Senate
21 November 1918

7^th Parliament · 2^nd Session

SELECT COMMITTEE ON INTOXICANTS
QUESTION
- REPATRIATION
PAPERS
NAVAL DEFENCE BILL
QUESTION
- TRANSPORT MEDIC: OUTBREAK OF INFLUENZA
ELECTORAL BILL
SERVICE AND EXECUTION OF PROCESS BILL
LAND TAX BILL
AMENDMENTS INCORPORATION BILL
QUESTION
- SHIPMENT OF BLUE PEAS
QUESTION
- COMMONWEALTH LINE OF STEAMERS
QUESTION
- PAPER CONTROL
QUESTION
- MILITARY PRINTING OFFICES
QUESTION
- DUTY ON IMPORTED FILMS
INSTITUTE OF SCIENCE AND INDUSTRY BILL
INCOME TAX BILL (No. 2)
ELECTORAL BILL
QUESTION
- PRIVATE MEMBERS’ BUSINESS
INCOMETAXBILL (No. 2)
- First Reading
CONTROL OF NAVAL WATERS BILL
LAND TAX BILL
- Second Reading
ADJOURNMENT

The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and read prayers.

page 8154

SELECT COMMITTEE ON INTOXICANTS

Senator THOMAS:
NEW SOUTH WALES · NAT

– I present the final report of the Select Committee on Intoxicants, ‘together with minutes of evidence and appendices, and move -

That the paper be printed.

Senator GARDINER:
New South Wales

– I rise to refer to the report of this Select Committee, because when the motion to appoint it was before the Senate, I had to bear the censure of many people who thought that I had no right to oppose it. With . a knowledge of Select Committees, I felt that the members of the Select Committee on Intoxicants would find themselves in the summer time at Hobart, and . in the winter time at Cairns. I find that they only got as far as Brisbane in the winter time, but they were in Hobart all right in the summer time. I have seen press references to. the. report and findings of the Committee, and it would appear that, so far as -its inquiry is concerned, we are now just about where we were before its appointment. There seems to have been a divided opinion amongst the members, and they were unable to come to a unanimous decision. Most inquiries by Select Committees’ of this character end in. a similar way, and I have risen merely to remind the Senate that the inquiry by the Select Committee on Intoxicants has ended exactly as I pointed out it would end, when its appointment was moved for.

Senator GRANT:
New South Wales

That all the words after the word ‘” That “’ be left out, with a view to insert in lieu thereof the words “ the report, before being printed’, shall bo referred to a Board of Conciliation and Arbitration.”

The PRESIDENT:

– The amendment is not seconded.

Question resolved in the- affirmative:.

page 8155

QUESTION

Internment or Mr. Kiely.

The PRESIDENT (Senator the Hon T Givens:

– I have received from Senator O’Keefe an intimation that he desires to move the adjournment of the Senate until 9 a.m. to-morrow, in order to call attention to a matter of urgent public importance, name])’, “ the continued internment of persons arrested in Australia under the War Precautions Act, and the methods adopted iu arresting such persons.”

Senator O’KEEFE:
Tasmania

– I move -

That the Senate at its rising adjourn until 9 a.m. to-morrow.

Four honorable senators having risen in their -plates in support of the motion,

Senator O’KEEFE:

– I am submitting this motion because I regard its subject-matter as ‘ of sufficient public importance to come within the category of urgent matters, and because of a letter which I received yesterday from a man named Kiely, who is confined in the Darlinghurst Detention Camp, and whose case I first brought before the Senate many weeks ago. On 26th September last I asked the Minister for Defence (Senator Pearce) a question relating to the case of this individual, who had been arrested on the North Coast of Tasmania. Later on, either on a motion for adjournment,, or in connexion with a Supply Bill, I again referred to the case, giving the Minister such information as had been placed before me, and expressly stating that I had no personal knowledge as to what were the facts. However, I did express my desire that Kiely should be told in open court what were the charges upon” which he had been arrested. On the 2nd October last I put the following question to the Minister : -

Has any investigation been made into the charges against the man named Kiely, who. was arrested in Tasmania a few weeks ago under the War Precautions Act? If so’, where was such investigation made, what was the nature, and what was the result, of such inquiry ?

To that the”- Minister replied -

An investigation was made on evidence submitted to the Department. It is not proposed at this juncture to make public its nature. The result of the investigation was that it was thought desirable that Kiely should be arrested. Consideration is ‘being given to the question -as to whether there should be a magisterial inquiry in this case, and a decision will” shortly be given.

The statements made to me were made directly by a member of the Tasmanian Parliament. I have never yet met Kiely, and it was with some surprise that I received from him yesterday a letter which, if the statements contained in it Ve true, shows that a most lamentable course has been pursued by the authorities in his case. The letter reads -

I have noticed that a few weeks ago you asked some questions of the Minister for Defence concerning my case. I will now give you the full details, previous to and since my arrest and internment. My name is Michael Kiely. I was born at Illowa, Warrnambool, Victoria, on the 1st of November, thirty-seven years ago, of Irish parents. Therefore,_ I am not of hostile origin, unless the authorities _ regard Irishmen as such. During the last eighteen years I have suffered from ill-health. I have been treated by a number of doctors, but gradually grew worse, until three, years ago I was advised by one of them to try a change of air, as my system evidently would not respond to medicine. I took his advice, and went to New Zealand, where I remained for twelve months, which greatly improved my health. But on returning to Victoria I became as bad as before. I then decided to try another change, so I went to Tasmania, accompanied by a friend, landing in Hobart, where we stayed for four months,’ again greatly improving my health. While in Hobart we were told by the owner of the hotel where we were staying that we were liable to be arrested, as detectives had come to him making inquiries as to who we were, as to where we came from, and what we were doing, and if we seemed to have much money. Haying done no wrong, and paying 20s. in the pound, of course, we took no notice. But on leaving Hobart we went to Devonport, where we stayed a week. While there we met Detective Summers on several occasions. He never questioned us as to who we were, or anything else. If he did, we would have told him the truth. But w’hen we. left for Ulverstone he had wired ahead to two Secret Service men to watch the train for us when we arrived. They were there, and shadowed us to our hotel. Next morning, when we were leaving, we were stopped in the street by these men, who closely questioned us as to who we were and as to what we were doing in Tasmania; also our nationality and religion, which they carefully took notes of - I being an Irish Australian and Roman Catholic, while my friend was an Australian also, but a Protestant, which accounts for him not being where I am to-day. For, if there was anything against me, the same would apply to him. On leaving Ulverstone we went to Burnie, where we were arrested on the night of 25th June. Three police and a detective came -to ‘where we were staying, and demanded admittance to our room. When admitted, they addressed us in this manner : “Is this where ye are now? I see ye are shifting about from post to pillar. Have you. got any firearms?” When told we had not, and what would we require them for, and when we asked what all this, was about, we were told to accompany them to the police station, where we would find out what we were wanted for. They had plenty opportunities for arresting us during the day, but they waited until night till we were in bed to do so; and this was the means of causing us more trouble and anxiety. When at the police station a warrant was read to me, which stated that in view of my hostile origin and associations I was to be interned till the end of the war. - There - was also a warrant for’ my friend, but his was a search warrant; but as the search of his luggage, as well as mine, revealed nothing to incriminate, they immediately discharged him. But they detained me, and I was removed to a cold cell to spend the night, bail being -refused. I was sent on to Hobart the following morning, where I had to spend that night again in a. dungeon, all bail being refused, although any bail that was required was forthcoming. Next morning I was brought before military officials, who- informed me that I was to remain here until Saturday morning, which was three days later, to be sent by boat to Sydney to be interned at Holdsworthy. This was rather a shock to me, and I wanted to know why they were taking such action. But they told me they did not know. They had the warrant, and they had to carry out their instructions; but I would know when I got ‘to Sydney. The warrant stated that any representations made to the Minister would be considered by him. While waiting in the Hobart gaol I wrote to the Minister/ giving all particulars of my case, and stated I was prepared to make a sworn declaration as to the truth of my statements. But no action was taken, not even an acknowledgment of my letter. When the boat was to sail I was escorted down the street by five military officials. It would appear to those who knew me while I was in Hobart that they were making friends with a criminal. My frail constitution by this time had again given way from want of sleep and unsuitable food, which I could not eat. When I landed in Sydney the authorities were evidently discovering their mistake, for I was met at the wharf by more military officials, and removed to Darlinghurst gaol, despite the fact that the officer who escorted me over had full instructions to deliver me at Holdsworthy Camp. When I arrived at Darlinghurst they informed me that they were going to make a few inquiries, with the result that I have been interned with the Irish seven, here in Darlinghurst. I again wanted to know what the Minister meant by such action, but no one could give me any information as to the charge I was arrested for. That is five months ago, and I am just as wise to-day. Again, the conditions did not suit rae, as I had to eat food that did not agree with me, and was daily undoing what had taken months, in Tasmania to build up at a considerable cost. I consulted the gaol medical officer day after day, and explained to him my true position, and what the. result would be if I was forced to continue on as I was. But he only kept on prescribing medicine for me. But when I informed him that medicine was of no use, and that I had been long ago advised by medical men to give it up, and that what I required was. suitable food, I met with the reply that I must remember that I was in Darlinghurst, and not in Usher’s Hotel or in a hospital. I then tried to get a sum of money which was taken from me when I was arrested, and which I was entitled to get when I landed in Sydney, so I could buy suitable diet. I applied to every officer in the barracks, and explained the reason I required it for, but met with the same reply from each - “ I will .see what I can do for you.” Nine weeks had passed before I could obtain same. By this time my health was broken down, and I was removed to the hospital; but after a week there I was sent back as bad as when admitted. A few weeks later I was again admitted, and after a week’s treatment 1 was again sent back, but no improvement . whatever. I was then suffering greatly, for food of any kind would not agree with me, and sleep was almost out of the question. Seeing that the military doctors did not understand, or did not want to understand, what was wrong, and it appeared to me that they thought I was a malingerer, and consequently did not bother much with me, I then requested to see a specialist, which was granted. And, although I agreed to pay all expenses, it took a week before he would be admitted, as the Chief Medical Officer had stated there was very little wrong. When admitted, and when he could not locate the trouble by an examination, he requested an X-ray examination, which was granted. But nearly three weeks had passed before that event took place. When it did, weeks -more passed before the result was made known. In the meantime, I had to suffer severely. When the result came to hand it disclosed a serious state of the stomach, which required an. operation, which has been performed.

