon the consideration of this matter by the Treasurer and the Government in future years.
.- A great deal could be said about the speech of the honorable member for Port Adelaide (Mr. Thompson), but I resist the temptation. The only thing I say about his speech is that he omitted to inform the House that in the seven or eight years before 1949, when Labour was in office, no special grants of this description were made to supplement the tax reimbursements to the States. That, to my mind, is a notable omission. Of course, it may have been quite unintentional on the honorable gentleman’s part, but I feel that this reference is pertinent to his observations. When related to that simple fact, some of his arguments collapse.
This is a bill to provide for payment to the States of a sum of £20,450,00. Apart from that, the legislation achieves a number of things. In the first place, it brings into clear relief the fact that this is an opportunity for this Parliament to reconsider Commonwealth-State financial relationships. 1 suppose that the great majority of taxpayers, in a sense, are perfectly well aware that they are contributing to this £20,450,000 because they assume roughly - or possibly in some cases accurately - that the Commonwealth is providing money to tho States. But they have no conception of the amount of money that has been paid to the States over the last seven years by special financial assistance and grants of this description.
My friend and colleague, the honorable member for Petrie (Mr. Hulme), last night reminded the House, as did the honorable member for Bendigo (Mr. Clarey), that in the last seven years, approximately £157,000,000 has been paid to the States by way of grants of this description. That is a most significant fact. The majority of taxpayers are aware that the Commonwealth levies taxation, but I think it would be safe to say that the great majority of them are totally unaware of the manner in which the Commonwealth spends the bulk of that money, or to be more pointed, the great majority of taxpayers are unaware of the nature of financial assistance given by the Commonwealth to the States.
Since I have been in this House, I have heard references, pointed and otherwise, to the financial relationship between the Commonwealth and the States. I have heard it suggested that it is time for an overhaul of that relationship or that it is time for the House to reconsider the relationship. May I be so bold as to say that it is high time that the system of uniform taxation was abandoned? It seems to me that if we retain uniform taxation without challenge, we tolerate a federal system being discarded and rendered useless. I realize, of course, that it is a point of view. Some honorable gentlemen opposite - indeed, I suppose most honorable gentlemen opposite - do not favour the federal system of government. The great majority of Opposition members are unificationists in one sense or another. I happen to be a federalist. I believe in the division of legislative power. I believe that responsibility should accompany power and that to divorce the two is to commit a grave error and to lead to the possibility of exposing people to great danger. If every member of this House, with one mind and with one will, set out to destroy the federal system of government, then the task could not be achieved with a greater degree of perfection than it is being achieved at the moment by the retention of uniform taxation.
In the majority of States, Labour Premiers and Ministers, during a federal election campaign, say, “ Of course, the Commonwealth has maintained taxation at too high a rate “. During a State election campaign, the same gentlemen say that the Commonwealth has treated them ungenerously. So we come to what I describe as the dangerous divorce of responsibility from power. For example, the Queensland Treasurer, Mr. Walsh, when presenting his budget recently, said -
At the present time the Commonwealth is virtually the sole adjudicator upon the State’s main source of revenue, the tax reimbursement and special financial assistance grants and loan finance. This dominance of the Commonwealth allows too great an influence on the domestic policies of the States.
That proves the point I am making. During a federal election campaign, the same gentleman would take the hustings and say that the Commonwealth was treating the taxpayers too harshly and that the rates of taxation were too high. It is a simple case of a person wanting the best of both worlds - wanting to secure a political advantage when it is available to him, no matter what his real principles or thoughts may be. How much longer are we to tolerate this divorce of responsibility from power?
What is possibly the most curious aspect of the problem of uniform taxation and the Commonwealth-States financial relationship is the attitude of the Labour party. For the life of me I have been unable to determine to my own satisfaction whether members of the Opposition have a common mind upon the issue of uniform taxation. Possibly honorable gentlemen opposite say, “ In this House, at any rate “. But I say to them, with respect, that outside this House it is most difficult to find evidence of a common mind on the retention or otherwise of uniform taxation. Let me go back to the Premiers conference in 1953. That conference was called to consider the issue of the return of taxing powers to the States. The Premier of New South Wales, Mr. Cahill, observed -
We are practical men, and as the Commonwealth has said, it is determined to make this change-
The change being the abandonment of uniform taxation - we must set about working out the details.
The Premier of Victoria at that time, Mr. Cain, said -
I am praying for the day when our taxing powers will be restored to us.
The Premier of Queensland, Mr. Gair, said -
I agree with your-
Referring to the Prime Minister (Mr. Menzies) - statement that the levying of taxation by the States is an indispensable element of sovereign government.
The Labour Premier of Tasmania, Mr. Cosgrove, declared -
Tasmania is not in favour of the abolition of Uniform Taxation. I cannot see that such action will be of any benefit to our State, or indeed to Australia.
The Labour Premier of Western Australia. Mr. Hawke, said-
We certainly would not be prepared to accept the abolition of Uniform Taxation unless it was forced upon us.
The Labour Premier of Victoria at that time, Mr. Cain, categorically averred thai he was praying, as he put it, for the return of taxing powers. The spectacle of Mr. Cain praying for the return of taxing powers conjures all sorts of thoughts in one’s mind. But one Premier categorically affirmed the desirability of returning taxing powers to the States. Mr. Cahill, the Labour Premier of New South Wales, and Mr. Gair, the Labour Premier of Queensland, tacitly approved of the return of taxing powers to the States, and two other Premiers totally opposed it. A Senate election took place a few months later, and the right honorable member for Barton (Dr. Evatt), who is Leader of the Opposition, strode the stage at Marrickville to plead the cause of the Australian Labour party. On that occasion he declared -
A “ Labour “ Senate majority would prevent the abolition of the system of Uniform Taxation throughout Australia in relation to taxation.
It is interesting to compare that statement with the views of Mr. Cain, the then Labour Premier of Victoria, who said in the plainest terms that he was in favour of the return of taxing powers to the States. It is interesting to consider also the opinions of the honorable member for Melbourne (Mr. Calwell), who declared in September, 1953 -
The Labour party stands for the maintenance of uniform taxation. It is a plank of our platform. That platform binds every member of the Labour party in this Parliament, every member of the party in every State parliament, and ever, other member. There is no question about where the Labour party stands in regard to uniform taxation. We stand for the maintenance of uniform taxation and for a revision of the formula under which grants are made to the States. [ have always admired the honorable member’s engaging frankness, but I should like to know who was right in 1953 - he or Mr. Cain, the Labour Premier of Victoria. Once again, Mr. Acting Deputy Speaker, this House and the country sees disconcerting evidence of the great fragmentation of the Australian Labour party on matters of policy. Of course, the simple truth is that when the Labour Premiers of Victoria and Queensland declared themselves in favour of State rights they either showed abysmal ignorance of the platform of the party to which they belonged or were merely seeking party political advantage. That is a factor that must be recognized.
The honorable member for Port Adelaide said that if war had not intervened in 1939 uniform taxation may never have come into being. I suppose that is perfectly true, but it is one of the paradoxes of the position that whereas the constitutional warrant for uniform taxation was sought under the defence power, the High Court of Australia found in 1942 that the Commonwealth possessed the power to maintain or levy taxation. In other words, the States have been de facto and not de jure deprived of their taxing rights. One of the great arguments used by the devotees of uniform taxation against those of us who are opposed to it consists in asking whether we want to return to the old pre-war system of a multiplicity of taxation returns, assessment codes, and collecting authorities. That is on the surface a most impressive argument, but to my certain knowledge no one who opposes the retention of uniform taxation has ever seriously advocated embracing that form of capricious action which would destroy uniform taxation overnight and return this country to the pre-war situation of 23 tax systems. An abrupt abandonment of uniform taxation could he achieved very simply, of course. It would be necessary only to repeal the relevant legislation, principally section 221 of the Income Tax Assessment Act, and the States Grants (Tax Reimbursement) Act. As I stated a few moments ago, T would not for one moment seriously advocate the abandonment of uniform taxation and a return to the pre-war taxing evils.
To my mind three compelling questions stand on the threshold of the problem. Each is predicated by the need to do justice to the Australian taxpayers and to Australia as a nation. The first question is how to divide the income tax field so as not to place one State at a disadvantage compared with the others. Honorable members may recall, if they turn their minds back to the conference of Commonwealth and State Ministers held in 1953, the report of which they no doubt read at the time, that the Prime Minister (Mr. Menzies) observed that the abandonment of uniform taxation would present uncommon difficulties foi Queensland. He then went on to say that what would be required would be the enactment by this Parliament from time to time of legislation authorizing the payment of supplementary grants so that Queensland would not be placed at a disadvantage. In other words, the division of the taxation field would have to be accompanied by the judicious exercise of power under section 96 of the Australian Constitution and the payment to the States of subventions and grants in various forms. The second question implicit in this problem is how to adopt and maintain uniform assessment laws. The third is how to retain the single-return system with one tax-collecting authority. Two methods of achieving uniform assessment laws commend themselves to me. Uniformity could be achieved by each Parliament passing identical acts, or alternatively by each State Parliament adopting the Commonwealth assessment act following the precedent of the Air Navigation Code. That brings me to the point that even if uniform taxation were abandoned and satisfactory uniform assessment laws were adopted they would be only as durable as the good faith of succeeding parliaments. In other words, it would be possible for a government ten or fifteen years hence to repeal the uniform assessment legislation and restore uniform taxation. Therefore, I say it is absolutely necessary to entrench the uniform assessment code in the Constitution in the manner in which the Financial Agreement has been entrenched in section 105a.
At the outset T said that one of the great failings and dangers of uniform taxation consisted in the divorcing of responsibility from power and the gradual destruction of the federal system of government. I for one believe that uniform taxation just mocks the whole federal system and that it is up to this Government and this Parliament to decide once and for all whether to retain the federal system or to declare in favour of and to work towards the achievement of unification. We all can read a prophecy made more than half a century ago by Alfred Deakin, who forecast that the financial power of the Commonwealth would eventually drive the States out of existence and destroy the federal system of government. If we examine the historical records of the time when Alfred Deakin made that prophecy, we find that many people scoffed and told him that his judgment erred greatly. However, if we turn to South Australia’s case against the Commonwealth on the question of uniform taxation, which was heard in 1941, we find that the High Court, and in particular the then Chief Justice, Sir John Latham, affirmed and approved the substance of Deakin’s prophecy. Sir John Latham said -
If the Commonwealth Parliament, in a grants act, simply provided for the payment of moneys to States, without attaching any conditions whatever, none of the legislation could be challenged by any of the arguments submitted to the court in these cases. The amount of the grants could be determined in fact by the satisfaction of the Commonwealth with the policies, legislative or other, of the respective States, no reference being made to such matters in any Commonwealth Statute. Thus, if the Commonwealth Parliament were prepared to pass legislation, all State powers would be controlled by the Commonwealth - a result which would mean the end of the political independence of the States. Such a result cannot be prevented by any legal decision. The determination of the propriety of any such policy must rest with the Commonwealth Parliament and ultimately with the people. The remedy for alleged abuse of power or for the use of power to promote what are thought to be improper objects is to be found in the political arena and not in the courts.
In other words, this situation could arise: A Commonwealth parliament, determined to destroy the States, could say to the States, “ Either you surrender your powers to us or you will get no money “. Honorable members may be tempted to describe that as financial blackmail and, no doubt, they would be right. Some other honorable gentlemen may be attracted to the idea that such a proposal is in communion with fantasy. I therefore shall read to the House a comment made by Mr. Ross Anderson, senior lecturer in law at the Queensland University, in a work entitled “ Essays on the Australian Constitution”! I may add in passing that Mr. Anderson is a member of the Australian Labour party. He said -
Since the referendum procedure offers little hope of increasing direct Commonwealth powers, some greater use of Section SI may perhaps be anticipated. Attempts to enlarge Commonwealth powers by reference of matters under this provision in the past have failed largely because of equality of all seven parties. In the future-
And this is the punch-line - when the political atmosphere is favorable to the Commonwealth, the States may be induced by financial pressure to make the reference required by the Commonwealth.
So, we have a situation in which the retention of the uniform taxation system is not merely undermining our federal system of government; it stands poised as a constant threat to the whole federal system of government. The sooner it is abandoned, the sooner a sensible division of the field of taxation is determined, and the sooner there is entrenched in the Commonwealth Constitution adequate provision to prevent any extremist government in the future from using the system of uniform taxation to destroy the States by financial blackmail, then, I say, the better. For ten years or more we have seen a constant procession of examples of irresponsibility in State legislatures. It is high time that that procession was brought to a halt. It will never be brought to a halt as long as State Premiers are in a position to criticize the level of taxes imposed by the Commonwealth, while, at the same time, demanding more and more generous gifts. I appeal to the Government to give urgent and prompt consideration to the whole problem of uniform taxation. I have heard it suggested that some financial advisers and economists say that it is not possible to destroy the system of uniform taxation. In the face of such an assertion, all I can say is that I should be sorely tempted to go out and get another set of advisers.
.- I wish to support the views put forward by my colleagues, the honorable member for Bendigo (Mr. Clarey) and the honorable member for Adelaide (Mr. Chambers). This is one of a series of annual measures that have come before this House in the last seven years. It is apparent that the formula that was arrived at in about 1950 has never been adequate to achieve the purpose for which it was supposed to have been designed. This shows that in an economy such as ours, in which circumstances are constantly changing, we cannot hope to arrive at any cut and dried or simple solution of these problems that effect all of the governments of Australia, be they local, State or Commonwealth.
As the honorable member for Moreton (Mr. Killen) has rightly remarked, the central problem confronting our federal system to-day is bound up with the question of State and Commonwealth financial relations. The honorable member has been here for only a short time, and I can assure him that this is not the last occasion on which he will hear statements to the effect that the time has arrived to face this problem. The time is always ripe to face the problem, but we do not seem to face it, and, consequently, the problem is always with us.
The Opposition stands by the principle of uniform taxation. We believe that it is the most sensible method of ensuring that some of the resources of the more fortunate sections of the Commonwealth shall be used to assist those sections which are not so well off. From the very nature of our continent, containing as it does over 3,000,000 square miles of territory, and sustaining a population of less than 10,000,000, and with the most suitable areas for settlement located in a narrow strip around the coast, there must be an economic imbalance between the various areas that initially became States only through geographical accidents. I submit that the major problem facing Australia to-day is that the Commonwealth still has a lot of money to play around with, while the States have no financial manoeuvrability at all. The States cannot plan ahead. They have to live from year to year, depending on what the Commonwealth may see fit to give them. We on this side of the House do not believe that the moneys received by the Commonwealth belong to the Commonwealth as of right; they are held by the Commonwealth as a trustee for the good government of the nation as a whole. I believe that this position will obtain for a great many years to come.
Constitutionally, a great amount of responsibility still rests with the States. One nas only to consider the various social ser vices that affect the community and which are provided by the States. Education, health, law and order are three headings under which services are provided by the States. These services are still, constitutionally, the functions of the States, but each year the States find themselves in an embarrassing position in trying to obtain enough money to meet the needs of a community that is growing, as we know, both by natural increase and by immigration. An honorable member last night suggested in this House that immigration was not as great a factor in our economic problems as was sometimes argued. It is, nevertheless, a significant factor. Even if, in the field of education, as suggested by the honorable member for Petrie (Mr. Hulme), only one-quarter of the expansion in schools can be attributed to immigration, that is still a significant proportion, and I suggest that the most difficult problems confronting the States are associated with the uncertainty of population growth through immigration and of the amount of money that they can expect to receive from the Commonwealth.
