8th Parliament · 1st Session
The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and read prayers.
SenatorFAIRBAIRN.- I ask the
Acting Leader of the Senate whether he is aware that Saturday next will be Henley day, and that Mrs. Fairbairn and myself will be very glad to see honorable senators and their wives upon pur houseboat during that afternoon and evening?
– Ministers are sometimes asked questions of an embarrassing character, but the inquiry put by Senator Fairbairn certainly does not fall within that category. I am aware of the important engagement to which he has referred, and I am also aware of his well-known reputation for hospitality. I am sure that that reputation alone will be sufficient to guarantee the presence of a quorum uponthe occasion in question.
asked the Minister representing the Minister for Trade and Customs, upon notice -
Will he moke the necessary arrangements so that catalogues forwarded from seedsmen and nurserymen in European countries to Australia shall bear in all cases duty stamps similar to those imposed on catalogues from Great Britain?
– The answer isCatalogues of the character referred to are all subject to duty. Provision has been made to enable exporters to pay in advance in England by means of attachable stamps, thus securing prompt delivery of catalogues and avoiding delay at this end.
It does not follow that catalogues not bearing stamps have not paid duty, the practice being to ascertain the weight in any one mail and assess duty thereon, which is paid by the representative of the company in Australia. This, of course, entails some delay in effecting delivery.
asked the Minister representing the Postmaster-General, upon notice -
If, seeing that the stated scarcity of timber for telegraph poles in certain parts of the Commonwealth hinders and renders very costly the extension of telegraph lines, consideration on the grounds of durability and economy has been given to the fact that, in many tropical countries with areas similarto much Commonwealth territory, old lengths of rails no longer suitable for railway purposes are used in place of telegraph poles?
– The answer is-
Yes. It has been the practice for many years to use old rails for the purpose named,’ when such a procedure is economical.
Bill read a third time.
In Committee (Consideration resumed from 6th October, vide page 5343) :
Clause 4 -
Notwithstanding anything contained in the last three sub-sections, the tax payable by any person who-
is not married, has no dependants, and is not an absentee; and (b)hasa gross income of not less than One hundred pounds, or, in the case of a person carrying on business in Australia, has an income from the business which, after deducting from the gross income the deductions specified in paragraph a of subsection 1 of section18 of the Income Tax Assessment Act 1915-1918, amounts, together with his income from all other sources in Australia, to not less than One hundred pounds ; and
would apart from this sub-section, not be liable to pay an income tax of One pound or upwards, shall be One pound.
To which Senator Earle had moved, by way of amendment -
That the House of Representatives be requested to amend the clause by inserting after the word “ hundred,” in paragraph 6 of subclause 4, the word “ and fifty.”
– Since this Bill was last before the Committee a little more than a week ago, I have had an opportunity of learning several things in connexion with my proposal. One is that the Commonwealth is urgently in need of all the revenue that it can obtain; that the present is, therefore, a very inopportune time to propose a remission of taxation; thatan amending measure would require to be introduced in another place to give effect to my proposition; and, most important of all, that the whole question of taxation is about to be considered by aRoyal Commission which has been appointed to review it in all its ramifications. In these circumstances, I believe it will meet with the approval of honorable senators if I withdraw my proposal. I ask leave to do this reluctantly, because I recognise that a very great number of persons, particularly women who are employed in offices, and who are in, receipt of a couple of pounds per week, will be called upon to pay a flat rate of £1 to the Commonwealth revenue - rather a heavy toll to exact from them. But I entertain the hope that the Commission which has been appointed will take into consideration the position of this particular class of taxpayers,so that in the near future relief may be afforded to it and also to taxpayers with families. I, therefore, ask leave to withdraw my proposal.
– I do not wish to oppose-
– I do not think that the honorable senator will be in order in speaking now. The question before the Chair is whether the Committee will grant Senator Earle leave to withdraw his proposal. There cannot be any debate upon that matter.
– Then I shall object to the withdrawal of the proposal, because I wish to have the opportunity of discussing this clause.
– If it is the desire of the Committee that leave shall not be granted the proposal cannot be withdrawn.
– I regret being placed in the position of having to object to the withdrawal of the amendment.
– The withdrawal of my amendment will not prevent the honorable senator from discussing the clause.
– I intend to discuss it in such a way that I believe the honorable senator will realize that he is doing wrong in withdrawing it.
– As the position seems somewhat obscure, I shall put the question again. Is it the pleasure of the Committee that Senator Earle have leave to withdraw his proposal for a request?
Leave granted ; request withdrawn.
– I think the Senate is ill-advised in not insisting on an amendment which, I am sure, would have met with general approval.
– The honorable senator cannot discuss it now.
– I can discuss the clause. I am not prepared to deal with two Chairmen of Committees; at times I find one more than enough. I trust that Senator Senior will allow me to get into my stride, and not endeavour to direct me as to the proper procedure.
