10th Parliament · 1st Session
The Senate met at 2.30 p.m.
The Deputy appointed by the GovernorGeneral, the Right Hon. Isaac Alfred Isaacs, F.C., a Justice of the High Court of Australia, having been announced by the Usher of the Black Rod, entered the Chamber and, taking his seat on the dais, said -
Gentlemenof the Senate,
His Excellency the Governor-General, not thinking fit to be present in person at this time, has been pleased to cause Letters Patent to issue under the Great Seal of the Commonwealth, constituting me his Deputy to administer the oath or affirmation of allegiance to honorable senators, as will more fully appear from the Letters Patent which will now be read.
Letters Patent read by the Clerk.
The Clerk produced the returns to writs issued for the election of members to serve in the Senate from and after 1st July, 1926.
The following honorable senators made and subscribed the nath of allegiance: -
Alexander John McLachlan.
The Deputy having retired,
– I desire to remind the Senate that the time has now arrived for honorable senators to choose a member ofthe Senate as its President. I move -
That Senator John Newlands do take the chair of this Senate as President.
– I second the motion.
– I desire to thank honorable senators for the honour proposed to be conferred on me, and I place myself in the hands of the Senate.
. - In supporting the candidature of Senator Newlands for the office of President of the Senate, I desire to avail myself of the opportunity to say a few words in respect to the contest that has just been concluded. The Senate, so far as I can understand, is a place where explanations can be given, or apologies made, and where the results of experience may also be mentioned. As honorable senators are aware, in the contest which has taken place, I was a candidate for the position of President. I received, roughly, the support of one-third of the members of the party to which I belong. To those who voted for me, I am very grateful. I feel, however, that I lost the position of President largely, if not entirely, by the vote of the Vice-President of the Executive Council (Senator Pearce), and I now desire to express my regret that I have not behaved as well and as kindly towards that gentleman as perhaps I should have done, and have hot appeared to be more concerned about him. I could direct attention to many occasions when that gentleman called upon me to step in and help his Government through in connexion with debates in this chamber. I need only refer to two in order to refresh his memory. I may remind him that, on one occasion, Senator Duncan came to me when the Government was short of a vote, and when it was necessary to send to Geelong for Senator Guthrie. I then stepped into the breach as usual, and held the fort until that honorable senator arrived. On another occasion, Senator Pearce sent the Government Whip (Senator Drake-Brockman), to me to reply to statements made by the Deputy Leader of the Opposition (Senator Needham), when the Crimes Bill was under discussion. These are instances of which I think it necessary to remind honorable senators, with the accompanying assurance that I am afraid I did not on those occasions serve Senator Pearce and his Government as well perhaps as I might have done, hut I did my best.
– The honorable senator is doing me an injustice.
– I can refer to several instances which have occurred since I first came into contact with the right honorable senator 25 years ago. I refer more particularly to the war period, when Senator Pearce, who was then a Minister, sent me a special cypher message. I was at the time engaged on my farm in Western Australia. I left my work- in fact, I left everything- -in order to obey the request presented to me in that cypher message, dispatched through the Defence Department. For what purpose? To request me to enter into a wordy and lengthy warfare with the Fremantle wharf lumpers, with the object of getting them to return to their work of loading the ships in order to despatch supplies to our fellow citizens, who were engaged in an important field of endeavour in Europe. I was the only one selected for the purpose, and I believe I performed my duty loyally. That brought me into conflict with those men in a way which honorable senators can well imagine. I did my duty on that occasion. Apparently I was singled out because I was considered the only one fit for the work, but in carrying out the duty I was requested to perform, I made myself very unpopular. On another occasion during the war, .when a Government of which. Senator Pearce was a member was in office, I was selected to interview a number of miners at the Kalgoorlie mines and prevail upon them not to go on strike. I was to see to it that the aliens were dislodged. I was the spear head on that occasion, as on others. I was doing the work of Ministers, and of the Government. I came in contact, as Senator Graham knows, with hundreds of ) Kalgoorlie miners, and in doing so was performing the work of Ministers who remained in their offices in Melbourne. On another occasion, when the late Lord Forrest died, I was specially commissioned by a Government of which Senator Pearce was a member to proceed to Western Australia to endeavour to heal the breach between two contending branches of the party. In doing so I made myself unpopular with many in the farming districts of Western Australia, as honorable senators from that State can testify, just as I did in connexion with my work amongst the Fremantle wharf lumpers and the miners on the Kalgoorlie goldfield. I acted not in my own interests but in the interests of the Government, and of Senator Pearce, but I now feel that I have not served him as- well as I might have done. There are further instances to which I could refer, but those I have mentioned will throw some light on the present situation. Apparently, I have not found favour in his sight this time. This gentleman impugned the race to which I belong, at a public gathering, when he stated that the Country party in Australia was founded by Sinn Feiners, but I made him eat and swallow his own words, and therein may lie some explanation of why I did not receive sufficient support on this occasion. I may [not have gone far enough. I am sorry if I did not. As for my loyalty to this gentleman, I may say that I have been as docile to his interests as I could possibly be. I made speeches from hundreds of platforms, from which he gained the benefit. When the Prime Minister (Mr. Bruce) was in Western Australia and the tide of popularity was running hard against the Government, the Prime Minister spoke, as also did Senator Pearce. What did Mr. Bruce say on that occasion? His remarks are on record. The Prime Minister said, “ It was worth my while coming all the way from Melbourne to hear the manly speech of Senator Lynch on my colleague’s behalf.” Was I speaking for myself? Not much. On those occasions I was speaking for others, and particularly for the gentleman to whom I have referred. I could go on, and on. It is, perhaps, useless to make these references, but when I entered the contest, I did not expect to see any foul blows struck. The ordinary relations that govern men of character and uprightness, and particularly of gratitude, should be observed in contests for this exalted position. I could go on and say more, but ] 3hall forebear. I shall return to my humble calling, thanking God, but nobody else. No one can dislodge me from the confidence of the people of Western Australia, as far as I know, and it will- not be men of an ungrateful and blackhearted type that will stop my grass from growing or my sheep from increasing. There is a higher power, thank God, that governs these things. Ungrateful man has nothing to do with them. And when I bring my produce to market, I venture to say that men even of the type of Senator Pearce will buy it, particularly if it is available at a farthing below the price at which any one else is prepared to sell. So I am independent and, perhaps, I shall be in a better position than if. for the present, I occupied the coveted plush chair in this chamber. I leave this subject. It is a painful one for me.. I know that the right honorable gentleman has supported me in the past. On one occasion, when I was sitting beside him at the Ministerial table, he said to me, “ How proud I am to have a man . like you up here beside me, fighting at the table.” I was then Minister for Works, because, no doubt, there was fighting to be done. I was approached by Senator Pearce to take the portfolio. We all know what that means. But when it is a question of distributing plums, it appears that I am considered not good enough ; that I must be shoved aside. Paddy Lynch, it seems, was good enough to do the fighting, but when plums were to be ladled out, Paddy Lynch must be thrust into the background. But I have my character still. No lodge-ridden serf will ever cross my pathway and prevent me from attaining that position of independence that I shall yet attain. A3 for my popularity among honorable senators, I can say that I have never crouched to them in my life. I have never asked any member of this chamber for a vote in connexion with this contest, nor have I ever asked any man for a vote, except on the public platform. I am going, as I said, to retire to my place, but I shall continue to occupy my position in this chamber, too, and take my part in the conduct of the affairs of the Senate. I entreat that, for the future, in the filling of these posts, we should look for men of character. As far as I am concerned, although I say it myself, I feel that mine has been fairly well tested with acid and in the crucible. For the present, I have, finished what I intended to say. I thought I should recall these incidents, if. only for the sake of showing how kissing goes by favour; how the past is forgotten, and how a person, particularly of my name, race, and religion, can be regarded as an excellent spearhead or buffer to stand all the abuse or odium that may attach to his efforts, but when gifts are to be distributed, as one to be shoved on one side, in the interests of a pet. British fair play, gentlemen ! Where is it ? If I am good enough to be in the forefront of the battle, I should be good enough to enjoy the safe and comfortable positions offering. British fair play, they call it ! This is a rare example of British fair play. But I leave the matter now. I thank again the members of my party who voted for me, and also other honorable senators who would have voted for me but for this incident, and for the fact that the past has been forgotten, no matter how I have tried to serve my party and the right honorable gentleman, and because there are favorites to be served.
– Before you put the motion, Mr. Clerk, I should like to express my regret at the bitter and altogether unjustifiable attack which Senator Lynch has seen fit to make upon myself. I shall not traverse his remarks. It would not be seemly to do so. All I wish to say is that when the honorable senator reflects upon what he has said I am sure that no one will regret it more than will the honorable senator himself.