Each year the States have to plan their budgets, not knowing precisely how much they will ultimately receive from the Commonwealth, either by tax reimbursements or in the form of loan moneys from the Australian Loan Council. The report of the Commonwealth Grants Commission that was tabled in this House to-day indicates that in the financial year ended lune, 1955, out of a total revenue of £325,000,000 obtained by the States from all sources, only £94,000,000 was raised by the States themselves from their own sources of taxation. I have excluded the figures relating to State railways because those are business undertakings which are expected to balance themselves out. The remaining amount of £231,000,000 was provided from payments under the tax reimbursement formula, from special grants under section 96 of the Commonwealth Constitution, from various aid roads grants and a number of other minor grants.
One has only to look at the kind of measures that have gone through the House recently to see the difficulties under which the States are labouring. We dealt recently with a bill to assist home-nursing organizations. It was estimated that no more than £40,000 would be expended for that purpose by the Commonwealth during the current financial year. The fact that the six States, between them, cannot afford to pay £40,000 a year to expand what is, constitutionally, a State service highlights the embarrassing position in which they find themselves. State governments want to expand, for instance, their library services and their facilities for adult education, but they find that the money that would be required to finance such schemes must be used for, say, the expansion of hospital services and for additional schools. No one will deny that there is a shortage of hospitals in this country, but recently the absurd position arose in Victoria that work on a hospital building project, already well on the way to completion, almost came to a standstill owing to a shortage of £75,000. That is absurd in a community that is raising over £1,300.000,000 a year by taxes of one kind or another. It is an indication of the kind of problems which the honorable member for Moreton says, quite rightly, have not been faced squarely.
There is an annual wrangle known as the meeting of the Loan Council. The States and the Commonwealth start off on the wrong foot at those meetings, because they argue, not about what needs to be done most for the benefit of the nation, but about how certain sums of money shall be distributed. Under that system, it is impossible to get coherent national planning, and unless we have coherent national planning all the citizens of this country will suffer. lt is high time that we made a more realistic approach to these problems.
Measures of this kind will continue to come before us for many years. The tax reimbursement formula is designed to proceed progressively to what is called a per capita basis of distribution. That may serve the interests of the wealthy States, but the poorer States - I do not refer to them as mendicant States, a term that is used sometimes, because T think they are poor, not in that sense, but only in the way in which nature has distributed their populations and their resources - will still require additional subventions, subsidies and payments of one kind and another. That will be the pattern for a great many years to come - until there are fundamental shifts of constitutional responsibility.
The suggestion is made from time to time that the States should hand over to the Commonwealth responsibility for such things as railways and roads. If such a proposition were put to them, the States might agree to it. I think they are still zealous to retain the constitutional powers entrusted to them, but there is no doubt that they lack the financial resources necessary to make the present system work satisfactorily. The honorable member for Bendigo (Mr. Clarey), in a closely reasoned speech which indicated that he had dug down to the very roots of the problem, said that it was most unfair that the Commonwealth should pay for all its public works from revenue and expect the States to finance their works from available loan moneys, on which they have to pay interest, and from moneys made available to them by the Commonwealth from its budget surplus, on which they have to pay interest also. The honorable member suggested that all moneys raised from loans and taxes should be pooled and that the States should not be required to bear the burden of interest charges alone. I agree that such a scheme would not make any over-all difference. There would be merely a transfer of a part of the burden of interest charges from the States to the Commonwealth. The national picture would be the same as before.
The honorable member for Bendigo explained that we are paying about £130.000.000 a year in interest charges on our national debt. Looking at the community as a whole, that is a transaction in which money is taken from the pockets of all the taxpayers and a proportion of it b paid to a set of individuals in the community who are interest receivers. As we know, a large part of the national debt is held by agencies such as the Commonwealth Bank and various State savings banks, and the interest payments made to those agencies is used ultimately for the benefit of the community. Nevertheless, the payment of interest does impose a great burden on the States. Every year, the sum paid in interest charges rises by over £10.000,000, and additional taxation to that extent must be levied. The aggregate debt of the Commonwealth has been stationary for a number of years, whilst that of the States is rising by over £200,000,000 a year. That throws an additional burden upon the resources of the States, yet when a measure such as this comes before the Parliament honorable members on the Government side talk about the extravagance of the States. It is the foolish interest policy adopted by the Federal Government that is the direct cause of the need of the States for an additional £10,000,000 a year.
The Opposition takes advantage of this opportunity to affirm its view that uniform taxation is the best taxation system for Australia. If we analyse the suggestions made by the honorable member for Moreton, we see that they relate more to machinery than to fundamental issues. He asked: How could we divide the income tax field? Committees which have examined that problem have said that it would be very difficult to divide the income tax field in anything other than a very illusory fashion. The honorable member said that there ought to be one taxation return form and one collecting authority. Under uniform taxation, there is one taxation return and one collecting authority. I think the majority of the people of Australia prefer that. I have forgotten his second proposed solution, but I submit that the problem will not be solved along the lines that he suggested.
I believe that the solution will be found in co-operation between the States and the Commonwealth as working partners. The problem will not be solved while one partner ungraciously wields the big stick and tells the other partner that, as a junior partner, it is not really entitled to what it is getting. The problem will never be solved while the Commonwealth makes grants to the States only grudgingly and makes no attempt to acquaint itself with the problems with which the States are faced in their budgeting. Only a few million pounds more, shared amongst the States, would give a little more flexibility and permit them to go ahead with their plans for development. I refer mainly to development on the social and cultural side, because that kind of development is necessary for a healthier public life.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from 23rd October (vide page 1690), on motion by Sir Arthur Fadden -
That the bill be now read a second time.
.- In opening this debate for the Opposition. I should like to make what I feel is a justifiable protest about the speed with which this measure is being pushed through this House. We have here a bill of 25 clauses, supported by an explanatory memorandum of 22 closely printed pages. It was introduced in this House at 4 o’clock yesterday afternoon. Now, less than 24 hours later, we are being asked to make an intelligent appraisal of it, and pass it into law. A considerable number of amendments are to be made - the introductory no’.e to the memorandum lists nine separate heads. While it is true that one or two are machinery in nature, and that some were foreshadowed in the budget which was presented a month or two ago, the Opposition ought to have been given more time to consider them. After all, the Income Tax and Social Services Contribution Assessment Act imposes each year taxation totalling about £550,000,000 on individuals and companies. That is nearly one-half of the total tax that is collected in Australia, and a more serious approach to the matter than we have been permitted on this occasion is surely warranted. I feel that a protest ought to be made. It is not fair to ask honorable members to make a proper appraisal of the bill at such short notice.
The Treasurer (Sir Arthur Fadden), during his budget speech, indicated that he proposed to effect certain alterations in the income tax law. He said that they were of a minor kind. The Opposition feels that if the Treasurer has reached the stage of believing that the revenue position is reasonably sound, the time has come for a complete re-examination of Australian income tax which is, I. repeat, the most important single tax in operation in our community. It is levied on more than 3.500,000 individuals, and something like 25,000 separate companies, private and public. It yields an aggregate of about £550,000,000 annually. Its importance to the community of which we are members is, therefore, undeniable.
It is easy enough these days to talk about referring things to royal commissions, or special committees, but some matters are of sufficient importance to warrant a different kind of examination than can be given to them in this Parliament. Ultimately the Parliament is responsible for passing the law, but often it can be appreciably aided by expert assistance from outside. An example is provided by the work of the Commonwealth committee on rates of depreciation, of which the honorable member for Petrie (Mr. Hulme) was chairman. [ commend him and his committee for their examination of this one aspect of the important field of taxation. It is only one aspect, but the committee’s work indicates the kind of examination that can be made of such matters.
It is probably true to say that the business section is better organized than is the small taxpayer to make its representations felt in Parliament. It may do so either directly, through individual honorable members, or through the various organizations such as chambers of commerce, taxpayers’ associations and so on. However, the 3,500,000 individual taxpayers do not always get a proper hearing. I think that occasionally we should look a little at their requirements also.
The Treasurer has seen fit, in this measure, to grant concessions which he says will involve a loss in revenue aggregating about £1,000,000. That, out of £1,230,000,000, is not a great deal, but there may be some scope for the argument that if the Treasurer can afford taxation remissions amounting to £1,003,000, these may not be the more desirable remissions. Is the section of the community which is to receive this alleviation of taxation the most deserving? I think that, upon examination, it will be agreed that this is not the best method of giving concessions.
Sometimes we ought to consider another fundamental proposition also. Let us assume, for the sake of argument, that the Treasurer needs to collect about £360,000,000 from taxation on individuals. Will that burden be shared in the most equitable way? Again, I submit that upon proper examination it must become apparent that the family man is shouldering an unfair income tax burden.
I propose now to give one or two reasons for that view. The matters that we are considering do not involve the rates of taxation, but they do involve the principles of assessment, and once we have decided tocollect a certain sum in taxation it is very difficult to segregate our principles of assessment on the one part from our ratesof taxation on the other. As an indication’ of what I mean, I would draw the attention of honorable members to page 158 of the budget papers which were presented to us some months ago. On that page appears a statistical table which indicates that in the year ended June, 1954 - the last for which published statistics are available - there were 3,545,000 income taxpayers in Australia, and that, in all, they paid £319,000,000. The table covers taxpayers according to grades of income. There were 387,000 persons in Australia who had taxable income of £300 a year or less, and between them they paid an aggregate of £1,439,000 in tax. I now submit, as I have done before, that it is doubtful whether assessing 387,000 people for the sake of collecting £1,439,000 in revenue is an economical method of obtaining revenue. A large field of taxpayers could be eliminated without much affecting the total of revenue collected.
When income tax was first introduced many years ago, there existed what was known as the statutory exemption, which provided that a person whose annual income was less than £200 or £250, or whatever the figure was, paid no tax, and that only income in excess of that amount was subject to tax. Now, however, the exemption provides only that no tax is payable by a person who earns £105 a year or less. Once the total income of a person exceeds £105, he is taxed on the whole amount. As I see it, the conception behind the statutory exemption was that the taxation authorities fixed an amount that they reckoned was the minimum amount necessary to sustain a person; and that there was no scope for the levying of tax on an income that did not exceed that amount, because the entire income was needed to support the person concerned. On top of that, if a person were married, a further allowance, the wife’s allowance, which at the moment is £130, was taken into consideration. Whether that figure means that a wife can be supported for £130, which is £2 10s. a week, I am not sure. Most of us know that it costs a great deal more than that to keep a wife.
The present concession in respect of a first child is £78, and in respect of subsequent children, £52. The lower allowance in respect of subsequent children is based on the fact that child endowment of only 5s. a week is paid in respect of the first child, whereas in respect of other children the endowment paid is 10s. a week, or £26 a year. This accounts for the difference of £26 in the level of the two allowances. It is hard to know precisely what is the logic in that. It seems, in fact, that there is no longer any logic in those matters, and I submit that there should be, perhaps, a return to the old basis of taxation - a return to the statutory exemption, with a more realistic appraisal of the allowable deduction for a wife, and for children, even if some allowance were made for social services payments. However, once we begin to take social services payments into consideration we obtrude a new factor into the income taxation field.
Recently, the honorable member for Fremantle (Mr. Beazley), I think, asked the Treasurer what it would cost if the allowance for a wife were increased from £130 to £156 or some such figure. The Treasurer’s answer indicated that it would not cost very many millions of pounds. Of course, the presumption there was that if this increase were made, present rates of tax would continue. That assumption might not prove to be correct once it was decided to increase the allowance, because the Treasurer would have to collect a certain amount of revenue from a taxation field which, although more restricted, would ensure a fairer distribution of the overall burden. The increase of the wife’s allowance would give more justice to those with family responsibilities. I suggest that that is the principle on which income tax ought to be levied. It was the principle on which income tax was first imposed, but it was lost sight of during the war years when, for particular reasons, a completely new system was introduced. That was the scheme of concessional rebates as against concessional deductions. Since the rebate system has been changed back to the old system of deductions, there is no longer any logical justification for the amounts that now apply.
The entire subject of income tax should be examined by a comprehensive committee of inquiry, which would, if necessary, take a year or two to reach its conclusions. There have been similar inquiries in Great Britain, and two voluminous reports have been produced in that country dealing with taxation on the incomes of businesses, and on taxation generally. They have thrown a great deal of light upon this important field of taxation because, in a modern community, income tax is the prime social engine for securing a better distribution of the national income.
The basic principle of taxation is supposed to be taxation according to ability to pay, which means that a progressive rate of tax is levied. The higher the income the higher the rate of tax that has to be paid. We have a progressive tax rate in theory but its true purpose has been defeated because the allowable deductions in respect of families are no longer sufficient to enable the taxpayer at the bottom of the scale to meet his commitments. That is the first point to be considered, whether it be considered directly by a government or handed over to a committee formed of members of all parties, which would examine the facts put before it; or whether it be considered by a judicial committee of some kind that would call evidence, as was done by the committee on depreciation allowances. That committee covered a very limited field, and its recommendations affected only one section of the community, although it is a section able to make its views known.
Of the particular amendments before us I select the one concerned with the change that is being made in respect of the allowable deduction for insurance payments, or assurance payments as they are sometimes called. At the moment, the maximum amount allowable is £200 per annum. Again, I submit, as a matter of economic reality, that there is at present only a small section of the community whose members are able to claim even that maximum deduction. The benefit of the maximum as it stands can be enjoyed only by people who are able to save nearly £4 a week from their incomes for the payment of assurance premiums. I ask the Government on what level of income does it believe that a saving of £4 a week is possible, lt certainly cannot be made by a man on the average wage of £17 a week if he has to keep a wife and family. He does not get enough to save £4 a week, and so will receive no benefit whatever from the increase of the allowable deduction to £300 per annum or, roughly, £6 a week. That is why I ask whether, if the Government is able to spare the £500,000 or so that this concession will cost the revenue, it would not be more just to spread the benefit among the more deserving members of the community.
To indicate the result of this concession, I quote from a circular sent to most honorable members by the Taxpayers Association of Victoria. The circular is dated, “ 30th August. 1956. Budget Night - 9 p.m.”, so it apparently was printed immediately after the presentation of the budget. It shows what the increase of the allowable deduction in respect of life assurance premiums from £200 to £300 means to individual taxpayers. It shows that the value of the increase, if the new maximum is claimed, will be £3 15s. to a person whose taxable income is £250. If. on the other hand, a man’s taxable income were £1.000, the increase from £200 to £300 would reduce
I he amount of tax payable by him by £19 3s. If his taxable income were £2.000, the increase from £200 to £300 in the allowance would reduce the amount of tax payable by him by £32 2s. Finally, the increase in the insurance allowance from £200 to £300 would reduce the amount of tax payable on an income of £5,000 by £51 13s.
– The man in receipt of t small income could not undertake such insurance.