I have just pointed out the above facts to show you how an innocent man is treated in supposed free Australia. As the war is now ended, I suppose I will soon be liberated. But before that event takes place I want to know why I have been subjected to this treatment, and who has been responsible for giving the false information which led to my arrest. My friends in Victoria will also want to know. I had done nothing when in Tasmania to earn for me the penalty I received. I have been a peaceful, law-abiding citizen all my life, who has never injured any one, either individually or collectively. And I am sure my reputation is far above any of those responsible for my arrest. There was one incident that happened which may have been responsible for it. While at Devonport I stayed at a hotel kept by John Luck. One night, when seated in the bar parlour, the proprietor, who is a councillor, and another councillor, returned from a meeting. There were a few others also in the room. One of those men started a conversation on the war, and the part the Irish were taking in it, and said that they should be shot. Luck replied, “ The Irish are all right. They have done a lot for the Empire. It is their leaders that ore to blame.” “Yes,” replied the. young mon, “ we got some of them here - Mannix and a few others - that should be interned or deported.” I was very unwell the same evening, and had no~ desire to enter into an argument. However, I could not stand an honorable mon like Dr. “Mannix being abused by men who knew nothing about him. I asked them did they ever hear or see him. They said, “No,” nor did not want to; but they ‘had read the reports of his disloyal speeches. I then said it would be an unscrupulous judge and jury that would condemn a man on the evidence obtained in a biased newspaper, and that I heard himself state that when he read his own speech he could not recognise it, it was mutilated to such an extent. I then stated that if they were fair-minded men they would want to hear him before they should condemn, and it is a strange fact . that any man who has heard him has- never written against him, owing to the fact of being so honest, straight-forward, truthful in his statements, and it is a pity that we have not got a few more men in Australia like him, who have the courage of their opinions and who are not afraid to express them. And it was n blessing for Australia the day Dr. Mannix was sent here, for he, no doubt, played a big part in keeping us free from the conscription yoke. That was more than Luck could stand. The very name of Dr. Mannix was to him like a red rag to a bull. He went mad with rage, and, stamping his feet on the floor, said, “ Get off .my property.” Although it was 12 o’clock at night, and I was very’ ill, and n the prospects of getting -another place very re-, mote, I immediately left. About two weeks later I was arrested by Detective Summers, of Devonport.

However, if what 1 have said is responsible for the treatment I have received, I can assure you that if I was liberated to-morrow, and the same was to happen under the same circumstances, I would adopt the same ‘attitude. The manner in which 1 have been treated shows that justice in Australia has got to a pretty low level. And the account which I have given seems almost incredible, but, nevertheless, every item is true, and I am prepared to make a sworn declaration to that effect.

Thanking you again sincerely for the action you have taken on my behalf.

I hold* no brief for this man. I have never seen him, and do not know him, and was surprised when I received a letter from him. Where was the necessity for the continued internment of a man who said he was willing to make a sworn declaration of the truth of the tilings he has stated to be facts in that letter? He was born in this country. Surely, it would be quite easy for the officials to discover whether his statements are true or not, and whether or not he is a dangerous character. Surely, it was not necessary to do more than give him a chance in open Court to reply to his accusers, whoever they were, because he did not know who had accused him. Prom his letter he evidently suspects that he was arrested because of a conversation that took place in the hotel that night, but he does not know. The request I made here previously in the public interest, and not at the urging of the man himself , that cases like this should be heard in open Court,” is perfectly fair and legitimate. That was a good while ago, and even five or six weeks ago the Minister for Defence (Senator Pearce) said there would be an investigation, but that he had not yet decided whether it should be public or private.

The. letter I have read, is dated .15th November, and the writer says that he is as wise now as to the cause as he was when he was arrested. Colonel Clark, the Commandant of Tasmania, told me when I interviewed him, that the man was arrested by order of the Defence Department on evidence given by him. If the arrest was justified, that would be the proper course to pursue, but I presume that the authority of the Minister was first secured. If the Commandant of Tasmania heard that a man had said certain things, and considered that he should be arrested in the public interest as a precautionary measure, that would be a right step to take; but the man, according to his own statement, which he is willing to support by a sworn declaration, has never been given an opportunity of confronting hia accusers, or knowing the charges on which he was apprehended. Why did not the Min.ister take him at his word when he said he was willing to make a sworn declaration as to the truth of his . statements ? This man’s liberty is as dear to him as that of Senator Pearce is to himself,, and even in war time no mail’s liberty should . be taken from him without sufficient reason. If those in authority are sure they have sufficient reason, they will be doing only bare justice to the man whose liberty they take away if they give him an opportunity to reply ‘to the charges, and to be confronted with those who accuse him, instead . of keeping him interned for a number of months on the ex parte statements of two or three men, all of whom hold diametrically opposite political opinions to himself. Apparently, the only reason for his arrest was some public statements made by him in a public place - statements which the military authorities considered dangerous to the safety of the community. _ If the statements were publicly made, surely the charge should have been heard1 publicly, *and a proper tribunal given a chance, with the witnesses before it, to weigh the value of the evidence. If the man’s only offence was to stick up for Dr. Mannix, who has just as much right to his political views as those persons who were so violently and bitterly opposed to him on that occasion have to theirs, 1 submit that there was no crime, even if Dr. Mannix’s critics thought he should be interned or deported.. I am not saying whether Dr. Mannix’s views are right or wrong, but this man had as much right to support them as the other persons had to oppose them. If a man’s liberty may be taken from him on grounds of that sort, no one in Australia is safe in war time, or even now, because the same law is still in force. “ Any man in this chamber, except Ministers, if he made similar statements 100 yards from this building, might be deprived of his liberty in the same way and in the same circumstances. At all events the power exists and was evidently used on this occasion. Under such a power any one might be arrested and locked up for months without being given an opportunity to speak in his own defence.

From the day on which the Minister said that an investigation was to be made, but that he had not decided on the form which it should take, six weeks passed until the 15th of this month, when the above letter waswritten. Ifthe Minister was so busy before he spoke that he had not time to see into the matter, he should have made the investigation, or had a tribunal appointed to make it, immediately after he spoke. An extra six weeks in gaol to a man who says he is a chronic invalid is a serious matter. It may not appear much in the eyes of some of the Defence officials, or of the men in whose care this man is now, but it may be very serious to a man in such a grievous state of health that an operation had to be performed, on the advice of a specialist, after an X-ray examination, despite the opinions of the medical officer. If the man’s statements are not correct, they should be easy of disproof. If they are correct, somebody ought to be punished. Certainly the medical officer there ought to bebrought to book, and all others responsible for this man’s treatment should receive their deserts.