It is not my intention to discuss the withdrawal of Senotor Earle’s proposal, but surely in opening my remarks I am entitled to make some reference to it. The view of the honorable senator is that the exemption is too low in the case of those families in our community who find it hard indeed to make ends meet in view of increasing prices. The amendment he suggested was to increase the amount, and thus make the exemption higher.
– I was proposing an exemption of £150 instead of a flat rate of £100.
– The honorable senator had in his mind the hardships that are being experienced by individuals who have to pay a flat rate, and I think he has made a mistake in withdrawing his amendment. This Parliament should endeavour to afford some relief to the people whom its members represent. I understand that a Commission has been appointed to inquire into the whole incidence of taxation; but surely we can give relief to the people we represent, because if there is one thing more striking than another, it. is the frantic method in which prices are chasing increased wages.
– We cannot do it in this Bill.
– I have an idea that, as far as the flat rate is concerned, Senator Earle’s amendment would have done it. Our Income Tax Act, which is renewed year after year, imposes certain taxation rates; and it must be admitted that £100 is worth, approximately, £50 as compared with the time when the present exemption was fixed. Generally, our exemption is too low, and the working classes of this community are paying more than their fair share of taxation. The man who is paying a -big income tax directs attention to the enormous sams he has to contribute ; but we have to realize that the worker, in proportion to the income he receives, pays quite ten times more. If he is a smoker, he is compelled to pay an exorbitant tax on tobacco; and if he consumes spirits, he also has to contribute an extraordinary tax. A few “ wowsers “ like myself avoid both taxes, which have to be met by those who enjoy the luxuries I have mentioned. Almost everything that is consumed is heavily taxed through the Customs De partment, and many useful and necessary commodities cannot be purchased by many, owing to the prohibitive Customs duties imposed. I have seen the statement that a number “ of imported Italian hats that came to Sydney had to be returned to the country in which they were manufactured, because of the methods adopted by the Customs Department in dealing with the rate of exchange. The same applies to the goods coming from France, and the Government are increasing the cost by imposing heavy Customs duties, which bear very. heavily upon the working classes. The working man with a large family has to contribute more to the revenue of the country than the one with a small family.
– Would the honorable senator tell the men at Yarraville that preference should be given to imported hats?
– I do not think the interjection has much weight, because for many years I have been endeavouring, as far as my powers will permit, to show that the bulk of the- Customs duties are paid by the working classes. I have endeavoured to show how the huge Customs duties compare with the light income tax paid by those who own the wealth of this country. The financial situation is so grave that I would not object if salaries were limited to £500. and the Government confiscated all above that amount.
– And the honorable senator voted for our salaries to be increased to £1,000.
– The Government which the honorable senator supports introduced that proposal when I was not present, but had I been here I would have voted for it.
– The honorable senator once suggested that all above £300 should be confiscated ; but now he has raised the amount to £500.
– In the days when I advocated that policy £300 would purchase what it now requires £500 to purchase. If this Parliament is not prepared to relieve those people who are so hardly pressed in the matter of income tax, some drastic method is needed by which the wealthy section of the community shall pay in proportion to the income they receive. As far as hat makers, boot manufacturers, and sugar producers are concerned, I shall take the opportunity, when the Tariff is under consideration, of proving that the working classes, who are awaking fortunes for the factory-owners, are contributing more than their fair share.
– They are getting cheap sugar.
– Yes, at 6d. per lb. If we .assume that ‘by imposing duties we prevent the outside producer competing with the local man, and say that the local producer increases the price of his produce to the level of the outside producer, plus the tax, we have paid £19,000,000 to the .sugar-producing companies..
– The wageearners have received 80 per cent, of that.
– I am glad to learn that the workers have got something out of it.
– Why does not the honorable senator reserve this discussion until the Tariff is under consideration ?
– I am afraid I shall die of old-age before I have that opportunity. It is the duty of this Parliament to relieve that section of the community which has so little money with which to pay income tax of the responsibility of paying it, and to place the burden on the shoulders of those who can afford to bear it. Therefore, I protest against the withdrawal of Senator Earle’s proposal. It would have conferred great benefit, not only on the community as a whole, but also on the Government. In times of serious financial circumstances, my idea of good government is that we should have as few discontented and dissatisfied people as possible in our midst. One way in which we can achieve that object is by removing any source of hardship or of irritation. Apart altogether from the obligation to pay income tax, it is most irritating for people who have but a paltry sum to pay to. be obliged to fill in income tax returns; and as Senator Earle’s proposal would have removed that source of irritation from a large number of people, I believe the Government would act wisely in adopting his suggestion. The New South Wales Government have brought their income tax ‘exemption into line with the living wage standard of £4 5s. per week for a man with a family, as fixed by the Board of Trade, but the. Federal Government have not done - anything iu the same direction, or at any rate, if it .is their intention to do anything in the matter, they are extremely slow about it, and in the meantime this irritation continues. We have the spectacle now of a .man employed in the Postal Department, and drawing from the Federal Government £3 14s. per week, working side by side in any part of New South Wales with a man drawing a rninimum wage of £4 5s. per week. That i3 not fair to the Commonwealth employee. I know that our officials can apply to the Arbitration Court to get the increased wages, but an application to that tribunal takes considerable time, and in the meantime the landlord, the butcher, and the baker keep calling to collect their rent or bills. Post Office officials, with twenty years’ and thirty years’ service, are not drawing the minimum living wage as laid down by the Board of Trade in New South Wales. ‘They are most patient and forbearing, but.it does not tend to good administration or to the securing of good service from Commonwealth employees, when they are treated so unfairly by being paid a wage which is less than a living wage, and when on top of all this Parliament imposes an income tax which, still further reduces their scanty earnings. I hope that the Government will be well advised in this matter, and that the next Income Tax Bill they bring down will exempt from the payment of the tax those persons who are not in receipt of a living wage.