– Never I
– One statement made by Senator Lynch will, I am sure, be a revelation to a number of people who do not follow closely the proceedings of Parliament. It has been said here on many occasions that the party on this side of the chamber is dominated by a secret body known officially as the caucus. We heard today that a meeting has been held somewhere, and that the election of the President of the Senate was decided at that meeting. We have not been informed of the exact figures in the voting, but we have been told that Senator Lynch received approximately one-third of the votes of members attending the ministerial caucus meeting. It is as well that this fact be placed upon record. The party to which I belong openly acknowledges that it conducts at least some portion of its business by the method known as the caucus. It also should be placed on record that Government supporters, who lose no opportunity to condemn our system of party government, did, at least on this occasion, elect in caucus the President of the Senate before a motion was formally submitted in this chamber.
Senator NEWLANDS, being the only senator proposed as President, was conducted to the ‘chair, and said -
I desire to express my gratitude to the Senate for having elected me to this important and high position. I should like to say at the outset that I regret very much the unpleasant incident that has taken place. I do not intend to refer to it except to say that I take the strongest possible exception to Senator Lynch’s statement that a pet of the Government has been appointed to this position. The honorable senator said that the Senate in electing a member to this high office should look for a man of character. I contend that my character will stand as close an investigation as will Senator Lynch’s, and that I am no pet of the Government or of any other section.
– You need not fit the cap.
– I regret exceedingly that the incident has taken place; but I shall say no more. I feel that, as President of the Senate, I am following in the footsteps of a number of illustrious gentlemen, and I recognize the difficulty I shall have to live up to their splendid record of service and high reputation; but at all times I shall do my best to follow their footsteps. I assure the Senate that every member will receive equal treatment at my hands. So long as I occupy thishigh and honorable office, I shall show favoritism to none; but shall at all times endeavour to discharge my duties with the impartiality that has characterized every previous occupant of the Chair.
– On behalf of the Government and its supporters I wish to tender our congratulations to you, Mr. President, on the honour that has been conferred upon you by the Senate. The position which vou have been chosen to fill is. a high and honorable one, calling for judgment, calmness, and impartiality, and I feel sure that in the discharge of the duties of the office you will show that you possess those qualities. As it will be your duty to secure obedience to the Standing Orders of the Senate, I can assure you of the support of the Government in that connexion. I wish you a successful term of office.
– On behalf of honorable senators sitting on your left, I join with the Leader of the Senate in tendering to you, Mr. President, our congratulations on your elevation to thepresidential chair. During the period in which you have acted as Deputy President you have revealed your fitness for the high position you have been chosen to occupy. I feel sure that the traditions of the high and honorable office of President of this Senate will be maintained by you, and that you will at all times act with strict impartiality.
– I desire to extend to you, Mr. President, my hearty congratulations on your elevation to the distinguished office which you now occupy. I am surethat I reecho the wish of every honorable senator when I say that I trust you may have a lone and successful career in the presidential chair. Already you have had considerable experience as one of the presiding officers’ in this Chamber, so that you now come to the position of President with . that considerable advantage. You will find, as I found during my long period in that Chair, that you will have the sympathy and co-operation of the whole Senate in the discharge of your high duties.’ You may at all times rely on the solid support of honorable senators in maintaining the honour and dignity of this Chamber. If my long experience as President will enable me to be of service to you in the future, it will be cheerfully and heartily placed at your disposal. I conclude by wishing you a long and happy career in the high and honorable office to which you have been elected.
Senator McLACHLAN (South Australia) [3.91. - As a South Australian colleague, I offer you my personal congratulations on having attained to the high office whichyou have been chosen to fill. I can speak with a personal knowledge of you extending over a quarter of a century, and I feel that your personal character and probity leave nothing to be desired. I am sure that you will occupy the Chair with that dignity with which you have discharged your other duties in this Chamber, and with credit to your State and to Australia.
The PRESIDENT (Senator the Hon. J. Newlands) [3.10]. - I desire to thank the right honorable the Leader of the Senate (Senator Pearce), the Leader of the Opposition (Senator Needham), Senator Givens and Senator McLachlan for their kind and encouraging words. I feel particularly indebted to my predecessor (Senator Givens) for his very kind and generous offer to place his vast fund of knowledge and extensive experience at my disposal should I at any time require them. I again thank all honorable senators for having elected me to this high office.
– His Excellency the GovernorGeneral has intimated that he will be pleased to receive Mr. President and members of the Senate at 25 minutes to 4 o’clock to-day. Conveyances for those honorable senators who desire to accompany Mr. President will leave the steps of Parliament House at 20 minutes past 3 o’clock. I suggest that in order to suit the convenience of honorable senators the sitting be suspended until 4.15 p m.
– I shall be glad if as many honorable senators as can make it convenient will accompany me to Govern- ment House to present myself, as the choice of the Senate, to His Excellency the Governor-General. For that purpose I shall suspend the sitting of the Senate as suggested.
Sitting suspended from3.12to4.15 p.m.
The Senate having re-assembled,
– I desire to announce to the Senate that, accompanied by honorable senators, I this day presented myself to His Excellency the GovernorGeneral. He was pleased to congratulate me on my appointment as President.
The President read prayers.
The following papers were presented:–
Public Service Act - Appointment - Post- master-General’s Department - A. N. Horner.
Representation Act - Notification setting forth the number of Members of the House of Representatives to be chosen in the several States.
Representation Act - Certificate of the Chief Electoral Officer of the numbers of the people of the Commonwealth and of the several States.
– I have to announce the receipt of a letter from Senator Sir William Glasgow tendering his resignation as a member of’ the Committee of Disputed Returns and Qualifications.
Motion (by Senator. Pearce) agreed to-
That Senator Sir William Glasgow be discharged from attendance on this committee.
– I have to announce that I have received a letter from Senator Sir William Glasgow tendering his resignation as a member of the Library Committee.
Motion (by Senator Pearce) agreed to-
That Senator Sir William Glasgow he discharged from attendance on this committee.
Motion (by Senator Pearce) (by leave) agreed to -
That Senator Plain be appointed Chairman of Committees of the Senate.
Motion (by Senator Pearce) (by leave) agreed to -
That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-1921, the following senators be appointed to fill the vacancies on the Parliamentary Standing Committee on Public Works, namely, Senator Payne and Senator Reid.
Motion (by Senator Pearce) (by leave) agreed to -
That, in accordance with the provisions of the Committee of Public Accounts Act 1913-20, the following senators be appointed tofill the vacancies on the. Joint Committee of Public Accounts, namely, Senator J.B. Hayes, Senator Kingsmill, and Senator McHugh.”
Motions (by Senator Pearce) (by leave) agreed to -
That Senator Needham be appointed to fill the vacancy now existing on the Standing Orders Committee.
That Senator McLachlan be appointed to fill the vacancy now existing on the House Committee.
That Senator Abbott and Senator Needham be appointed to fill the vacancies now existing on the Library Committee.
– (By leave.) - For the information of honorable senators I desire tointimate that I have been elected Leader of the Opposition in the Senate, that Senator Grant has been elected Deputy Leader of the Opposition, and that Senator McHugh has been re-elected as Opposition Whip.
– (By leave.) - I extend my congratulations to the Leader of the Opposition (Senator Needham), and making use once more of the old joke which is always used, in party government, I express the hope that he may long adorn the position to which he has been elected. I am sure that, however strenuous our future fights may be, they will always be as fair and aboveboard as those of the past, and that afterwards we can both say that we have done our duty towards the country without any ill-feeling towards one another, or, indeed, towards any one in opposition to us.
On behalf of the Government I desire to announce that Senator Foll has been appointed Government Whip in the Senate.
In committee (Consideration of House of Representatives’ message resumed from 30th June, vide page 3633) :
The CHAIRMAN (Senator Plain).Before the committee resumes its consideration of the House of Representatives’ message, I desire to thank honorable senators for the great honour they have conferred on me in electing me as Chairman of Committees of the Senate. I assure them that I shall do my best to carry out the duties attaching to the position to which I have been appointed.
– I congratulate you, sir, on your election as Chairman of Committees. I feel sure that honorable senators on the Government side of the chamber will do their best to assist you in carrying out your duties, and that you will be an impartial chairman, extending to honorable senators on both sides every consideration to which they are entitled under the Standing Orders.
.- On behalf of the Opposition, I congratulate you, sir, on your election. I am sure that you will hold the scales justly and impartially.
Providedthat any such films printed from a negative which was not the produce or manufacture of the United Kingdom shall not be entitled to entry at the rate of the British preferential tariff under this sub-item.
Senate’s Request. - In sub-item (C) (2) (b) leave out “1½d.” and insert “ 2½d.”
House of Representatives’ Message. - Not made.
Motion (by Senator Crawford) -
That the request he not pressed.