I should not have brought this individual case forward if I did not know that other cases have occurred where men’s liberties have been’ taken away without their being fairly satisfied as to the reasons. In the opinion of nine-tenths of the people of this free country - and it should be free now if it has not been free for the last four years - the time has arrived when all these men, who have been interned on charges similar to this, should, in the name of common fair play and political decency, be immediately granted a public trial, and allowed to be publicly confronted with their accusers. As they have been publicly arrested, impugned, and disgraced, they should be given the same public chance of clearing themselves. Now that hostilities have ceased, that chance should he afforded them, or they should be immediately released. Either one thing or the other. If the Minister and the officers of his Department still think that this man should be interned,there is ‘ only one alternative, namely, to give him and others who have been similarly treated a publicchance to confront their accusers and answer the charges brought against them.

Senator PEARCE:
Minister for Defence · Western Australia · NAT

.- I take exception to Senator O’Keefe designating this gentleman, and any others who have been similarly arrested, as political prisoners. I say that “neither this man nor any of those other men. to whom I have referred is in that sense a political prisoner. Kiely was interned as a precautionary measure in view of the fact that we were at war, and because of evidence submitted as to his attitude in regard to the war. An inquiry into his case has been ordered.

Senator O’Keefe:

– That was six weeks ago.

Senator PEARCE:

– The necessary instructions were sent to the Commandant in Tasmania to select a magistrate to conduct the inquiry.

Senator O’Keefe:

– ‘Seven weeks ago.

Senator PEARCE:

– The instructions were forwarded on the 14th November. The Commandant was advised to fix a date for the inquiry and to arrange for Kiely to be sent down from Sydney to attend the hearing. Senator O’Keefe will understand, of course, that the inquiry could not take place in Sydney. It must be held in Tasmania, and, therefore, arrangements must be made to bring Kiely down from New South Wales to Tasmania for that purpose. Itmay be that any delay that has occurred has been due to the fact that, as stated in the letter read by ‘Senator O’Keefe, the man’s health is unsatisfactory. Possibly owing to the operation which he had to undergo, the authorities thought fit to delay his removal. However, I am not in a position to say what caused the delay. I only know that instructions were given to the Commandant to make arrangements for the inquiry.

I do not propose to discuss the merits or demerits of Kiely’s internment here. It would not be proper to do so; but I can assure the Senate that his arrest was not carried out in a haphazard way. His case was fully considered. As Senator O’Keefe himself has correctly stated, the District Commandant took action on evidence which apparently he thought fully justified that course. The evidence was forwarded to Melbourne and considered by the General Staff, which recommended his internment. It was then considered by myself, and by me taken to Cabinet, which approved of the course recommended.

– So much the worse for this country that the war has lasted so long.

It is the element of war that determines when these men may be safely released. If the war had not occurred, none of them would have been arrested and interned, and apparently it is this existence of a stateof war which the honorable senator refuses to realize.

Senator O’Keefe:

– I have never forgotten it.

Senator PEARCE:

– I do not think that is anything about which the Department should boast. . It was only failtreatment.

Senator PEARCE:

– I am not boasting about it; but I want the honorable senator not to assume that this ‘man was badly treated, as is sometimes said outside for the sake of gaining the applause of a small :and unthinking section of this community.

-Colonel ‘ O’LOGHLIN (South Australia) [4.4]. - Several cases of this kind have been brought under the notice of the Minister for Defence (Senator Pearce), and in connexion with them all he ‘has taken up the position that the evidence submitted justified the internment of the men. But I put it to hon?orable senators to say whether any evidence is sufficient to justify a man being deprived of his liberty when he has had no opportunity of stating his case, and rebutting the evidence brought against him. The weakness of the position taken up by the Minister in every case is that he assumes that an ex . -parte statement of those responsible for having the. persons interned . is sufficient to justify him in’ taking this arbitrary action without giving the accused any opportunity whatever of stating his defence, or put-, ting a different construction upon the evidence brought against him. We have arrived . at a time, fortunately, when peace is assured. We are all rejoicing over that result, and all feel in a magnanimous and generous frame of mind, even to those who may have differed from us in regard to the war. Would it not have been more in ‘Consonance with the jubilant feeling experienced throughout the country if the Government had declared, whilst Ave were celebrating the victory of the Allied Forces, that all persons who had been interned during the war should, as an act 6”f grace, be immediately released?

I shall conclude my remarks by quoting a. few. lines published in to-day’s newspapers from a speech delivered by the late Prime Minister of England, Mr. Asquith, in which he is thus reported -

Finally, he deprecated, in the strongest language, the conditions now forced upon the country. Restrictions on personal .liberty freedom of speech, and even compulsory service, for which he was largely responsible, must end. We must get back as soon as possible to the old atmosphere of freedom.

I commend those words to the attention of the Minister and of honorable senators. “We ought- immediately to get back to the old atmosphere of freedom which the exigencies of the war have prevented us from : enjoying during the past four . years.

Upon a few occasions I have found it necessary to bring under the notice of the Minister for Defence cases of internment in which I believed injustice had been done. One case was that of a man named Gailet, who was arrested at Port Pirie, removed to Adelaide, and placed under surveillance’ there. When he obtained employment, he was obliged,’ during his working hours, to report himself to the military authorities every three or four days. If. it was neces-sary for him so frequently to report himself, surely a time might have been fixed for him to do so, when he would not have been obliged to forgo a portion of hia wages by reason of the sacrifice of his ‘ working hours. .The last I heard of this man -was that, without having been afforded an opportunity of even seeing his friends prior to his departure, he had been removed to New South Wales with a view to his deportation.

Senator Pearce:

– He must have been arrested under the Unlawful Associations Act. It could not have been a military arrest.

Senator Lt Colonel O’LOGHLIN:

– I cannot understand why he was not allowed to see his friends before being removed to Sydney.

Senator Pearce:

– The military law does not provide for the deportation of anybody, and consequently he must have been arrested under the Unlawful Associations Act.

Senator Lt Colonel O’LOGHLIN:

– I think that Mr. Asquith’s words are extremely applicable to our own position to-day. “We are supposed to be living in a country where -

Girt by friend or foe,

A man may speak the thing he will.

If the necessity for these restrictions existed during the past four years, certainly it does not exist to-day. I repeat that the men who have been interned ought to be immediately released, if only as an act of grace.

Senator O’KEEFE:
Tasmania

– The reply of the Minister for Defence (Senator Pearce) evaded the main point connected with this case which is that, especially in the case of a British subject, it should have been easy to prove whether any of Kiely’s actions or utterances were a menace to the safety of the Commonwealth. It surely ought to have been very easy to determine this matter in open Court. At any rate, there is no justification for the Department having withheld for so long an investigation into his case. Particularly is this so in view of the fact that from the very beginning Kiely has expressed his willingness to make a sworn declaration of the truth of his statements. A man who can write such a connected letter as he has written is certainly no fool, and he must know that if he made a false declaration he would im- mediately render himself liable to a prosecution for perjury. In the circumstances, it would surely have been a fair thing to have taken him at his word.

Senator Senior:

– And have given publicity to that which it was undesirable to publish.

Senator O’KEEFE:

– Had Kiely deliberately attempted to use the opportunity thus afforded him of establishing his innocence, to make statements which were calculated to endanger the safety of the Commonwealth, he would have been immediately stopped by the presiding officer. Had he continued to disobey, he would have been punished for contempt of Court.

Senator Senior:

– Then a cry would have been raised that free speech was being denied him.

Senator O’KEEFE:

– No. People who are not traitors would recognise that, in such circumstances, freedom of speech had degenerated into licence. But the whole of . this man’s life is open to the public, and upon the merits of evidence adduced before an open tribunal, it ought surely to have been possible either to punish him or to acquit him. His claim to have his case heard is only a just one. Of course, I realize that the Minister must make out the best case he can for his Department. But his reply to-day convincingly shows that his case is a very weak one indeed: I ask leave to withdraw the motion.

