Senate
8 December 1927

10th Parliament · 1st Session

  1. Senate
  2. 10th Parliament
  3. 1927

The President (Senator the Hon. Sir John Newlands) took the chair at 3 p.m. and read prayers.

page 2824

PAPER

The following paper was presented : -

Industrial Delegation to United States of America - Report of the Industrial Delegation appointed by the Commonwealth Government to investigate the method employed in, and the working conditions associated with, the manufacturing industries of the United States (in substitution for the report tabled on the 3rd November, 1927).

page 2824

QUESTION

GOVERNMENT PRINTING OFFICE

Pneumatic Tube

Senator FINDLEY:
VICTORIA

asked the Minister representing the Minister for Home and Territories, upon notice -

  1. What was the cost of installing the pneumatic tube connecting ParliamentHouse with the Government Printing Office?
  2. What is the cost of working the tube ?
  3. Is the tube working satisfactorily?
Senator Sir WILLIAM GLASGOW:

– The information required by the honorable senator is being obtained, and he will be advised as soon as it is available.

page 2824

QUESTION

TASMANIAN COMMUNICATIONS

Senator OGDEN:
TASMANIA

asked the Minister representing the Postmaster-General, upon notice -

  1. Whetherhe has noticed that the Oonah, which carries on the service betweenBurnie and Melbourne, has broken down?
  2. In view of this breakdown, will the Government, as soon as possible, give effect to the recommendation of the Joint Committee of Public Accounts regarding the provision of a more modern vessel for this service?

Senator McLACHLAN.The honorable the Postmaster General has supplied the following answers :

  1. Yes.
  2. The Government has been closely considering the report of the Public Accounts Committee on communications between the mainland and Tasmania, and expects to announce its decision very shortly.

page 2824

QUESTION

FEDERAL CAPITAL COMMISSION

Motor Cars

Senator GUTHRIE:
through Senator Sir Henry Barwell

asked the Minister representing the Minister for Home and Territories, upon notice -

  1. Is it a fact that the Federal Capital Commission stated that they wrote off Ford motor cars in two years, Dodge and/or other American cars in three years, and British cars in five years?
  2. Why does the Commission use foreign cars?
Senator Sir WILLIAM GLASGOW:

– The honorable the Minister for Home and Territories has supplied the following answer : -

Inquiry is being made of the Federal Capital Commission in regard to this matter and as soon as a reply is to hand it will be communicated to the honorable senator.

page 2824

APPROPRIATION BILL 1927-28

Third Reading

Motion (by Senator Sir George Pearce) proposed -

That the bill be now read a third time.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The Ministry, after the third reading of the Appropriation Bill has been passed, will have many millions of pounds at its disposal with which to carry on the functions of government. It is impossible for honorable senators, in the committee stages of the bill, to examine every item in the Estimates and determine whether or not they are justified. As supporters of the Government we have to assume that the Ministry is satisfied with the Estimates as they are presented to Parliament. But before the Senate is called upon to vote for the third reading of this bill, I should like’ to have an assurance from the Leader of the Senate (Senator Pearce) that the Government takes complete responsibility for every item in the Estimates. I make this request for a definite reason. I realize that we may not, on this motion, refer to anything that occurred in committee; but I may be permitted to remind honorable senators that the’ Leader of the Senate stated on Tuesday that the Government was not responsible for a certain section of the Estimates.

His admission has placed me in a somewhat awkward position. I might be prepared to vote for Estimates for which the Government was responsible, but not for that portion for which the Government did not accept responsibility, and the only way in which I could indicate my protest would be by voting against the third reading of the bill. If a majority of honorable senators shared my view the bill would not pass its third reading and the Government would be wrecked, net because it had introduced Estimates for which it accepted full responsiblity, but for having included Estimates prepared by some other authority. I understand that the Leader of the Senate does not fully approve of certain of the Estimates. If that is so, I do not like the idea of having to support the Government in respect of the whole of the Estimates, I care not how high or influential certain officers may be. The Minister has said that the Government is not responsible for the Estimates for the Parliament, prepared by the President and Mr. Speaker. If that is so it seems to me that the Ministry, in asking the Senate to pass the third reading of this bill, is sheltering itself behind certain officers. Ministers have no right to do that. If a certain portion of the Estimates is not presented by the Government and if the Government does not accept responsibility for them, but asks the Senate to pass the third reading of the bill, then it is clear that the Estimates are in watertight compartments. I do not say that the Minister would do it, but I suggest that, in the circumstances I have related, it would be open for a Minister, if he objected to some portion of the Estimates, momentarily to divest himself of his responsibility as a Minister- of the Crown, and as a senator in committee, call upon other honorable senators to vote with him to request another place to alter the Estimates. Then having used every argument against the items in question, he could, if he chose, as a Minister, vote for them. The Whip of a party, I understand, is not recognized as such in the Constitution. It makes mention of the Parliament, Ministers. Senators, and the Members of the House of Representatives. There is no reference to a party Whip, but usage has made the Whip a very important member of this chamber. A principal part of his business is to rally supporters of the Ministry to vote for Government proposals. I have always understood that the Appropriation Bill, containing the Estimates, was essentially a Government bill. Perhaps I have been wrong. It seems to me quite possible - I do not say it would be done - that if the Estimates are presented in these watertight compartments, the Whip might vote against the Government in respect of that portion .of the Estimates for which the Government was not responsible, and might excuse himself by saying, “ These are the Estimates, not of the Government, but of some other authority, and they have been included in the bill against the wish of the Government.” If the President and Mr. Speaker can include in the Estimates items that do not meet with the approval of the Government, or its idea of what is right, those officers are stronger than the two Houses combined. We may consider i> that some salaries are not sufficiently high, but all that we can do is to move for a reduction of the vote. We have not the constitutional right to add one penny to the expenditure. We, in this chamber, are fortunate in having among us some senators who, as Premiers and Treasurers, have played a very important part in State politics. When I heard this statement, I availed myself of the opportunity to question some of these distinguished senators regarding the practice which they observed in the State sphere. I asked th em whether they had ever declined to accept the fullest responsibility for every item of their Estimates. They were all good enough to tell me that they had always taken full responsibility, although they did their best to meet the wishes of officers of State, Presidents of Legislative Councils, and Speakers of Legislative Assemblies who made requests to them. When I expressed surprise that such a thing as this could happen in the Federal arena, I was told that I still had something to learn. I admit that there is a good deal of which I am ignorant. It may be that under the Federal Constitution things can be done which would never be dreamed of in State politics. The Appropriation Bill and the Estimates have run the gauntlet of this and another pla::e, and not a line of either has been altered. I believe that the Treasurer takes the fullest responsibility for all monies raised by way of taxation. I should like the Minister to tell me if, in an equal degree, the Government accepts responsibility for every item of the Estimates, whether the money is to be expended within the sacred precincts of Parliament or in helping to make brighter the home of the humblest citizen of this great Commonwealth.

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

[3.22].- The honorable senator has spent the last quarter of an hour in making a dummy of straw, setting it up, industriously belabouring it, and then knocking it down. He has not proved anything except either his own lack of comprehension in relation to the attitude which is adopted towards the Estimates or my inability to use words which would convey to his mind the meaning I intend to convey. It is a fact,* whether Senator Thomas is aware of it or not, that since the inauguration of the Commonwealth Parliament, the Parliamentary Estimates have been prepared and submitted by the President and Mr. Speaker. All that the Government does is to include them with the other Estimates that are submitted to Parliament. I invite the honorable senator to consider also something else that he apparently has not noticed, but which has been patent to me during my 26 years experience in the Commonwealth Parliament; that is, that no member of the Government ever replies to criticisms of Parliamentary Estimates. That duty is invariably left to the President in .this chamber and to Mr: Speaker in another place, because they are responsible for those Estimates. So far as my experience extends, no Treasurer has ever altered Estimates that have- been submitted by the President and Mr. Speaker.