.- I think that all honorable senators will agree with a great deal of what Senator Gardiner has said. As a matter pf fact the Treasurer (Sir Joseph Cook) has already announced that the Government look with a favorable eye on the proposition to increase the exemption as set out in the Income Tax Assessment Act. But the returns for incomes earned last year have already been furnished to the Taxation Department, and on them the tax imposed by the Bill now before the Senate will be collected. Before the next returns are due there will be ample opportunity f»r the Government to submit to Parliament fresh proposals in this matter and avoid the hardships pointed out by the. honorable senator. The Government recognise that there are many defects in the incidence of our taxation, and. for that reason have appointed a Royal Commission. Another important factor to be taken into consideration is the expiry by effluxion of tamie of the -war-time profits tax., and, in framing future proposals for taxation, a matter to be taken into consideration will be whether the people who are now taxable under the war-time profits tax are to escape further payment of taxation in this direction, and, if so,” to what extent. All these matters the Royal Commission will investigate and report upon; but, before the next income tax returns are due, there will be ample time for them to do so, and for the Government to take action upon their recommendations.
– I have a considerable amount of sympathy with the effort made by Senator Earle to do something in the direction of raising the exemption under the Income Tax Assessment Act, and I have noted Senator Gardiner’s sympathy for the main principle, which we have previously attempted to carry out in this Senate, but an actual examination of the income tax figures show that the incidence of the tax falls on the shoulders of the wealthy. ‘ I want to remove from Senator Gardiner any illusion he may have that these smaller incomes bear anything like the proportion of the tax which is paid by the larger incomes. The latest figures issued by the Taxation Department are for the taxable year 1918-19, and it is surprising how little of the aggregate of the income tax paid is actually derived from the smaller incomes. There are 388,000 assessed incomes throughout the Commonwealth, which paid during the year under1 review tha total of £10 ,820 ,000 . These figures dissected show that, although 3SS,000 taxpayers paid in income tax £10,S20,000, there were 2S2,000 taxpayers who paid in all under £500,000, or something over £1 per head. In other words, over 70 per cent: of the total assessed incomes throughout the Commonwealth paid under 5 per cent, of the total tax gathered, while under 30 per cent, of the higher incomes paid 95 per cent, of the whole income tax assessed. These figures should, I think, disabuse Senator Gardiner of my illusion he may have that the smaller incomes are paying anything like a reasonable portion of the income tax. I want to stress the fact that 70 per cent, of the incomes assessed throughout the Commonwealth pay under 5 per cent, of the total tax gathered. It is obvious, therefore, that the wealthy taxpayers are bearing a very great burden; and, while I am sympathetic towards the suggestion that the exemption should be raised, and that married men should be placed in a better position than at present, I must say there is a good deal of force in what Senator Pearce has said, that there are many other inequities in connexion with the income taxation that we want righted. I am as strong as any other honorable senator in the matter of making the rich pay by placing the burden of taxation upon the shoulders of those best able to bear it ; but it seems to me that we have nearly done that already in connexion with the Bill before the Committee.