Motion, by leave, withdrawn.

page 8165

ELECTORAL BILL

Bill returned from the House of Representatives with a message intimating that it had agreed to the amendments made by the Senate.

page 8165

SERVICE AND EXECUTION OF PROCESS BILL

Bill returned from the House of Representativeswithout amendment.

page 8165

LAND TAX BILL

Bill received” from the House of Representatives.

Senator MILLEN:
Minister for Repatriation · New South Wales · NAT

.- I move -

That so much of the Standing and Sessional Orders be suspended as will prevent the Bill being passed through all its stages without delay.

– *We would- then have to-day and to-morrow’s sittings to discuss the first readings of those measures.

Senator MILLEN:

– By the action which I am taking, I am not impairing honorable senator’s rights in the slightest degree; but I ask, if between the present moment and the rising of the Senate at 4 o’clock p.m. to-morrow, there is still time, that theSenate will permit me this week rather than next week to make my second-reading speeches.

Question put. The. Senate divided.

Ayes…. 19

Noes…. 9

Majority . . . . 10

Question so resolved in the affirmative.

page 8167

AMENDMENTS INCORPORATION BILL

Bill’ received from the House of Representatives, and (on motion by Senator Millen) read a first time.

page 8167

QUESTION

SHIPMENT OF BLUE PEAS

Senator DE LARGIE:
for Senator, Bakhap

asked the Minister representing the Acting ‘Prime Minister, upon notice -

Have representations been made to the Commonwealth Government on behalf of growers of blue peas in Tasmania regarding the. urgency for the provision of shipping space for the transport of this crop overseas?
Will the matter bo considered whether representations such as are referred to have been made or not?

Senator MILLEN:
NAT

– The answers are : -

Yes.
The matter is at present under consideration,

page 8167

QUESTION

COMMONWEALTH LINE OF STEAMERS

Carriage of Wheat

Senator GARDINER:

asked the Min ister representing the Acting Prime Minister, upon notice -

How many tons of wheat have the Commonwealth vessels taken from Australia?
What amount of profit has been earned by these vessels from the carriage of wheat?
If the vessels have paid for themselves during the first two years under Commonwealth control, will the ‘ Government reduce the freight charges from 4s. to 2s. a bushel, giving the farmers the difference?
Or will they deduct 2s. per bushel from freight as a set-off for the wheat damaged by mice and weevils while tinder the control of the Government?

Senator MILLEN:
NAT

– The answers are:-

190,751 tons of wheat; in addition to which they carried 23,551 tons, of flour.
An endeavour will be made- to obtain this information. 3 and 4. The matter will receive consideration.

page 8167

QUESTION

PAPER CONTROL

Senator GRANT:

asked the Minister representing the Acting Prime Minister, upon notice -

Is it a fact that Mr. Brooks, the Coga? troller of the Paper Board, has resigned?
Has the Board ceased operations?
What was the cost per ton of news paper when the Board was appointed?
What is the present cost of news paper per ton?
What is the total cost . of the Board’s operations to date?
What are the details of expenditure?

Senator MILLEN:
NAT

– The answers are : -

Yes.
Yes.
£63 per ton.
£63 per ton. .
£1,172.
Salaries, Controller and staff, £399; travelling expenses, Controller and staff, £99; advertising,. £38; cost Paper Conferences, £631 ; miscellaneous, £5.

page 8167

QUESTION

MILITARY PRINTING OFFICES

Privileges of Employees

Senator GRANT:

asked the Minister for Defence, upon notice -

Do military printing offices (manned by civilian employees) enjoy the same privileges, rates of pay, and holiday concessions as the State Government Printing Offices?

Senator PEARCE:
NAT

– Printers are employed by the Defence Department in New South Wales only, and the rates of pay are in accordance with the State Arbitration award. Holiday concessions and privileges are governed by regulations under the Defence Act, and in this regard they are treated in the same way as other civilian employees of the Department.

page 8168

QUESTION

DUTY ON IMPORTED FILMS

Senator GRANT:

asked the Minister representing the Minister for Trade and Customs, upon notice -

What was the date or -dates on which representations were made to the Minister for Customs inreference to the reduction of duty on imported films which was effected on 10th August, 1917?
What are the names of the - (a) importers; (b) picture-theatre proprietors; (c) employees - who made the representations?

Senator RUSSELL:
Vice-President of the Executive Council · VICTORIA · NAT

– The information is being obtained, and will be supplied at a later date.

page 8168

INSTITUTE OF SCIENCE AND INDUSTRY BILL

SenatorGARDINER.- I shall be glad ifthe Minister will look into the matter. I shall say no more about the Bill now., because I shall have an opportunity to speak on the second reading, that is, if the Minister is not going to do what he did with the Electoral Bill - saying that he was going to put only a certain stage through, and then putting the whole Bill through at one sitting.

There are thousands of cases where I understand the Department is collecting tax on Tattersall’s prizes won two or three years ago. People whose income is not sufficiently large for them to be taxed directly should not be taxed, for the sake of 2s. or 3s., on prizes they won some years’ back. I shall call attention to several provisions in the Bill as they are reached at a later stage.

Senator FAIRBAIRN:
Victoria

– I am pleased that we have at last time to discuss the financial outlook of the Commonwealth. We were promised that this would be a session largely devoted to finance, but there are only a” few weeks between now and Christmas. I hope that a good deal of the intervening time will be given to the consideration of the financial outlook, because now that the war is happily in course of being ended, the most important question before the country is the repatriation of our soldiers, and that will demand enormous sums. Withthe present financial . outlook, the greatest possible care is needed in the expenditure of our Commonwealth income to make it possible to do what we should like to do for our soldiers alone. We should, therefore, offer no apology for giving every thought to the most important matter of our financial prospects.

To boil the Budget figures down, and make them easily comprehensible, I find that the estimated Federal expenditure “for the” current . financial year is £45,344,595, while the estimated revenue, including extra taxation to the amount of £5,356,000, totals only £40,670,000, leaving a deficiency on the year of £4,674,595. That gap is to be made up by surplus revenue brought forward from last year, and by various odds and ends, but the fact remains that we are not paying our way even with the additional taxation now before us, which ‘ I am assuming will be passed. One way to make our cloth fit our coat is to see that it is properly cut.

People do not sufficiently recognise how hard Australia has been hit financially by the war. Apart from the enormous expenditure which the war itself has involved, there is no doubt that, because of our isolated position, practically in a backwater, the want of freight has hit us very hard indeed. In comparison with other nations which have been at war, and with neutrals, we have not received war prices for Australian commodities. I do not blame the Old Country, because she had important duties with which even our financial stability cannot be compared. She had to save her people from starvation, and to bring the American troops across the Atlantic to win the war. No one will -deny that those matters are infinitely more important than even the financial stability of Australia. The Old Country has treated us remarkably well, but we have to look facts in the face, and the facts show that Australia has not received anything like war prices for her goods.’ We have received for our wool ls. 3 1/2d. per lb., which would be a’ very high price in ordinary times, but in America they are receiving 2s. 7£d., and in Canada over 2s. 7d. per lb. Australia is receiving for her wheat crop only 4s. 6d. per bushel as a’ general rule, with a little more for small shipments to other parts, whereas in Canada and America nearly 10s. per bushel is being paid. Before the war the enormous American cotton crop brought about 5d. per lb.. The Americans are selling their cotton now at, ls. 94d.. per lb., and that brings in enormous quantities of money to the United States. I do not claim that the wool-grower, or the wheat-grower, or the producer of butter in Australia ought to get the extra money, but if we had been “ paid what I call really war prices for our products we should have been freed, by the use of our War-time Profits Act, from all financial trouble in Australia. The British Government received for ten months only from their war profits tax the immense sum of £221,000,000. With one-tenth of the population of the Old Country, if we had received a corresponding amount from our tax the Treasury would have obtained a revenue of £22,000,000, instead -of the £1,000,000 that it has actually received.

Senator Colonel Rowell:

– Most of the British profits come from shipping and munitions.

Senator FAIRBAIRN:

Senator FAIRBAIRN:

– I am entirely of that opinion, and we all hope that this war, which has placed an enormous strain upon Australia, may be the last.