Senator Sir Henry Barwell:

– Does that cover the Hansard staff?

Senator Sir GEORGE PEARCE:

– Yes, it covers all those officers who are under the control of the President and Mr. Speaker. The Estimates are com piled by them and submitted to the Treasurer, who has invariably presented them to Parliament in the form iu winch they have been submitted to him. When I dealt with this question in committee I said that the Government was not responsible. The meaning I intended to convey was that it was not responsible for the form in which the Parliamentary Estimates were presented. Senator Thomas ought to have known that I did not mean that the Government disowned responsibility for the Estimates as a whole. Now that Parliament has agreed to them the Government has the responsibility of seeing that the expenditure is kept within those limits. The President and Mr. Speaker have no power to impose taxation* or to raise revenue. Therefore, if they wish to exceed the Parliamentary Estimates, they must obtain the consent of the Treasurer, which implies the consent of the Government. That is my reply to Senator Thomas’ laboured statement.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The Minister has made a very weak reply.

Senator Sir GEORGE PEARCE:

– If the honorable senator holds that view, I say again that the fault may be either my inability to express myself clearly or his lack of understanding.

Question resolved in the affirmative.

Bill read a third time.

page 2826

INCOME TAX ASSESSMENT BILL

Second Reading

Debate resumed from 7th December (vide page 2718) on motion by Senator PEARCE -

That the bill be now read a second time.

Senator NEEDHAM:
Western Australia

.- Whilst I. listened yesterday to the speech that was delivered by the Leader of the Senate (Senator Sir George. Pearce) in moving the motion for the second reading of this bill, I almost visualized the Federal Treasurer (Dr. Earle Page) as a political Santa Claus with a basket full of toys in the shape of concessions and reductions of income tax; but, having perused the bill, I am beginning to realize that the toys are not so beautiful as the right honorable gentleman would have us believe they are. I think I shall be able to prove that this measure is not such a valuable addition to our legislation as it would appear to be at first blush. Since 1915 we have had brought down each year taxation measures of every description. Up to date the Commonwealth Parliament has dealt with 44 measures relating to income tax, land tax, war time profits tax, &c. Those measures, as the Leader of the Senate said yester. day, are both intricate and technical, and j it is most difficult for a layman such as I am to grasp every detail. In his budget speech the Treasurer ! states that a 10 per cent, reduction on incomes derived from personal exertion is contemplated. He estimates that this year £9,800,000 will be derived from the taxation of incomes as against £11,126,000 received in 1926-27- a reduction of £1,326,000. I desire to refer to two phases of this question - first, the wisdom or otherwise of the proposed reduction; and, secondly, who will benefit by it. It has been contended, both in the public press of Australia and in this Parliament, that the Commonwealth should vacate forthwith the field of direct taxation.

Senator Ogden:

– It would be better if the Commonwealth were the sole collector of income, tax.

Senator NEEDHAM:

– I should not like to see the Commonwealth vacate the field of direct taxation, In view of our unsatisfactory financial position it would be wrong to do so. Federal income tax was first imposed in 1915 in order to finance the war. Although many years have elapsed’ since the termination of the war, we have not discharged our obligations in connexion with it. Honorable senators will agree that it is just as incumbent upon us to liquidate our debts now as it was in 1915. We may be told that since 1922 our war debt has been reduced by £36,000,000. I do not question that statement, but during the same period “ other debts “ have increased by, approximately, £39,000,000; and that amount do.es not include loans obtained on behalf of the States, concerning which we have heard so much from Senator Crawford. On the 30th June, 1927, notwithstanding the reduction which has been mentioned, our war debt was still £296,905,000. Which section of the. community benefited most as a result of the war? It certainly was not that section which is dependent entirely on the sale of its labour - men who depend on their weekly wage. The war benefited those persons in the community who were already in possession of much of this world’s goods.

Senator Herbert Hays:

– Why raise that question ?

Senator NEEDHAM:

– Persons already possessed of considerable! wealth gained most from the war. Notwithstanding the heavy war obligations which still remain, it is now proposed to grant further concessions to many who, to a great extent, amassed their wealth as the result of the shedding of human blood. Surely it is not asking too much that those who benefited most from the war should continue to help pay the debt incurred in connexion with it. On this subject the present Treasurer had something to say in 1920. Speaking on the budget, on the 13th October of that year, the honorable gentleman, as reported in Hansard, page 5565, said -

I make no complaint of the incidence of taxation. I do not complain of its being high, because, in my view, now is the time when we should tax ourselves with the object of reducing our public debt.

Since he made that statement, Dr. Page has become Treasurer, but during his term of office the position has not improved. In 1921-22, the amount derived from the taxation of incomes was £16,790,000. This year the Treasurer expects to collect from that source £9,800,000, a difference of, approximately, £7,000,000.

Senator Payne:

– Surely the honorable senator is not complaining about that reduction

Senator NEEDHAM:

– I am pointing out that the reduction will benefit only that section of the community which can well afford to pay the present taxes.

Senator Payne:

– Other sections of the community will be entirely relieved of taxation.

Senator NEEDHAM:

– If the Treasurer had collected income tax each year on the same basis that he adopted for the year 1921-22 it would have placed an additional £34,000,000, including the estimate for the current financial year, in the coffers of the Commonwealth, and that amount could have been used to reduce our war debt.

Senator Sir Henry Barwell:

– It is better in the pockets of the people.

Senator NEEDHAM:

– In case honorable senators are of the opinion that the taxation imposed in 1921-22 was too great a burden on the wealthier sections of the community, I invite them to consider the position in Great Britain, and what has been done there in the way of reducing the war debt. During the last five years the war debt of Great Britain has been reduced by £586,000,000. The last budget introduced into the British Parliament provided for a reduction o.t income tax to the extent of 4s. in the fi. Even allowing for that considerable reduction, the taxation per head in the United Kingdom, is still £15 5s. 9d., as compared with £3 lis. 4d., in 1914. Those figures show clearly the big effort being made by the people of Britain to reduce their war indebtedness. Australia’s gross debt in: 1922 was £416,000,000; to-day it is £461,000,000, an increase of £45,000,000 in five years. Our net debt has also in creased during that period from £339,000,000 to £341,000,000. Australia is therefore in a worse position financially than was the case five years ago. Moreover, our interest bill, which in 1921-22/ amounted to £18,976,000, is estimated this year to reach £21,539,000 - an increase of £2,563,000.

Now let us consider who will benefit from these reductions in taxation. During the term of office of the present .Treasurer, there has been a tendency to reduce direct taxation, while at the same time indirect taxation has increased. During the last election campaign, the Treasurer pointed with pride to the reductions in direct taxation which had taken place since he became Treasurer. The community as a whole has not benefited from those reductions.

Senator Sir Henry Barwell:

– The workers have not suffered as a result of increased indirect taxation, because their wages have been increased to meet it.

Senator NEEDHAM:

– The community generally has been penalized by the huge increases that have taken place in indirect taxation during the last five years. Take the case of men who earn a wage of £6 a week. According to the statistician’s figures, 90 per cent, of them are the fathers of children under 14 years of age. I ask honorable senators opposite whether these men will benefit by the proposed reduction in income taxation, and whether they have benefited by the increase in indirect taxation. The answer must be in the negative. In 1921-22 the revenue from indirect taxation was £27,630,000, and in 1926-27 £43,552,000, or an increase of approximately £16,000,000. In 1921-22 the revenue received from direct taxation was £22,000,000, and in 1926-27 £15,442,000, or a reduction of approximately £6,550,000. It will be seen that while the taxation on personal exertion has been reduced by that amount during the last five years, benefiting the rich man only, the indirect taxation, which chiefly affects the workers, has been increased by more that double during that period. The Leader of the Country party (Dr. Earle Page), speaking on 12th October, 1922, stated -

The electors must know, . and will know as far as lies in the power of the Country party *to inform them, that the proposed reduction in taxation cannot continue unless there is a permanent reduction in the cost of government.