.- I would not have troubled the Senate at all in connexion with this Bill, but for the statements that are made so often by public men throughout the Commonwealth, and which certainly lead people to believe that the workers are called upon to pay a very much heavier share of taxation than are those in happier financial circumstances. This impression has grown to such an extent that it is met by public men on every platform. I have taken the trouble to look at the details since Senator Gardiner spoke this afternoon, and I find that, while Senator Pratten proved conclusively ‘by his analysis of percentages that the heaviest burden is levied mainly on those who are best able to bear it, the Budget-papers which are in the possession of all honorable senators take the matter a little further. On page 20, honorable senators will find certain facts which cannot be s;iven too frequently to the people. The last figures are for the year 1918-19. and show that the total income tax collected from individuals - not from companies - was £8,747,903, while the amount received from those whose incomes were under £200 per year was £476,000; and from those with incomes from £200 up to £500 a year, £549,000; or a total of £1,000,000 from incomes up to £500 a year out of the total amount of £8,747,000 received by the Treasurer. These figures demonstrate that the. bulk of the burden has been placed upon the shoulders of those best able to bear it. Much as one would like to raise the exemp- tion just now, and to make further concessions, one cannot help feeling that, as every adult person has the same power in regard to the election of representatives to this Parliament, so should every adult individual be called upon to bear some portion, no matter how small, of the financial responsibility of the Commonwealth. In view of the stringency of our financial position, and considering all things, we ought to compliment ourselves upon the fact that it has not been necessary to increase the burden to any appreciable extent upon the smaller wage earners of the Commonwealth. Senator Gardiner this afternoon quite properly pointed out that the man in receipt of £4 per week now is in no better a position than a man who received £2 10s. per week a few years ago. We all grant that. The £1 sterling is not worth so much as it was a few years ago. But we may also apply the same argument to the amount of tax paid. If the purchasing power of £1 is only about 10s. as compared with its purchasing power a few years ago, then £2 paid in income taxation to-day is really only worth £1 to the Department. Let me repeat that in 1918-19 taxpayers in receipt of incomes up to £200 a year paid £476,000; those with incomes from £200 up to £500 a year, £549,000; those with incomes from £500 up to £1,000, £767,000; and those with incomes of from £1,000 to £10,000, £4,250,000.
– But you must divide that amount by two, according to your reasoning.
– I am not reasoning at all. I am simply making a plain statement of the facts.
– I was pleased to hear that the Government propose to lighten the load of taxation upon the married man, because he is the individual who deserves consideration, as owing to the increased cost of living, he finds it very difficult indeed to keep going if he has a family of little ones. I am glad Senator Gardiner is present, because some time ago he made a statement that all incomes over £300 should be paid into the Treasury. Now he has jumped the figure up to £500 a. year. If every income over £500 a year was nationalized it would be practically lost, because that is the state of all things that are nationalized, and if the cost of living should rise to £1 ,000 . a year, where would the people be? Would they have to starve? If the limit fixed was £300 per year, and the cost of keeping oneself was £500, while everything over £300 a year was nationalized and poured into the coffers of the Government, how would people live in the circumstances? If we nationalized at £500 per year, and the cost of living rose to £1,000 a year, as it very well may - it is far ahead of that in Russia - people would have to starve.
– Nobody would attempt to produce more than £500 worth.
– Then the cost of living would go up in consequence. That ought to be pointed out as one of the economic unsoundnesses of Senator Gardiner’s argument. I wish to back up what ‘Senator Pratten said. There is always talk of putting the burden on the shoulders of those best able to bear it; but Senator Pratten has shown that those shoulders are carrying a very fair load already. The top rates of Federal and State income taxes in Queensland amount to lis. 6d. in the £1. If a man is engaged in pastoral pursuits, his lambs are treated as income. In order to pay the tax, he has to turn them into cash. If he keeps them, they may die. Not only lis. 6d. in the £1 of the money of a good many of these people has gone in income tax, but the whole income - every farthing of it - went last year. I do not want people to rely too much on those shoulders, which are always supposed to be so well able to bear the burden, carrying much moreWhen we reach lis. 6d. in the £1 we get to the top of our curve. We have a.u extraordinary system of income taxation called the curve system; Ss. 6d. in the £1 is about the top of the curve. If .ve proceed further, we go along on a straight line. That is the highest rate, because, if we went up to 10s., it would be found that the man with £8,000 a year was poorer after paying his income tax than the man with £5,000 a year. If we went up to 19s. in the £1, it would be found that he was below the line altogether, because Ave should have taken practically the whole of his income. The curve system is very difficult to follow. I wish we still had lie old straight-out system that acted so well in all other parts of the world. I have put these considerations forward, because it is always as well to consider both sides of a question. All honorable senators are agreed’ that in timeslike this we must pull together.We do not want any section of the community to think they are badly treated. I remember the late Sir PhilipFysh years ago analyzing the Customs duties, and showing that if a man was really hard up, he did not require to pay any indirect taxation through the Customs. All cotton goods and flannelette goods; for instance, were absolutely free. Of course, he might want luxuries, like beer and tobacco. We ought to grow, and I think will grow, our own tobacco here before long.
-i am amused at your calling beer and tobacco luxuries.
SenatorFAIRBAIRN. - They are generally considered to be luxuries. They pay a great deal of the revenue. If people, unfortunately, had to avoid the payment of any duties through the Customs, they could do without beer and tobacco. I hope that will never be necessary for anybody. I should like to see people have plenty of money, so that they could buy a drop of beer and tobacco whenever’ they wished. Still, if they could not afford those things, they could possibly do without them. The Tariff, as a whole, has been so adjusted that poor people need pay nothing under it. When Mr. J. C. Watson was Prime Minister, he insisted on having no duty on anything” that was indispensable for the wear of poor people; and I think the bulk of the community agreed with that view. That is how the Tariff was; to a great extent, constructed, and I hope that is how it will continue to be constructed.