.- The imposition of a heavier duty on films will not achieve the desired objective. Moving picture entertainments have come to stay, and however we may deplore the fact that many of the pictures now shown are not of the standard we desire, public opinion will eventually ensure the production of better films. The censor and his staff have done excellent work, but more could be done in the direction of educating the public concerning the benefits to be derived by the rising generation if films of a higher standard are produced. No one can reasonably suggest that the imposition of a higher duty will result in films of an educational and inspiring character being displayed. If the imposition of higher duties on films would be a mean3 of excluding those which I consider are not worth showing, I would support higher rates ; but. it will not have that effect. If higher duties are imposed, the proprietors of picture theatres will immediately increase the prices of admission.
– What would the additional cost amount to on each ticket?
– It would be only small; but it would enable picture-theatre proprietors to make additional profits. For these reasons, I intend to support the motion of the Minister that the request be not pressed.
.- There has been a good deal of discussion both inside and outside this chamber concerning the picture business, and I cannot understand why some honorable senators have become so agitated. When the tariff was before Parliament in 1921, I made exhaustive inquiries concerning the influence of American films upon the people of Australia. I found that Australian showmen believe, as we do, that the pictures shown in Australia should be of a high standard. Some Australian showmen have gone out of their way to encourage the projection of Australian productions, although it meant losing money. Thousands of pound.s have been lost in endeavouring to successfully produce Australian pictures, owing largely to the fact that, as our population is small, the demand is limited. America has a population of over 100,000,000, and if the producers in that country did not export one film a year; they would still be able to show a profit. Mr. Stoll, the head of the British picture industry, has lost hundreds of thousands of pounds in endeavouring to compete with American producers, who obtained control of the business during the war period. After ‘the termination of hostilities, a determined, but unsuccessful attempt was made to develop the British motion-picture industry; but some of the pictures produced in Great Britain had to be more severely censored than those which came from America. Some were of such an unsatisfactory character that the censor refused to allow them to be exhibited. Mr. Stoll said that it was impossible for British producers to compete against the American combine, because it has unlimited funds at its disposal, and consequently is able to obtain the best talent available.
– It is only a question of money.
– Not altogether. The population of America is so large that pictures produced in that country can be profitably shown for a long time. That cannot be done in Australia. If the Australian industry is to be a success, we must produce pictures which will be acceptable in other countries. The Sentimental Bloke, for instance, paid handsomely because it appealed to human instincts ; but other Australian productions have failed, largely because they were of little interest to picture patrons in other countries. I have often been boiling with indignation at the manner in which British history is ridiculedby American producers.
– Why should not pictures of historical interest to Britishers be produced in Great Britain ?
– The British manufacturers have said that they cannot successfully compete with the American producers. At present, Great Britain imports fully 90 per cent. of the pictures shown in that country. The exercise of some control over the Australian representatives of the American combine has been considered by the Federal* Commissioner of Taxation, and also by the Customs Department, but the investigations disclosed that those handling the business in Australia were losing money. Although hundreds of thousands of pounds are going out of Australia yearly, Vhe Government is powerless to act.
– How can that be prevented ?
– Pictures should be valued at the price at which they are supplied in America, plus the cost of transit to Australia.
– Does the honorable senator suggest that subsidiary companies under the control of the combine say that they are not making any profit?
– The pictures supplied . to their agencies in Australia are overvalued.
– Yes; but not to the showmen. Pictures have been of great advantage to the Australian people, particularly those in the country who before their introduction found life somewhat dull. That is one thing that the pictures have altered. In every little bushtown now, even in the backblocks of Queensland, the people have an opportunity to attend a picture show once a week or once a fortnight. In this way many world events are brought within their knowledge. The attack that has been made on the picture industry is quite unjustified. At the present time the leading morning newspapers in Melbourne are severely criticizing a certain entertainment, but up to the present there has been no interference with it. I have not seen it, but although it has been strongly condemned, no one has suggested that the theatre in which the. entertainment is given ought to be closed. Senator Grant stated that it is difficult to get Australian pictures put. on the screen. I deny that any picture show proprietor has ever refused to screen Australian pictures.
– Is it not a factthat managers of picture theatres must contract for twelve months’ supplies of pic- . tures from American firms?
– They have to make their arrangement for a twelve months’ supply of films, but they are not obliged to show American pictures exclusively. There are many distributors in the business, and the picture show proprietors have a fairly wide choice. There is always room in their programmes for the screening of pictures other than those supplied by the American firms. I need only instance the readiness with which the picture show proprietors screen the series of pictures of Australian scenery produced by the Commonwealth Government. I have seen many of them. They are a credit to the producers, and they are very welcome to Australian audiences. Picture show men are always ready to screen British or Australian pictures. Many of them are exceedingly patriotic, and if it were possible, they would get rid entirely of the American films. Wo must remember, however, that they have to consider their public, and as the American producers have practically captured the market, there is very little that can be done to improve the present position.
– It is a wrong for some honorable senators to stigmatize the action of those who voted for the increased impost on foreign-made films as an attack on the industry. I agree with Senator Reid that this problem should be dealt with in a common sense manner, and that we should not become hysterical about it. . I have seen no evidence of hysteria in this chamber during the debate, but I submit that this Parliament should deal with the situation that has arisen. No sane person condemns moving pictures as a form of entertainment, because, when properly directed, their educational value is very great, and there can be no doubt that they are a very popular form of entertainment. But we’ should endeavour to cultivate an Australian and a British sentiment, and I am afraid we shall not do that if we continue on our present lines. Those honorable senators who spoke of the proposed increase in the duty on foreign films as a wicked imposition, appear to think that the Yankee is almighty, and that it is utterly hopeless for any other country to strike out on its own account and produce pictures. That is a most dismal doctrine to preach. It is on a par with the idea that good Australians should be always “wood and water joeys” for other nations, and never attempt to make anything themselves. This matter has been exercising my mind for many years. I have seen moving pictures in many parts of the world, and I have seen unspeakable pictures in certain unspeakable places. Those honorable senators who went along to 501 Swanstonstreet the other day and saw the censored portions of certain films will agree with me that we should thank God we have picture censors as well as a navy. The point I wish to emphasize is that although pictures are passed by the censors, nevertheless many of them must have a harmful effect upon youthful minds. This is one of the problems that we have to face. It has been suggested that we should make an attempt to classify certain pictures as suitable for the normal adult, and other pictures as suitable for children. As this would raise the question of admission of children to picture shows, it is difficult to see what can be done. 1 know of no reason why Australia should not produce good films. Our climate is ideal for photography, and we have excellent scenery. I believe that we could make a success of the business if we broke away from Yankee conventions and produced good Australian pictures. We had one notable instance of what I am speaking about in a picture that was made recently in Tasmania. As a matter of fact, it was simply a reproduction of Hollywood traditions “in my State. There were the same dresses, costumes, and every other American convention, and the manner in which the osmiridium miners in Tasmania were portrayed was perfectly absurd. It was not a bit typical of Australian life and conditions. If we attempt to produce Australian pictures on those lines we shall deserve to fail. I have no time for all this Yankee convention as portrayed in the American pictures, but unfortunately it is becoming part of our national life. Let me tell honorable senators of my own personal experience in connexion with this tariff item. When the names of the division list on the motion to increase the duty on films were published, some of these representatives of American film companies had the audacity and impudence to send me telegrams of a threatening nature. They said that a lot of picture fans - “ fans,” by the way, is not a good Australian word, and I dislike it - resented my action in voting to impose this additional tax on the worker, stating that it would mean an extra 3d. for admission to picture show’s. This, notwithstanding that the proposed increase in duty represented only about 3-16ths of a penny on each ticket of admission, according to the numbers who attended picture shows in Australia last year. I strongly resent this attempted Americanization of Australia by means of Yankee picture films.
– The extra duty of1d. per foot will not stem the flood.
– Perhaps it will not, but 1 take this opportunity - it is one of the few we have - to express my own views on this question. The other day we had an opportunity to see one picture which quite rightly has been prohibited. Speaking as a soldier, and one who for about two years was in the front line in France, I can say that the picture, which was supposed !.o depict modern warfare as it was waged in Western Europe a few years ago, was an absolute burlesque. I should not like the rising generation of Australians - nor, indeed, any people in Australia - to conclude that members of the Australian Imperial Forces were guilty of such antics as were depicted in that picture. Possibly it was the sort of thing that the late-comers in the war indulged in. The exhibition of the picture in Australia could serve no good purpose. As far as I can see, the only thing we can do to counteract the influence of the American films is to carry on with our censorship. In my opinion it is being conducted very well indeed, and I hope it will not “be relaxed in any way. Only in this way can we hope to ensure the screening of pictures suitable for Australian audiences. It is not too much to expect Australians to be able to produce good pictures on a commercial basis, and I fail to see why Britain and the other continental nations cannot compete with America. Prior to the war we had many excellent pictures from Pathe Freres and the Gaumont people in France, as well as Italian pictures and some very good British films, and we were not then treated to so much of this American “ sob “ stuff. During the period when other nations were at war, the United States of America gained control of the film industry; and since the war the British, French, and Italian picture produoers have been unable to overtake the great lead gained during the war by the American producers. I must congratulate the censors upon the excellent work they are doing. Those of us who saw the exhibition of cuts from films the other day must realize the neoessity for a strict censorship of films. I see no reason for departing from the attitude I adopted when this matter was before us previously.