I ask honorable senators of the Country party to show any reduction in the cost of government since their leader has been Treasurer of the Commonwealth. Why do they not take action to give effect to that doctrine? Since 1921-22 the Commonwealth expenditure has increased from approximately £64,000,000 to £75,000,000. That is abundant evidence that there has been no reduction in the cost of government.

Senator Andrew:

– Does the Leader of the Opposition object to a reduction of taxation ?

Senator NEEDHAM:

– Honorable senators are not very enthusiastic on the subject of taxation at all, and they certainly do not wax eloquent about it. I am opposed, to this proposed reduction of taxation, because it assists only those who can well afford to pay taxation, while those in need of assistance receive no benefit at all. I opposed it also because our financial position does not warrant it. The measure now before us is in some respects dissimilar to the original bill when introduced in another place. An important alteration was made to it, mainly, if not wholly, as a result of the vigilance of the Labour opposition in that Chamber. The bill provided that absentee shareholders residing outside Australia would not be required to pay taxation on dividends received from companies operating in Australia; but, on the other hand, shareholders residing in Australia would be taxed.

Senator Sir Henry Barwell:

– I rise to a point of order. I have carefully examined the bill, and can find no trace of any reference to absentee shareholders. The Leader of the Opposition has admitted that he is dealing with a provision that was eliminated from the original bill in another place, and therefore I submit that his remarks are irrelevant to the subject matter before the Chair.

The PRESIDENT (Senator the Hon. Sir John Newlands). - The Leader of the Opposition, in elaborating his case against the measure, has merely referred incidentally to a clause that was eliminated from it, as originally introduced by another place. I rule that his remarks are in order.

Senat or NEEDHAM. - The intention of that clause was admittedly unfair, and I venture to say that, had it remained in, honorable senators would not have hesitated to eliminate it. Despite the action taken by another place, Senator Kingsmill intends to move an amendment to exempt absentee shareholders from income taxation. The subsection and proviso to the sub-section that he wishes to omit from the principal act read -

  1. In addition to any other income tax payable by it, a company shall also pay income tax on -

    1. the interest paid or credited by the company to any person who is an absentee on money raised by debentures of the company and used in Australia or on money lodged at interest in Australia with the company.

Provided that a company shall be entitled to deduct and retain for the use of the company from the amount payable to any of the persons referred to in paragraph (b) of this subsection such amount as is necessary to pay tax which becomes due in respect of that amount.

If Senator Kingsmill’s amendment be carried, it will mean, according to the construction that I put upon it, that when debentures are issued by a company, or where money is lodged at interest with a company in Australia, persons resident outside Australia who take up such debentures or lodge such money with companies in Australia, at interest, will not be called upon to pay taxation on the interest they receive; but, on the other hand, a person resident in Australiawho invests his money in a similar manner, will be compelled to pay tax. That, I maintain, would be manifestly unfair. Another clause in the original bill referred to the taxation of dividends to absentee shareholders, and that was also withdrawn. It will be noticed that there is a very close relationship between those clauses and the amendment that has been circulated by Senator Kingsmill. Why should we exempt persons resident outside Australia from taxation on interest or dividends that they receive from Australia when we make our own investors pay such taxation. I see no reason at all for those exemptions from taxation. The Treasurer, when introducing the original bill, said that it would attract outside capital to this country. In his budget speech he also stated that the purpose of continuing the policy of borrowing overseas was to make available more local money for local investments. By his extravagant policy of overseas borrowing he is heaping up the burden of debt on the people of this country; but that, he says, will enable people resident in Australia to invest their money in local concerns! He wants the people to invest money locally; nevertheless he says that they must be taxed on the profits derived from such investments. Then he turns to foreign investors and tells them that if they like to invest their money in Australian concerns, they will escape taxation. We all realize the necessity of obtaining capital to develop our industries and resources; but look at the millions of pounds that have been sent out of this country. Take our gold mines. Let us imagine that they began again to pay huge dividends as they did years ago. The Treasurer has said that we cannot tax absentee shareholders, because they are beyond the jurisdiction of the Commnwealth, but we can tax the companies. Can any argument justify the exemption of the overseas shareholders from paying taxation when the Australian shareholders are forced to pay taxation on their dividends ! I cannot see any justification for such a course, and I consider the Government acted wisely in withdrawing, those provisions from the bill. For these reasons I shall certainly oppose the amendment that Senator Kingsmill intends to move. Prior to the amending act of 1923, there was no provision for a tax on companies with the exception of the tax of 2s. 5d. in the pound on undistributed profits. In 1923, this Parliament imposed a flat rate of ls. in the pound on all profits of companies, and I want to show how it operates. Distributed profits must be included in a person’s income, and are taxed accordingly. Some shareholders in companies secure a rebate while others do not, and those who suffer in this respect are the small shareholders dependent for their incomes on the dividends they draw on the shares they hold. Under the present system where a shareholder’s income is taxable he is allowed a rebate, but if a shareholder’s income is not taxable he receives no rebate. A shareholder, however, must have a taxable rate of ls. in the £ before he can receive the full company rebate of ls. in the £.

Senator Sir George Pearce:

– How can he get a rebate if he pays no tax?

Senator NEEDHAM:

– Let me put the matter in another way. Take the case of two people receiving dividends from the same source, the one £1,000 a year, and the other £100 a year. The former pays tax at the rate of ls. in the pound, but as the company has already paid the company tax at the rate of ls. in the pound, he is allowed a rebate of ls. in the pound from the company. As a result he pays no taxation on his direct income. But that cannot happen in the case of the smaller man whose income is only £100 a year. He receives no such rebate. It is also proposed in this bill to extend the averaging ‘prin ciple by permitting losses in one year to be carried forward. Under the averaging system an income is averaged over a period of five years, and the average so obtained, as far as I understand this part of the bill, is used not for the purpose of ascertaining the amount on which tax has to be paid, but the rate to be charged upon the taxable income, in respect of any particular year. In other words the system is an averaging of rates and not of income. I have been informed by persons who have made a close study of taxation that a taxpayer with a diminishing income is often taxed more heavily under the present system than one whose regular income is the same as the average of a man with a diminishing income, and that the man with an increasing income will often pay less. It is the opinion of people, well versed in taxation matters, that the fairest basis to adopt is to tax the average income, rather than average the income in order to ascertain the rate applicable to such average, and then apply the rate thus arrived at to the income derived in any ‘particular year. Provision is made to allow for expenditure on improvements such as those devised for exterminating various pests, animal and vegetable, the clearing of scrub and so forth. I think it is a very wise provision to make. Honorable senators of the Labour party welcome it. I am pleased to see honorable senators of the Country party smiling, but as a matter of fact in this respect the Government is merely following the good example set by the Labour party, not only in Commonwealth legislation, but also in that introduced by it in various State Parliaments. I shall defer any further criticism I have to offer on the bill until we reach the committee stage.