I do not say that the individual woolgrower, the wheat farmer, or the butter producer ought to get more than he has been getting for his products, but if our producers do not get full war prices Australia will be placed at a disadvantage with the other nations of the world that have been carrying on this war. I think the question I have raised is well worthy of serious consideration. I do not for a moment blame the British Government. They behaved magnificently towards us; as, in addition to standing an enormous financial strain to maintain their own forces in the field, they have actually bolstered up other Allied Powers, and have bought a great deal of our wheat and our wool, much of which is still lying here. This is something which no other nation on the face of the earth would have done. We might have been left to stew in our own juice had theMother Country chosen to overlook us, but I think, as a matter of equity, the question I have raised should be fairly and courteously placed before the British Government, so that Australia may get a fair proportion of the war-time profits obtained from the manufacture of munitions, which, no doubt, is. now rolling into. . the British Treasury. Everybody should be treated on fair and proper lines. If Australian producers had had the benefit of war prices, our woolgrowers ought to have got at least 2s. 5d. for their wool. I do not say they wanted any more than ls. 3id., which they have received, because- at that price they are well paid, so long as it is not all taken away, as I think it will have to.be, in taxation. The wheatgrower is in the same position. No doubt he is feeling the effect of this taxation, although 4s. 6d. is a payable price when taxation is at a reasonable amount. In view of these facts I think that if some arrangement could be arrived at on the lines I have suggested, we would be doing no injustice to the Old Country, while, at the same time, we would certainly be doing justice to Australia. We must remember that very many of our boys have died,’ we are sorry to say, more in proportion than those from any other part of the Empire. We have done our fair share in the fighting, and- we ought to see that we get a proper deal in the distribution of finances after the war, chiefly that we -may treat our returned soldiers in a thoroughly satisfactorymanner.

Canada has been in a favorable position in this war. Owing to her geographical situation she has been able to get tremendous prices for her products; and she has manufactured an enormous amount of war munitions. With all these advantages Canada borrows money at’ 5^ per cent., and the other day a loan of 100,000,000 dollars was largely oversubscribed. The interest rate - - per cent. - is free of income tax, whereas Australia pays only 4-^ per cent, free of this obligation and 5 per cent, less Federal income tax. Evidently the Canadian Government desires to attract capital to the Dominion by offering liberal terms. However, that is not a matter which I desire to stress to any great extent. So far we have keen able to get all the money asked for, but we should realize that Australians who have contributed to the Commonwealth loan on a basis of 5 per cent., less Federal income tax, which will probably reduce the interest to 3 per cent., have shown considerably more patriotism than- Canadians, who get 5^ per cent, for the money they advance to their Government.

I have seen it stated in the Old Country, and I have no doubt that honorable senators will agree with the statement as applied to Australia, that Parliament has pretty well lost control of the finances. One can easily realize how this might be when one peruses our bulky Estimates, about 1 inch thick, of foolscap paper simply smothered with figures. It is impossible for any honorable senator to take even a proportion of the Estimates and be to some extent responsible for them. During the war, also, Ministers had an enormous amount of work to do. Ministers come and go. There have been about twelve or fourteen’ changes in the Government since the inauguration of the Commonwealth. Ministers have to attend Parliament, answer questions, make speeches, ‘ attend Cabinet meetings, as well as numerous outside functions, and then they are supposed to control their Departments. This is absolutely impossible in the circumstances, so we shall have to think how we are going to meet the situation, with estimates of expenditure swelling from year to year in a most remarkable way. ‘The Stales, I think, are beginning to realize that they are coming to the end of their tether! They have been told that there is to be no more borrowing in the Old Country, and it is getting harder for them to obtain money out of the Commonwealth” Government nowadays. This shows that they are approaching the end of their spending time, ‘and I think it is well that.it should be so. From 1901 to 1914 the States were spending, principally on new works, £9,000,000 a year, and during the first two years of the war, when everybody expected that they would cut down expenditure, they managed to spend £20,000,000 of borrowed money. It is just about time, therefore, that the States realized that they must > cut down expenditure. There is no getting away from this fact, because our obligations in regard to repatriation will take all the money available. State Government expenditure increased by £3,231,488 in the first two years of the war. It is astounding that iri a time of war, witu which the State Governments had nothing to do, their expenditure should have increased by that amount. I express the hope, also, ‘ that the Commonwealth Government will -try to curb their energies in this direction, because the extravagance of the . States is simply a flea-bite compared with the extravagance of the Commonwealth, although, of course, we have the excuse that Commonwealth Departments are -affected by the war, and, therefore, it could not be expected that Ministers should be able of late years to give such close attention to -the operations of” their, several Departments. But now that we are getting to the end of the war, we shall have to take the utmost care.

One thing that has always struck me, as a business man, when I ‘look round and see how Government money is spent, is the unsatisfactory condition of our Government offices. I make exception, however, in regard to the ‘RepatriationOffices in Jolimont. . These have been erected on good business lines. Unfortunately the same cannot be said of all the other offices which have been built at an earlier period. If on© visits the Vic’torian Lands Office, for instance, one finds that every man has a place to himself.’ Good business cannot be done in this way. In all modern banking institutions or other large private business establishments, the whole of the officers are readily- available, and accordingly the work is done economically.

Senator Millen:

– The honorable senator must recognise that the State offices to which he refers were built many years ago, and ideas have changed since then.

Senator FAIRBAIRN:

– Yes, and I think it would be wise to remodel many of the earlier ‘ Government offices. I do not know whether the Minister has had the same experience as I have, but whenever I visit some of these offices, although I have a certain amount of prestige, I generally go to the inquiry office, to find that the man who is supposed to .be there is absent, being away on some message, I presume. So, after looking around helplessly for some time, I have to seek directions from somebody else before .1 can transact the business that takes me there. Imagine the’ position of ordinary citizens, people perhaps from the country, when they find themselves in these offices, and how much time is lost by them before finally they seek the assistance of members of Parliament? These offices ought to be remodelled- and conducted for the convenience of the public. In any big commercial establishment the aim is to attract the public to ‘the various departments, but unfortunately if one visits some Government offices one has a feeling that the principal desire is to repel the public. We have splendid men in the Civil Service, but they should be provided with convenient offices for the transaction of their business. I do make exception, of course, to the Repatriation Office, which has been built on up-to-date lines.

Senator EARLE:
TASMANIA

– And those offices cost only £8,000.

Senator FAIRBAIRN:

Senator Guthrie:

– I think that it should have been erected in Trafalgar Square.

Senator FAIRBAIRN:

– It is done with now anyway, and I think that we should sell it. because we shall certainly want the money which its sale would bring. It is a good advertisement, no doubt, but a most expensive one, and I think its construction should never have been undertaken.

– I hope that they are. They should all he honorary. It is, in my view, an honour to any’ man at such a time to be asked to serve his country on one of these Boards.

– That is absolutely not the case j but it is not the matter with which I am dealing at the present time. If we wish to carry on the industries of this country and encourage the establishment of new industries, we must do away with the greater number of these Committees. I have said that the Central Wool Committee has been a most valuable Committee, and has carried out its work in a very capable manner. It is constituted of some of the most successful’ men in the wool trade. They are buyers, and know wool thoroughly, and have had to make their living by dealing in wool. The Committee has been a splendid body of business men. But after the war is over these men will not continue to give their services for the small pittance they now receive as members of the Central Wool Committee. If we should again revert to the public auction system in dealing with wool they wi:l leave the Committee, and we may have men from the Government offices filling their positions who may deal with the great wool industry which has been the backbone of Australia in such a way ss to bring it to a standstill. Already there are extraordinary restrictions imposed. When I visited a wool store the other day for the purpose of seeing some wool that I had up for sale, I was told by the valuer of it- that he was not allowed to speak to me. I asked him the reason why, and he replied. “ Look at the notice on the door.” I did so, and found that’ it stated that wool-owners were not allowed on the floor while wool was being valued. It appears that there had been a. case in which a wool dealer had approached one of the valuers with a view to bribing him. Had the reason urged been that while wool was being valued nobody was wanted on’ the floor of the wool store I could have understood it. But it was astonishing to me to learn that bribery was already creeping into these operations. If the present employees were to leave, and fresh men. with small salaries, were put in their places, I fear that the bribery which would spring up would be something staggering. ,

Senator FAIRBAIRN:

Senator FAIRBAIRN:

Senator FAIRBAIRN:

– I do not blame him, at any rate. But we should get back from the Germans the money which this war has cost us. If a man knocks me down in the street and takes my watch, I do not regard it as a penal indemnity if the law forces him to return my watch and pay my doctor’s bill; and I think that the Labour party should be, and would be, prepared to go with us that far. at least in applying the same principle as between nations. I am not sure that the Germans are not camouflaging the whole business as to their ability to feed themselves and to pay for the damage they have done and the expenditure they have necessitated. I believe that they are well off, and have plenty of food as well. . They are screaming about the millions of lives that will be lost if we throw obstacles in the way of their provisioning themselves; but I note that the American Food Controller, Mr. Hoover, says that such agitation on the part of Germany does not concern him, but that they have plenty of money, and should be made to pay for the food with which the Allies intend to supply them.