– I suggested, in the first place, that the wage-earner would not have the capacity to insure himself for these amounts. But even if he had the capacity to pay for this insurance, the amount by which his tax would be reduced would be infinitesimal. So this bill is what might be called a piece of class legislation. It will effect only those people who previously could save £4 a week, or £200 per annum. out of their income and who may now be ;ible to save £300 per annum. This is a very restricted class of the community but. nevertheless, it is the group that thisGovernment has chosen to favour. Apparently, this proposal is connected in some way with the idea that it will encourage saving. I doubt very much whether it will encourage saving. It will certainly be an inducement or an advantage to those who do save in this way, because the extra £100 per annum that is put into insurance will be saved and the person with an income of £5,000 per annum will also save £51 13s. per annum in taxation, which makes it a very good investment for a wealthy person
I simply cite this as the kind of concession which the Government has chosen to give because it feels that it can forgo this amount. But I have indicated that concessions could have been given which would have benefited everybody in the community. I agree that the greater the number of people they affected, the greater amount of revenue they would involve. Nevertheless, we may have to get round to a re-sharing of this total collection of £300,000.000. Some people with large family responsibilities might pay less, and some people with higher incomes and less responsibilities might pay more. Surely, nobody could cavil at that, on a social basis.
Another matter that is mentioned in this measure is an alteration to what is known as the zone allowance. When the explanatory memorandum relating to this bill was circulated to honorable members, they were given a map of Australia which had red lines on it indicating zone A and zone B. I understand that these zone allowances were introduced in the I940!s or thereabouts. At that time the allowance for zone B was £20, and the allowance for zone A was £40. Subsequently, the allowance for zone A was increased from £40 to £120, which is the level at which it now stands. But no alteration whatever was made in the allowance for zone B although, initially, the proportion of the allowance for zone A to the allowance for zone B was two to one. When the allowance of £40 for zone A was increased to £ 1 20, the allowance for zone B remained at £20.
It is proposed, in this legislation, to increase the zone A allowance to £ 1 80 and to increase the zone B allowance by 50 per cent, to £30. I halt at this point to indicate that this simply means a deduction of £180 or £30, as the case may be, from the gross incomes of the people concerned. It does not mean a reduction of their tax by that amount. Therefore, if a person’s rate of tax is low, amounting to 2s. or 3s. in the £1, the increase of the zone allowance from £20 to £30 might make a difference of £1 10s. or of £2 in the amount of tax paid, lt seems to me that it will not make any fundamental difference to those people who settle in these areas. I think that the honorable member for the Northern Territory (Mr. Nelson) would feel that it would be better for the Government to give the people in these areas relief by means of subsidy on transport charges than to allow them direct deductions for income tax purposes. They are grateful to be able to take what they can off their incomes for tax purposes, but it is indirect taxes rather than the direct ones which are causing havoc to their standards of living.
The Opposition proposes, in committee, to move that the allowance for zone B, which this bill fixes at £30, be increased to £90, to keep the same ratio between the allowances for zone A and zone B respectively as determined when the arrangement was initially made. One of the main reasons for this suggestion is that the people living on the west coast of Tasmania, which is designated zone B - my friend the honorable member for Wilmot (Mr. Duthie) knows the district well - are experiencing great hardships at the moment by reason of transport costs, adverse weather, bad roads and all that kind of thing. Their zone allowance is to be increased from £20 to £30, which will mean a reduction of only £2 or £3 in the aggregate amount of tax that they will pay. If the allowance were increased from £20 to £90, it would make a difference of £18 or thereabouts in the aggregate amount of their tax, which would really be a worthwhile reduction to them.
The Opposition does not suggest that allowances of £90 or £180 would necessarily be adequate but, at least, the ratio that prevailed between the allowances for the two zones, when they were initially drawn, would be re-established. It is possible that the same argument could not be advanced about some of the closer parts of Western Australia but it certainly could be advanced about the inland parts of Western Australia, a large part of South Australia and part of Queensland, which are included in zone B. They are farflung areas in which the cost of living has gone up considerably because road and rail freights have been increased. There seems to be some justification for increasing the zone allowances by greater amounts than are proposed in the bill. As I have said, 1 foreshadow that, at the appropriate stage in committee the Opposition will move that the allowance for zone B be increased to £90, in order to preserve the ratio which originally existed between the zone A allowance and the zone B allowance.
The other measures that are encompassed by this bill, for a great part, deal with depreciation allowances. I have referred already to the report made by the honorable member for Petrie (Mr. Hulme) as a member of a committee which dealt with depreciation. This measure adopts, to some extent, one or two of the recommendations that have been made in that report. The committee, when it looked at one or two of the matters that were brought to it, suggested that no change ought to be made in the present methods that are adopted in the taxation law and the rates which are allowed by the Commissioner of Taxation under his discretionary power with regard to particular pieces of plant. Again, I submit that this is an indication of the organized pressure which sometimes comes from certain sections of the community because they are organized. There has been a lot of talk among business people about what they call “ capital erosion “. It arises out of the problem of inflation. I submit that it is part and parcel of inflation; and inflation does not affect only the business section of the community, lt affects wage-earners just as much as, and probably more, than it affects the business person.
However, if a businessman bought a piece of plant for £1,000 in 1946. the Commissioner of Taxation would have allowed depreciation on the basis of what accountants call “ historical cost “. If the rate of depreciation is 20 per cent, or 10 per cent., that percentage is written off the initial cost of £1,003, whether it is done by the straight line method or on the diminishing balance. However, when the plant is worn out and it is desired to purchase similar plant in 1956, it may cost £2,000. All kinds of elaborate schemes have been worked out by accountancy journals to warrant departing from the historical cost basis. Wisely, in my view, no government has yet accepted the desirability of doing so, because such a departure would ignore the fact that the same degree of capital erosion is experienced by the man with £1,000 in the savings bank. In 1946, his £1,000 would have purchased certain goods, such as a motor car or a house, but if, in 1956, he tried to purchase similar goods he would find that he had suffered the same degree of capital erosion as that suffered by the man in business. The people in business have put this magic phrase, “ capital erosion “, into common currency, but the unorganized and defenceless individual has not been able to bring the same kind of argument to bear. I submit that taxing authorities have been wise to resist this capital erosion argument which has been advanced by the clamant business sections of the community. Apparently, the tax authorities appreciate that inflation does not affect only business people.
The bill proposes to adjust the zone allowances of persons serving in the Australian occupation forces in order to bring their allowances up to the amounts to which I have already referred, and the Opposition offers no objection to this course. For the most part, the bill consists of machinery measures designed to correct anomalies in some instances, and in others, to concede to submissions of the Commonwealth Committee on Rates of Depreciation. Finally, it is proposed to increase tax deductions in respect of insurance premiums, which I have cited as a good example of doing the right thing to the wrong people. As I have said, the time is now ripe for a fundamental review of the whole of the income tax structure, both as to rates and assessment principles.
.- The bill now before the House does not provide for any increases of income tax, nor does it propose any substantial reductions of tax. It does, however, recognize the importance of saving, and the concession that is to be given in respect of insurance premiums is a recognition of the fact that relatively small annual contributions to insurance can provide substantial capital sums which, in the long run, provide loan funds for the construction of schools, hospitals and other public works. The honorable member for Melbourne Ports (Mr. Crean) took rather a superficial view of this allowance. He pointed out that the advantage would go to those on high incomes rather than to those on low incomes. He entirely overlooked the fact that if, for example, £10,000,000 were put into insurance as a result of this amendment, and that £10,000,000 found its way into government loans, as it obviously would, the budget would be relieved, in one year, of an amount of £10,000,000.
As honorable members know, and as the Treasurer (Sir Arthur Fadden) has pointed out, in this financial year the Commonwealth proposes to pay for practically the whole of its public works from revenue. Approximately £100,000,000, which will be expended by the Commonwealth on public works, otherwise could be used for tax relief. Similarly, the surplus, which it is estimated will be approximately £108,000,000, to be reserved to fulfil loan commitments of the States, also could be used for tax remissions if the Government were sure that it would receive all the loan moneys that it required for its own purposes, as well as for the capital works of the States. Therefore, in addition to providing an inducement to saving by means of a small tax concession, we are making available millions of pounds of additional loan moneys and, at the same time, relieving the budget of a like amount. Therefore, simply to dismiss this proposal for increased allowances in respect of life assurance premiums and superannuation payments, by saying that the benefit will go to those on the higher incomes, is to miss entirely the real point. If we are to provide relief for those on the lower incomes and to make a general reduction in the rate of tax, obviously, under present conditions, we must have more savings. The proposal embodied in this bill will grant relief to future budgets quite out of proportion to the very small amount of revenue that the Government will lose by the introduction of this additional benefit.
When we look at this proposed relief in respect of life assurance and superannuation payments, it is clear that not only those on large incomes will benefit from it. Benefit also will accrue to those people who, for many years, have been contributing substantially to superannuation funds, many of whom have taken out life assurance premiums and who now find that their commitments in those respects exceed £200 a year. This proposal, particularly in relation to the more elderly members of the community, will enable people to provide insurance for their children. I suggest that for every £1 of concession that the Government gives under this proposal, it will get back £10 because of the increased amounts which will go into loan funds from savings. I believe that this is the kind of incentive that the Government should give. It should say to the people, “ If you are prepared to provide for your old age and also to provide for your children, we, the Government, will encourage you to do so. We shall give you a concession in your income tax returns in respect of the amount that you pay for superannuation or life assurance”.
Similarly, I am delighted that contributions to medical benefits funds and hospital funds are to be made an allowable deduction, regardless of the deduction for life assurance and superannuation. It shows that the Government is prepared to help those who help themselves. If a person insures against the vicissitudes of ill health, and against having to undergo hospital treatment, the amounts paid to medical and hospital benefits funds will, regardless of any other deductions, be allowable deductions for taxation purposes.
– How many persons will this provision assist?
– It will assist every wise man who insures himself against the liability of incurring hospital and medical expenses.
– If he pays more than £300. He has the concession already if he pays less.
– There are many who, for several reasons, do not receive much benefit from this provision. At present, many other items are included in the same classification. This bill proposes that we say to people, “ If you are prepared to insure yourself against the expense of sickness and hospital treatment, the amount you pay in insurance premiums, regardless of any other payments, will be an allowable deduction for taxation purposes “. To the extent that this will encourage people to insure themselves in this way, for every £1 of benefit which the Government gives it will receive back £10, because insured persons do not become a charge upon the State in the event of sickness or having to undergo hospital treatment. We appreciate the difficulties that the States now face in providing hospital services, and the losses that these services entail. Therefore, any move that will have the effect of helping people to pay their own medical expenses and hospital bills will help the Government, and the taxpayers generally.
In the provisions of this bill there is recognition of the need to develop Australia. To those persons who are prepared to develop isolated parts of the country we say, “We are prepared to help you by allowing a special deduction for taxation purposes “. Once again, this demonstrates the Government’s true Liberal principle of helping persons who are prepared to help in the development of this country. In the increased allowance for educational expenses, there is recognition of the importance of the family and of education in the community. We all appreciate the great difficulty now faced by parents in meeting education expenses for their children. At present, there is an allowable deduction of £75 for each child undergoing full-time education. It is now proposed that we increase that allowance to £100. This will be a most valuable reform, and will relieve a very deserving section of the community of portion of the tax burden. I refer to those parents who are making sacrifices to enable their children to have the best possible education.
There is evident in the provisions of the bill a recognition of the value of charity. lt will be a sad day if people ever believe that charity has lost its value, and that the Government must do everything. I believe that the charitable instincts of the British people should be encouraged in every possible way.
Sitting suspended from 6 to 8 p.m.
– Before the suspension of the sitting, I pointed out that this bill not only provides worthwhile benefits for the taxpayers but also aids the development of Australia. I pointed out that the concessions for life insurance premiums and superannuation payments would encourage thrift and saving. The Treasurer, in his budget speech, estimated that the direct loss of revenue as a result of the allowable deductions for insurance premiums and payments to hospital and medical benefit funds would amount in a full year to £540,0J0. If we assume, for the sake of argument, that the average rate of tax for those who will receive the benefit of this concession is 5s. in the £1, we can assume that at least £2,000,000 a year will be saved as a result of this concession. So, by granting a concession which will result in a loss of revenue of £540,000, we may assume that in the long run the budget will receive the benefit of savings of £2.030,00 a year. As we know, at the present time the Government is unable to make substantial tax reductions because surplus revenues must be retained to make up shortages in loan funds. This concession should go a long way towards assisting loan raisings and increasing savings.
I believe the pattern of this bill should be used in many other directions to encourage thrift and saving. At the present time, the Government is financing out of general revenue any deficiencies in a loan programme totalling £203,000,000. This is necessary because people are not saving sufficient to meet our loan commitments. Therefore, every means should be used to encourage saving, particularly subscriptions to government loans, which will be used to finance the construction of schools, hospitals and things of that nature. In that way, we will help reach a state of affairs where substantial tax reductions can be made.
It is perfectly obvious that no government can reduce the rate of income tax while all surplus revenues are used to meet shortages in loan raisings. Therefore, if we are to tackle this problem in the right manner, we must tackle the problem of savings and adopt such means as are necessary to obtain the savings that are needed for the development of this country. Inducements such as those in this bill, which encourage savings by giving taxation concessions, provide a sound means to meet the situation. I believe that, if other inducements of this nature are offered, in many cases £10 will be received for every £1 allowed in concessions.
Another valuable concession in this bill is that provided for isolated areas. It will not cost a great amount of money, but, as it assists the development of those isolated areas, the Government will ultimately get back far more than it loses by giving this concession.
I come now to the allowance for education. Education is very costly at the present time and families have the greatest difficulty in paying taxation as well as meeting the cost of schooling and ull that goes with it. Although some revenue will be lost to the Government as a result of this valuable concession, in the long run the Government will get the money back many times over. If it were not for concessions of this nature, many families would be unable to provide adequate education for their children, and unless the children receive a proper education, we will not obtain the maximum production of which we are capable.
Several other concessions, which are not particularly costly to the budget, are granted by this bill. They will remove anomalies and assist production in many ways. For example, gifts made to certain scientific bodies are, for the first time, to be allowable deductions for taxation purposes. As I said earlier. I believe that the charitable instincts of the people should be encouraged in every way. particularly when donations are made for the support of scientific research organizations whose work will help to increase the production and wealth of this country.
Although this bill is limited in its operation, it is a very valuable one. It removes a number of anomalies at present existing in our taxation laws. It aids development and encourages thrift, an-l deserves the support of every member of this House.
Mr. MAKIN (Bonython) 18.8].- This bill relates to the assessment of income tax and social services contributions. I have listened carefully to several of the speeches of the honorable member for Sturt (Mr. Wilson) on social service matters. He never misses an opportunity to state his view on social services, particularly in relation to contributory schemes. Two matters are inherent in his submission. First, he wants to inaugurate a social service benefits scheme with universal and uniform payments. Secondly, whatever broadening is to be made shall essentially add to the income of those who are reasonably well circumstanced. Not one penny is provided in his scheme for the relief of the pensioner in necessitous circumstances. It is ingenious, but it is not equitable. Social services are a means of distributing the wealth of the community among all with some measure of equitability. To achieve this objective, income tax is paid on a graduated scale. Those who have been blessed with good fortune pay at higher rates than do those who have been less fortunate. So. the nation’s wealth is shared among all with advantage to the less fortunate members of the community. That is the principle underlying the social services scheme. The honorable member for Sturt would seek to destroy that principle and progressively relieve the wealthier sections -of the people of their undoubted responsibility to make provision by way of social services contributions to meet the needs of those less fortunate than themselves.