Senator Sir HENRY BARWELL (South Australia) [4.7]. - I realize that this is largely what might be called a committee measure, and my remarks at this stage will therefore be few and general in character. As a matter of fact I doubt whether I should have spoken now but for certain remarks made in opposition to the bill by the Leader of the Opposition. Before dealing with those remarks I shall refer to some of the benefits that will be conferred by the bill. The Government is to be commended for bringing forward the measure. It is a distinct advance in taxation legislation. Its object is to remove various anomalies and inequities in our Income Tax Assessment Act, and to grant concessions, principally to tracers and primary producers. I quite agree with .the Leader of the Opposition that taxation legislation is highly technical in character, and I suppose that accounts for the honorable senator’s failure to make reference to so many provisions contained in the bill. In speaking of the benefits concerned, I shall take, first of all, the averaging system referred to by the Leader of the Opposition in ,his concluding remarks. The bill gives the right to carry forward trade losses made by a taxpayer in one year as a deduction to be made from his assessable income derived in the next four years before his income is assessed for taxation purposes. The system of imposing the tax upon profits without any regard to losses is manifestly unfair, and I quite agree with the remarks of the Leader of the Opposition about its effect on persons with diminishing or increasing incomes. In fact, I believe that cases could be quoted in which taxpayers have paid in taxation over a period of year3 more than they have actually earned in the same period. That system is manifestly inequitable. We have had an averaging period for some time past. At the present time the average annual- income over the five-year period fixes the rate of income tax to be paid. That is a distinct advance over the old system, but a further advance is undoubtedly being made in this bill. The present system does not take into account trade losses made in any one year, and does not allow for a deduction to be made on account of those losses. It is now proposed to allow those losses to be carried forward and deducted from the four-year period, thus giving a greater degree of equity and a certain amount of relief which ought to be given to taxpayers. It seems to me that we ought to endeavour to arrange that the taxpayer who has an irregular income should pay as nearly as possible, the same tax as the man who has a regular income equal to the- average income of the man who has an irregular income over a particular period. I know that it is quite impossible to do it with absolute accuracy. In every system of taxation there are bound to be some inequities, and we shall never have a system that has no anomalies in it; but we should endeavour to approximate equity in our income taxation. Here we are making a distinct advance. No system can be judged over a short period of time; but I believe that the Government has given us an averaging system which will work equitably over a period of years. This concession, as I have already said, will benefit traders and primary producers. Other concessions will be of great benefit to primary producers. The capital of the primary producer is net in the land itself but in the productivity of the land, and that productivity can only be made available or increased by the expenditure of money - in some cases by a considerable expenditure of money. .It seems to me fair that expenditure which is essential in order to increase the productivity of land should be permitted as a deduction in the case of an income tax return. The Minister has pointed out, I think quite rightly, that there is a difference between rural and city land. We get nothing out of city, land by itself, but in the case of rural lands the income is derived from the soil.’ They yield income only if their potentialities have been brought out or increased by the expenditure very often of large sums of money. Every one will agree that, in a country like Australia, we should do all we can to encourage primary production. There is no doubt that development has boon retarded in the past partly because of high taxation and partly because the primary producer has not been allowed to make those deductions from assessable income now provided for in this measure. Unlike certain other taxpayers, he i3 unable to pass on income taxation, and, therefore, is entitled to some special consideration. The provisions of the bill, liberalizing deductions for depreciation of machinery and plant will be welcomed, particularly by the man on the land. I understand that it will now be possible to make deductions on account of obsolescence in all cases. That is only fair. The provisions relating to the fixation of prices for wool also will be welcomed. The Minister said yesterday that this will prevent double taxation of the purchaser of sheep in respect of the wool on the sheep. He might have added that it will make possible also the effective taxation of the vendor, who at present escapes. Therefore, this amending measure rectifies two anomalies in the present system - it makes possible the taxation of the vendor as to the value of wool on the sheep, and it prevents double taxation in the case of the purchaser. The concessions granted in respect of gold-mining in the Mandated Territories will bring the provisions applying to New Guinea into line with those that obtain in Australia. The proposal to tax the profits of gold-miners in New Guinea, made recently by the Taxation Department, was undoubtedly unreasonable, and it is re-assuring to know that the Government proposes to rectify the position. . Many other provisions of the measure are designed to benefit industry generally.

I turn now to the remarks of the Leader of the Opposition (Senator Needham). He stated that he doubted the wisdom of a reduction in taxation, and made it perfectly clear that he did not favour any reduction of direct taxation. Evidently the honorable gentleman believes that it will be better for the Government to raise in this way even larger sums than are being obtained at present, instead of making concessions. He thinks that the extra money thus made available should be used for industrial enterprise under government control. I wonder when the Leader of the Opposition and his party will learn the lessen that government control of business activities is foredoomed to failure? I am afraid, however, that it would not be of much use for me to deliver a lecture to the honorable gentleman on that subject. It is far better to give relief to taxpayers so that money which otherwise would be collected by the Treasurer, may be available tor use in industry by private enterprise. The Leader of the Opposition stated that if the taxation burdens were the same to-day as they were in 1921-22, the receipts would be greater by £34,000,000, and he went on to say that he thought that that would be a mighty good thing for Australia. I do not agree with the honorable gentleman. Surely he realizes that industry could not well bear that extra strain. Even now some businesses of_long standing, and which have been regarded as thoroughly sound over a great period of years, are feeling the strain and going under, and there are rumours that others may soon share the same fate. A’l the indications are that the burden at present placed upon industry is as great as it can bear, and that if relief can be given it should be given. The Leader of the Opposition declared also that any benefits following from a reduction in taxation were enjoyed, not by the working man, but- by the wealthier section of the community. Again I disagree with the honorable senator. A reduction in taxation gives an immediate impetus to industry, and undoubtedly the first to benefit is the working man. It is obvious, therefore, that benefits from a reduction in taxation are enjoyed by all sections of the community. Senator Needham referred also to the increases made in indirect taxation during the last few years, and again declared that the burden of high customs duties fell chiefly upon the working classes. Surely he knows as well as I do that any increased indirect taxation which is responsible for .an increase in the cost of living is more than counterbalanced by increases in wages awarded from time to time by the Arbitration Court.

Senator Needham:

– Nothing of the kind. Increases in wages are a long way behind the increase in. the cost of living..

Senator Sir HENRY BARWELL:

– I . repeat that any increases in indirect taxation press heavily upon industry generally, and are felt by all sections of the community.

Senator Sir George Pearce:

– The items that have been responsible for heavy increases in customs revenue, do not include articles in popular use.

Senator Sir HENRY BARWELL.That is so. It is clear that the working classes do not suffer to the same extent as other sections of the community from increases in customs duties. In the Sydney Sun, which reached Canberra this morning, I saw a statement - I do not know whether it was inspired - that the Government intended to launch upon a big economy campaign. This is extremely good news. It is, I believe, the outcome of pressure brought to bear upon the- Ministry by the Chambers of Manufacture and Chambers of Commerce throughout Australia, and by members of another place and of this chamber during the last few weeks. Economy is necessary; but while the Government proposes to cut down expenditure of Government moneys, both from loan and revenue, we have not been told yet if it intends to deal with the root cause of all our difficulties. I refer to our system of arbitration for the fixation of wages. Until this is dealt with the. present economic drift will go on notwithstanding the economies that may be effected by the Government from time to time. Our system of arbitration is responsible for the increased cost of production, the increased cost of living, and for the perpetuation of the vicious circle of which we have heard so much of late. Until Ministers take their courage in both hands, and deal with the situaton as it should be dealt with, it will, not be possible, to arrest permanently the present drift in our financial and economic affairs. However, I am glad to know that there is to be an economy campaign. As I remarked earlier in my speech, this bill is essentially one for the committee. I do not propose, therefore, to consider in detail its various clauses at this stage. I shall reserve what further remarks. I have to make until the measure is in committee.

Senator PAYNE:
Tasmania

– I listened attentively to the strictures of the Leader of the Opposition (Senator Needham) concerning what he termed the failure of the Government to realize its obligations to the people of Australia with regard to the imposition of direct taxation. I remind him that a few years ago this Parliament did not subject the great masses of the people to that form of taxation, and that the great bulk of the revenue from income taxation comes from comparatively a small number of taxpayers. I deprecate the base ingratitude of the honorable senator and other members of his party, who, while professing to represent the working classes, ignore this fact.