– When this matter was before us on a previous occasion I supported the request moved by Senator Grant, and, subsequently, that moved by Senator Guthrie. It may be true that the imposition of higher duties would not result in the picture industry being established in Australia, or in old-world countries, because of the power of the gigantio combines in the United States of America. Perhaps it is due to my somewhat puritanical upbringing, but I believe that many of the pictures now exhibited have a harmful effect on young people and on the future welfare of this country. Much of the juvenile crime which, unfortunately, exists to-day is directly traceable to a certain class of pictures. Pictures, like literature, vary in quality. On the few occasions that I have visited picture shows, it has been my misfortune to have seen, together with interesting and instructive films, others which evidently had been severely censored, but which, nevertheless, required very little imagination to fill in the gaps made by the censor. We may not be able immediately to deal effectively with that kind of thing, but it is as well to make it known that we are watching, because the result may be a better class of picture than has been supplied in the past. I think, however, that we shall have to take more drastic steps to deal with this problem. I do not subscribe to the policy of despair that has been enunciated by Senator Reid. I think that something can be> done to remedy this defect. It is our duty as public men to protect the young people of this country, and when we see their appetites being whetted by films such as only too frequently are placed before them, we must strike a blow whenever we can in their interests. If at present we cannot entirely prevent the importation of these films, we may at least derive some revenue from them. The Minister has admitted that this is a revenue duty. He could do no other and be logical. If we add to the duty we shall assist Australia to the extent that we increase our revenue. Then, if people are foolish enough to pay a higher price for admission to picture shows, they must pay it. For a long time, as was mentioned by Senator Reid, difficulty has been experienced in dealing with the picture companies. We cannot get at them effectively through the Customs or the income tax. The American producers fix the price which they charge to the Australian companies. They have that matter in their own hands. In the circumstances it is easy to see how the Australian companies are unable to make profits. I suggest to the Government that this matter might be dealt with through the copyrights. It might be possible, not only to control the class of film which comes here, but also to prevent the entry of unsuitable films. That is why I voted as I did oh a Former occasion. We were informed yesterday that no inter-Empire industry would result from the imposition of this higher duty, but I understand that already there is a movement in that direction. It is our duty to adhere to the increased duty for what it is worth. It may not be worth much; but I see no reason for departing from the attitude I adopted when this matter was before ns previously.
– Although I have not had the privilege of listening to the debate on this subject in this chamber, I heard a good deal of the discussion in another place regarding it. I do not think that any one can accuse me of not wanting to assist local industries. I have given evidence of my desire that Australian industries shall flourish, and, next to them, British industries. When I had the honour and privilege to introduce a previous tariff I advocated increased preference to Great Britain in connexion with films, in order to encourage that country to send more films here. We must all admit that picture shows have a wonderful influence on the psychology of our people. The ramifications of the picture film industry are so widespread that, even out in the solitude and silence of the bush, in places where there are no public halls, pictures are presented to the people in the open.
SenatorMcLachlan. - To a great extent, pictures have supplanted literature.
– That is so. One cannot but be struck with the fact that, whereas in some respects the picture industry has improved, in other respects it has not done so. The influence of many pictures shown to-day is decidedly harmful. It was largely due to the deterioration . in the general moral tone of the pictures presented to Australian audiences that the Commonwealth Government instituted the system of censorship of films. That that action was necessary has been made increasingly evident during recent years. We are confronted with the question whether, by placing a tax on the films as they enter this country, we shall obtain the result we. desire. Will such a tax cause to be presented to our people pictures which are more in accordance with our national sentiment, and present a better side of life and of human nature than many of the pictures now shown? Having given this subject a great deal of thought, I have come definitely to the conclusion that taxation at the borders of our country will have very little effect upon the film industry in Australia. Pictures are not like general merchandise; theyare more like works of art. The pictures of one artist may attract great crowds, whereas those of another artist may fail to do so. A good picture, no matter by whom painted, will command a good price so long as it appeals to the public taste. In the making of films more than mechanical skill is required. We, in Australia, could make numbers of pictures, but only those which appealed to the public taste would be successful. The cost of making picture films is enormous, many running into thousands of pounds. Such pictures require a large circulation if their production is to pay.
– Are not royalties paid on films?
– Yes ; but the amount is regulated by the number of performances or the number of films sold. The making of films in Australia is a costly undertaking. I admit that simple scenes, such as the harvesting of our wheat, are not. costly to produce. Many pictures cost a vast amount of money.
SenatorReid. - An ordinary picture costs £60,000 or £70,000.
– Some pictures cost very much more than that. It is absolutely certain that, if Australia could produce good pictures, the world would take them, but our great trouble is the fact that the American companies specialize in picture production, and so far have led the worldin that respect.For some extraordinary reason they have been able to produce better pictures than have producers in other parts of the worldThat is the whole secret of this matter. After all is said and done, if the American picture people are making what th. public wants, the showmen must buy from them, because he must give the public what it wants. It is the only way in which he can get his box-office returns. That is the position in a nutshell, and the only way in which Australia, with its wonderful climatic conditions for making pictures, can produce pictures which will gain a clientele throughout the world is to set to work to make pictures which the public wants. As I have said, previously, we must make a world-wide demand for our pictures. Senator Reid referred to the picture which was built around the story of The Sentimental Bloke. That picture made an appeal to the whole world, and, consequently, the world-wide circulation it got brought a tremendous return to the people who produced it. They saw the opportunity that story afforded to make a picture which would appeal to the world, _ and when it was produced the world paid to see it. ‘ All that our picture producers have to do is to make a few mora “ Sentimental Blokes,” and they will get a ready sale for them. There is no magic about the business- There is no manufacturing process about it such as there is in making hoots or cloth. We could protect an industry for the manufacture of the sensitized film on which the pictures are produced, and could compel Australian producers to use that class of film, but it is quite a different matter to utilize a protective duty to build up an industry which, after all is said and done, is based on art. Art is cosmopolitan. By protective duties we cannot create something artistic; artists are noi; made by the imposition of duties at the Customs House. If we impose this extra duty, who will pay it?
– The people who attend the picture shows.
– No one else will pay it.
– Would it not increase the preference to the British films ?
– The imposition of a duty of ls. a foot against American films would, not help the British film producer very much. British producers must do exactly as was done by the pro ducers of The Sentimental Bloke picture. They must make up pictures which the world will pay to see. I am inclined to compel the proprietors of films to pay something to the revenue of the Commonwealth.
– The honorable senator would not remove the duty altogether?
– Because it was the honorable senator’s Government that first imposed the duty.
– When the duty was first imposed, I recognized that it was a revenue duty only. When I was told to frame the 1921 tariff, the Government gave me a fairly free hand in regard to its protective incidence, but I had very definite instructions from the Treasurer that I was also to show him that he would get some revenue out of it. The duty on films was frankly one of the revenue duties in that tariff, but we arranged it so that we could give Great Britain some preference. It was a preference of 33 per cent., one of the best in the tariff, but if my information is correct fewer British films are being imported to-day than were being imported before that preference was given. The reason is that the British producers have not been making the class of picture the public wants.
– We should not pander to all tastes. We ought to try to build up an appreciation for good pictures.
– I agree that this Parliament has some responsibility in the direction indicated by the honorable senator, but the general experience is that anything attempted to be done by legislation to raise the moral tone of a community proves a failure. 1 can remember many efforts made by various Parliaments to do something along the lines suggested by Senator Ogden, but they have almost invariably failed. I am afraid, therefore, that we cannot do very much by statute, but, at any rate, we can prevent films with a certain definite salacious trend from reaching the public. When I had authority as Minister for Trade and Customs I tried to tighten up the censorship, and I think we laid the foundation of a very good censorship, which has done most excellent work. By levying a duty, we shall not impose a single 6d. additional burden on the people who are drawing a heavy tribute from Australia. They will simply say to those who buy their films, “ Your Parliament has imposed an extra duty. Our price before the duty was imposed was so much; today it is so much higher.”
The CHAIRMAN (Senator Plain).The honorable senator’s time has expired.