– The rebuilding of the shattered portions of Europe will probably not so much affect Australians. 1 hope, at any rate, that we shall not lose any of our population thereby. We do not want our fighting men to remain away, or more men to go away, in order to rebuild Belgium. Australia is the place for Australians, and Australia needs more population. We have a tremendous liability upon us; and it is our responsibility, as legislators, to do all that is possible to keep our people fully and happily employed. I hope the Government will make every effort to see that our money shall not be wasted, and that all our resources shall be conserved.

I am aware that another Land Tax Bill is to come before the Senate. I do not think that that is a right and proper tax to impose. It is a tax upon wealth. Both political parties, at the last Federal elections, pledged themselves that there would be no wealth tax. The Labour manifesto stated -

It is not the intention of the Australian Labour party to make a compulsory levy upon wealth for any . purpose. Further consideration has shown that such a levy is not necessary, and that it is Bounder finance to obtain revenue . by way of income tax upon the inoomes derived from wealth.

The wealth tax was referred to by the Labour party as long ago as June, 1915,

A motion for its imposition was rejected at the Labour Conference, in Adelaide. I quote the following report from the press at that time: -

Another taxing proposal, having as its object the raising of greater revenue for the Com- monwealth, was a wealth tax. It contemplated agraduated tax on all incomes over £1,000 a year, the rate to be higher on incomes from rent, interest, or dividends than on incomes from personal exertion.

The motion covering that proposition was defeated without discussion, and, no doubt, was responsible for the reference in the manifesto of the Labour party at the last general elections. Labour mem- , bers, therefore, are bound not to advocate the imposition of any wealth tax. So far as our party is concerned, the same assurance was given that there would be no wealth taxation. But what is this land tax proposition except a wealth tax ? It singles out one portion of the community, and it imposes a special levy on that particular class of wealth which has been put into land. It is a breach of a pledge to introduce such a Bill.

Senator O’Keefe:

– Following the . honorable senator’s line of argument, every form of taxation is a tax on wealth.

Senator FAIRBAIRN:

– Then, why not impose it on all wealth? Why single . out wealth put into land ?

Senator O’Keefe:

– The wealth tax is understood practically to mean a tax on capital, while other forms of taxation are upon income derived from land and from personal exertion.

Senator FAIRBAIRN:

– The honorable senator is entirely wrong. At present each £1 of wealth derived from land is taxed 6d. The suggestion in the Bill to which I have referred is to add 2d. to that. Land taxation is not a tax on income, but on the capital value of the land. Had Senator Grant been present, it was my intention to” point out to him that I quite sympathized with the object of bursting up large estates. A man who holds half the countryside should be compelled, at any rate, to pay for what he holds. But if I were to put money into land, and Senator Grant were to lend me some of his capital to improve and develop that land, I. would be. paying him interest, say, at the rate of 6 per cent. He would be sitting back and receiving his percentage on the money borrowed by me, and he would be doing nothing while T did all the work.

The PRESIDENT (Senator the Hon. . T. Givens). - I would point out that the honorable senator is anticipating discussion upon another Bill which is. to come before the Senate. In debating the motion for the first reading of a money Bill honorable senators may cover a wide field of discussion. That is permitted under certain Standing Orders; but, at the same time, there are others which limit discussion and do not permit of reference to other measures before the Senate, or about to be brought before it. I have already allowed the honorable senator very considerable latitude.

Senator FAIRBAIRN:

– I shall not follow up that line of argument:

With regard to the cash transactions of 1918-19, the estimated amount required is £100,044,411 for war expenditure. That is a fabulous sum. From the total should be deducted the amount to be paid from revenue, namely, £21,129,602. That leaves a sum ‘ of £78,914,809. From that total let us take moneys in hand, or in sight, which include balance brought forward from 1917-18, £23,710,662; and instalments to be received in respect to the sixth war loan, namely, £12,943,901; making, to- ‘gether, a total of £36,654,563. A balance is left to be raised to meet actual payments up to the 30th June, 1919, amounting to £42,260,246. The Government have already received £43,000,000 by the last loan, no that I hope that by the real application of good business principles, we may avoid the necessity of raising any further loans. T_he only thing that makes me doubtful is the fact that we owe, in deferred pay to the soldiers, £10,309,908. That will be a maturing liability very shortly, and must be met as our soldiers return. Adding that to the £42,000,000 which we have to meet in cash makes a total of £52,000,000 that we shall have to find. Against that, we have £43,000,000 from the last loan, and therefore I hope the end of borrowing for war purposes is near. One expenditure set down this year in the £100,000,000 referred to is £27,155,000 for money provided by the British Government for munitions and various other things. I trust that air that will not be required, and that “the Minister for Defence (Senator Pearce) will, cut the estimates down considerably,, perhaps saving enough to pay the £10,000,000 odd due to .the returning, soldiers.

Senator Guthrie:

– We cannot cut it down until we are absolutely safe.

Senator FAIRBAIRN:

– Certainly, we must be out of the wood before we begin to crow.

Our accounts should be made as simple as possible. On one side appears the item, “ “Valuation of properties transferred from the States, £11,202,516,” and on the other side of the ledger, under the note fund, appears the item, “ Loans made to States before . the war, £2,634,000,” and! also another item, “ Loans made to States since the ‘war began, £18,000,000,” . or £20,000,000 in, all. Why not take over the transferred, properties at the valuation, and writethe amount off the other side of theledger? That would greatly simplify our accounts, and make them more understandable to the public. I do not know, whether there is any objection to that, suggestion; personally, I can see none-

Senator Guthrie:

– What will the States say?

Senator FAIRBAIRN:

– It will be as. broad as it is long. We pay the Statesinterest on. the valuation of the transferred properties, and they pay us- interest on the money we have lent tothem. Why not practically buy their buildings, for £11,000,000 odd, and reduce their liability to us correspondingly I

Senator Millen:

– As a financial transaction it has this disadvantage, that’ we are paying the States,, on the amount we owe them, interest at a lower rate thanthey are paying us on the money we have lent to them.

Senator FAIRBAIRN:

– After all’, a* both States arid Commonwealth represent the same people, I do not see that that need be a fatal objection.

I look with the gravest concern: on the financial outlook, not only here, but in other p arts * of the world. We are faced with very serious problems, and if we want a happy community, living in the comfort that we should like to see -them all enjoying, we must give our financial affairs the closest study. It is for that reason that I have spoken to-day.

Senator PRATTEN:
New South Wales

– It is fortunate that, in this Chamber, honorable senators have an opportunity of discussing, on the first reading of a Bill like this, rather wider and more general finance than is set out in the Bill itself. -There is a tendency in another place to keep money Bills hung up till the last moment, and then send them to this Chamber of review, where due consideration is supposed to be given to them, at such a time that, owing to the exigencies, perhaps, of the payment of public servants, or for other reasons, it becomes necessary for the Minister . in charge to move the suspension of the Standing “Orders, so that they may be put through in one sitting. I am glad that this Bill, allows some latitude on the question of finance, particularly in the absence of the Budget papers, which are so voluminous and interesting just now.

I agree with the preceding speaker that Australia has not yet faced -up its liabilities. The Minister for Defence (Senator Pearce), in this chamber, and the Treasurer (Mr. Watt), in another place, have forecast the necessity for additional taxation next year, -so far as the administration of the Commonwealth is concerned. Those statements were made before the conclusion of the armistice. It is a matter for much regret that the maximum of taxation was. not imposed by the Treasurer in the previous Budge’t, because now. the war is over the taxpayers will have to face the payment of additional taxation probably six months after the conclusion of peace. I do not think they will face it then with any pleasure. It was therefore a strategic mistake, so far as the policy of the Administration is concerned, not to have imposed even more taxation during the war, so that our burden after the war could be lightened. For that reason, I shall most heartily support this Bill. I support it because I believe the income-tax payers can pay the money, because it is not unreasonable in view of the taxation in other countries, and because we want the maximum of taxation while the war is on and while our expenditure is at a maximum.