The honorable senator’s suggestion that the Government should continue to im pose this burden upon a small section of the people is entirely without justification. Any remissions in direct taxation should appeal to honorable senators opposite, because the relief given is felt by the whole of the people. If taxation burdens are made lighter, the money that remains in the pockets of the taxpayers is available for industry and developmental purposes. In this way further employment is provided for the people. I was particularly interested in the honorable senator’s references to the public debt. He stated that the gross debt of the Commonwealth was considerably more than £400,000,000. He overlooked entirely the fact that the net debt of the Commonwealth, apart from the war debt, is only £44,000,000, and that the bulk of this debt is represented almost exclusively by works which, if not directly, are indirectly reproductive. He also referred to the magnificent effort which has been made by the people of Great Britain to reduce their war debt. We all agree that the British taxpayers have been standing up magnificently to their obligations. I invite honorable senators to examine the position of the Commonwealth and see how the people in this part of the Empire have been meeting the financial burdens laid upon them as the result of the war. The honorable senator chooses to ignore the fact that this small community of only a little over 6,000,000 people has paid out of revenue war expenditure amounting to no less a sum than £280,000,000. On a population basis such a result has not been achieved by any other part of the British Empire. We have a war debt of fairly considerable dimensions, but not so large as to make us doubt our ability to wipe it off. Ample provision for its liquidation has been made by the establishment of a sinking fund. Surely there can be no sounder finance than that! The bill proposes to relieve those who have been bearing practically the whole of the direct taxation that has been imposed to the extent, of 10 per cent.

Senator Hoare:

– What about the man on the bottom rung if the ladder?

Senator PAYNE:

– He is not asked to contribute one penny by way of direct taxation. If the honorable senator will study the tables on pages 21 and 22 of the budget papers he will see that the man on the bottom rung of the ladder is exempted entirely from the payment of direct taxation. First of all there is a statutory exemption of £300; then the taxpayer is allowed to make a deduction in respect of each child. A married man with three children would need to have an income of £450 a year before he would be called upon to pay any income tax. I do not believe that in any other part of the British Empire the great mass of the people have had such remissions granted to them. These facts are ignored by honorable senators opposite because they do not expect to receive any support from the section which is to be relieved of a certain proportion of the tax. If this proposition could be connected in any way with the mass of the people, Senator Hoare would welcome it with both hands.

Senator Sir Henry Barwell:

– If he looked far enough he would see the connexion.

Senator PAYNE:

– This will certainly benefit those from whom Senator Hoare gets his support, because some of the money that is now paid to the Treasurer will be released for investment in industry. Thus more employment will be provided, and we shall become more selfsupporting. The lighter we make taxation the better for the community. It is proposed to reduce the tax by 10 per cent.; but there are also other admirable provisions for giving relief to those who have been suffering under a grave injustice. The provision that the losses of one year may be set off against the profits of succeeding years is a wise and equitable one. It is most unjust to compel a man who sustains a loss of £500 this year, and makes a profit of £1,000 next year, to pay the full amount of tax on the £1,000. I do not charge either the department or the Treasurer with having been wilfully unjust in the administration of the act. Its character is such that it is impossible to make it perfect. Year after year we are obliged to amend it. Only experience can show us the directions in which anomalies may be rectified. I welcome the bill, and heartily support the motion for its second reading. I trust that in committee honorable senators will be given information that will enable them to grasp fully the meaning of each proposed amendment of the act. Even a cursory examination proves that those amendments are eminently satisfactory, and that they will be welcomed by the community. Instead of proving a disadvantage to the Commonwealth as a whole, as suggested by the Opposition, I believe it will be found that they will confer upon it a considerable benefit.

Senator HOARE:
South Australia

– Senator Payne has argued that the worker will benefit by the proposed reduction of 10 per cent., because a greater amount will be spent in industry. He has also asserted that the worker is exempt from income tax. Surely he does not believe that the men who are at the head of big businesses pay the income tax that is imposed on them ! Wherever possible they pass it on, and that process continues until it eventually reaches the bottom dog.

Senator Payne:

– If he is relieved of taxation there is nothing for him to pass on.

Senator HOARE:

– Does the honorable senator believe that the prices of commodities will be lowered by one farthing, because of this proposed reduction of 10 per cent. in income tax? Of course they will not! The workers will be asked to pay as much as they pay now. It is well known that immediately income tax or any other tax is increased it is passed on, wherever that is possible, until it reaches the wage-earner. There was a reduction in 1925, but the worker did not benefit by being able to purchase his goods more cheaply. There will be no reduction because of this concession. The Government has shown that it is on the side of big business. The greatest advantage will be obtained by those who are bestable to bear the burden. The men with an income of £10,000 a year will have their tax reduced by £191 each. Those who have income amounting to £20,000 a year willpay £491 less than they are now paying; and those fortunate few whose income amounts to £50,000 a year are to have their taxes reduced by £1,391. A better plan would be to give the full amount of the reduction to those who earn up to £1,000 a year, and then to reduce it proportionately as the income increased. Why should a man who has an income of £50,000 a year be given this reduction?

Senator Payne:

– Would the honorable senator take all his income from him?

Senator HOARE:

– We do not want to take it all from him; but he is not deserving of any reduction, because he is well able to pay the tax. I believe in a tax on incomes, and am willing to pay my proportion. So long as we have such an immense debt, not one farthing should be taken off this tax. The Government ought to assist those who are least able to bear the burden.

Senator Payne:

– How would the honorable senator relieve them?

Senator HOARE:

– It is the duty of the Government to say how that can be done. Senator Payne went on to say that, in his opinion, these deductions would benefit the workers.

Senator Payne:

– I said they would benefit the community generally.

Senator HOARE:

– How can that be the case? The man on the land cannot pass on the tax to others.

Senator Payne:

– The honorable senator said that every one passes it on.

Senator HOARE:

– I said that those connected with big businesses do so. The man on the land, and the man in receipt of a regular salary or wage, cannot pass on the tax. Our protectionist policy has resulted in big incomes being earned by a few persons in the community, yet the bulk of the income taxation is paid, not by them, but by persons in receipt of wages and salaries, who cannot pass on the tax. If, instead of income taxation being reduced by 10 per cent., the existing tax were allowed to remain, the Government would be able to proceed with a number of reproductive works which would not only benefit the workers, but would also be an asset to the country. The Federal income tax was first imposed to meet our obligations incurred in connexion with the war. The war has ended, but many of those obligations still remain.

Senator Payne:

– Did the honorable senator expect otherwise?

Senator HOARE:

– No; but if the indebtedness remains the taxation imposed to meet it should also remain.

Senator Foll:

– Is the honorable senator in favour of increasing the income tax?

Senator HOARE:

– Yes, on salaries beyond a certain amount. I suggest that the rate of tax should be increased on incomes exceeding £3,000. I do not advocate that it be increased on small incomes. I believe that those who receive most from the country should pay most by way of taxation.

Senator Foll:

– Why have increased taxation when there is a surplus?

Senator HOARE:

– I should decrease taxation in other directions.

Senator Duncan:

– Would the honorable senator advocate a reduction of customs duties?

Senator HOARE:

-AlthoughIthink that our customs duties in some instances are too high, I should probably not be in order in discussing customs duties at this stage. For many of the goods produced in Australia we are paying far too much. That money is taken from the pockets of the workers. The result is that our industries are being strangled. I do not consider that I am entitled to any reduction in the income tax on my salary of £1,000 per annum. I am able to pay my share of the expenses of government, and I should be made to do so. The man in receipt of £3,000 per annum should pay more than I do, while the man whose salary is £10,000 per annum should contribute a great deal more.