– Why does the honorable member not state his own views, instead of mis-stating mine?
– The honorable member Joes not like the fallacy of his proposals to be exposed to the community.
– I am quite capable of stating my own position.
– The honorable member makes many declarations, but he would never vote, in this House, in support of a proposal to help the needy pensioners. Therefore. I say that his advocacy has been primarily in favour of relieving the wealthier sections of the community of their responsibility to provide the funds needed to pay social services benefits, and to place those responsibilities more upon the shoulders of the less well-to-do people who cannot afford to pay increased social services contributions. The honorable member’s proposals are as inequitable as they are inadequate. I hope that, in future, he will offer somei h i n 3 much more constructive than he has advocated in many of his recent speeches on social services.
The bill makes certain concessions, but, in the main, they are to the advantage of people in the higher income bracket.
– We are paying the taxation, anyway.
– Evidently, I am making an impression, because my remarks are being challenged so much. I invite Government supporters to come forward, if they can, with convincing arguments to contradict my statements. They are not capable of controverting them. Surely, the Government has an obligation to be a little more just to the community generally. The honorable member for Sturt did not say one word about the necessitous circumstances of people who depend on social services benefits. He did not advance any argument in favour of improving the circumstances of those thousands of people who are in dire need because the social services payments on which they depend are so inadequate.
– I rise to order. I suggest that the bill relates to taxation and not to the payment of social services benefits, and that the honorable member for Bonython’s statement that I did not mention social services is not only irrelevant, unfair, and unjust, but also out of order.
– Order! I ask the honorable member for Bonython to confine his remarks to the bill.
– With great respect, Mr. Speaker, I point out that the bill is the Income Tax and Social Services Contribution Assessment Bill (No. 3) 1956. Since it deals with social services contributions I think my remarks were relevant and consistent with its provisions.
When I was interrupted, I was pointing out that the benefits to be derived from this measure will go mainly to those who are already in a position of advantage. For instance, concessions are to be given to those who pay a substantial amount annually in insurance premiums. The great body of people, particularly wage-earners, and most certainly pensioners, find it financially impossible to pay so much in insurance premiums as to obtain any benefit from those concessions. Concessions are to be given also to people who pay to have their children educated at the kind of schools to which only those in the higherincome bracket can afford to send their children. It may be very nice to be able to s.end one’s children to such a school, but the community generally makes adequateprovision for proper education. There may be reasons why some people would like to have their children educated at these expensive schools, but surely there is no reason why they should not meet the cost without special taxation concessions so that others who are in a less fortunate position may receive a little additional benefit! The Government should rectify the anomalies, inequities and inadequacies that are apparent in this measure. One could comment on many faults in it. I am glad that some benefit is to be given to the men who have rendered service in Korea and Malaya. They are most deserving of consideration. But for the most part the bill gives benefits only to those who already enjoy an advantage because they are rich and prosperous, and it denies to 80 per cent, of the people benefits to which they are justly entitled and which the Government refuses to give them.
I was quite intrigued with the contention of the honorable member for Sturt (Mr. Wilson) that the increase in the maximum allowable income tax deduction on account of insurance and superannuation contributions will result in savings that will be available for investment in government loans. If ever I have heard an ingenious line of special pleading for a piece of legislation, I heard it to-night from the honorable member for Sturt. There is no doubt that the Government is in difficulties in trying to raise its loan requirements, but I hardly believe that the Treasurer had in mind, when he increased the maximum deduction on account of insurance payments, that it would result in any substantial benefit to his projected loan programme. I suggest that the honorable member for Sturt should try to realize that we owe a responsibility to the sections of the community the members of which are less fortunately placed than those who can afford to pay £300 a year in insurance premiums. I submit that a more useful purpose would have been served by liberalizing the social services provisions relating to hospitals and medical attention than by granting concessions of the kind outlined in this bill.
.- I was rather surprised and disappointed to hear the honorable member for Bonython (Mr. Makin) making a personal attack on my colleague, the honorable member for Sturt (Mr. Wilson), and virtually accusing him of being insincere in relation to the matter of social services.
– I did not say that.
– I understand the honorable member for Bonython to say that if it came to the point the honorable member for Sturt would refrain from voting on any legislation designed to improve the lot of the pensioners. Now, sir, I feel that such a statement is not only unfair but also inaccurate. During the years that I have been in this House, no one has been more assiduous or, I believe, more sincere, in his efforts to urge the Government to adopt measures for the benefit of pensioners and the other less fortunate sections of the community than has the honorable member for Sturt.
Government Supporters. - Hear, hear!
– The exclamations of “ Hear, hear! “ from the Government benches merely serve to support my contention. Nothing is gained by a personal attack of the kind indulged in by the honorable member for Bonython, and I was personally very sorry to hear it. I believe that there is no more humanitarian person in this House than the honorable member for Sturt.
Now, Mr. Speaker, it would be rather difficult to deal piecemeal with the points put forward by the honorable member for Bonython, and I shall merely make reference to two or three of his major arguments. In the first place, he suggested that this bill provides concessions for the wealthier sections of the community. I do not believe that this is so. and I do not know of any substantial facts that bear out such a contention. The honorable member used, as the main fulcrum of his argument, Mr. Speaker, the particular clause of the bill relating to the increase in the maximum deductions, for income tax purposes, on account of superannuation and insurance payments. It is true that the maximum amount is proposed to be increased from £200 to £300, but I believe that the benefit therefrom will be derived not by a single small section of the community, but by a large number of persons. There is a vast middle-income group, which perhaps I should call the small businessman group, which comprises a great proportion of the overall population; the members of that group will be very pleased to avail themselves of this increased concession. The
Government has been urged to increase this benefit, not by the representatives of any one particular class of persons, but by many sections of the community. It is very pleasing to find that the Government has acceded to these requests.
The honorable member for Bonython said, in effect, Mr. Speaker, that this Government is really not interested in the plight of pensioners. Indeed, I think he said that 80 per cent, of the people derived no benefit from legislation of this kind. If one were prepared to take part in a detailed debate on the matter of social services benefits, and the record of this Government in the field of social services during the last seven years were compared with the record of the Chifley Government in the last seven years of its regime, it would be found that, even allowing for the variation in the cost of living, this Government has done substantially more for pensioners than the Labour government did.
– That is just rubbish! Of course, the honorable member knows that.
– Not only has the total amount of pensions by this Government been greater than that paid by the Labour government, but the pension rate has been increased more times than it was during the period when Labour was in office. Nobody knows that better than the honorable member for East Sydney (Mr. Ward), who is chipping in merely for the sake of being heard.
The attack on the Government has not been supported in any way, either in regard to its social services record or its general humanitarian outlook. As the honorable member for Bonython made some special reference to hospitalization and medical services, may I contrast what this Government has done for the community in that field with what was done by the last Labour government. The Labour government made unsuccessful and abortive attempts to introduce a national health scheme. Under the present Government a most successful national health scheme has been implemented. It cannot be gainsaid that this scheme is benefiting a very substantial section of our people.
– Order! The honorable member must get back to the bill. This is a measure to amend the law relating to income tax.
– I beg your pardon, sir. I made reference to that only because of some remarks that were made by the preceding speaker. This rather technical and complex measure is designed to give effect to proposals that were outlined by the Treasurer (Sir Arthur Fadden) in his budget speech on 30th August. It goes some way to meet recommendations from various sections of the community, including one very well-informed section, representing the taxpayers of Australia as a general body. I refer to the delegates to the Federal Tax Conference that was held in Hobart in May of this year. I am pleased that the Treasurer has seen fit to go at least some way towards adopting some of the recommendations of that conference, because I believe that the report of the conference shows that the delegates went very fully into all aspects of taxation. I am dealing in particular, of course, with the aspects of taxation that are dealt with in the bill. An analysis of the recommendations of the conference and of the proposals contained in the bill will show, 1 think, that the Treasurer has given some consideration to those recommendations.
Over a period, the income tax laws of this country have been considerably simplified by this Government. That does not mean that they cannot be simplified still further. I believe that this measure will go some way towards a further simplification of our income tax laws and also towards the removal of anomalies. That point has already been made by my friend, the honorable member for Sturt (Mr. Wilson). Many valuable concessions in the income tax field have been granted by this Government in the last few years. It is very pleasing that, even at this time of inflation and rising costs, the Treasurer has been able in this measure to offer further concessions to the taxpayers. Despite what honorable members opposite have said, I believe that the measure will be welcomed generally in the community and that it will benefit a great number of people, directly and indirectly.
In view of the detailed, complex and technical nature of the bill, it is not possible for me in the time at my disposal to deal with all of the clauses, or even with all of the main clauses, but I shall refer to a few of the principal features. First, I congratulate the Treasurer on clause 4 (a), which provides for the exemption from income taxation of hospital benefits organizations and medical benefits organizations. I believe that this provision will be of great value to those organizations, which are rendering a very useful service, particularly to the family man. Speaking as a family man who knows something of the financial burden involved in the upkeep of a home and the education and maintenance of children, I feel that the Treasurer is on the right track in doing everything that he can to alleviate the financial difficulties of the family man. This is one way in which he has seen fit to do so. The bill provides for a refund of income tax as from 1952 to the various registered medical benefits organizations and hospital benefits organizations. I think that that is a worth-while provision.
Clause 4 (c) relates to the Fulbright scholarships, to which 1 want to make a passing reference. We read in the press these days quite a lot about the Fulbright scholarships and the exchanges of scholars, teachers and lecturers between this country and the United States of America. Those exchanges are of immense importance and of great value, doubtless to us and probably to the other country concerned. The Treasurer has explained that he has considered it necessary to make legislative provision for a matter which previously was taken for granted. The reciprocal arrangements in relation to the exemption of grants from income tax will be given legislative authority and, in that way, formal recognition will be given in this country to a provision in article 1 3 of the agreement which was taken for granted in each of the two countries. [ want to say something about clause 5, which must be considered in conjunction with clause 13. Clause 5 provides for the exemption from income taxation of the pay and allowances of members of the defence forces serving in certain areas. This is an important clause, because it will remove an existing anomaly. Honorable members will see that the clause provides that as from 1st July, 1955”, naval personnel serving in certain areas referred to in the bill shall be exempted from income tax. That exemption, however, will continue only until the royal assent has been given to the bill. Then the exemption from income taxation granted to naval, air force and army personnel serving in those areas will cease and a special allowable deduction of £180 a year will be granted to them, putting them in the same category for taxation purposes as people living in zone A. I shall say something later about concessions to taxpayers in zone A.
Clause 7 is important, particularly for business men, because it provides for a system of balancing adjustments of depreciating assets. I should like to make a passing comment on clause 9, which must be considered in conjunction with clause 20. Clause 9 deals with expenses relating to the grant of patents, copyrights and designs, and clause 20 deals with allowances for depreciating assets, referring, in particular, to access roads for the timber industry. The clauses are complex, but I feel it is important that they be explained as fully as possible and understood as clearly as possible. Clause 9 proposes that a taxpayer shall be allowed to deduct for income tax purposes all expenditure incurred by him in obtaining the grant or renewal of a patent, registered design or copyright for use in the production of assessable income. It is complementary to that part of clause 20 which relates to the deduction of capital expenditure on industrial property in the form of patent rights, registered designs and copyrights.
In passing, Mr. Speaker, I should like to make some reference to a suggestion which I advanced in this House a considerable time ago in relation to patents, copyrights and designs. It was a suggestion which, I feel, is worthy of consideration by the Government. It may be remembered that I suggested the Government should consider granting prizes or awards for inventions in peace-time. I believe that a great deal could be achieved in industry and in many walks of life if more encouragement and greater incentives were given to people of an inventive turn of mind. I believe that people should be encouraged to think up new ideas and to patent them. 1 should be very pleased indeed if the Government gave some consideration to my suggestion that in peace-time it should do as it does in war-time - that is, grant special prizes or awards for worth-while inventions. Any inventions that would increase productivity, help to make industry more efficient or improve the national economy would be well worth while.
Gifts of £1 or more to certain very worthy institutions, which are set out in clause 11, are to be allowed as deductions.
These institutions include the Royal Australasian College of Surgeons, the Royal Australasian College of Physicians, and various colleges of nursing. I should very much like to see the list extended, and perhaps next year the Treasurer will find that possible. Organizations of a charitable and worth-while nature come readily to mind. One is the Boy Scouts movement, with which I am associated in Queensland, and another is the Girl Guides movement, a splendid organization, which should be encouraged in every possible way.
I suppose that every honorable member can readily think of other organizations and societies, and I can appreciate the perplexity of the Treasurer in deciding at budget time just which he will approve for the purpose of allowing deductions. I know that his own approach would be to extend the list if he possibly could, and I feel confident that when he believes the time is ripe he will do so. It is very proper that there should also be some recognition of the value of scientific and research work. I welcome the inclusion of the name of the Council for Christian Education in Government Schools in the list of organizations, donations to which are deductible for income tax purposes.
I want now to say something about zone allowances. This ties up with the very important problem of the need to decentralize our population. Every honorable member will agree, for I do not think that this is a party-political issue, that if we are to develop this country we must not only increase our population but also make the most of our resources, many of which are as yet untapped. Great areas of Australia are not adequately populated and developed. Some are not even partially developed. The Government is moving in the right direction in liberalizing zone allowances, the effect of which can be more readily followed by reference to the map which the Treasurer has issued in conjunction with this legislation. Briefly, zone A includes that section of Australia north of the tropic of Capricorn, with the exception of the more settled parts of coastal and central Queensland. It also includes the islands forming that part of Australia lying adjacent to the zone, and also the external territories of the Commonwealth. The previous concessional allowance for zone A was £120 a year. The bill increases the allowance to £180. The zone has been extended to include more of Western Australia, the whole of the Northern Territory and a portion of south-western Queensland which at present is in zone B. Al! of the people in the areas added to zone A will, of course, benefit from the new zone allowance. In zone B, which comprises the remainder of the country affected, the allowance has been increased from £20 to £30.
I have already referred to the effect of clause 5 on servicemen stationed in the Malayan area, and have pointed out the need to look at it in conjunction with clause 13. A serious anomaly has been remedied, and as soon as Royal Assent is given to the bill, certain personnel in Malaya wi!! be placed on the same footing as those in zone A and will receive a concessional allowance of £180 a year.
In granting increased zone allowances, the Government is recognizing the need for the decentralization of our population. Many industries could be, and should be, encouraged to move away from the metropolises. There is far too great a concentration of population and industry around our capital cities, and I am hopeful that zone allowances will assist in a positive way to distribute our population more evenly and help to develop our national resources. The increased zone allowances are, of course, also a recognition of the hardship, suffering and loneliness of the people outback. Those of us who are accustomed to all the amenities of city life, and who have not seen much of life outback, probably do not appreciate all that these people have to put up with in order to sustain life and play their part in the development of this continent. I am very pleased indeed thai the Government has recognized their value.