– Senators Pratten, Fairbairn, and Payne speak as if the wealthy man, who actually fills up the return and sends in the money for the income tax, pays it, although they know very well that he does not. He increases his business profits, and makes the workers pay. No one knows that better than does Senator Pratten. He is out of business now, and can admit it.
– I do not know anything about it.
– He would be a very poor business main who, finding that he had to pay £100 more in income tax this year, did not lay himself out to increase the price of the goods he was selling sufficiently to cover it. Under the present system, the workers pay most of the increase. Senator Fairbairn twitted me with suggesting the raising of the exemption, not only to £300, but to £500. That is in proportion to the way in which his Government increased my earnings.
– According to your argument,we ought to take the taxes off
The wealthy so as to benefit the workers.
– I wish to let the wealthy section of the community, who will not meet their obligations, know that, When this Parliament imposes a tax on them, they must not pass it on to the shoulder’s of those beneath them.
– How would you increase production?
– The honorable senator believes, with Senator Crawford, that production would cease if we took such action. They belong to the go-slow section of the community. They argue that capital will not work or undertake production unless it gets its last ounce of profit. I believe capital would draw out, but where would it go? Would it go to Italy? Would it rush to Great Britain? There is no country in the world which offers such safe and sound investment for capital as Australia does. When I say a limit should be fixed, and that all profit over and above it should go into the public treasury, I do not’ mean that that should be done for all time. It should be done to meet the grave emergency with which we are, and will be, confronted. If we could face it boldly, and decide to. square up the finances of Australia within about five years, we would glide into a smooth sea, with open sailing ahead of us. We should enter an era of prosperity that Australia never dreamt of. But we will not face the emergency.
– Will the Labour Government of New South Wales put your ideas to the test?
– I have no doubt they will do as the Queensland Government have done- make New South Wales the host place in Australia for the
Working man. In Queensland, in 1915, the State Parliament was sent to the country with a. membership of forty-eight Nationalists and twenty-four Labour men. In 1920. it again went to the country, and thirty-eight or forty Labour men were returned, as against twelve Nationalists. I mention those figures to show how the Queensland Government’s methods of taxation are appreciated.
– You forget the other party, which is on the same side as the Nationalists.
– I did not mention the Country party, because it was not in the first appeal, and, therefore, I could not draw a parallel.’
The Federal Government, without giving Parliament a voice in the matter, have enormously increased the taxation on the shoulders of the workers by their Tariff proposals. They are putting taxes on in that way, although Parliament has not approved of them. In the circumstances, we can well lift the income tax from the shoulders of those whose living wage does not reach the’ standard set by the Board of Trade in New .South Wales. If honorable senators have any doubts about the wealthy conditions in which many people live, I advise them to go to Flemington on the 2nd November. They will see there “that many people revel in untold wealth and luxury.
– There will be as many members of the honorable senator’s party there as there will be members of other parties.-
– Of course. There will be many persons present who possess splendid motor cars, and beautifully attired women will parade the lawn. The workers’ share in this gorgeous show will be to pay for it. Senator Fairbairn could not help referring to spirits and beer as the “luxuries” of the working classes, just imagine classing these things as “ luxuries,” when every day one may see wealth flaunted in the face of poverty, and, indeed in the face of our own debts. Look at the enormous tax which the working man pays upon tobacco. His smokes consist of about four-fifths tax and one-fifth tobacco.
– Most of the workers look very happy whilst they are doing it.
– They smile, notwithstanding that they are always upon the brink of poverty. As I do not indulge in the so-called luxuries of spirits and beer, I do not pay Customs duty upon those articles’.
– Is not the paying of duty upon those articles a voluntary act?
– It is voluntary in the same sense that every other act is voluntary.. W& are all free men. A man is not obliged to accept the wage which he is- offered. He may refuse it and starve. But why place such an enormous duty upon tobacco? Simply because it is an article which is in1 general use amongst the working classes, and thus affords an easy means of collecting revenue.
– Smoking is a bad habit.
– It is an excellent habit. I am not going to say. that it is a bad habit because I do not indulge in it.
– I say that it is, and I do indulge in it.
– If we prevent the working people of this country from obtaining some little measure of enjoyment we shall certainly precipitate a serious crisis. In Russia the authorities prohibited the sale of spirits, and a revolution followed within twelve months. Similarly if we wipe out the liquor traffic in Victoria I shall cease to advocate the removal of the Seat of Government to Canberra,, because the revolution will come very quickly. However, I think that I am becoming too general in my observations.
– Much too general.