– When this question was last before the committee, I voted for an increase in the duty on films. I appreciate the fact that picture shows have become a part of our life. There is no country centre without a picture show. The man who seeks to establish an industry such as a mining industry in the outposts of Australia cannot hold his men unless he provides them with a picture show. Seeing that the pictures have such a grip on the general life of Australia, I, in common with other honorable senators, felt that it was advisable to indicate to the producers of films that the Commonwealth Senate was prepared in a very handsome way to assist any person who would produce Australian films as desired by the public. I think we have attained the object we had in view. Senator Sampson has told us that he has received a wild and woolly telegram from some showman who objects to the vote the honorable senator gave. I would have had a method of replying to that gentleman which would probably make him think twice beforehe sent a telegram like that again. Every honorable senator is entitled to express himself without fear of comment outside, and it is a good thing for the country that senators do so. The question is whether we have already done sufficient. I know that there is a tendency to-day to attribute most of the crimes in a community to attendance at picture shows, and to declare that many of the new things which are happening are the result of children seeing pictures. But that is only a small factor in the causes which contribute to any moral decadence. The principal factor is the demand for luxuries. I do not wish to be misunderstood. I do not say that people should not live up to the fullness of the life the Creator has given them ; but there is a tendency to indulge to excess in luxuries, and pictures’ are among the things that pander to that tendency, which is the principal cause of any ethical decadence among our people to day. Thereis no possible chance of eliminating picture shows from the life of the people of Australia.
– Or of any other country.
– I agree with the honorable senator, but I think it is very essential that something should be done. 1 do not think that the increased duty will effect our desires. I deliberately voted on the last occasion for the increase to indicate that I was. prepared to assist any one in Australia or Great Britain adventurous enough to produce the films that are necessary, and I believe that other honorable senators supported the increase for the same reason. A great number of magnificent films cannot be produced without highlytrained picture staffs. To-day we are getting from America pictures which are not only artistic, but also technically perfect. There has been created in the minds of Australians who attend picture shows a wide knowledge of picture technique, and they are not prepared to accept second-rate efforts. No showman could succeed who would put on a second-rate programme. He must screen the very best pictures, because the people have been educated to good films, and it is part of their lives to-day to see the very best. Like every other honorable senator, I dislike the American propaganda, but if we are to produce pictures we must go heart and soul into the business, and until we do so, and produce a sufficient number of films to keep our picture show’ programmes filled, very little good will be accomplished. If we had an Australian film company producing six or seven films a year, what use would that be to a showman who has to keep a programme filled six nights a week for 52 weeks in the year ?
– In some States they are shown on seven nights a week.
– Yes. I have the strongest objection to Sunday picture shows. We can assume, however, that as pictures are shown on six nights a week throughout the year, it would require a very large number to be produced in order to supply the Australian demand. Moreover, artists and others would have to be thoroughly trained in order to do the work as efficiently as it is done in America. Reference has been made to patriotism ; but if Australian pictures are not of the same high standard of some of those produced in America, there will be very little demand for them. When this matter was last before the committee, I voted against the Government for the specific purpose of indicating my objection to American propaganda, and to show those prepared to produce films in Australia that they would have my hearty support, but on this occasion I intend to support the Minister.
– It is needless for me to enlighten the committee concerning my views on fiscalism. I do not think I have ever given a vote other than in the direction of encouraging Australian industries. In common with other members of the committee, I expressed the hope that the establishment of the picture producing industry in Australia would be possible ; but that hope was of recent origin. Had the members of the Federal Parliament been desirous of assisting the film producing industry in Australia in years gone by, they could have given some concrete evidence of their sincerity in the tariffs which have been introduced into the Federal Parliament. What were the duties imposed on imported films under the tariff to which Senator Greene referred ? The rates were - British1d., intermediate lid., and general1½d. Senator Greene admitted to-day that those duties were not protective duties, but were essentially for revenue purposes. I am not a revenue tariffist. As a representative of the working class, I know that pictures are a popular form of entertainment to the masses engaged in the hard workaday world. There are, of course, good, bad, and indifferent pictures. Some are tropical, some are semitropical, and others temperate. Some who have spoken in support of the duties agreed upon in this chamber a short time ago, including Senator McLachlan, said thatthey supported higher duties because pictures shown in Australia were displeasing, and not in any way elevating. Some productions, they asserted, created an atmosphere which, in a sense, was responsible for some of the crimes that are committed. Because Senator McLachlan held such opinions, he was anxious, not only to retain a duty of2½d. per foot, but to prohibit the importation of pictures.
– I would.
– We are discussing this subject from a fiscal view-point.
– From a moral viewpoint.
– We are discussing it from a fiscal stand-point, as the moral standard of pictures is left to the censor. We are not here as censors, but as legislators to do our best in the interests of the Australian people.
– The imposition of a duty will not improve the moral tone of pictures.
– Whatever duties are imposed, pictures will still come to Australia.
– We can at least try to raise the standard.
– Is it the desire of honorable members to impose such duties as will prohibit American pictures coming to Australia ?
– I would stop them to-morrow if I could.
– If the imposition of higher duties would result in the picture-producing industry being established in Australia, I would adopt a different attitude; but we are assured that it will not have that effect.
– Higher duties will bring in more revenue.
– I am just coming to that point. These are essentially revenue duties. The proposed rates are, British, free; intermediate,1d., and general, 2d. a foot. It is estimated that the additional revenue will be, approximately, £90,000 annually. By whom will that be paid? Not by the film producers, but by those who attend picture entertainments. Whatever duty is imposed will be passed on.
– With a little extra.
– Exactly. I have always been opposed to an entertainments tax.
SenatorNeedham. - It has always been an injustice.
– Higher duties will mean imposing an entertainments tax in a worse form, because in fixing an entertainments tax, we knew the additional amount which patrons would have to pay ; but in this instance we do not know what they will be charged.. When this item was last under consideration, I supported higher duties, in the honest belief that the Australian picture-producing industry would be encouraged; but I have since discovered that that will not be the case. I had the pleasure of viewing two Australian pictures - The Sentimental Bloke, and Ginger Mick - the production of which was not- made possible by the imposition of high duties. As Senator Reid said, such productions appeal to human instincts, and if they could be produced under the old rates, there is no reason, provided the capital is available, why other similar pictures cannot be produced under the proposed duties. I am of the opinion that higher duties will be a tax upon those who attend picture shows, and particularly the working classes; and I therefore intend to reverse the vote which I gave on a former Occasion.
– When this item was last before the -committee, I recorded a silent vote; but I do not intend to do so on this occasion. If the proposed duty would be of value to Great Britain, I would support it; but the number of films imported from Great Britain is so small as to be almost unworthy of consideration. For the information of honorable senators, I quote the following, from a gentleman who has invested a lot of money in the picture industry in Australia: -
My firm made a very big effort to do this successfully in Australia in 1920. We stuck to the business for two years, and spared no capital or effort. We brought out American producers, American scenario writers, American technical experts; but still the project was a failure, but the experience gained has given us the opportunity to form an opinion of what we consider the best possibilities for the development of picture production in Australia.
As the successful production of pictures depends largely upon the market available, and as the Americans have secured world distribution, it could, perhaps, be arranged for British capitalists, producers, and artists to come to Australia, where the climate is undoubtedly favorable for the production of pictures. That is a means of providing for the production of British pictures which has not been suggested before. If British producers were to direct their energies in this way instead of endeavouring to produce good pictures in that murky little isle, they would have a better opportunity of successfully competing with American interests. A good deal has been said . concerning the influence of moving pictures upon a certain sec-: tion of the community. . One production to which reference has been made ie said to belittle Great Britain; but, after seeing the picture, I cannot agree with that contention. It is a pretty love story of a young American who joined the American Army. The movements of the unit to which he was attached are depicted until he was , wOunded and invalided home.
– It is a particularly clean story.
– Yes. Before the picture is screened, the descriptive matter states that, although the story relates to the movements of a unit in the American Army, it could also apply to a unit of any other of the allied armies. From that simple story we have had the inference drawn that the picture belittles Great Britain, and makes the suggestion that America won the war. I deprecate such statements. Senator Sampson referred to the value of the picture. Certainly, I do not think it is a good war picture. It gives a very horrid view of war, and, for that reason, possibly, the censor was’ quite justified in refusing to permit its exhibition in Australia.
– It gives a fair indication of what our men had to put up with.
– Yes ; but it depicts so many dead men, and in such horrible attitudes, that perhaps it was better not to allow it to be shown in Australia, It would only harrow the feelings of many people who suffered during; the Avar. The censor was quite justified in holding it up.
– That is the only reason for which the honorable senator w.ould prohibit its exhibition here?
– Yes. I could, see nothing in it that was likely to belittle Great Britain. Much has been, said about the character of American films shown in Australia. I think they are improving. The censor told us theother day when we were’ viewing excerpts that had been made from films. that a great many of the pictures from which they were cut were old, and that, in his opinion, the tone of the pictures coming from America was improving. One thing that has occurred to me in connexion with the American picture business, and which has not been touched upon by other honorable senators, is the language employed in the editorial part of the pictures. It is a new language to many of us. If the censor had the power to cut that out, and thus get rid of so many objectionable phrases and Americanisms, which, I think, spoil our language, he would be doing good service. We get surfeited with these American slang terms, that have nothing to. recommend them, and I suggest that the censor give this matter his attention. If I thought it would be of any use to the British importer to insist on the higher rate on foreign films as requested by the Senate, my vote would be against the Government on this occasion; but, since I am satisfied that the extra impost would be passed on to the people with, as I interjected when Senator Findley was speaking, a bit extra, we should support the Government, and so save the public from that imposition.