Sitting suspended from 6.30 to 8 p.m.

page 8185

ELECTORAL BILL

Assent reported.

page 8185

QUESTION

PRIVATE MEMBERS’ BUSINESS

Senator DE LARGIE:

– Before we proceed with Government business, I desire to know whether the items relating to private members’ business which were called on just now, and the postponement of which . was not moved, will disappear from the notice-paper?

The PRESIDENT (Senator the Hon T Givens:

– They will drop off the businesspaper.

page 8185

INCOMETAXBILL (No. 2)

First Reading

Debate resumed.

Senator PRATTEN:
New South Wales

.- When the sitting -was suspended, I was. pointing out that the total cost of the war to the whole of the belligerents engaged in it is likely to approximate £35,000,000,000. I was endeavouring to make it quite clear that this enormous sum does not represent all waste, for, according to those who are best able to form a sound judgment on the matter, not more than 50 per cent. of it may be accounted waste, whilst other authorities set the wastage down at not more than one-third of the total expenditure. I had stated, too, that, in my opinion, the result of the war had been ‘a greater diffusion of wealth throughout thecommunity, so that, although Governments will owe enormous sums at the conclusion of the struggle, private individuals will have benefited considerably, whilst the aggregations of private wealth will also have been largely increased.

Coming to Australia, there is very conclusive evidence that individual wealth has substantially increased by reason of the war. Therehas been a striking war prosperity throughout the Commonwealth. The total deposits in banks increased by nearly £45,000,000 during the first three years of the struggle, and during no similar . period have bank deposits increased so” much. The deposits in cheque-bearing banks in Australia, including interest-bearing and noninterestbearing deposits, increased during the decade from 1907 . to 1916 by over £80,000,000. In’ the Savings Banks of ‘ this country during the same decade, there was an increase in the number of depositors from 1,258,000 to 2,420,000, and’ the- number of depositors -per 1,000 of population increased from 308 to 494. In addition to the figures quoted in relation to the deposits in cheque-bearing banks, there was an increase in the net amounts to the credit of depositors in our Savings Banks from £42,000,000 in 1907 to £97,000,000 in 1916. Per head of depositors, the increase was £7, whilst per head of population it was from £10 to £20. The largest, of these increases have been made during the second’ half of this decade, more than two years of which have been years of war.

Following out that argument, I assert without fear of contradiction, that the Commonwealth statistics collected by the Commonwealth Statistician, Mr. Knibbs, in connexion with the wealth census of 1915 considerably understate the real position in regard, to what are the incomes and capitalwealth of this continent. In fairness to the Government Statistician, however, he has never affirmed that the census figures in question were accurate, or indeed that they were anything . more than a rough’ approximate aggregate of the position, based upon thereturns that were sent to him. I am quite convinced, and I intend to quote some figures which,’ I hope, will convince honorable senators that, at . all events, the income, if not the wealth, of the people of the Commonwealth is very much more than Mr. Knibbs has collected, and, consequently, that the amount to be derived from the present Federal income taxation is much more than his figures suggest. Indeed, if all the people who ought to pay existing taxation were made to pay, there would be an amount received greatly in excess of the Federal Treasurer’s estimate.

The latest New South “Wales figures in connexion with the assessments ‘ made in that ‘State for income tax .purposes aTe as follow: -

– The New South Wales income tax does- not, in it.3 incidence, reach out in the same way as does the Commonwealth law, because in the mother State income’ derived from companies is taxed at its source, and is not included in the schedules of individual taxpayers.

Senator Senior:

– It is not taxed twice.

Senator PRATTEN:

– That is so. Consequently, the taxable income of companies in New South Wales is very large. If the Income Tax Act of that State were administered in the same way as is the Commonwealth Income Tax Act, the taxation borne by companies would be very much less than it is, whilst that borne by individuals would be very considerably more. According to the latest assessment, the total number of companies taxed in New South Wales was 2,308, their taxable income representing £16,503,575. From the summary to> the table which I have quoted, ‘ it will, be . seen that the number of assessments ,. made by the New South. Wales Taxation Department was 48,322, whilst the taxable income aggregated £38,529,893. In other words, that is the amount of income actually taxed after allowing for the statutory deduction of £250 in each private assessment, and. after making further deductions on account of children and insurance. Now I think it is fair to assume that, on ari average, each taxpayer deducts £50 on> account of one child, and £10 on account of insurance, so that in New South Wales every private income that is taxable under the State Income Tax Act represents ari income in excess of £300 per year. The wealth census figures compiled by Mr, Knibbs in 1915 set down the total yearly income of all individuals and companies: in the Commonwealth at £257,000,000, and of this sum £101,000,000 can be credited to New “South Wales. The proportion of the total incomes of that State _ to the total incomes of the Commonwealth, according to this census, is, therefore, 40 per cent!, or two-fifths - a proportion that I have previously adopted, and one which is sustained by the fixed contribution of £16,000,000 by New South .Wales to the recent war loan of £40,000,000. It is, therefore, a proportion which we may accept for our guidance in connexion with the calculations that I am about to submit.

Knibbs gives the number of people, inAustralia enjoying incomes of £300 or over per annum as 94,000. There are more than 46,000 persons in New South. Wales receiving incomes of £300- a year and over - altogether outside of companies and those persons who derive the whole of their income from companies, and consequently are not assessed ; and, if we take again as the basis of calculationNew South Wales? being in population, in wealth, in trade, taxation, and most, other comparisons, two-fifths of the Federation, it is reasonable that if there arenearly 50,000 persons in that State enjoying incomes of £300 or over per an11Unl, there are at least 125,000 persons: in the Commonwealth having the same income, instead of 94,000 persons tabulated -by Knibbs. Those figures are buttressed by the fact that the wealth census returns showed 12,384 persons enjoying incomes of £1,000 and over, while New South Wales assessments show that over 6,670 persons. in New South Wales, individually, and without company assessments, pay income tax on these figures - more than half the figures given by Knibbs for the total of all incomes of this amount in Australia. Knibbs’ wealth census returns again show that only 2,026 persons enjoyed incomes of £3,000 and over throughout the. Commonwealth, while 1,300 persons at least are paying income tax on this amount to the State of New South Wales alone. And, on the same basis of comparison, there are more likely to be 3,250 persons throughout the Commonwealth enjoying this large income rather than the 2,026 given by Knibbs. The New South Wales returns again show that persons paying on incomes of £5,000 and over number about 500. Knibbs gives only 832 for the whole of Australia. The experience is that in this figure, as in most others, New South Wales totals can be multiplied by two and a half, which would give 1,250 persons, instead of 832 as stated in the wealth census to be in the enjoyment of incomes of £5,000 or more yearly, throughout the Commonwealth.

I shall now take my analysis of the wealth census figures for the whole of the Commonwealth as against New South Wales a step ‘or two further. The total amount of private taxable income represented in the most recent New South Wales taxation figures is a sum of £22,000,000 odd. To this must be added the average for the deduction made by 46,000 taxpayers of £310 each, say, £14,260,000 altogether; or a total of income represented upon which taxation is paid, before deductions are made, of £36,260,000-. If this figure is multiplied by two and a half, we get an approximate sum for the Commonwealth of £90,650,000, which com-‘ pares reasonably with the £83,700,000 of the total incomes of £300 per annum and over, including that of companies, given in the wealth census figures of 1915. But the latter -figures give statistics for companies as being only £16,413,000 in all. In . New South Wales alone, in addition to the figures I have already given of taxable income of individuals, there are 2,308 companies assessed with a taxable income of £16,500,000, so that the total incomes over £300’ in New South Wales are: - Individuals, £22,000,000 ; companies, £16,500,000 ; exemptions on private incomes, £14,250,000; making a total of £52,750,000 altogether. If we multiply this by two and a half, we get a total for ‘the Commonwealth of nearly £132,000,000, instead .of under £100,000,000 as given in the wealth statistics. Therefore, the total incomes, of £300 and over in the Commonwealth, including all companies, on a computation of the latest New South Wale? taxation figures of actual assessments, is likely to be £132,000,000, and not under £100,000,000, as given in the Commonwealth statistics.