– I interpret the remarks made by Senator Pearce to mean that, before we are called upon to deal with the next Income Tax Bill, provision will be made for the very things to which we have directed attention. Figures which have been quoted by Senator Pratten convincingly show that the average income tax paid by 250,000 persons in the Commonwealth is about £1. Thus a very large number of people are obliged to fill in returns, notwithstanding that they make only a verysmall contribution to the revenue.
– I think that we might well simplify the taxation schedules which the public are at present asked to fill in.
There are few business men to-day who do not pay to accountants, or to members of the profession to which Senator Benny belongs, a considerable percentage on what they contribute by way of income tax, for the assistance which they require to enable them to furnish these schedules. The details which are demanded from the taxpayer are altogether too absurd and too far-reaching.
– I have seen people make up their returns upon plain paper, in a perfect fashion, and then transfer the details to the printed schedule.
– If the VicePresident of the Executive Council (Senator Russell) can explain to anybody else the formula of the present income tax schedule he must be possessed of more brains than I have. We have an excellent body of officers managing our Taxation Department, because they are able to make so many of us pay more than we desire to pay. With regard to the exemption proposed in the case of single men and single women, I think that there is no class in the community which is more fitted to pay its quota to taxation than is this class. I hope that the Taxation Commission will not recommend that these people shall be afforded any relief from taxation. Senator Gardiner has spoken about the advisableness of placing taxation upon the capitalistic class and upon industry and manufactures. To my mind, there is nothing that will stop our progress more effectually than will an abuse of our powers in the direction of imposing practically the whole burden of taxation upon the shoulders of the capitalistic class. That class has a right to contribute its quota. But when my honorable friend says that he would confiscate all incomes in excess of £500 per annum I cannot think that he is serious, because he himself is in receipt of more than that amount.
– But the statement sounds well.
– It is catchy, but it is not effective. I believe that the people who are best able to bear taxation should pay their full quota to the general revenue. But, as a matter of fact, the capitalistic class is already carrying its burden nobly and well. When Senator Gardiner says that its members should bear the entire burden of taxation, I ask him, “ What would be the position of this country if they were to pull their capital out of industry, or if those who are ambitious were told by the Legislature that all income derived by them in excess of a very limited sum would be confiscated ?”
– Seeing that in war time the honorable member would have compelled men to die, surely in peace time he ought to be prepared to compel the capitalists to pay?
– Thank God I did not compel any men to die. although I recognised that many men died for the honorable senator and myself. However, that has no relevance to the present discussion. We wish to see Australia progress, and she can progress only by means of her secondary industries. If taxation be unnecessarily imposed upon those industries, unquestionably we shall suffer. Senator Gardiner has spoken of the way in which the Tariff affects the working classes. But who is a better working man than the producer? He does not work eight hours a day, but fourteen and sixteen hours. Upon every machine that he uses he is required to pay an enormous duty.
– Why should he do so?
– Because he is obliged to do so.
– Let him acquire the power to work the land cheaply and he will soon be wealthy.
– Why, in Queensland at the present time men are being paid up to £2 10s. per day for cutting cane. In these matters we have to get back to the very foundation, which is the cost of production. The cost of production has increased to a very large extent because of the high wages which are being paid in our various industries.
– It is the result of a stupid protective policy.
– It is more the result of the slowing-down policy. The sooner we get back to the principle of a fair day’s work for a fair day’s pay, the sooner we shall get back to normal conditions. I recognise the necessity which exists for taxation. But at the present time the filling in of our taxation schedules constitutes a. veritable nightmare to 75per cent. of our people. Those schedules. I repeat, should be very much simplified.
Clause agreed to.
Clauses 5 to 9, schedules, and title agreed to.
Bill reported without request; report adopted.
Motion (by Senator Pearce) proposed -
That this Bill be now read a third time.
– I desire to say a few words upon this Bill in ‘order that a record may be made, perhaps for the information of the Taxation Commission and also for the information of the Ministry. It will probably be remembered that the consensus of opinion in this Chamber is that some relief from taxation should be afforded single men and women, married men and women, and married men with families, by raising the exemptions and allowances. ‘The view has been expressed that the married man, in regard to children whom he has wholly to maintain, should occupy a much bettor position than he occupies today. But there are constitutional difficulties connected with any action which the State may take in regard to these matters. I believe the constitutional position is that taxation Bills are sent to this Chamber in two sections. One is a Bill which imposes the rate, which Ave cannot amend, and the other provides the various ways of collecting the tax. This is merely a rating Bill, unaccompanied by an assessment Bill, which can lae amended here, and consequently, if an amendment had been placed in this rating Bill, the constitutional position would have gone against the Senate.