– I am surprised at the apparent stampede of honorable senators away from their recent decision. Has anything happened since then to cause them to alter their opinions? I was under the impression that the vote on that occasion was an evidence of British sentiment in the Senate, and an earnest of our intention to encourage the production of British films.
– But Great Britain is not producing the pictures; that is the trouble.
– I understand that we are importing 1,000,000 feet of British films a year as against 20,000,000 feet of American films. As for the argument that the extra1d. a foot would bc passed on to the public, the increase is so infinitesimal that it is hardly likely that that would be done.
– Picture-show proprietors have announced that they will pass it on.
– Then the Parliament should consider legislation to ensure the screening of a certain percentage of British films in all Australian picture theatres.
– Parliament has not the power to do that.
– Certain of the State Governments are taking action in that direction.
– The States have not done much up to the present. It has also been said that the American companies, to dodge the payment of company income tax in Australia, establish distributing companies in the Commonwealth, and debit them with, say, £20,000, as cost of distribution, as against a revenue of £15,000. Perhaps the parent companies in America can be forced to contribute to the Commonwealth revenue by being required to pay a commission on all films imported.
– They would pass that on to the public, too.
-Then the only solution appears to be the production of pictures in Australia. It has been objected that the industry would not be profitable. That has been the experience of many new business ventures. If the shareholders of a film producing company could stand up to competition, and get over their initial difficulties, and if, by legislation, we could help them, it should be possible to build up the moving picture industry in Australia.I see no reason why I should change my vote on this item. I believe the imposition of the extra duty will help to some extent to build up a great industry in the Commonwealth.
– We have been informed that over £100,000,000 has been invested in the moving picture industry in America, and that it has practically captured the markets of the world. If Australia were to invest an amount of money comparable to the capitalization of the American producers, we should require to invest approximately £5,000,000 in the business. It is hardly likely that that amount of money will be available for the purpose. The big business concerns in the United States of America, especially those engaged in the production of motor cars and typewriters, are apparently determined to supply the Australian market. An import duty of £60 on every complete motor car imported into Australia did not shut out American competition. I am afraid the extra Id. a foot on foreign films will not have the desired effect. I was not surprised to hear Senator Greene state that the original duty of l£d. a foot was a revenue duty, because I have all along contended that this Government is not a protectionist, but a revenue tariff Government. The proposed increase of Id. a foot may not shut out American pictures, but the debate has riveted public attention on this subject in such a way that Parliament should be able to do something. I should not object to the £130,000 now received annually from the import duty in the general tariff being devoted to financing an Australian company for the production of Australian films. “We may not be able to make the people moral by act of Parliament, but I remind honorable senators that the censorship of picture films is part of the machinery of government under the Customs Act, and the censor, in cutting some films and prohibiting the screening of others, is safeguarding the morals of the people. With other honorable senators, I saw many of the cuts in films made by the censor, and I have no hesitation in saying that had they been released, the censor would have been unworthy of his position. The point I wish to emphasize is that, as a Government agent, the censor is looking after the morals of the people. Senator Reid adopted a very pessimistic attitude. He told us that we cannot hope to be able to combat the American moving picture industry. If the same pessimism had been abroad when attempts were made to establish the f iron industry, nothing would have been done. The people who first went into that business lost thousands of pounds, but they kept on, and eventually established a great industry. There is no reason why the moving picture industry should nob be built up here in the same way. We have been informed that the picture show proprietors in Australia are in favour of an effort being made to put the business on a sound footing in this country, because at present they aTe absolutely dependent on American companies for their supplies of films. The price which they have to pay has not been revealed.
It has been said here and elsewhere that the American companies are making enormous profits, and that they escape the payment of both Federal and State income tax.
– There are six or seven American film corporations, all of which are making huge profits.
– In New South Wales an attempt has been made to obtain some revenue from these companies, but I do not know with what success. It is debatable whether the imposition of this extra duty would have the desired effect. Nevertheless, it is the same remedy that is applied in the case of almost every imported article, and, it is alleged, sometimes with success. The film industry is one of great importance to the whole of the people of Australia. Although we are told that it is still in its infancy, it has already invaded almost every nook and corner of the Commonwealth. These great American corporations are drawing large sums of money from our people and are giving no revenue in return. I suggest that something in the nature of a comprehensive royal commission be appointed at an early date to inquire into the operations of these film-producing companies in Australia, and to lay bare the true position. We may be entirely misinformed- regarding the profits they make. I am anxious to do whatever is possible to assist in the production of genuine Australian films. The statement made by Senator Sampson regarding a film produced in Tasmania provides food for thought. We ought to aim at making in Australia pictures that are really Australian in character and outlook. I am tired of seeing pictures depicting typistes in offices tapping a few typewriter keys and then disappearing in motor cars. I should like to see a royal commission, or other body, appointed to inquire into the best way of establishing the Australianfilm industry on a satisfactory basis, sothat, instead of Australian audiences having always to view foreign-made films,, they would be able to see their own country portrayed on the screen. I intend to. vote as I did when this subject was last before the Senate.
Question - That the ^request be not; pressed - put. The committee divided.
Majority . . . . 9
Question so resolved in the affirmative.
Request not pressed.
Resolution, that the committee had agreed to the House of Representatives’ modification of the Senate’s requests, numbers 3 and 4, and had not pressed request number 15, reported.
– As this is only a formal bill, in order to enable it to pass its final stages to-day, I move -
That so much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through its remaining stages without delay.
– There being an absolute majority of the whole Senate present, and no voice being raised in the negative, I declare the motion carried.
Bill (on motion by Senator Crawford) read a third time.
Motion (by Senator Crawford) proposed -
That the report be adopted.
Motion (by Senator Elliott) agreed to-
That the bill be recommitted for the purpose of reconsidering clause 4, and a proposed new clause 4a.
In committee (recommittal) :
Clause 4 -
Where the profits derived - . . .
. . . . ..
Provided that where any such individual or member satisfies the Commissioner, Assistant Commissioner, or a Deputy Commissioner, that his military or naval duties required him to be in any part of the field of operations in connexion with the war where there was danger to life as a result of the operations of enemy forces, and that he was, before the commencement of the said war, the owner of, or partner in, the business from which the aforesaid profits were derived, then notwithstanding anything contained in the War-time Profits Tax Assessment Act 191 7-1918, such person shall, and is hereby declared to be -
when the sole owner of the business exempt from liability to pay the wartime profits tax; and
when a partner in the business entitled to a refund from the Commissioner of the part of the tax payable by the partnership which bears the same proportion to the tax payable by the partnership as his interest in the profit bears to the total profits.
Provided further that where any such individual or member was not the owner of, or partner in, the said business before the commencement of the said war, it shall be necessary for such person to satisfy the Commissioner, Assistant Commissioner, or a Deputy Commissioner that he did not become the owner of, or a partner in, that business with the direct or indirect object of reducing its liability to war-time profits tax.
.- I move -
That the provisos, sub-clause 1, be left out.
Honorable senators will remember that, when this bill was previously before the committee, I moved an amendment to insert these provisos for the purpose of removing certain hardships to which I had called attention. I explained at the time that my amendment had been hurriedly prepared, and that it might need alteration. Since then I have had an opportunity of reading the remarks of Senator Crawford, and I quite agree with his statement that the amendment in the form in which I submitted it was open to criticism. Consequently, I consulted the Parliamentary Draftsman, and he is satisfied that the new clause 4 a, which I propose to have inserted in lieu of the provisos to sub-clause 1 will express the intention of the provisos in a better form. As a matter of fact, my amendment had a scope which was much wider than I intended. For example, it would have exempted absentees with business interests in Australia if they had served in any of the allied forces, or persons that became partners in a business during the progress of the war. The latter difficulty has been overcome by using the words “ before the commencement of or during the war.”
Otherwise, the proposed new clause does not differ materially from the provisos to clause 4 previously inserted by the committee.
– The amendment now proposed by Senator Elliott is no more acceptable to the Government than was his previous . amendment, to which I took exception on the ground that it would not accomplish what the honorable senator desired, and also because it proposed a drastic alteration to the basic principle of the original act itself. As tho honorable senator’s present proposal does not differ materially from the amendment which he previously submitted, I must ask the committee to reject it, and also to delete the provisos which were inserted in clause 4 at the instance of the honorable senator. It is contended that these provisos merely remove certain anomalies; but, as a matter of fact, they exempt a large body of wealthy taxpayers whom it was never intended to exempt. If the bill is altered as proposed by Senator Elliott, it will be, not a Government measure, but, to all intents and purposes, a private member’s bill. Both the honororable senator’s original amendment and his present proposal have received very careful consideration from the taxation authorities, the Treasurer, and the Government; and, although the time at my disposal is limited, I shall endeavour to explain the position as comprehensively as possible. The admitted object of the amendment inserted by the committee, at the instance of Senator Elliott, is to grant relief to sole owners or partner owners of taxed businesses who had not obtained relief under the existing law because they had not devoted the whole or the greater part of their time to the management of the business prior to enlisting for active service. The position under the present law is that relief is granted from tax to -
a shareholder in a company, the number of shareholders in which does not exceed twenty, subject to the following conditions: -
It will be noticed that the companies mentioned are principally privately owned companies.