Senator FINDLEY:
Victoria

– The measure before us is so intricate that in introducing it the Leader of the Government had recourse to a carefullyprepared type-written report. Its main purpose is to reduce by 10 per cent. the tax levied on certain citizens of the Commonwealth. It also provides for other concessions. Income taxation was first imposed by the Commonwealth for the purpose of helping to finance the war, in connexion with which we incurred heavy indebtedness. The interest on the money borrowed to prosecute the war must be paid. That is being done, and in addition contributions are being made towards a sinking fund. It is true that during recent years our war indebtedness has been reduced, but in other directions our debts have increased to an even greater extent. In the circumstances, I ask whether it is wise at this juncture to introduce a measure to reduce the revenue of the Commonwealth by over one and a quarter million pounds per annum? Throughout Australia there is financial stringency, and a good deal of unemployment; some of the States are experiencing the worst season for many years. Men in the commercial and financial world look with apprehension at the immediate future. They realize that for some years Australia will be confronted with serious financial problems. That the governments of Australia, both Federal and State, realize the position is evidenced by the curtailment of their public works programmes. It has been said that this policy of curtailment will, so far as the Commonwealth is concerned, be applied first in connexion with the Postmaster-General’s Department. Contemplated extensions of postal, telegraphic, and telephonic facilities are, I understand, not to be proceeded with because of the existing financial stringency. Every member of this Parliament has at some time or other urged that these facilities should be extended in the State or constituency which he represents.

Senator Sir George Pearce:

– And when his request has been acceded to he denounces the Government for extravagance.

Senator FINDLEY:

– The right honorable gentleman’s interjection is uncalled for: I take exception to it. At no time have I found fault with any Government for proceeding with necessary works. If the Leader of the Senate will recall my speeches in the Senate from time to time he will see that I do not regard essential public works solely from an £ s. d. point of view. Attention has been directed to certain Government undertakings which have not shown a profit; but I am not so concerned with immediate profits as I am with the development and progress of the country. Our apparent financial stability to-day is due, not to the prosperity of Australia at the moment, but to excessive importations. The receipts through the customs house have been soaring year after year.

Senator Sir George Pearce:

– Do importations cause prosperity? That is a strange argument to be used by a protectionist.

Senator FINDLEY:

– No. The Government would make it appear that our financial position is so satisfactory that it can reduce taxation without anything serious happening. The customs receipts have been soaring year after year, and there is no doubt that the Government wishes them to continue to increase.

Senator Sir George Pearce:

– Is that why we are taking off £400,000 this year?

Senator FINDLEY:

– Such an admission was made by the Treasurer when the first proposal to alter the financial arrangement between the Commonwealth and the States was before another place. He then said the Government intended to vacate the field of direct taxation, as that form of taxation was unpopular. It wished to transfer an unpopular system of taxation from its shoulders to the States. It proposed to retain control of 60 per cent. of income taxation, and to surrender its right to collect land tax and estate and probate duties; but it altered its policy. The object of the Government at the period to which I am referring was to strengthen the position of the representatives ofthe Country party. The members of that party have always said that land taxation is unpopular, and is strongly objected to by the primary producers. The Treasurer thought that his first proposals for altering the financial arrangements between the Commonwealth and the States would be agreed to. He knew, however, that, apart from the proportion of revenue from direct taxation, reserved to the Commonwealth under its proposals, its only source of revenue would be the customs house. Under the present fiscal system too much revenue is being derived in the form of customs duties. Our present tariff is largely a revenue tariff. Under a real protectionist policy the customs revenue would be much lower; but I hope the time is not far distant when we shall have a truly protectionist tariff. With a reduction in income taxation, land taxation, dry seasons and general commercial depression, a reduction in direct taxation amounting to f 1,2>50,000 should not he countenanced. We are not in a position to give up such a large amount of revenue, especially when the Government intends to discontinue many works which are essential to the progress and development of Australia. If the Government does not propose to raise further loans for the present, it should not reduce direct taxation. The amount by which income taxation is to be reduced would finance many of the public works which are not to be proceeded with. Our liabilities ‘are just as heavy as they have been at any period in our history, and the problems with which we are confronted are quite as great. In these circumstances the Government cannot afford to effect such a reduction, especially in view of the fact that all the States are financially embarrassed and the Commonwealth Government is in a sound position only on paper. The Government’s apparently prosperous position is due solely to the fact that the major portion of its revenue is derived from the Customs House. We do not know what the next year or two will bring forth.

Senator Grant:

– It will be mo-re.

Senator FINDLEY:

– We do not know. A general election is to be held within the next twelve or eighteen months, and when the people are appealed to there may be a change of government.

Senator Herbert Hays:

– Would a Labour government reduce customs duties ?

Senator FINDLEY:

– I did not say that. Ours is not a truly protectionist tariff when we are collecting such large sums on goods coming to Australia. The Government admits that many of the duties are essentially for revenue purposes. I am a protectionist, and I believe in the highest duties being imposed upon goods’ which can and are being manufactured in Australia. So far as my memory serves me, I have never insisted on a high duty being imposed essentially for revenue purposes.

Senator Foll:

– The honorable senator supported a higher duty on imported whisky.

Senator FINDLEY:

– If I did it was to assist the local manufacturers. Soma honorable senators believe that a low tariff would be the best for Australia. On the other hand there are some people who believe in absolute freetrade. Senator Grant is the only freetrader in this chamber. He believes a better form nf society can be established under freetrade together with the adoption of a certain principle.

The DEPUTY PRESIDENT (Senator Plain). - Order!

Senator Kingsmill:

– Does the honorable senator intend to refer to the bill?

Senator FINDLEY:

– The proposals of the Government in this instance have a -direct bearing upon the fiscal policy of the Commonwealth. The Government has proposed a reduction in income taxation only because we have excessive importations and a high revenue through the customs. Does any honorable senator suggest that the Government would propose a 10 per cent, reduction and provide for other concessions if it was not receiving a high revenue through the customs house? We have been told that the war was fought to ensure the safety of the lives and property of the people. Human life is the most sacred form of property. But there are others who, in addition to their lives, had substantial interests at stake in Australia, about which they were seriously concerned. And those citizens who were so protected are, many of them, better circumstanced to-day as the result of the war, and should continue to pay their fair and just contribution towards the liquidation of our war debt. There were many men in Australia who had little or no worldly wealth at the outbreak of the war, but who, during its progress, madu a great deal of money, and long before its termination became immensely wealthy. We know that during one period of the war, shareholders in some companies got back in the shape of dividends and bonus shares in less than three years the whole of the capital they had invested in them. Although from time to time these companies watered their stock, their shares are above par to-day, and in addition to paying high dividends they have been distributing bonus shares and paying bonuses. It would be no hardship to people so situated to continue paying the taxation they have been paying up to thepresent time, and for that reason and others Ihavepreviously mentioned neither by my voice nor by my vote can I give support to the proposed reductions in thisbill

Senator J B HAYES:
Tasmania

.-I welcome this bill because it makes a very substantial reduction in taxation amounting to over £1,000,000, and because it is a proof ofthe fact that the Government is not unmindful of the load of taxation that the people have to bear. I am also pleased to welcome the billbecause it takes into consideration largelythose who are making a living on the land, and allows some very desirable deductions for money that is spent on improvements and in other ways. It has also made much simpler the intricate problem dealing with sales of sheep in the wool. I cannot agree with Senator Hoare and Senator Findley that the proposed reduction in taxationwill not confer any benefit on the workers or relieveunemployment. It is the almostincessessant complaint of business people that the high taxation they have to pay prevents them from extending their operations This reduction should at least encourage them to enlarge their businesses and afford more employment. AlthoughI welcome a reduction of 10 per cent. as shown in this bill,I hope that similar reductions will be made at frequent intervals until the income tax is wiped out altogether, because I have long held the principle that it isthe right of the States to inflict an income tax.

Senator Sampson:

– “ Inflict “ is a good word to use.