X was pleased to hear the Minister in charge of the measure (Senator Pearce) say that the Ministry was very sympathetically considering the position of those income tax payers who were in low categories, and more particularly the position of married men with children under sixteen years of age whom ‘they were wholly supporting. I have ‘been placed in a most difficult position in connexion Avith my viewpoint of the whole ambit of this Bill. I am not altogether in favour of increasing the income tax by 5 per cent. ; but it must be generally admitted that the financial position all over the world is going from bad to worse. I am very doubtful whether the fair and reasonable estimates made by the Treasurer (Sir Joseph Cook) a month or two ago are likely to pan out, and consequently it is very dangerous for this Chamber at this juncture to consider a remission of taxation in view of the possibility of financial complications in the not distant future. I have expressed my personal opinion in this chamber more than once, that during the years -of war this Parliament, as a Parliament, had not faced up the taxation that was necessary, and, as a result of that, I am afraid the people of the Commonwealth will have to pay more taxation after the Avar than they will care to contribute. We are in a very different position to even the British Government. I came across a few figures in connexion with this matter, which may be of assistance to honorable senators and others. The cost of the Napoleonic Avars to the United Kingdom
Avas £831,000.000. Of that total the amount raised by taxation was 47 per cent., and consequently the amount raised by loan was 53 per cent. The cost of the Crimean War to the United Kingdom was £67,500,000. The amount raised by taxation was 53 per cent., and that raised by loan 47 per cent.
– Not during the currency of the war.
– I am referring to the period of the war. The Boer War, which lasted three years, cost the United Kingdom £211,000,000. The amount raised by taxation represented 32 per cent., and that raised by loan 68 per cent. The cost of the Great War to the United Kingdom, which lasted five years, was £10,656,000,000. The amount raised by taxation represented 32 per cent., and that raised by loan 68 per. cent. I a3k honorable senators to compare those figures with what we have done in Australia. .
– Do those figures in-‘ elude money loaned to other nations?
– Yes , because, if the money loaned to British Dominions and . our Allies is not included, the amount raised by taxation for the cost of the Great War would be increased from 32 per cent, to 38 per- cent., and the amount raised by loan would be diminished from 68 per cent, to 62 per cent. I Avant honorable senators to contrast this position with the one in which Australia is to-day. We have not done anything like that in connexion with war costs and taxation, and I am using these figures as an argument to show why the present Budget should not be interfered with” by diminishing the revenue, and why it should be increased.
I would like to record for the information of honorable senators the particulars contained in an estimate I received from the Income Tax Department by the kind permission of the Treasurer, in connexion with the exemption of single and married men,’ as well as the allowances for children. It will, I think, be of some information to the Royal Commission on taxation, which is now arranging its preliminary work prior to considering the whole incidence of taxation. It will also show what could reasonably be done in connexion with our income taxation for next year. The Department says that the total amount allowed for the year 1919-20 as deductions from income for children, namely £26 for each child, was £7,000,000. Obviously, then, if £7,000,000 is divided by twenty-six there are approximately 270,000 children, wholly maintained by the taxpayers, who come within the ambit of income tax deductions. If an exemption of £39 were allowed for each child, the loss of income from the field of taxation would be £10,500,000, includingthe £7,000,000 mentioned, with a consequent loss of tax of £125,000. If an exemption of £52 were allowed for eachchild the loss of income would be £14,000,000, including the £10,500,000 mentioned, with a consequent loss of tax of £260,000, including the £125,000 mentioned. In regard to the point raised by Senator Earle in relation to the minimum tax of £1, I may explain that if the section which at present imposes that tax were repealed the loss would be £65,000. If the section which at present gives some persons a diminishing exemption of £100 were re pealed, and a general diminishing exemption of £156 were allowed to all persons, the loss of tax, including the £65,000 mentioned, would be £160,000. If a diminishing exemption of £200 were given to all persons, the exemption decreasing by £l for every £3 of the excess over £200, the loss, including £160,000, would be £430,000. If a diminishing general exemption of £250 were given to all persons, the exemption decreasing by £1 for every £3 of the excess over £250, the loss, including the £430,000 mentioned would be £750,000. I believe these figures will be interesting to honorable senators, particularly in connexion with their consideration of the position which, I think, the Minister has half promised will arise in connexion with an endeavour to relieve married men who are supporting children under sixteen years of age. I make these remarks largely for the purpose of recording them, and so that a consideration of the position in the not distant future will be somewhat easier in view of the official figures I have given.
Question resolved in the affirmative.
Bill read a third time.
Motion (by Senator Pearce) agreed to-
That the Senate, at its rising, adjourn until Wednesday, 3rd November, at 3 p.m.
Debate resumed from 14th October (vide page 5641), on motion by Senator de largie-
That a Select Committee be appointed to inquire into and report to the Senate on the question of the position of the officials engaged in and about the Senate, and the working of the Public Service Act so far as it concerns officers controlled ‘by the Senate or Committees of the Senate.
That the Select Committee consist of Senators Senior, Duncan,Reid, Earle, DrakeBrockman, Elliott, and the mover.