Clause 14 will do much to help business people by correcting an anomaly in relation to the payment of taxation by persona involved in bankruptcy proceedings. Under the bill, the amount paid by a taxpayer in respect of a debt incurred in one of the seven years preceding the year of income will be an allowable deduction “ to the extent that it does not exceed so much of the debt as the Commissioner is satisfied was taken into account in ascertaining the amount of the loss “. Perhaps to one who is not familiar with the wording of the clause that is a little hard to understand, but it corrects an existing anomaly and, even though it is subject to two qualifications, is a step in the right direction. It will certainly be a help to business people who come up against financial difficulty.
In replying to the honorable member for Bonython (Mr. Makin), 1 have referred to clauses IS and 16. Clause 15 deals with the increased amount of life insurance and superannuation allowed for tax deduction purposes. Clause 16 relates to medical and hospital fund contributions. I should like to express my appreciation of the Treasurer’s action in providing that payments to those funds shall now be allowed as a separate deduction. That will help a great many people in the community, especially the family man and the small businessman - the great middleincomeearning group who are struggling hard to pay off homes and educate families. The honorable member for Bonython does not think that the concessional allowances for education expenses are worth while, and argues that they will benefit only the wealthy section of the community. From my observations, that is not correct. Education expenses include university and college fees, and, in these days, such institutions are open to any one. A great number of Commonwealth scholarships are awarded annually, and there is no reason why any intelligent boy or girl, who is prepared to work hard, cannot go to the very top in the field of education. That process will be helped considerably by these increased concessional allowances. Payment of fares and provision of text books are an expenditure that weighs heavily on poor families whose children attend State schools, and the Government’s, action in increasing the concessional allowance from £75 to £100 in respect of such expenditures will help a great many struggling family men. Three years ago the allowance was increased from £50 to £75. The Treasurer has shown throughout that he is a man who has a very ready and sympathetic understanding of the burdens that have to be borne by family men, and has approached the whole matter in a very broad, humane and practical way. It was the Treasurer who introduced the original £50 allowance in respect of educational expenses, who increased it from £50 to £75 in 1953, and who is now asking the Parliament to increase it again, from £75 fo £100.
It is no doubt a disappointment to many business people of all kinds that the Treasurer does not consider the time ripe for any further implementation of the recommendations of the Hulme Committee in respect of depreciation allowances. However, the question of these allowances is one that has to be considered in relation to the economy as a whole.
– Order! The honorable member’s time has expired.
.- This measure, the Income Tax and Social Services Contribution Assessment Bill, highlights the most important differences between the Liberal party and the Country party, now in office, and the Labour party, now in Opposition. This difference can be seen if the electorates represented by members are examined. The average income of electors in the divisions represented in this House by members of the two governing parties is considerably higher than the average income of electors in the divisions represented by members of the Labour party. I can never understand why electors should elect members of the Australian Country party to represent them here, and I will exclude them from my remarks. Metropolitan electorates in which well-to-do people live are represented here by members of the Liberal party, and working-class areas, where the average income is probably, at the most, £17 a week, are represented here by members of the Labour party. That statement has elicited some noisy interjections from honorable members opposite. I know that it is a fact that they find very unpalatable, but I remind them right at the start of my speech that this measure is the kind of legislation one would expect to be formulated and supported by members representing electorates whose inhabitants are wealthy or fairly well-to-do. The bill is a reflection of the main tax proposals outlined in the budget. In fact, it is, substantially, the only tax measure deriving from the Government’s policy for this financial year as announced in the budget.
What has the Government to offer us in its tax proposals for 1956-57? It offers us legislation which provides for an increase in concessional tax deductions that may be enjoyed by members of the community who can afford to increase their already high contributions to superannuation schemes or friendly societies, or in respect of life assurance policies. The concession in these cases is to be increased from about £4 a week to about £6 a week. The bill also provides for an increase in the concessional deduction enjoyed by members of the community who can afford to pay for the education of their children. The concession in this case is to be increased from £75 to £100 for each child. 1 do not know one person whom I represent in this chamber who can afford to pay £4 a week to a superannuation scheme or a friendly society, or as premiums for a life assurance policy, or who can pay 30s. or £2 a week for the education of each of his children. I suggest that the people who can afford to do those things are represented in this chamber by honorable members opposite, and that this measure, with its generous provisions to benefit well-to-do people, is the kind of taxation measure one would expect from a class-conscious government.
– This is precisely the sort of legislation we would expect to be supported by honorable members opposite who, like the Minister for Social Services (Mr. Roberton), indulge in turgid denunciations of socialism. I say that if this is the kind of one-sided, biased class legislation we are to have placed before us by this Government, the sooner we have more socialism the better. The attitude of the Government can be deduced from the characteristics of the measure. I suggest that the concessions made in the measure are made to people in the higher income brackets, and to those people alone. This is the same government that makes concessions to private business interests, despite the receipt by those interests of already highly excessive profits. I suggest that if the Government, in this time of so-called prosperity when the money income - I repeat, the money income - of the Commonwealth has never been so great, can afford to give concessions to taxpayers it should be giving those concessions to family men on low incomes, on whom has fallen the brunt of the inflation produced by the Government’s bankrupt financial policy. But this Government is a government serving the wealthy, the well-to-do, and the private business interests.
The bill contains concessions that benefit only the well-to-do. It provides that the maximum allowable deduction for life assurance premiums, superannuation contributions and subscriptions to friendly societies shall be increased from £200 to £300 a year or, on a weekly basis, from almost £4 to almost £6. The estimated cost to the revenue given by the Treasurer (Sir Arthur Fadden), when he introduced the measure, is about £450,000 annually. The honorable member for Ryan (Mr. Drury) said a few moments ago that a large class of people would benefit from the measure. But who will benefit from it? Just what proportion of the people can afford to pay between £4 and £6 a week for insurance? In the first place, taxpayers, in order to benefit from the measure, must already be able to afford to pay about £4 a week in those avenues of expenditure. I suggest that in order to be able to do this a taxpayer would have to have an annual income of at least £1,500, or, more likely, £2,000, which, on a weekly basis, is £40. It is for the benefit of that kind of people that the Government is legislating. If that is true - and it is open to argument - I point out that, according to the 34th Annual Report of the Commissioner for Taxation, in a table at pages 56 and 57, the number of persons who earn £40 a week is 129.180, or only 2.72 per cent, of the total of income earners of 3,470,866. That is the small proportion of people who, at most, will benefit from this measure. That relatively small number of people had, in the last financial year, before paying tax, £450,849,000 of income, or 19.1 per cent, of the total taxable income in Australia.
A Government supporter may say, “ Yes, but what happened after our exorbitantly large tax rates were applied to these people? “ Let us see what happened after the Government’s tax rates were applied to these people with over £2,000 a year. After having paid their tax in the last financial year, those people had £283,679,000 left, or 15.75 per cent, of total taxable income. So 2.72 per cent, of the people for whom the Government is legislating, after income tax had been imposed on them, were left with 15.75 per cent, of all taxable income.
Let us look at the position to which the honorable member for Sturt (Mr. Wilson) referred. I think that the honorable member put forward the other main argument for the Government. The real point, the honorable member said, is that saving must be encouraged. He said that the concessions that are to be made to lue people who put between £4 and £6 a week into insurance will encourage people to put more money into the insurance companies. Therefore, he said, more money will be obtainable through the insurance companies for government loans for the building of hospitals and schools and other most necessary works.
Let me remind the House of one significant new financial development that has been taking place in Australia before our eyes in the last twelve months. Prior to this time, the greater amount of money that was put into the insurance companies tended to go into relatively low return investment such as Commonwealth and other government bonds, and tended to be directed into the provision of public utilities. But the great trading banks, possibly in continuation of their agreement with the Prime Minister, have set up hire-purchase subsidiaries. Hire purchase has become eminently respectable as a result. It is now almost a gilt edged security. Consequently, we find that the insurance companies which were previously satisfied with, perhaps, a 5 per cent, or, at the most 10 per cent, return on their loans are now putting their money into the hire-purchase companies which are run by the trading banks.
So a great deal of this money which the honorable member for Sturt says will be saved as a result of this measure will be directed, not into industrial uses, but through that machinery, into high profit returns in the hire-purchase field. Here again, we find the impossibility of achieving any social aim by the laisser-faire. unplanned, irrational method that a government of this sort is compelled to use. This increased concession is totally unjustified in view of the fact that, if the Government has any money available it should give concessions to the family income earners who have suffered far more than the people who will benefit by this legislation.
The second most important provision in this legislation, as I have already mentioned, is that those people who can afford to pay between £75 and £100 a year towards the education of each of their children will receive additional concessions. This, the Treasurer estimated in his budget speech, will cost Consolidated Revenue £550,000 in the coming year. I suggest that if this
Government genuinely desired to assist education, it would see whether it was possible to use that £550,000 in the provision, say, of new class rooms. That sum of money might finance the construction of between 2,000 and 3,000 classrooms. But, no! That is not the kind of government that we have in office. We have a government that wants to give concessions to people who can afford between £75 and £100 a year for the education of their children - the kind of people who live in the electorate of the honorable member for Mackellar (Mr. Wentworth) - the kind of people who have an income of £2,000 a year or more - the kind of people who go to what we call, in Melbourne, public schools - the kind of people who go to what they call, in Sydney, the great public schools. These are the people-
– Yarra bank!
– Can honorable members opposite not take the truth for once? lt is not likely that any one whose children-
– Order! There is a rule in regard to tedious repetition. The honorable member for Yarra has mentioned the one thing a number of times in his speech. I suggest that he move on to another matter.
– My judgment of honorable members opposite is that they need some repetition if they are to understand even the most simple thing that is being said.
I should like to refer to some statistics to show that the kind of people who will benefit from this educational provision are the kind of people to whom 1 have just referred. 1 hope that you will not rule that this is tedious, Mr. Acting Deputy Speaker. Recently, an investigation was made in Sydney, and the results were published in “ The Forum of Education “. Volume XIV., No. 1 of July, 1955. The investigator endeavoured to discover whether there was any occupational correlation between the parents of children at school and the children who passed on to high schools. At page 6 of this publication he says this -
If school success bears closely on tendency to go further with study, so also does a boy’s father’s occupation.
The investigator then provided a table of statistics showing that the following percentages of children who went on to high school had parents in the occupational groups indicated: -
He concluded from this -
It is clear that it matters a great deal whether a boy comes from a high or a low occupational group if we are to predict his chances of leaving or surviving at high school.
That is a reference to high schools, Mr. Acting Deputy Speaker, not to private schools. Probably nothing like £75 a year is spent, on each student at a high school, but the Government is providing in this measure for the parents of children who wish to spend between £75 and £100 a year on the education of their children. I am prepared to guarantee that very few of those children go to high schools. Only 29 per cent, of the children of skilled, semiskilled and unskilled workers - the kind of people who vote for the party on this side of the House - are able to go through high school; so that it is obvious that this concession is a clear example of class education.
– An extension of the class war, is it?
– The honorable member for Hume (Mr. Anderson) is responsible for carrying on the class war. I am merely describing one aspect of it.
Let me refer now to other aspects of the bill. The honorable member for Sturt, in attempting to justify the measure, said that it would encourage diligence and charity, and that its introduction was the action of a government that was prepared to help those who were out to help themselves. That, he. said, was what every wise man did. 1 suggest that the people whom this fellow traveller of the nineteenth-century tory philosophers represents as those who are out to help themselves are the people who earn £2,000 or more a year, of whom I have just been speaking. If the Government wants to consider only those people and to encourage only them to help themselves, then that is the Government’s affair, but 1 suggest !hat the 3,400,000 people in the lower income groups try a great deal harder to help themselves than do the majority of those who are sufficiently fortunate to be in the other income group. I believe in doing the best we can to assist the people in the lower income groups. They are the ones who make the efforts to help themselves that are worthy of note and worthy of praise. They are the people who start from nothing - many thousands of them - and make a great deal more effort, to help themselves than honorable members opposite are prepared to recognize. 1 am not willing to accept the idea that the only people who try to help themselves are th-~ in the £2,000 a year and more income group. They certainly help themselves by saving, contributing to insurance policies and other methods, but we must not overlook those who work hard through the State schools and proceed to the university, very often at their own expense, in order to help themselves.
I wish to refer now to one or two relatively minor matters in relation to this bill. First, I refer to the proposed change in respect of tax exemption for members of the defence forces. It seems that members of the defence forces serving in Malaya have been exempt from income tax. This measure proposes to terminate that exemption. It seeks to classify members of the defence forces who are serving in Malaya as coming within zone A and to allow them exemption of £180 a year. The Treasurer, in his second-reading speech, stated that this decision had been made in the light of changed circumstances of service in Malaya. Perhaps the circumstances have changed, but the right honorable gentleman gave no indication to the House of the way in which they had changed, and I think that the House has a right to know the nature of the change before it is asked finally to pass this measure.
Another provision of this bill is that certain grants made under the Fulbright agreement are to be exempted from taxation. The Treasurer stated, in the course of his speech -
It is proposed in the bill to give formal legislative effect to Article 13 of an agreement dated 26th November, 1949, between the United States and Australia, generally known as the Fulbright Agreement. In this article, it was agreed that grants by the United States Educational Foundation in Australia to students and research workers should be exempt from income tax. Until recent times, it was not necessary to provide a specific exemption of these grants in the Assessment Act as the grants were made to students in circumstances that caused one of the present exemptions to apply. More recently, however, visiting professors, lecturers and research workers have received grants to which the present exemption does not apply. It is now proposed to amend the Assessment Act to provide specifically for the exemption of all grants by the foundation.
Again, I think that the House is entitled to a little more information. Why is it that although, to a certain date, payments made under the Fulbright Agreement to visiting professors, lecturers and research workers were eligible for exemption, they are no longer eligible? What is the explanation of the change? In this measure the Government could, perhaps, have taken the opportunity to exempt specifically all payments made to visiting lecturers and research workers, or, perhaps, it could have decided to grant them exemption in respect of income earned in Australia below a certain limit. I say that because most lecturers and research workers do not visit other countries in the course of their permanent occupations. Invariably, the people who make these trips suffer loss of income. They sacrifice income for the sake of the experience they gain, and to increase their knowledge of the problems of the countries they visit. In view of the great benefits which, I feel, invariably are conferred upon the country visited by such people, I think that we could exempt, if not all the income earned by them here, at least income below a fixed limit.
In conclusion, this measure seems to me to draw, clearly, a distinction between the policy and philosophy of the Government parties and those of the Australian Labour party. It indicates, clearly, that the Government is prepared to make concessions to those who can afford to contribute between £200 and £300 a year to insurance companies, superannuation funds and friendly societies, which necessarily assumes that they have a fairly large income - if not as much as £2,000 a year, then fairly close to that sum.
– I can understand the Minister for Social Services (Mr. Roberton) being well able to afford to pay between £4 and £6 a week in that way, but 1 suggest that, to do so, it is necessary to have an income something in the nature of that of members of this Parliament. Perhaps, as I am reminded, honorable members on the other side of the House regard their parliamentary salaries, because of private income, as quite insignificant, and as somewhat of an embarrassment. The time has come for a complete review of the tax structure, with the object of making it more scientifically progressive and attempting to make it provide tax allowances for the taxpayers who most need them. That is the policy of the party on this side of the House. Now in its eight year of office, this Government has failed to give consideration to these matters.