Where the foregoing conditions existed, the relief granted was -
No difficulty has arisen in the case of shareholders in companies. The only difficulty which has been complained of is that affecting sole owners and partners in the ownership of a business who had not devoted the whole or part of their time in connexion with the management of the business prior to their enlistment. Wheu the present law was framed, the Government of the day gave exhaustive consideration to all phases of the subject. Consideration had first of all been given to the question of granting an exemption from war-time profits tax for reasons similar to those which had been adopted by the Parliament for purposes of exemption from income tax. It was found, however, that exemption from war-time profits tax could not be expressed in a manner similar to that used in the Income Tax Assessment Act, because the war-time profits tax is a tax on a business irrespective of the character of the ownership, whether it be a sole owner, a partnership ownership, or a company ownership. It was, therefore, necessary to provide a special expression of the personal relief which was to be afforded to the sole owner, the separate partner, and the employee shareholder. This was done. The basic principle finally adopted by the Government was that relief from tax should be granted to those individuals who were residents of Australia, whose absence on active service was likely to prejudice the business, and whose active service exposed them personally to risk of injury or death in the danger zone of the war. It was considered that a business would be prejudiced by the absence of an owner who had been actively associated with its management, but that it would not be prejudiced by the absence of any other person. The arguments which have been advanced for and against the proposed extension of the present relief to those who were on active service in the danger zone, notwithstanding that they may not, prior to enlistment, have devoted the whole or the greater part of their time in connexion with the management of the business are as follow : -
For the extension -
That it is unfair to any person who went on active service to be penalized by being required to pay war-time profits tax. That, as relief has been granted to one class of soldier, it should be granted to all. That all those who went on active service did so at the call of their country, and each made some sacrifice for the country.
That it was the clear intention of the Parliament to make no distinction between persons who went on active service, as evidenced by the exemption granted under the Income Tax Assessment Act.
It has to be observed that persons who went on active service in the war were not entirely exempt from income tax. They were only exempt in respect of income from personal exertion. If they had sufficient income from property to render them taxable, they were taxed. It has wrongly been assumed by many people that complete exemption from income tax had been enjoyed by persons on active service.
Against the extension -
A carried on a business in Australia.
He had several sons, but none was connected with the management of the busi ness in any way. One son was in England at the outbreak of the war. He enlisted with the British Forces. During the war A died, and under his will his sons inherited his business. The son on active service did not take any part in the business until his return to Australia from active service. He did nothing to gain or conduct the business. The proposal under consideration would, however, grant him a refund of the share of the war-time profits tax assessed to the business which is proportionate to his capital interest in the business. If his father had lived, the tax would have been paid by him without any diminution on account of the absence of his son on active service. As the assessment was made on the business as distinct from the owners, the sons have merely paid the tax which their father would have paid. There does not appear to be any good ground for granting a refund to the active service son, while his brothers would get no relief, although they kept the business going for the benefit of themselves and their absent brother.
The only way by which all possible hard cases now existing might be considered in relation to other cases, is to have each war-time profits tax return examined for the purpose of extracting a complete description of the circumstances connected with each case in which an interested person on active service had not received relief from tax. There is not sufficient information in hand at present to render successful any attempt to express an amendment which would limit an extension of the existing relief to particular cases.
Sitting suspended from 6.30 to 8 p.m.
Order of the Day for resumption of debate, on motion by Senator Grant (vide page 2576), called on, and debate adjourned (on motion by Senator Pearce).
In committee (recommittal) : Consideration resumed.
– I have submitted a comprehensive statement showing why the Government cannot accept Senator Elliott’s amendment. I pointed out, amongst other things, that the object of the proposal is entirely outside the scope of the bill as submitted to the Senate. The bill is, as I stated in my secondreading speech, designed to provide lor the following points, which were not covered by the War-time Profits Tax Assessment Act of 1924: -
Senator Elliott’s amendment has nothing whatever to do with any of those points, but seeks to introduce into the bill something entirely new and far-reaching in its effect. I again remind the committee that the principal act was passed in 1917, nine years ago, and no war-time profits taxation has been collected on incomes earned after the 30th June, 1919, nor is it proposed to collect any. The proposal, now is to make the act retrospective for nine years, which, as I have said, will necessitate the examination of a very large number of returns.
– Only if application is made.
– -Returned soldiers whose income taxation has been considerable are sure to ask for exemption, which, if granted, would mean the return of scores of thousands of pounds to wealthy men, in whose interests a number of paid agents have been actively engaged for some time. No request whatever has been made to the Government or to the Taxation Department by any recognized returned soldiers’ or sailors’ organization
The honorable senator has exhausted his time.
Senator NEEDHAM (Western Australia) T8.61. - When this measure was last under consideration it was understood that Senator Elliott was to re-draft his amendment in such a way that its meaning would be quite clear. After studying the amendment now proposed, and hearing Senator Elliott’s speech, I am of the opinion that his present proposal is even more involved. If this proposal is carried persons who can well afford to pay taxation will be exempt, and for that reason I cannot support the amendment. When we were last considering this clause I indicated that it was my intention to move an amendment to provide that returned soldiers who were partners in businesses and who were in the danger zone during the war, should be in the same position in the matter of income taxation as they were prior to the outbreak of hostilities. I do- not wish those who can afford to pay to- escape just taxation.
– Why make a distinction between those who are wealthy and those who are not - both sections are entitled to consideration ?
– I am anxious to provide that a partner in a business shall pay taxation on the profits he made as the result of the war. I do not want any one to amass wealth as the result of the spilling of human blood, and then to escape taxes which were imposed to meet our war obligations. Unless Senator Elliott can prove that his amendment will not benefit certain wealthy persons I intend to oppose it.
Senator ELLIOTT (Victoria) [8.101.- I dealt with this question fairly exhaustively on a previous occasion, but in view of the debate which has arisen I think it necessary to repeat what I said on a former occasion. In addressing himself to the bill in another place, the Treasurer said -
The position of ex -soldiers who became partners in undertakings after they went away is more difficult. Now that the war is over, and we are looking retrospectively on the position, the difficulty is to find a form of words to express what is intended without including some who are not entitled to the relief proposed, and excluding others who are just as much entitled to it as are those mentioned.
The Treasurer further stated -
In regard to the case mentioned, the commissioner, while recognizing that an anomaly exists, cannot suggest any form of words that would meet such cases.
Apparently the officers of the Taxation Department fell down on the job, because they could not draft a clause to meet the position. I have, however, had an amendment drafted which should meet the case, but the Minister has objected to it. I have endeavoured to meet his criticism on a previous occasion, and permanent officials of the department are of the opinion that the amendment is in proper form. The Minister now says that it is contrary to the principles of the principal act.
– I said that repeatedly when the measure was previously before the committee.
– -The intention of the principal act is to exempt a man actually engaged in business at the time of his enlistment. The Leader of the Opposition (Senator Needham) thinks that the department should discriminate between those who are wealthy and those who are not, but the measure operates irrespective of wealth. The act was intended to assist those who went to the war, despite their position. Many of those who were able to go were wealthy.
– Only those doing good business could come under the provisions of the principal act.
– -Therefore, the objection of the Leader of the Opposition falls to the ground.
– Not at all.
– My amendment is to assist those who have a small interest in a business and who have been penalized. I seek to rectify an admitted anomaly. The Treasurer admits that there are anomalies, but apparently the department fell down on its job, as certain officers had not sufficient intelligence to draft a provision to meet hard cases. I have already mentioned a South Australian case, in which a man had been carrying on business in the ordinary way when his health broke down two years before the outbreak of war. The owner of the business went abroad and handed over his responsibility to his principal officer, who carried it on. He returned at the outbreak of war, with his health restored, and, as he found the business was being satisfactorily conducted, considered it his duty to enlist. If he had assumed control of the business on his return, he would have been exempt from the provisions of the act, but because he enlisted immediately after landing in Australia, he has to pay the war-time profits tax. There is also the case of a father and his son, who were carrying on business together. The father was an elderly man, and the son was managing the business for him, although he had not been actually admitted as a partner. When war broke out the father, in a burst of patriotism, said he would carry on and allow his son to enlist. In a couple of years his health broke down, and the boy succeeded him. Under the act the son is not exempt from the provisions of the War-time Profits Act. Had he been formally admitted as a partner prior to the war he would have been in a different position. To make my amendment acceptable to the Minister, I have hedged it around with every possible precaution against fraud. The onus of proof in every case is thrown upon the applicant, who must satisfy the commissioner that he has not merely beer admitted as a partner to defeat the provisions of the War-time Profits Act. I am, however, now in a dilemma. The hill has been introduced to meet certain cases of hardship, and I am anxious that we should not lose those concessions. Therefore, the attitude of the Government alarms me. We have been told that if my amendment ib carried the Government will drop the bill. We should then lose what we have been promised in this measure. I appeal to the Minister to give my proposal a trial. I am satisfied that it will not have the effect which he fears it will have, and that there will not be so many applications.