Senator J B HAYES:

– I used it advisedly. But if itsuits the honorable senator better I can substitute “ impose.’’ I think that the States ought to have this field of taxation to themselves for their own activities. I hope that the Government will amendclause 17, which is the provision under which the income tax comes into conflictwithprobateduties, and in some cases inflicts an injustice. If a man dies just about the time hissheep arebeingshorn, probate duty hastobe paidonthe wool as capital, andincome tax on the wool as income, andin additiontothaton the amount already paid as probate duty. I have a case which makes the point clear. The sheep with the wool on their backs were worth 3 2s. ; shorn they were worth £1; consequently the wool was worth 12s. The probate duty paid on the wool as capital was 2s. 5d. , the beneficiaryreceiving the balance of 9s. 7d. This9s. 7d. should have been free from income tax, seeing that it had been regarded as capital upon which probate duty was paid, but under the present law, and this bill does not seem to alter it, immediately the wool wasshorn the whole 12s. was taken as income arising after the death of the owner, and the beneficiary had to pay income tax upon it. Thus the beneficiary paid income tax not only on the 9s. 7d. balance after the payment of the probate duty, but also on the 2s. 5d. which he did not receive, that amount having already been paid in probate duties. I do not think it fair that a man should be called upon to pay income tax on what is obviously capital, and is regarded as such for probate duty purposes, and it is certainly unfair that an amount already paid as probate duty should be regarded as income.

Senator McLachlan:

– Surely that is already provided for.

Senator J B HAYES:

– I should like the honorable senator, who is a lawyer, to look into the matter. When this case came under my notice it seemed so unjust that I thought I had only to bring it under the notice of the Government to have it rectified in this bill.

Senator KINGSMILL:
Western Australia

– I have very few remarks to make on this bill. Of course I ambound to welcome it; at all events politeness compels meto do so, although the very mention of an income tax is enough to make a man think very seriously about the future and also, so far as that goes, about theimmediate present. I must say that, for reasons which I shall dwell upon presently, I do not like the bill now as well as I did when it was introduced in another place. I am pleased to be able to agree with Senator Hoare and Senator Findley, that, after all, an income tax is the fairest tax that could be imposed, or, as Senator Hayes has said, inflicted.” It is true that occasionally extremely ingenious commissioners of taxation turn what an ordinary individual would look upon as a loss into, for taxation purposes, an apparent profit; and, while that might be a comfort to the taxpayer, it is not a comfort .when he has to pay taxation on it. But taking it by and large, I think the principle which underlies income taxation, in that it does first find out whether the taxpayer has anything with which to pay a tax before he is asked to pay it, is a good one. It is one that does not apply to all forms of taxation, more particularly to laud taxation. I do not know whether honorable senators recollect that I have expressed a preference for a form of taxation which differentiates between the sources of income. For instance, there are some pursuits in life which undoubtedly are good for the community as a whole, and those, unfortunately, are, as a rule, not too remunerative for the persons who follow them. There are other pursuits in life or sources of income which are undoubtedly deleterious to the community, and it is a most peculiar thing - I have been thinking over the matter for years, and I cannot see any instances to the contrary - that the less useful the pursuit is’ to the community the most money is made in it in the easiest manner. Take, for instance, the pursuit of hotelkeeping. No one can call that an arduous task. The hotelkeeper is favoured by legislation in every possible way. He is the owner of an asset which returns him a very fine revenue, and increases in value the whole time, yet he is called upon to pay tax et the same rate in the pound as the struggling farmer who has to work extremely hard for everything h<a can get, and while doing the best for himself is doing something for the good of the country. No one can say that the selling of liquor or the running of picture shows or the making of books on racecourses has any good effect on the community, yet all the men .who are engaged iri these pursuits which yield ample incomes pay exactly the same rate of income tax in the pound as is paid by men like farmers and miners, who, through their own labour, or through the money they have put into them, are engaged in industries which are undoubtedly beneficial to the community. I hope that in the years to come this differentiation will, be made. I feel certain that it is possible, and, living in that hope, I am inclined to put up more readily with the inflictions,’ if I may again barrow Senator Hayes’s word, from which we are suffering to-day. I said at the outset that I did not like this bill as well as the bill which was introduced in another place I believe that on the whole it is a very legitimate and earnest effort to reduce taxation in the best possible way. But there is still one way. It appeared in the bill when introduced) but it is not there now, having disappeared in it3 passage through committee in another place. Every one who thinks on the subject will know that a great deal of tins development of this) country is carried on with the aid of money obtained from outside Australia. It must necessarily be so. The demands of such bodies as harbour trusts, municipalities, and other semi-public bodies absorb mr.ch of th.-; floating capital in Australia required foc developmental purposes. A great deal has to be done by private individuals to develop Australia, and consequently the demand for money from outside the Commonwealth is ‘ becoming greater an 1 greater. In its anxiety, some years ago, to make overseas lenders pay interest on money invested in Australia the government of the day introduced a bill imposing income taxation on English moneylenders in respect of interest on such loans. The action was not calculated to contribute to the progress of this country. Legal complications soon presented themselves. It was disclosed that there wa* no obligation on English lenders to pay taxation on the interest they received from Australian investments Thereupon an attempt was made to place thE burden on the Australian borrower. Letus consider the position of an Australian company which relies for some of its capital on the sale of debentures in England at, say, 6 per cent, or 7 per cent. The sale of those debentures is a definite contract between the Australian company and the purchaser in England Obviously the latter expects to get 6 pe/ cent, or 7 per cent., whatever the agreed upon rate may be, on the money that he lends to the Australian companies. If the government of the day hnd had its way the English money-lender would have received his interest, less income taxation; but the English courts ruled that the’ deduction could not be made legitimately. Accordingly the tax has to be paid by the company in Australia. This s.imply means- that instead of income tax on the interest earned here being collected from the English money-lender the unfortunate company has itself to pay it. The object of this bill when it was introduced in another place was to make this form of taxation impossible. I regret very much that the: provision to achieve this purpose’ has disappeared from the measure, but r have had printed and circulated a:j amendment which I hope the Senate will accept, to remedy this foolish state of affairs. If we cannot collect this taxation of interest from the English lender, and that obviously is impossible, it should not be levied on the Australian company or an individual Australian borrower who is using English money. As ‘the law stands it is farcical. I hope that the Senate will see its way, wher th-j bill is in committee, to amend the biU in the way I have indicated. The complicated nature of taxation legislation, which has been evolved principally owing to the successful efforts by various individuals and associations to avoid taxation on incomes, and which, < f course, has necessitated further amendments to an already complicated act, render the discussion by a layman of a measure such as this almost -impossible. This warecognized by the Leader of the Senate, who wisely read notes prepared for him by his technical advisers. It is almost impossible for honorable senators to discuss the provisions of this bill unless they get an outline of absurdities, such as I have alluded to, and which I shall endeavour to lop off However, in the hope that the Senate will take some steps to eliminate the obvious inconsistencie > which appear in the parent act, I have pleasure’ in supporting the second read ing of the bill.

Senator GRANT:
New South Wales

– I listened carefully to the statement of the Leader of the Senate (Senator Pearce) when moving thd second-reading of the bill. I was pleased to hear him confess that he is not a taxation expert, and that regarding the provisions of the bill he had to rely upon information supplied to him by his responsible officers. I well remember on a previous -occasion when an Income Tax Bill was under consideration the right honorable gentleman submitted a formula for the assessment of incomes that had been prepared by Mr. - now Sir George - Knibbs, the then Commonwealth Statistician. Senator Pearce did not profess to understand the formula, nor did senators, but they looked wise, and adopted it. Shortly afterwards Professor Carslaw, of the Sydney University, exposed its faults in a letter to the Sydney Morning Herald. A few days later Senator Pearce informed the Senate that the formula would not have the desired result, and he presented another, which Mr. Knibbs had assured him would be entirely satisfactory. Again honorable senators looked wise, and adopted it. It is impossible for the average person to calculate the amount of assessable income according to the formula that appears in the act. I regret very much that the method has not been simplified.