– It will be here for sixteen years.
– Possibly the honorable member for Bruce (Mr. Snedden) will be here long enough to see these things done by the party on this side of the, House, but I doubt whether he will be here then. The Government has made no attempt, although it had the opportunity, to assist by tax concessions those people who have suffered most from its bankrupt economic policy and from the fact that prices have risen by nearly 90 per cent, since the Government has been in office although the incomes of a great many persons in this community have not risen by anything like 90 per cent. I suggest that the measure equally shows the difference between Labour and the Government parties in relation to education concessions. It is a measure calculated to assist only those persons in the higher income group with the education of their children.
Mr. ACTING DEPUTY SPEAKER (Mr. Lucock). - Order! The honorable member’s time has expired.
– The honorable member for Yarra (Mr. Cairns) in his opening remarks said that the measure before the House clearly showed the distinction between the philosophies and policies of the Australian Labour party and of the Government. In that respect I agree with him wholeheartedly. He went on to say that in his opinion we should have more socialism. He was quite honest, as I believe that he is a socialist, slightly tinged with red. He said that there is no doubt that honorable members on this side of the House represent the privileged sections of the community, while honorable members opposite represent the average person who receives a wage of from £14 to £18 a week. Even if that is so, I hazard a guess that an examination of the incomes of honorable members would show that the capitalists in this House are to be found on on the other side and every thought they have is related to capitalism.
Opposition members interjecting.
– I am not pulling anybody’s leg. If honorable members opposite believe they have an affinity with the low-wage worker they are pulling their own legs. The honorable member for Yarra then discussed the concessional allowance for educational expenses, saying that the people who would benefit from the proposed provision were those who sent their children to private schools. A survey would show that the majority of honorable members opposite send their children to private schools, but they will not be honest about it. The honorable member for Yarra should be careful in his remarks on that subject. I remind him that there are such institutions as high schools, which in this country are free, and at which children may reach a very high standard of education. The proposed concession will be of benefit to the parents of children attending high schools, particularly in country districts, where they have to board at hostels. If the honorable member for Yarra likes to come to a western electorate, where his education might be - I hope could be - furthered, he will learn that the parents of the majority of children attending high schools are persons in the lower income group which he has mentioned.
– There are few schools there at all.
– As the honorable member for Fisher (Mr. Adermann) says, there is a scarcity of schools in those regions, and we all agree that more should be provided. The whole of the speech of the honorable member for Yarra was designed solely to stir up class hatred. That is the foundation of the brand of politics which he professes. His speech was vicious, because all of it was directed to that end. I do not intend to waste any more time on him, because he told us exactly where he stood when he said that it was a pity that this country could not embrace socialism of the kind that he advocates.
I wish to deal with the clause of the bill which relates to special deductions allowable to residents in isolated areas. We have before us a map, which shows the proposed alterations to the boundaries of zone A and zone B. The area of zone A is to be enlarged and will be bounded by the 26tb parallel and the 141st meridian. The concessional allowance in this zone is to be increased’ substantially, from £120 to £180. The concessional allowance to residents of zone B is to be increased by £10, a small concession, indeed, but one which will be very welcome. During the budget debate I advocated the re-adjustment of these boundaries. It is easy arbitrarily to draw a line across the 26th parallel and up to the 141st meridian and decide that the area delineated should be zone A, but I am at a loss to understand why these boundaries were selected. In the south-western portion of Queensland, the north-western area of New South Wales and the north-eastern part of South Australia, where the State boundaries join, there are localities which are further away from railways than are portions of zone A and have not the amenities which are available in those portions, yet they are to remain in zone B, with a smaller zone allowance. In that area there are no aerodromes, railways or good roads. All supplies have to be taken over bush tracks, zone A should be extended to include all the country west of the 144th meridian. Such an alteration would result in the inclusion in this zone of a large number of persons who have to meet a high cost of living and who do not enjoy even amenities that are available to some persons in zone A. This is a very serious matter. The cost of living in the south-western portion of Queensland, which is not included in zone A, is much higher than is the cost of living, say, at Townsville, which is in zone B. I ask the Treasurer (Sir Arthur Fadden) and the department to examine this matter again in the light of the cost of living in that locality. It will be found that the majority of the persons living there are worse off than are some persons who live in zone A. The honorable member for Ryan (Mr. Drury) spoke about decentralization. The region to which I refer has some of the richest grazing country in Australia. If there were better roads, railways, and communication facilities generally, it could be developed considerably, and the people would not be seeking these concessions. I submit that zone A should include the people in north-western New South Wales, south-western Queensland and portion of the north-east of South Australia. 1 ask that this matter be reconsidered to see whether something can be done about it.
That is all I wanted to say. The honorable member for Yarra was reprimanded by you, Mr. Acting Deputy Speaker, for tedious repetition, t do not intend to indulge in any tedious repetition. Most of the other features of this measure have already been discussed and I have nothing to add to what has been said by my colleagues. I have dealt with the only matter on which I wish to speak, and I hope that the Treasurer will consider the suggestion that I have made.
.- This measure deals with taxation rates for the current financial year. My complaints are that the rates of taxation, particularly on the lower income groups, are too high, imposing a great burden on many people who can ill afford to bear it, and that indirect taxes are far too high and should be reduced.
I believe that taxation rates can be substantially reduced. I propose to indicate several avenues through which the Government could make substantial savings which would lead to a reduction in taxation. The money collected from taxation is being expended in many wrongful ways, and I propose to deal with them during the course of my speech. The national income should be more equitably distributed so that those in need would receive social services and other benefits. The increasing cost of living is adversely affecting invalid and age pensioners and other recipients of social services benefits. But the Government has not done anything to assist them. Money raised by taxation should be used to provide a better way of life for those people.
One important aspect is that receipts from taxation, both direct and indirect, are being used to finance public works. The budget papers show that about £106,000,000 is being used for this purpose, but I believe that other substantial amounts in departmental votes, which are not so easy to detect, will also be used. I should like to know how much of the money collected from taxation during the present financial year will be used to finance capital works, the provision for which should be made from loan moneys or moneys made available by the issue of treasury-bills through the Commonwealth Bank. I believe that a substantial amount is being wasted in this way. Apparently about £30,000,000 will be spent on capital works associated with the War Service Homes Division. That money will be returned to the Government over a period of years, but the proceeds of direct taxation collected from the people are being used to finance those capital works. The money for works of this class should be regarded as capital expenditure, and revenue should not be used for the purpose. Some millions of pounds will be expended on the Snowy Mountains Hydro-electric scheme. Many generations to come will receive the benefit of that scheme, and I believe that posterity should pay for it. The scheme should not be financed from the proceeds of direct taxation. The use for this purpose of revenue obtained from this taxation is an unjust imposition on the taxpayer.
In budgeting for a surplus of £109,000,000 to provide for capital works, the Government is reducing the spending power of the less fortunate sections of the community. Many people are prevented from acquiring their own homes or the necessary furniture and fittings for those homes, and their capacity to buy many goods produced in Australia, particularly primary products, is reduced. I have examined the budgets of other years, and I shall take, for the purposes of comparison, the pre-war budget of 1938-39. The total direct taxation raised at that time was £74,000,000 or £10 13s. 9d. a head. The total revenue from all sources was £95,000,000 or £13 14s. 3d. a head. In the current financial year, taxpayers are called upon to pay about £11 10s. a head for capital works. As I said before, taxation receipts should not be used for capital works. It is a very unjust imposition.
If the’ £100,000,000 which is to be spent on capital works were raised from loans or similar sources, rather than from direct taxation, a substantial reduction in the rate of tax could be effected. For instance, sales tax could be reduced, thus making life easier for many people who are unduly oppressed by sales tax to-day. Income tax could be reduced and pay-roll tax, which increases the cost of production and, therefore, the cost of living, could be abolished. In that way, many benefits could be given to the people.
Revenue, which is being used to finance capital works, could be devoted to provide a better way of life for the people. Living standards could be improved without increasing the cost of living. For instance, money that is used to pay various social services does not add to costs; it is merely a distribution of the national income. Living standards could be improved by a fairer distribution of national income. The improvements would include increased social services, reduced direct and indirect taxes on the family man, higher taxation allowances in respect of children, particularly for the second and subsequent children, increased child endowment payments, reduced sales tax on essential home requirements, particularly furniture, the provision of finance for housing, which is being refused to many people to-day, accommodation for the aged, and loans for home requirements at reasonable interest rates, which would prevent the high costs and the exploitation, of the family to-day by high interests rates on time payment purchases.
In this way, the living standards of our people could be substantially improved without the cost being passed on’ to essential requirements, such as food. Young people would be encouraged to marry and rear families. There could be no sounder national investment than that which would bring more happiness and prosperity to our people. Increased spending power would assist primary and secondary industries by creating a better home market for our production, This, in turn, would increase employment, and demand.
I wish to mention another matter, which I have discussed here on many previous occasions. I again make a plea for the invalid pensioners and persons qualified for invalid pension, who are called upon to pay taxes. Age pensioners and persons qualified to receive the age pension are exempt from the payment of taxes on incomes which do not exceed £7 10s. a week. But invalid pensioners do not receive the same benefits, lt would be a very great blessing to many persons in receipt of the invalid pension, or physically qualified to receive it, if they were given the same tax exemption as is given to those qualified for the age pension. I have discussed this matter with the Treasury, and the taxation authorities before. I believe that invalid pensioners are entitled to the same income tax exemption as age pensioners receive. Many people in receipt of compensation for injury and retired from industry are called upon to pay tax on the miserable pittance they receive. I believe a very simple method of rectifying this anomaly could be adopted, lt is pointed out in a note on the salary and wages income tax return form that a deduction from taxable income may be claimed for the support of an invalid relative. The definition of “ invalid relative “, which . could easily be applied to a person eligible for an invalid pension, reads - . . “ Invalid Relative “ means a person . . who is in receipt of an invalid pension or for whom a certificate of invalidity has been obtained from the Commonwealth Department of Health. or a doctor approved by the DirectorGeneral of Social Services.
I think there is no difficulty in clearly defining, in that way, a person who is entitled to an invalid pension. If a person is already in receipt of an invalid pension, and has other income besides, he is qualified by the mere fact that he receives an invalid pension. If he can obtain a certificate of invalidity from the Department of Health or a doctor approved by the Director-General of Social Services, he could present the certificate with his income tax return and receive the benefit of the taxation reduction. So, the matter presents no real problem. I think this proposal is very just. Some of the £100,000,000 which it is proposed to expend on public works and other activities which are to be financed out of taxation could be used to finance this proposal without any increase of budget expenditure. 1 should like to direct the attention of the House, also, to a matter relating to allowable deductions for the education expenses of children and for donations for charitable purposes. I have made representations to the taxation authorities on behalf of the Tibooburra memorial hostel for bush children. In the outback areas of New South Wales, in my electorate, some 40 or 50 children who live far from- established schools cannot be educated at home because their parents, in most instances, are illiterate and are not capable of supervising their, education by correspondence. They can be educated only if they board in Tibooburra or some other town and attend school there. Representations have been made for the exemption from taxation of donations made to finance the construction of a hostel at Tibooburra where these children may be accommodated while they are being educated. But the authorities have rejected the request. Mr. Thompson, the Deputy Commissioner of Taxation in New South Wales, in a letter dated 10th September last, wrote -
Referring to your letter dated 1st August, 1956, you are advised that gifts to the abovenamed Hostel will not be allowable deductions under the provisions of Section 78 (1)(a)(vii) of the Income Tax and Social Services Contribution Assessment Act, 1936-1956.
The plan of the proposed memorial hostel is returned herewith.
In other words, the representations have been rejected out of hand. If the Government sincerely desires to assist in the essential education of the children of Australia it should give sympathetic consideration to requests such as this.
I wish to mention another matter also. Provision is made for firms to claim as deductions from taxable income business losses made in previous years. I am well aware of the manner in which advantage is being taken of this provision. Recently, the firm of W. E. Bird Limited in Sydney became insolvent. I understand that its business was bought by the Myer Emporium Limited, which paid approximately £299,000 for it. I was informed that the chief “ assets “ were an import quota for goods to the value of £240,000, and accumulated losses of £400,000. I understand that the Myer Emporium Limited, by incorporating the acquired company in its own activities, has become entitled to claim as a deduction from taxable income the accumulated losses of the acquired firm. That is one specific case that I can cite. I have in my hand an advertisement which appeared in the Sydney “ Sun “ on 30th August last It states -
Tenders are invited for the purchase of the Assets and Shares of a Company engaged in the Crockery Glassware and Gift Trades.
Situated in Clarence-street, the company is at present being carried on by a Receiver and “Manager, and holds relevant import licences, and has substantial Accumulated losses.
This advertisement is freely available to the Government if it wishes to see it. It is deplorable that companies should be able to sell their losses as an asset to enable other firms to evade taxes. If the Government wishes to reduce tax rates and the evasion of taxes it should investigate these matters. I am sure that if investigations were made, substantial reductions of taxation could be given and more money could be spent on the essential matters that I have mentioned. I am prepared to hand this advertisement to the Minister for the Interior (Mr. Fairhall) who is now at the table. It was lodged apparently by a Mr. Dulhunty, a chartered accountant, of Burgoyne-street, Gordon, over whose name it appears.
This is not an isolated case. I understand that the practice is general and that substantial sums have been paid and are still being paid for the purchase of accumulated losses by companies which are seeking to evade taxes. Tax instalments are deducted from the wages of the ordinary working man before he receives his pay every week, and he has no chance of evading taxes; but companies, by manipulating books and taking over accumulated losses, can evade substantial sums in taxes, and in so doing evade their responsibilities. Is the Government going to stand by and allow this sort of thing to continue? For how long will it allow tax evasions on a large scale in this fashion while it continues to inflict heavy taxation, both direct and indirect, on the less prosperous sections of the community? These heavy taxes weigh particularly heavily on the family man, who is less able to bear them than are others. When the Labour government was in office the family man in receipt of the basic wage paid no tax, but to-day he pays substantial taxes. I appeal to the Minister for the Interior to bring this matter to the notice of the Government and to urge it to investigate these companies which are evading substantial sums in taxes and thereby imposing heavier tax burdens upon those in the community who are least able to bear them.
.- lt is very strange that, in the eyes of the Australian Labour party, so far as we can judge from the speeches of Opposition members, a man is as honest as the day is long while he is earning wages, but comes under suspicion immediately he becomes successful, makes money, and places himself in a higher taxation bracket. It is very strange also that, no matter what this Government does, Opposition members say, as the honorable member for Darling (Mr. Clark) has just said, that it should be more liberal. This bill liberalizes the provisions of the principal act. The Opposition does not find fault with what is being done, but merely says that the bill should be even more liberal than it is. Honorable members have just heard the honorable member for Darling say that the Government should spend more money on accommodation for aged persons. It has done more to accommodate aged people than has been done by any other federal government. Although it has done so much, the Opposition says it should do even more, although the Labour government itself did not do anything. That is the substance of the argument of Opposition members.