– Does the honorable senator’ say that only a few people in the “ know “ will avail themselves of the benefits of his amendment?
– I suggest that there are only a few cases which will be able to comply with the conditions set out in my amendment.
– The commissioner bays that it will mean the loss of scores of thousands of pounds.
– I think that the commissioner is unduly pessimistic. A great majority of returned men are so absent-minded that many have not even claimed their war gratuities.
– But the honorable senator’s amendment involves much more than the payment of a war gratuity.
– It is possible ihat in the aggregate the concessions will amount to some thousands of pounds; but. the number of individual applicants will not be very great. I cannot see the force of the Minister’s objection. Why should a man be exempt from the provisions of the act simply because he happened to be the manager of a business before enlisting? The chances are that the man who was the manager of a business prior to the war drew a fairly substantial salary during the whole of the time that he was away, whereas if he were only an ordinary partner or shareholder in a firm he would not get anything while on active service. The Treasurer admitted that there were anomalies, and my purpose is to help him to remove them.
– It is true that the Treasurer admitted in another place that there might be one or two hard cases, but Senator Elliott’s amendment, designed to rectify those anomalies, proposes that every taxpayer who enlisted should be exempt from war-time profits tax. It is evident that this demand for an amendment comes, not from a number of men with comparatively small incomes, but from a few wealthy men, because the whole of this agitation has been conducted by paid agents. If a large number of returned soldiers were concerned in the movement, representations would have been made through the returned soldiers’ organization. Senator Elliott is aware that, under the Income Tax Act, a man who enlisted is assessed foi- income from property; but under his amendment to this bill, all classes of income of returned soldiers will be exempt from taxation under the War-time Profits Tax Act. Surely there is greater justification for requiring people to pay taxation on war-time profits than taxation on ordinary income. The act exempts men who, prior to enlistment, took ari active part in the management of a business, the presumption being that their business interests would be prejudiced owing to their absence from Australia. The amendment is so drastic in its effect that the scope and purpose of the bill will be entirely altered. It will not have the limited effect which Senator Elliott believes it will have, and because of this and its retrospective character, I must ask the committee not to accept it. The Government desires to be fair to all returned soldiers, but it is too much to ask the committee to accept an amendment which will alter the effect of the principal act so substantially.
– I supported Senator Elliott on a former occasion, and, after listening to the debate to-night, I can come to no other conclusion than that the ‘Government, in introducing the measure in another place, was of the opinion that certain individuals who should have enjoyed certain concessions under the bill were not included. That in itself was sufficient to cause Senator Elliott to< see if some amendment could not be drafted to remove the anomaly referred to by the Treasurer.
– And the Minister now says that the suggested amendment goes too far.
– The Minister should show in what respect the amendment is too drastic. I cannot understand the attitude of the Government. The Minister has told the committee that the amendment will extend the scope of assistance to be given, and that if it is agreed to the Government will have to drop the bill. Why should the Government do that? The amendment does not affect the principle of the bill. I. have no desire to assist in the passage of any measure that will be unfair. The underlying principle of the original provision was a recognition of the fact that business men who fought for their country should receive greater consideration in respect of taxation than those who stayed at home.
– That was not the intention of the original act.
– Then why did the Treasurer specially refer to certain anomalies ?
– The Treasurer’s remarks have been entirely misinterpreted.
– The Treasurer admitted that he had heard of a number of hard cases, and agreed that probably there were more, of men who, at the time of their enlistment, were engaged in business. A man might have been closely identified with a business, and after having reached the war zone, sue- ceeded to that business on the death of his father, the senior partner.
– He would have succeeded to a bigger estate.
– Had he succeeded his father the day before the war commenced, he would have received the benefits conferred by this bill. Because he happened to have become a partner while at the war, should he he deprived of thoso benefits? Before his enlistment, he probably had more to do with the business than his father had.
– That is pure assumption.
– lt is not. I intend to support the amendment moved by Senator Elliott.
– As I remarked before, I am in a dilemma. In view of the definite announcement of the Minister that the Ministry would not proceed with the bill were my amendment carried, in which case the small measure of relief which would be afforded to returned soldiers by the bill, as introduced by the Government, would be lost, I am reluctantly compelled not to press my amendment.
Amendment, by leave, withdrawn.
Amendment (by Senator Crawford) proposed -
That in sub-clause(1) the words - “ Provided that where any such individual or member satieties the Commissioner, Assistant Commissioner, or a Deputy Commissioner that his military or naval duties required him to be in any part of the Held of operations in connexion with the war, where there was danger to life as a resuit of the operations of enemy forces, and that he was, before the commencement of the said war, the owner of, or partner in, the business from which the aforesaid profits were derived, then notwithstanding anything contained in the War-time Profits Tax Assessment Act 1917-18, such person shall,andishereby declared to be-
When the sole owner of the business exempt from liability to pay the war-time profits tax; and
When a partner in the business, entitled to a refund from the Commissioner of the part of the tax payable by the partnership which bears the same proportion to the tax payable by the partnership as his interest in the profit bears to the total profits. “ Provided further that where any such . individual or member was not the owner of, or partner in, the said business before the commencement of the said war, it shall bc necessary for such person to satisfy the Commissioner, Assistant Commissioner, or a Deputy Commissioner, that he did not become the owner of, or a partner in, that business with the direct or indirect object of reducing its liability to war-time profits tax.” - be left out.
– I am afraid that the committee scarcely knows with what it is dealing. I understand that we are discussing clause 4.
– I am moving that the provisos previously made on the motion of Senator Elliott be struck out. That would leave the bill as it was when it reached us.
– Should the committee accept the Minister’s amendment, the way would still be clear for any honorable senator to move a further amendment to clause 4?
– I am satisfied with the position as now explained to me.
Amendment agreed to.
.- I move-
That the following sub-sectionbe added: - “ 1a. Where the naval or military duties of any individual or member referred to in the last preceding sub-section required him to be in any part of thefield of operations in connexion with the war where there was danger to life as a result of the operations of enemy forces, the Commissioner may further alter or make the said assessment so that there shall be deducted from the said profits so much of those profits as were entitled to an exemption from income tax by virtue of section 13 of the Income Tax Assessment Act 1915-21, and which would but for this subsection be. liable to war-time prolits tax.”
If this amendment be carried, it will put returned soldiers in the same position in relation to war-time profits taxes that they now occupy in relation to income taxation. I understand that Senator Elliott’s amendment, if agreed to, would have caused wealthy men who had made money as a result of the war, to escape taxation. My purpose in moving this amendment is to prevent injustice from being done to any man who served in the danger zone, and who might be called upon to pay a tax where he had no profit as a result of the war. The desire of Parliament was to exempt returned soldiers from income taxation, and, as far as possible, from war-time profits tax also. In order to avoid any improper evasion of payment of taxes, Parliament excluded any soldier who did not go into the danger zone, or who, if he did enter the danger zone, did not before the war devote the greater portion of his time to the management of his business. The risk no longer exists, as there can no longer be evasions by the transfer of businesses.
– The amendment moved by Senator Needham is similar to one which was moved in another place, and subsequently withdrawn. It is a far-reaching amendment, and I am informed by the taxation authorities goes considerably further than Senator Elliott’s, because it dispenses with not only the management requirements, but also the need for residence in Australia. Having declined to accept Senator Elliott’s amendment, the Government has greater reason for declining to . accept Senator Needham’s proposal. The honorable senator now proposes to exempt all the persons proposed to be exempted by Senator Elliott, and others in addition. Therefore, all I have said in regard to the proposal of Senator Elliott applies with greater force to Senator Needham’s amendment, and I trust the committee will reject it.
Clause, as further amended, agreed to.
Bill reported with a further amendment.
Motion (by -Senator Crawford) proposed -
That so much of the Standing Orders be suspended as would prevent the passing of the bill through all its remaining stages without delay.
The PRESIDENT (Senator the Hon.
Bill read a third time.
Motion (by Senator PEARCE) agreed to -
That the Senate, at its rising, adjourn until Wednesday next at 3 p.m.
Senate adjourned at 8.55 p.m.
Cite as: Australia, Senate, Debates, 1 July 1926, viewed 22 October 2017, <http://historichansard.net/senate/1926/19260701_senate_10_114/>.