Another test that the Commonwealth census figures are only partial and not complete, and do not show the total of the wealth or incomes of ‘the people of Australia to-day, is the fact that the wealth census gives 12,3S4 persons in receipt of total incomes of £1,000 per annum or more. In 1915-1.6, 13,372 persons paid- Federal income tax on incomes, after exemption, of £1,000 or more; and in 1916-17, 14,718 persons paid .on this amount and over. In New South Wales alone, where there is certainly more efficient income tax collection, the figures 3 have given show that there are nearly 7,000 persons assessed whose incomes an actually, without exemptions, £1,000 pei year or more - not including the addition to the incomes of those persons of amounts they collect from company dividends. So it is, to my mind, clear that as the figures I quote for New South Wales are for the year just assessed, an< assuming that the Federal income tax im proves in the same ratio as ‘between th. figures I have quoted and this year, in stead of there being 12,384 persons in thi enjoyment of incomes of £1,000 or more, as given in the Commonwealth census, there are at least- 16,000 to 17,000 persons in Australia actually in receipt of this income now; and. that represents^ an increase on the wealth census figures given of at least 33 per cent. Therefore, on these figures, there is a* very much greater income received by the people’ of Australia earning £300 a year and more than any figures which have hitherto been given indicate; and, that all arguments which have been and are being based upon the war census figures of 1915, are much below the actual; and that it is likely that the private wealth of Australia today is at least £2,000,000,000. For, clearly, the figures of incomes given by Knibbs are at least 33 per cent, less than the actual -taxable amounts that are being paid to State Treasurers by taxpayers throughout the Commonwealth. And it is likely that the wealth figures will show the same proportionate increase.

The war, then, has not interfered with the continued prosperity of Australia so far as these figures show; and the amount now within the ambit of taxation of incomes of £300 and over has been proved by the figures I have given to be at least £130,000,000 per annum. The total private wealth, of Australia is certainly at least the sum of £2,000,000>000, if not £2,250,000,000. The amount subscribed to war loans, including that just* closed, is £190,000,000- not 10 per cent, of the total wealth of the Commonwealth, as against the very high ‘figures of England and France. The position, therefore, is that probably half of those who can reasonably be asked to subscribe to loans have subscribed 15 per cent, to 20 per cent, of their total assets. The other half of the wealthy people have subscribed very little.

The Bill before the Senate, although it imposes a very stiff increase this year on the income tax payers of Australia, is not going further than the present financial position of Australia justifies. Although the increase of the income tax under this measure will be 62£ per cent, upon the income tax first brought -down by the Fisher Government a few years ago, it is not even now nearly so great as some of the increases made in the Mother Country. The Treasurer, in his secondreading speech upon the Bill, quoted a number of comparisons as between the taxation of Australia in this direction, and of the Mother Country. Most of those comparisons were favorable to Australia; and I hold that we have greatly prospered as a result of the war, and are very well able to bear the war burdens imposed, and to be imposed, by the Government. Great Britain’s income tax for 1917-18 is five “ times the total of 1913-14, and has jumped from £48,000,000 to £225,000,000. In 1913-14, £93,000,000, or 58 per cent, of the total taxation, was raised by direct taxation, as against £69,000,000, or 42 per cent., raised from indirect taxation. In 1916-17, the figures were £466,000,000 from direct taxation, or 82 per cent., as against £102,000,000 from indirect taxation’, or 18 per cent. It is true that probably about half of the huge total derived from direct taxation was raised by means of the> war profits tax, and was paid principally by the ship-owners and the munition makers; but, even so, the increase in income tax imposed upon the people of the Mother Country as the result of the war is very much greater than that imposed on the people of Australia, including the Bill now before .us.

– Did the honorable senator repudiate Norman Angell’s arguments? . No other great writer that I am acquainted with, or have read or heard of, would advance that argument in any shape or form.

Senator Pratten:

– Do you know anything that Angell has written except the one book?

– I hope that before the Bill leaves the Senate the honorable senator will take the opportunity to enlighten those of us who have not been able to understand him.

Question resolved in the affirmative.

Bill read a first time.

page 8190

CONTROL OF NAVAL WATERS BILL

Bill returned from the House of Representatives without amendment.

page 8190

LAND TAX BILL

Bill read a first time.

Second Reading

Senator MILLEN:
New South WalesMinister for Repatriation · NAT

– I move -

That this Bill be now read a second time.

The measure hardly requires any explanation from me, as its simple purpose is to increase the land tax by an additional 20 per cent. As honorable senators are well aware of the principles underlying the parent Act, it is unnecessary forme to do anything more than direct attention to its one purpose, namely, to add to the revenue of the Treasury.

Senator Long:

-Is the additional impost limited to any period?

Senator MILLEN:

-Forthe current financial year. I should like to add that the amounts obtained by the Treasury under the heading of land taxation since the imposition of this form of tax have been as follows .-1910-11, £1,370,345; 3911-12, £1,366,457; 1912-13, £1,564,794; 1913-14, £1,609,836; 1914-15, £1,953,696; 1915-16, £2,040,436; 1916-17, £2,121,952; 1917-18,. £2,123,778;. 1918 (estimated), £2,380,000. It is estimated that the last- named amount will be’ increased by £380,000 by the operation of the proposed additional tax.

Debate (on motion by Senator Needham) adjourned.

page 8191

ADJOURNMENT

Motion (toy Senator Millen) agreed to -

That the Senate, at its rising, adjourn till 3 o’clock, on Wednesday next.

Senate adjourned at 8.49 p.m.

Cite as: Australia, Senate, Debates, 21 November 1918, viewed 22 October 2017, <http://historichansard.net/senate/1918/19181121_senate_7_87/>.

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Senate21 November 1918

SELECT COMMITTEE ON INTOXICANTS

Senator THOMAS:NEW SOUTH WALES · NAT

Senator GARDINER:New South Wales

Senator GRANT:New South Wales

Senator GRANT:

Senator de Largie:

Senator GRANT:

The PRESIDENT:

Senator GRANT:

Senator McDOUGALL:New South. Wales

The PRESIDENT:

Senator McDOUGALL:

The PRESIDENT:

QUESTION

REPATRIATION

Senator BARNES:VICTORIA

Senator MILLEN:Minister for Repatriation · NEW SOUTH WALES · NAT

PAPERS

NAVAL DEFENCE BILL

QUESTION

TRANSPORT MEDIC: OUTBREAK OF INFLUENZA

Senator MCDOUGALL:

Senator PEARCE:Minister for Defence · WESTERN AUSTRALIA · NAT

The PRESIDENT (Senator the Hon T Givens:

Senator O’KEEFE:Tasmania

Senator O’KEEFE:

Senator PEARCE:Minister for Defence · Western Australia · NAT

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator Long:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator Long:

Senator PEARCE:

Senator Long:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator O’Keefe:

Senator PEARCE:

Senator GARDINER:New South Wales

Senator Lt Colonel O’loghlin:

Senator GARDINER:

Senator Reid:

Senator GARDINER:

Senator O’Keefe:

Senator GARDINER:

Senator O’LOGHLIN:SOUTH AUSTRALIA · ALP

Senator Pearce:

Senator Lt Colonel O’LOGHLIN:

Senator Pearce:

Senator Lt Colonel O’LOGHLIN:

Senator O’KEEFE:Tasmania

Senator Senior:

Senate
21 November 1918

Senator THOMAS:
NEW SOUTH WALES · NAT

Senator GARDINER:
New South Wales

Senator GRANT:
New South Wales

Senator McDOUGALL:
New South. Wales

Senator BARNES:
VICTORIA

Senator MILLEN:
Minister for Repatriation · NEW SOUTH WALES · NAT

Senator PEARCE:
Minister for Defence · WESTERN AUSTRALIA · NAT

Senator O’KEEFE:
Tasmania

Senator PEARCE:
Minister for Defence · Western Australia · NAT

Senator GARDINER:
New South Wales

Senator O’LOGHLIN:
SOUTH AUSTRALIA · ALP

Senator O’KEEFE:
Tasmania

Senator MILLEN:
Minister for Repatriation · New South Wales · NAT

Senator GARDINER:
New South Wales

Senator GRANT:
New South Wales

Senator MILLEN:
New South WalesMinister for. Repatriation · NAT

Senator DE LARGIE:
for Senator, Bakhap

Senator MILLEN:
NAT

Senator MILLEN:
NAT

Senator MILLEN:
NAT

Senator PEARCE:
NAT

Senator RUSSELL:
Vice-President of the Executive Council · VICTORIA · NAT

Senator MILLEN:
New South WalesMinister for Repatriation · NAT

Senator GARDINER:
New South Wales

Senator FAIRBAIRN:
Victoria