I have examined the clauses of this bill, and the measure appears to be quite satisfactory. I wish, however, to direct attention to a most interesting clause of the bill. I refer to clause 6. Section 26b of the principal act, which is proposed to be amended by this clause, permits a primary producer who receives insurance moneys in respect of live-stock losses through bush fires or other causes to include, if he so desires, one-fifth only of the insurance recovery in the assessable income of the year of receipt and one-fifth in each of the next four succeeding years. Apart from this provision, the whole amount of the insurance recovery would form part of the primary producer’s assessable income of the year when the moneys are received. By clause 6, it is proposed to extend this optional basis of assessment to insurance recoveries by primary producers in respect of losses by fire of trees. The amendment will have particular significance for taxpayers carrying on a business of afforestation. This is a matter of vital importance. There are many praiseworthy features of this bill, but I mention this clause particularly because every one knows that we must preserve our forests, and a person whose trees are destroyed by fire will be greatly assisted by being enabled to spread the amount of insurance recoveries over five years. This provision will be of very great benefit in catchment areas, because if the trees are destroyed in those areas soil erosion follows.
I am reminded of the following rhyme by Henry Van Dyke: -
In the wealth of the woods
Since the world began,
The trees have offered
Their gifts to man.
Practically everything that we use has been derived, at least in part, from wood. The desks that we use in our offices, the railway carriages and ships in which we travel, all are made, in part, of wood. Almost everything that we use, from the cradle to the grave, is, to some extent, of wooden construction. Theodore Roosevelt once, said: -
The fundamental idea of forestry is the perpetuation of forests for use. Forest production is not an end in itself, it is a means to increase and sustain the resources of our country, and the industries which depend upon them.
Although this clause has not been referred to in the debate, its provision will possibly be of more lasting benefit to Australia than any other provision in the bill. Another authority, Robert Chambers, has said -
When the forests go, the waters go, the fish and game go, herds and flocks go, fertility departs, then the age-old phantoms appear, stealthily one after another - drought, fire, famine, pestilence.
Anything that we can do to foster afforestation must be for the good of the community generally, and, therefore, this clause has my wholehearted support.
I have spoken recently in this House of the great success that primary producers have achieved in improving pastures by top-dressing. The taxation legislation provides that money spent in preparing land, and in obtaining seed and sowing it, and in purchasing superphosphate for pasture improvement, is allowed as a deduction from income, for taxation purposes, in the year in which the money is spent. The same principle applies to the preparation of land for agriculture. It appears to me that the Government might very well amend this provision so that money spent in this way may be deducted from income over a five-year period, just as the insurance recoveries may, under clause 6 of the bill, be spread over a five-year period. It is all very well to allow the amount spent on pasture improvement as a deduction in the year in which it is spent, if the amount of income greatly exceeds the amount spent in this way, but I suggest that the primary producer should be allowed to spread his expenditure over five years, because the increased productivity of the land from top-dressing would be apparent for a period of about five years. A producer might get a good yield in the first year if he planted a cereal crop in virgin soil. The improved production resulting from the preparation of the land for agriculture would continue. It is for this reason that 1 suggest that one-fifth of his expenditure should be allowed as a tax deduction in the first year, and one-fifth in each of the four succeeding years. This would result in benefit to Australia as a whole, because we should encourage greater production.
The present legislation favours the person who receives a large income, because any expenditure that he makes for the purpose of improving his land can be deducted immediately from his income. He may not even live on the land; he may be a city merchant, or he may be a primary producer who is already well established and receives a large income. If he is receiving an income that attracts a rate of tax as high as 10s. in the £1. and he spends £1,000 on pasture improvement, the effect of the legislation would be to reduce that expenditure by one-half.
The men we want to establish on the land are those who would benefit by the procedure that 1 am advocating. Many of the persons who are receiving large incomes and who can take advantage of the existing provisions are absentee owners. The adoption of my suggestion would encourage men to buy land and settle on it. Let us suppose that an auction sale of land is held and that the land being sold is rough country. The prospective buyers realize that they must spend a lot of money to improve it for pastoral purposes. Let us also suppose that in the final bidding two prospective buyers remain. If one of them has a large income, and knows that any money that he spends may be a tax deduction in the year that, it is spent, he can always out-bid the man who wants to buy the property but who has no immediate taxable income. It is another case of “ whosoever hath to him shall be given “, because the man who already has a large income can freeze out the settler whom we should encourage to go on the land. 1 should like the Government and the taxation authorities to look into this suggestion, because I believe it has merit, and that it would result in greater production, which is urgently needed to overcome our balance of payments problem. Although 90 per cent, of our exports at present consist of primary products, 1 believe that it is in this category thai we can increase our exports and put Australia on a stable footing.
.- I agree with the remarks of the honorable member for Mallee (Mr. Turnbull) regarding the preservation of our forests, but I do not agree that this measure is the most effective way in which the Commonwealth Government can encourage reafforestation. The reafforestation which is most urgently needed in Australia to-day is reafforestation of the catchment areas of the rivers. That could well involve the compulsory acquisition of land in the catchment areas by the States with a view to bringing it back to a virgin state, as well as real financial assistance by the Commonwealth to the States for reafforestation.
J was interested by the constant interjections of the honorable member for Hume (Mr. Anderson) in the course of the speech of the honorable member for Yarra (Mr. Cairns), f think that both honorable members confused what ought to be an argument in equity with an argument about classes of people. Let me say at the outset of my remarks on this subject that I shall benefit heavily from the kind of exemptions which the Government proposes to grant. Also, as a member of Parliament with an income of £3,000 a year, I belong to a highly privileged section of the Australian community. If the Government’s taxation statistics are correct, only a small percentage of the people have such an income.
It is quite true, as certain honorable members belonging to the Liberal party have interjected to say, that we shall benefit from this legislation, ls it their argument that the legislation is defensible because we ourselves will benefit from it? We pay £234 a year into the parliamentary pensions fund. In the past, only £200 of our payments for insurance purposes were exempted from taxation, but now, even if an honorable member has no private insurance, this concession will bring another £34 of his payments to the parliamentary pensions fund into the exempted category.
It is useless to get into a sterile argument about whether people who have high incomes must be degenerates or moral lepers. Some of the people with high incomes have got them through superior skill or organizing ability, some as the result of an inheritance, some because they have had good opportunities in life and others because they have been effective black marketeers. Equally, there* are some poor people who are poor because they have wasted their substance. But surely we can forget all about trying to make moral valuations of people whom we do not even know. We should ask ourselves: Are we drafting the most equitable form of taxation law?
A policy of increasing the exemption for insurance payments from £200 to £300 a year may be defensible, because it may encourage saving and bring all sorts of benefits to the nation, but it is, in one sense, a regressive taxation policy, because it is a violation of the principle that taxation should be graduated according to capacity to pay. I do not know how many people there are in Australia who pay between £200 and £300 a year for insurance and who, therefore, will benefit from this concession. I imagine that a large number of civil servants contributing to the Commonwealth and the State superannuation schemes come into that category. I believe there are many civil servants who contribute for nine or ten units of superannuation and whose yearly superannuation and insurance payments are between £200 and £300. But, by and large, this is a benefit extended only to the well-to-do section of the community.
It is my honest opinion that the tendency of the Government since it took office has been to draft regressive taxation laws, lt is constantly increasing the percentage of the total revenue that is derived from indirect taxes. We may justify indirect taxes or we may denounce them, but it is an undoubted fact that they do not strike the community according to ability to pay. They hit indiscriminately. The Government, through concessions like this, is cutting down the percentage of the total revenue derived from income tax and, in that way, is benefiting the well-to-do section of the people. By imposing indirect taxes, it is lightening their tax burden. This is a very old controversy. In point of fact, it was the kind of controversy that went on between Bismarck and the social democrats of his time. They argued in favour of income tax, but Bismarck prevented the imposition of income tax, and the Junker class - the landed people whom he represented - benefited accordingly. I think that this concession is unsound.
I think also that the new provision for educational expenses is unfair. Let me make no pretences. 1 believe that the Australian Labour party ought to come straight out and say that it is a heavy income tax party. If I could increase income tax revenue by £130,000,000 a year and so abolish the sales tax altogether, 1 should do so. I believe that that would be the right policy. I believe that we of the Labour party should stand up and say that we favour a heavy graduated income tax. We should make no bones about that. As I have said, I believe that the new provision for educational expenses is unfair. A taxpayer can claim an allowance of £78 a year for a first child and £52 a year for other children. If I feed my child at home, I can claim an allowance of £78 a year for him, but if I feed him at a boarding school I can claim an allowance of £178 a year for him. The well-to-do person will be able to claim the full allowance of £78 for a first child and, if he sends him to a college, an allowance of another £100 for school fees. He will be able to claim £178 more than a person who cannot afford to send his child to a college will be able to claim for his wife. The allowance for a wife is only £130 a year.
I noticed that the Anglican Bishop of Newcastle, Dr. de Witt Batty, was proposing that the educational allowance should be increased to £150. I know all the arguments that there are in favour of a Christian education, and 1 agree with them, but I do not think that a church which aims at giving a Christian education only to those children who can afford to pay for it is in a morally defensible position to advance such a proposal. There is at least moral consistency on the part of those in the Catholic Church - I am not a Catholic - who advocate direct grants by the State to subsidize the Christian education which they will give even to a ch;.1’.) who cannot afford to pay for it. They are more consistent than are those who oppose such grants but advocate increased taxation allowances for education expenses so that they will be able to raise their school fees.
This is not a question of class war. 1 do not resent a man sending his child to a private school or a great public school. He should not be denounced for that. He might place great value on the superior moral training which he believes his child would get at a private school. But we are making certain decisions in equity. If the Government wants to increase exemptions for children, it should lift the £78 exemption for the first child - I take him as an example, but my remarks apply equally to other children - to £100, irrespective of whether the child goes to a private school. Under these proposals, if a man cannot afford to give his child a public school education, he will be entitled to claim a taxation exemption of only £78 for him, but if he can afford to give the child a public school education, he will be entitled to claim a taxation exemption of £178 for him.
What is the moral basis for a scheme under which, if I feed my child at a boarding school, I receive more than double the taxation allowance for him? I get the £78 that I should get if I were feeding him at home, and I get another £100 because I am feeding him at a school. There is no justification for that in equity, although there may be some justification for it in politics. Honorable members may feel that that is a way of assisting Christian education, but surely there are more direct and open ways of doing that, if we really want to do it, than the way that the Government proposes. This is not a class issue. Our taxation system ought to be graduated according to ability to pay. There should be a fair distribution of the burden, but, with exemptions of this kind, the burden is distributed unfairly.
– ls the honorable gentleman making due allowance for the high cost of a college education?
– If I could afford to give my child a college education - it is probable that, as a member of the Parliament, I could- I should give it to him, if I thought that it would be better than a State high school education, irrespective of whether I should become entitled to a higher taxation exemption. The cost of maintaining a child must also be considered. I believe that it is better to give all children an exemption of £100 rather than to give some an exemption of £78 and some as exemption of £178, especially as those who go to private schools tend to come from the higher income group.
– What of the saving in cost to the State schools?
– If the honorable member wants me to make a blunt statement, I will say that the Roman Catholic Church does make a significant contribution. It is numbers of children that count. I do not think that there is any vast saving to the State as a result of the relatively few children who attend the great public schools.
– There is an enormous saving to the State.
– It is a matter of statistics. There are not so many pupils in the private schools that they would not be lost in the State schools. I do not say that they should be, and I hope that the honorable member will not misinterpret my argument. I am merely saying that there are not so many in the great public schools as would prevent them from being conveniently spread over the State schools.
The other important thing about this legislation which, I repeat, benefits me, as a member of Parliament, and therefore of the privileged income group in the community, is the way in which the medical benefits scheme is being worked. This Government can rightly claim credit for a scheme that works. It is true that, because of the resistance of the doctors, Labour’s scheme did not work. We can accept that as an agreed basis upon which to discuss this scheme. The lower income groups, at present, suffer a great disadvantage.
I can give a specific example of what happened to me in the last fortnight. 1 received a doctor’s bill for £22 18s. 6d., which I paid. I got back about £15 10s.. but if I had been on the basic wage, I would have found tremendous difficulty in trying to make the initial payment. One has to pay the doctor’s bill, get a receipt, and then put in a claim. A refund of about three-quarters of the amount paid is then received. It is a very good scheme if one can make the initial payment, but people in the lower income groups often find big bills extremely burdensome. The Government might well consider whether the scheme cannot be improved for the benefit of these people.
I am always glad to join in these discussions on social services. When Mr. Chifley was Prime Minister, he did something that was politically unwise, but politically honest. He separated the social services contribution from the income tax contribution and each taxpayer received two separate assessments - an income tax bill, and a bill for social services. This system created a furore, which undoubtedly benefited the Liberal party. Government supporters will recall that before 1949 a great deal was said about the abolition of the means test. They are now as silent as the grave on that subject. Mr. Chifley’s action at least dramatized the fact that people were paying a social services tax, but, very often, were not getting a corresponding benefit. It was politically unwise to separate the two forms of taxation, but it was also honest. People still pay social services tax, just as they always have done, but it is now concealed in the general income tax. Accordingly, some of the pressure for the abolition of the means test has disappeared. It is time that the social services tax was levied separately because if Government supporters are sincere - and 1 think that they are - in saying that they want a national contributory scheme, based on equity, that must be done. The tax which finances social services must be separated from, the general income tax.
.- I shall delay the House only a few minutes in order to comment on one section of this bill. I appreciate the sincerity of the honorable member for Fremantle (Mr. Beazley), but my only criticism of the proposed new allowance of £100 for education expenses is that it does not go far enough. I do not know of any State school which is also a boarding school. Most private schools are conducted by the churches, or by subsidiaries of the churches. Any one who sends a child to a boarding school will know that it costs between £300 and £400 a year. In quoting those figures I am thinking of the position in Western Australia. The cost is probably even higher in the eastern States. The majority of the parents are primary producers, who, as honorable members will agree, are not neglected when it comes to levying taxation. They are, in fact, among the highest contributors to the coffers of this Commonwealth. They have no option, if they want their children to proceed to higher education, but to send them to this type of school. If they go to a State school in a nearby area they will have to board with some one who may be quite unknown to the parent. By placing their child in a recognized boarding school, parents can solve its education problem. I should imagine that this clause is intended to assist the very people upon whom the future of this country depends - in the main the primary producers of Australia. I hope that this will not be the last time that the Government will grant an increase in the allowable deduction for education, and that the present increase will be only a small part of what will be given to the people who so richly deserve a reward for what they are doing for Australia.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 11 - by leave - taken together.