– It is not my intention to speak at length at this juncture, because I believe I have clearly and fully explained my object in moving the motion. Even if I had not spoken at all the motion clearly expresses my intention. We must recognise that there has not been an inquiry into this matter during the twenty years Parliament has been in existence, and, apart from any matters that may have arisen recently, when a system has been in operation for twenty years it is not unreasonable to request that inquiry should be made to ascertain whether it is working smoothly or not. I have already shown that the present arrangement is unsatisfactory, and I have no desire to enter into the personal aspect of the question. It is, however, apparent to many that friction exists between certain Committees and the Presiding Officer in this Chamber. I pointed out what had happened in the Library Committee, and I know that friction is occurring in the House Committee. The members of these
Committees are somewhat confused as to what their duties and functions are. They do not understand how far they can go in certain directions. There is a collision of opinion between, the Presiding Officers and the members of the Committees. For twenty years past, these Committees have been performing certain duties on precedents clearly established by the Presiding Officers of this Chamber and another place, and adhered to by all Presidents and Speakers with the exception of Senator Givens, who has seen fit to dispute them. ‘ It is only right, therefore, that a Select Committee should be appointed to find out if there is anything wrong with the practice that hitherto has worked so smoothly, and whether any reason may exist for certain changes which have been proposed. Such an inquiry would be in the interests of the proper working of the Senate, for there can be no prospect of securing harmony while disputed opinions prevail. In any case, the inquiry would be not so much into the position of the Committees I have mentioned as into the working of the Public Service Act as applied to Parliament. It is the provision of that Act which prescribe» that certain duties are to be performed by the President and Speaker that has caused all the trouble.
When submitting the motion for the appointment of the Select Committee, I made a mistake in attributing to Senator Givens a certain action. The matter was certainly too trivial to justify the amount of time the President spent in referring to it. I claimed that he had made a written protest to the Library Committee in regard to the manner in which it was carrying out its duties. I found out afterwards that it was a verbal protest, but from the way in which he reiterated his assertion that he had never written to the Library Committee, I began to doubt whether he had submitted any protest at all. However, he concluded by admitting that he had made a verbal protest. It was quite unnecessary for him to quibble about the matter. I had heard the minutes of the Library Committee read containing the President’s protest against the action of the Committee in doing what the members of it thought they had a perfect right to do, and I had fathered the impression that it was a written protest. It- makes little dif ference whether it was written or spoken. At any rate, the Joint Library Committee immediately proceeded to do what it had been doing for the last twenty years, and that was to control the officers in the Library, and deal with the question of their employment in a way which was quite in conflict with the President’s protest, which was treated as the Irish doctor proposed to treat pneumonic, plague - with contempt. Speakers Holder, Carty Salmon, and McDonald had all carried out their duties as Chairmen of the Joint Library Committee on lines already laid down by precedents, and there could be very little doubt indeed that, on this occasion, the members of that Committee were acting in accordance with wellestablished practice.
Senator Givens declares that my motion is for the appointment of a Committee to inquire into other Committees. It is nothing of the sort. It is simply a proposal to hold an inquiry into the workings of the .Public Service Act. I know that recently a change has come over the scene, and that the President has adopted a certain attitude which is indicated in the letter which he proposes to have printed recommending that the control of the officers of Parliament in regard to classification and salaries should be undertaken by the Public Service Commissioner. That is a matter which should he left to the decision of Parliament. At any rate, the President should have consulted the various Committees who have in the past exercised this control, before tabling the letter. So far as I am aware, neither the House Committee nor the Library Committee was consulted in the matter. In any case, if he did not think it worth while to consult the Committees, Parliament should have been given an opportunity to express an opinion before any action was taken by him. The Select Committee I propose will have the opportunity of collecting evidence and placing a report before the Senate, and then it will be for honorable senators to say whether they have sufficient information before them to guide them in coming to a decision upon the necessity for any alteration of the Public Service Act in respect to the control of officers of Parliament.
Question - That the motion be agreed to - put. The Senate divided.
Majority.. . . 1
Question so resolved in the affirmative.
Motion (by Senator de Largie) agreed to-
That the Committee report to the Senate on 24th November.
– In moving -
That the Senate do now adjourn. it would be as well that I should indicate the course of business so far as we can foresee it. As honorable senators will have noticed, another place has been dealing with the Estimates, and, as most of the Bills there are measures that have already been passedby this Chamber, there is not much probability of further legislation coming up to us from another place during the fortnight over which we shall adjourn. It is hoped, however, that honorable members elsewhere will have dealt with one or two Bills in the interim, and that, when we reassemble on the 3rd November, we shall have some measures, including the general amendment of the Public Service Act, to introduce into this Chamber. We shall then have enough business to keep us going, and maybe able to indicate the time for the adjournment over Christmas.
Question resolved in the affirmative.
Senate adjourned at 4.39 p.m.
Cite as: Australia, Senate, Debates, 21 October 1920, viewed 22 October 2017, <http://historichansard.net/senate/1920/19201021_senate_8_94/>.