.- I refer to clause 5 which deals with the exemption of pay and allowances to members of the Defence Force. I do not think the clause deals in the proper way with the granting of taxation concessions to members of the defence forces who are serving overseas. Certain people who are serving in the Malaya force will benefit under the bill by a zone allowance of £180. I understand that a person employed in a place like New Guinea, after establishing a home in the Territory, is granted exemption from income tax. I cannot agree that a person volunteering for service in the permanent forces, who is sent to Malaya or one of the areas set out in the bill, is doing anything else but establishing his home in that place, and I think it is wrong to provide an exemption of only £180 for people who must make considerable sacrifices as the result of taking up a career in the armed forces. # They certainly make sacrifices, because at present the retiring ages for commissioned officers in the services are so low as to deter people from joining. A man becomes an experienced serviceman, gains a commission, with the income associated with it, reaches an age which is extremely low compared with retiring ages in other avocations, and has to leave the service. He is thrown on to the labour market without training for civilian employment. I think the exemption in respect of pay and allowances for members of the services should extend beyond members of the permanent forces. It should be extended to those who are serving in the militia, because today the greater part of our defence potential consists of men who are devoting their time and their energies, in a voluntary capacity, to service in the defence forces of the nation. Men who have undertaken a career in the militia forces - Army, Navy or Air Force - receive very small reward indeed for the time they devote to the interests of the nation. Although statutory periods are laid down for training, varying from fourteen to 21 days a year, any man who has the interest of his unit at heart will find himself devoting many more hours to getting himself into a fit state to lead his men and to getting his men to attend for the prescribed periods. Yet the pay such a man receives from the Commonwealth is assessed along with his private income, and both are taxed as one income. The result is to bring him into a higher income group, and it is possible that his services in the militia forces would actually cost him money. No man is paid sufficient to reimburse him for the time and money it costs him to serve conscientiously as an officer in the militia forces. There are cases of members holding the rank of warrant officer whose service in the militia costs them money. The Government should therefore consider extending the exemption to all members of the militia forces, because service in the militia means hardship for the average man who is married and has children. He finds that his militia service, besides taking him away from his family life, costs him money. In view of the small amount of revenue the Government would lose by extending the exemption of these men. I think the least it can do is exempt from tax. entirely any pay received by any member of the Citizen Military Forces.
– I support the remarks of the honorable member for Perth (Mr. Chaney) in regard to the taxing of the pay of members of the Citizen Military Forces. I wish to say no more than that I feel that his argument is right, and should be supported.
Clauses 1 to 11 agreed to.
Section seventy-nine A of the Principal Act is amended -
by omitting from sub-section (2.) the words “ Twenty pounds “ (wherever occurring) and inserting in their stead the words “ Thirty pounds “.
Mr. CREAN (Melbourne Ports) [10.251- - I move -
That the words “ Thirty pounds “ be omitted with a view to inserting in place thereof the words “ Ninety pounds “.
The concessions in respect of zone A and zone B which the clause, as it stands, proposes to alter were, as mentioned earlier to-day, initially fixed at £40 for zone A and £20 for zone B - a ratio of two to one. The concession of £40 was later increased to £120, but no alteration was at that time made to the £20 concession. The clause seeks to increase the £120 concession - the concession that was originally £40 - to £180, and to increase the £20 concession to £30. The Opposition believes that the original ratio of two to one should be restored, particularly as it applies to certain parts of Tasmania and Western Australia. I outlined this afternoon, to some degree, the reason for the amendment that I have moved, and I indicated that the areas of Australia affected are remote from normal channels of transport: People in the western part of Tasmania have to depend for their communication with the rest of the island on roads which are difficult to negotiate and which are subject to the depredations of adverse weather. The freight charges paid by people in those areas impose a considerable hardship upon them, ft seems to us to be ridiculous to increase the concession in respect of those areas by only £104 to £30. I point out, in passing, that the concession does not mean that these people receive a tax rebate of £30. but merely that they may deduct £30 from their taxable income. The average taxpayer pays a rate of between 3s. and 4s. in the £1. and the net additional saving to the individual taxpayer will be between 30s. and 40s. a year. This is a ridiculously small concession, and I suggest that the Government should revert to the two-to-one ratio between zone A and zone B. This ratio would be restored if the zone B concession were fixed at £90 and, at the average rate, would represent a total saving of from £13 10s. to £18 a year to the taxpayer.
I have said that people who live in the areas affected feel that it would be more progressive and more realistic if the Government were to give them the benefit of freight subsidies, which would lower the cost of goods purchased by them. However, the Government has chosen to alter the zone allowances instead, and I am now directing attention to the petty nature of the alteration as it affects taxpayers in zone B. We do not suggest that, even if our amendment is accepted, the resulting concessions will be ideal, but at least some measure of justice will thereby be given to taxpayers in zone B.
fi 0.28]. - It is true that when the zone allowances were first introduced in 1945 the deduction was fixed at £40 for zone A and £20 for zone B, the ratio therefore being two to one; but honorable members will recall that after the scheme had been in operation for two years the Chifley Labour Government considered that the ratio was quite unsatisfactory and, after a comprehensive examination of the conditions in the area, it was decided that the allowance in respect of zone A should be increased to £120, but that the allowance in respect of zone B should remain at the original level of £20. So, for all practical purposes, the real criterion to be looked at is the lack of relationship, and not that mentioned by the honorable member for Melbourne Ports Mr. Crean).
The Government has reviewed the whole matter again at some length, and has found that some increase in the present allowance for both zones is justified. It has also found that some of the areas at present included in zone B are deserving of a greater allowance than that provided at present, and the result, of course, will be, the transfer of certain areas in zone B to zone
.- I propose to support the amendment that has been moved by the honorable member for Melbourne Ports (Mr. Crean). I want to deal with this clause for two reasons. 1 desire to say, at the outset, that the Opposition has no quarrel with the clause. We merely believe that it does not go far enough. We feel that the amendment which has been moved by the honorable member for Melbourne Ports would be favorably received, not only by members on this side but, I am sure, by members on the Government side and, undoubtedly, by those people living in zone B who would benefit by the increased allowance.
The allowance in respect of zone A is to be increased from £120 to £180 which, in my opinion, is a generous increase. The allowance relating to zone B is to be increased from £20 to £30, an increase of only £10. It has been pointed out by the honorable member for Melbourne Ports that the actual benefit which will accrue to taxpayers in zone B from that increase will be completely negligible. Therefore, I believe that honorable members ought to support the amendment, the purpose of which is to raise the allowance in respect of zone B from £20 to £90.
I also want to deal with another subject which is of extreme importance to me. to my electorate, and to the people of Tasmania. It is a subject that I have discussed frequently with the Treasurer (Sir Arthur
Fadden) and it relates to the islands in Bass Strait. I refer to Flinders Island and King Island.
– Order! I think that matter would come under another clause.
– I am dealing with zone allowances.
– It comes under clause 22. Notice of intention to move an amendment to that clause has been given.
– I accept your ruling on that matter, Mr. Chairman. I will deal with this matter when the clause that you mentioned comes before the committee.
.- I rise to support the suggestion that has been put forward by the Treasurer (Sir Arthur Fadden). I firmly believe that this zone allowance will never solve the problem which it is supposed to solve. In other words, it will never give encouragement to those people who are prepared to do something about the empty part of the north of Australia. In a few weeks, 100,000 people will pack the Melbourne cricket ground to see the Olympic Games. That number represents three times the number of people who reside in zone A. Most of us can visualize a crowd of 30,000 or 40,000 people. When we realize that the whole part of the continent indicated as zone A on the map that has been supplied to honorable members is occupied by only that number of people, we can recognize that this sort of measure will not solve the problem of populating our vast north. Some vigorous method will have to be adopted. One method that has been put before this Parliament on numerous occasions provides, for a trial period of some five years, for the complete exemption from taxation of people who are prepared to establish in that area, not only themselves, but also business undertakings.
I do not think that the solution to the problem of populating the north lies in a taxation allowance of some £180. To attract people to these areas it is necessary to offer very high salaries, of which £180 would only be a small percentage. In addition, it is necessary to attract companies that will be prepared to invest very large sums of money in the development of these areas. Probably, the opportunity for the greatest development lies in the mineral resources. The pastoral industry cannot hope to attract population to any great degree, because this type of country will allow of large holdings only, which carry a sheep to many acres or one head of cattle to many acres. In no way can we increase population by developing the pastoral industry, because no great amount of man-power is required to develop that industry. But that part of Australia is extraordinarily rich in minerals. I know that the honorable member for Kalgoorlie (Mr. H. V. Johnson) is getting ready to speak on this clause, because he is an authority on the northern part of Western Australia..
I know that this suggestion will raise the ire of some members of the Opposition, but I think that the Government must take the bold step of allowing very large companies to operate in this area, free of tax, in return for their work in developing this nation. At Wittenoom Gorge, in Western Australia, some one found large deposits of blue asbestos, but it required the Colonial Sugar Refining Company Limited to use its vast capital resources, and Commonwealth assistance, to carry out the development that produced vast quantities of blue asbestos. Opportunities like that abound in the north of Australia, but they will never be exploited until people realize that they will have some advantage in the taxation field by going there.
The granting of taxation concessions would not cost the Government anything, because the increase in population would increase the sale of goods, and the taxation on those goods would reimburse the Government for any exemptions in income tax that it granted. Although I oppose the amendment to this clause, I do entreat the Government to be bold in its outlook towards the north of Australia because we cannot continue, as the years pass, to have a country populated by 30,000 or 40,000 people which many millions of people to the north of us believe can be used to greater advantage by those who are crying out for space.
– I wish to support the amendment that has been moved by the honorable member for Melbourne- Ports (Mr. Crean). I realize that he will not get very far with it, but I support it as a protest against the Government’s adjustment of the zone allowance. It was good to hear the honorable member for Perth (Mr. Chaney) say something about the north, and particularly about taxation. There is much substance in what he said about that part of the country, which is rich in mineral resources. Appeals have been made to this Government from time to time to grant a concession that would provide an incentive for people to go to the north of Australia and develop the mineral resources that are known to exist there. The large variety of base metals, for instance, that exist in the Marble Bar and Hall’s Creek areas would offer great incentive to people with capital if they could get the necessary governmental assistance. Even if they could get exemption from taxation for five years that would, in itself, be an incentive to provide capital to develop that area.
From time to time, I have appealed in this Parliament for assistance to be granted for the development of the north. I have made so many appeals that I feel it is almost useless to talk about it, particularly while this Government is in power. In 1948, before the defeat of the Chifley Government, plans were in hand to enable people to go to the north of Australia. I do not suggest that the provision of zone allowances is a great incentive for people to go there, but at least it is something on which to build. The system of zone allowances for taxation purposes was first introduced in this Parliament in 1945 and was altered in 1947 to meet the increasing cost of living in the areas concerned. There has been no change in the system since 1947, although the cost of living at the present time is very much greater than it was then. The point I wish to make is that the adjustments now proposed will be of no real value to the people concerned.
As honorable members know, I have repeatedly addressed questions in this House to the Prime Minister (Mr. Menzies), the Treasurer (Sir Arthur Fadden) and successive Ministers for the Interior in an effort to have the legislation amended. I sincerely hope that, even at this stage, honorable members opposite who feel that the allowances are inequitable will support the amendment that has been moved by the honorable member for Melbourne Ports (Mr. Crean) on behalf of the Opposition. I do not propose to say much more on this matter. I have said a great deal in the past about the development of the north, but my appeals to the Government have not been heeded. However, I again issue a warning: If the northern part of Western Australia, from the Kimberleys down, is not developed by us, we must not be heard to complain if the people of over-populated countries who see this large area of our continent unoccupied, say, “ We wish to develop it if you do not “. While it remains unpopulated as it is to-day, it is a menace to the security of the Commonwealth. It is the bounden duty of governments in the Commonwealth sphere, regardless of political colour, to try to raise the necessary finance for developmental work such as the provision of water supplies in the Ord River and Fitzroy River districts. We must get on with the business of development and attempt to make that part of our coastline secure as quickly as we can.
– I am not entirely happy about the amendment that has been moved, but neither am 1 entirely happy about the bill as it is proposed to be put through. I believe that there is scope for further constructive review of this whole matter, and I hope that the Government will give that aspect its close and immediate attention.
.- I strongly support the amendment moved by the honorable member for Melbourne Ports (Mr. Crean), on behalf of the Opposition. I suggest that the proposal to increase the zone B allowance from £20 to £30 is an insult to those who live in that zone. If honorable members look at the map of Australia they will find that that zone covers some of the central part of Australia and extends from north of Adelaide to Alice Springs. This zone allowance is the only incentive to which the Government believes the people in that area are entitled - a miserly, petty £30. Do honorable members opposite really think that that will encourage people to go there? As my friend the honorable member for Kalgoorlie (Mr. H. V. Johnson) has said, it will do nothing of the kind. Even an allowance of £90 would not be such a large amount. Certainly it would not be large in relation to salaries or incomes of £5,000, £3,000, £2,000, or even £1,000. I protest at the paucity of the proposed increase of £10 for zone B. It is proposed to raise the allowance for residents of zone A from £120 to £180, which is a little more just.
Zone B in Tasmania covers the west coast. Much of the zone is in my electorate which, by the way, covers an area of 13,500 square miles, or half of the area of the island of Tasmania. Queenstown, which is in zone B, is 190 miles from the nearest large town, which is Hobart, the capital. I find that the boundary of zone A, in Queensland, is only 75 miles from Cairns, so that people who live 75 miles from Cairns are to receive an allowance of £180. whereas people who live at Queenstown, 190 miles from Hobart, are to have an allowance of only £30. There is no justice in that arrangement. The west coast of Tasmania is noted for mining activity and mineral resources. Large hydro-electric establishments are located in my electorate, and in addition, there are in the area two great forestry undertakings. The west coast is a very isolated area of the State. Yet, as I have said, the residents of the area will be entitled, under this bill, to a taxation exemption of only £30!
In principle, of course, zone allowances are excellent, but they do not go far enough. [ consider that the people living in zone A should be exempt from taxation altogether. If they are prepared to go into that area, that is the least that the Government should do for them. I understand that the residents of the Territory of Papua and New Guinea are exempt from federal taxation. If honorable gentlemen opposite contend that those people are more isolated than are the residents of this vast zone A, then I cannot understand their reasoning.
– Of course they are!
– Nothing of the kind. Because of the modern facilities and amenities that now exist in New Guinea, the residents are not as isolated as are the residents of the central part of the continent of Australia. I believe that the people who go to central and Northern Australia, particularly to the Northern Territory, are just as much entitled to exemption from taxation as are the residents of the Territory of Papua and New Guinea. I understand that the Government of “Canada gives large tax concessions to the people who live in the isolated north, particularly in the mining districts. Perhaps it would be a good idea to examine the Canadian legislation with a view to seeing whether we might not be able to adopt some of its provisions. Although I appreciate that the amendment put forward on behalf of the Opposition will not be carried, I entirely approve of it.
Question put -
That the words proposed to be omitted (Mr. Crean’s amendment) stand part of the clause.
The committee divided. (The Chairman - Mr. C. F. Adermann.)
Majority . . . . 16
Question so resolved in the affirmative.
Clause agreed to.
Clauses 13 to 21 - by leave - taken together and agreed to.
House adjourned at 10.55 p.m.
The following answers to questions were circulated: -
Royal Commission on Espionage.
d asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows: - 1 to 4. The officer to whom the honorable member refers did attend a gathering of people interested in Moral Rearmament in Canberra during 1955. It was not a Moral Rearmament Conference, but a film evening. Naturally, the officer concerned attended in a private capacity.
Cite as: Australia, House of Representatives, Debates, 24 October 1956, viewed 22 October 2017, <http://historichansard.net/hofreps/1956/19561024_reps_22_hor13/>.