This measure is extremely intricate; but there are one or two outstanding omissions to which I intend to direct attention. Most honorable senators know that I approve of taxation being levied on the lines laid down by Henry George. Consequently I do not look with enthusiasm upon any attempt to penalize a man by means of an income tax. * Unfortunately, the Labour Government in 1915, despite opposition in the caucus-room, introduced an income tax bill containing many objectionable provisions. One was the principle of taxing a man who owned a home of his own or lived in a home belonging to his wife. I regarded that as a direct tax upon industry. I therefore attacked it vigorously whenever an opportunity presented itself, and finally, in 1023, I succeeded in having it eliminated. That is the most important thing I have accomplished during the time I have been in -this Parliament. It removed the- Federal Income Tax from the taxpayer’s home. At the time I endeavoured also to secure another amendment to relieve farmers from taxation on the increase in their live-stock, but unfortunately I could not persuade a majority of honorable senators to agree with me. Ever since the act has been in operation farmers have been taxed in proportion to the increase in their live-stock. This imposition is a direct incentive to go slow. Wo have been told, and I believe there is some truth in the statement, that this ca’ canny sentiment, or go-alow policy, has permeated the commercial, financial, and even the political life of the Commonwealth. Some people who, in my judgment, are not well informed, go so far as to say that it is evidenced also in the industrial sphere. There can be no doubt that the Commonwealth Parliament is setting a very bad example by continuing to penalise the industrious and useful section of the community. That is what this bill will do unless it is radically amended. From time immemorial there has been an income tax in Great Britain, and last year the collections from that source amounted to £300,000,000. We are not justified in following slavishly such a bad example.- It cannot be gainsaid that the conditions in the United Kingdom to-day are very unsatisfactory, and the remedy is not to be found in an income tax.

It is argued that . all taxes are paid by labour, and therefore it does not matter to labour how they are imposed. That is true so far as it goes ; but it does not convey the whole of the truth, and to that extent is mischievous and misleading. In addition to paying all taxes, labour has also to pay for the maintenance of an army of what, in the absence of a more descriptive term, I shall call “ parasites.” This measure does not propose to interfere with that undesirable position. An erroneous impression is widespread throughout the Commonwealth with respect to the incidence and the operation of the income tax. Many thousands of well-meaning, upright people honestly believe that the salaries of members ‘of the Commonwealth ParKament are exempt from Federal and State income tax. They express amazement ‘ when they are informed that the contrary is the case. - I have, never . been able to find -out why the Parliaments of the States were given the right to tax the salaries of Federal members. ‘At the proper stage I shall move a number of amendments, one of which proposes that sub-section aa of section 16 of the Principal Act shall be repealed. That section renders possiblethe taxation of increases in livestock. It is absolutely wrong to penalize the fanner in that way. In 1923 the Senate agreed to repeal the provision which permitted a man to be taxed on the value of his home. Every one must admit that the man who launches out as a pastoralist, a wheat farmer, a dairy farmer, or a mixed farmer, engages in a very strenuous occupation. Sheep farming would probably be regarded as the most attractive; then wheat farming, after that mixed farming, and finally dairying. The man who grows sheep is harassed by inclement weather, blowflies, Bathurst burr, and dingoes. He gets some excitement during the shearing season, but encounters further trouble while his wool is being transported. No civilized community should countenance the taxing of a man because he strives to the utmost extent of his powers to produce more wealth. Is he an enemy of the country? Of course he is not. On the contrary, is he not performing a very useful service? He earns his income in a legal manner. I deny that there is a moral right to rob that man of any portion of his production; yet it is done every year. The longer he works, the more trouble he takes, the greater his improvements in the breed of his sheep, and in the quality of his wool, the heavier we tax him. If that is not an example of mischievous go-slowism I am at a loss to describe it.

Let us now consider the case of the man who grows wheat. First of all, he has to go to considerable trouble to secure the necessary land. Then he has to buy machinery and oil, employ labour and ascertain where water is available. After a lot of arduous work he commences to produce wheat. We stand ofl, look at him, and say-“ What is this?” In a meek voice he replies, “ I am producing some wheat. ‘ That is evidently regarded as a serious offence, because hs is fined exactly in proportion to his production. We go further and employ capable taxation officers, who keep u. close watch upon faim to see that he is taxed to the fi lies t extent of the wealth he produces. Tha., is altogether wrong The position o( the man who engages in mixed farming ii immeasurably worse. The sheep fa,me and the wheat farmer have some spare time, but ihe mixed farmer has an ever lasting job. Every day and every night in the year his time is fully occupied. He must be- an expert in the purchase of stock. The owner of a place called Darbalara, in the Tumut district of New South Wales, after many years of careful attention to stock breeding, bred Madame Melba XT.V., the champion cow of the Commonwealth, if not of thi; world. We look him up and in effect tell him he is doing wrong, because we fine him every year in proportion to the value of the stock he breeds There te no form of go-slowism that is comparable with that. A. man reads, labours and does his best to render an inestimable service to the community, and the community fines him every years in proportion to the value of the services hn renders. My amendment “will, to some extent, relieve such a man of what in my opinion ia a very unfair tax. Machinery agents, produce agents, even some members of Parliament, characterize the man on the lend as thi backbone of the country ignoring the fact that he is but a cog in- the big wheel of modern industry. The. underpaid, sweated, intermittently employed person in the city who assists in the manufacture of the machinery which the modern farm requires, is just as much a cog in that wheel as is the fanner. They both are essential to the production of an article. Why we should seek to punish the farmer by increasing his. .taxes in .proportion to ‘ the work he does is beyond my comprehension. - Let us now ‘ come’ to the man on- the bottom rung of the primary producing ladder - the dairy farmer. The sheep farmer ‘has some spare time, although not much; the wheat farmer has less; the mixed farmer, still less; but the dairy farmer has none. In all weathers - hot or cold, wet or dry - Sundays and week days; holidays and holy days; the cows must receive attention. The life of the dairy farmer is one long round of drudgery. Yet if he pays attention to -his work, improves the breed and increases the number and the value of his herds, the Commonwealth Government says that he must pay more by way of taxation. In proportion to the value of his work to the community, he is taxed. An amendment which I propose to move later will, if agreed to, grant relief to these men. Considering that during his term of office the Treasurer has consistently underestimated the customs revenue, we may confidently expect that he has done so again this year. In the circumstances, we could well extend the exemption in order to benefit the primary producers I have mentioned. I do not propose to move that the salaries paid to members of this Parliament shall be exempted from the payment of the tax, although with a little encouragement from honorable senators on the other side of the chamber, I should do so. Under the existing legislation, incomes under £300 per annum are not subject, to taxation. Many electors are of the opinion that members of this Parliament receive the benefit of that exemption; but that is not so. In committee, I propose to move an amendment to delete from section -24, sub-section 1, of the principal act the words “ less one pound for every three pounds by which the income exceeds three hundred pounds.” That would mean that all taxpayers would receive the full benefit of the £300 exemption. In addition to the amendment which I have foreshadowed, I propose in committee to move that clause 14 be amended by inserting a new paragraph providing for the amendment of section 23- h of the- principal act by omitting the word “fifty” and inserting in lieu thereof the word “ sixty,” and after the word “ years “ the- following words : - “ and the sum of One hundred pounds in respect of the wife of the taxpayer.” The effect of my amendments would be to grant to each taxpayer an exemption of £300;- an exemption of £100 in respect of his wife, and a furtherexemption of £60 for each child. This proposal has the support of the Australian Labourparty. At a conference -

The PRESIDENT (Senator the Hon. Sir John Newlands). - Thehonorable senator will not be in order in discussing in detail at this stage the amendments of which he has given notice.

Senator GRANT:

-If we consider the matter carefully, we can come to noother conclusion than that our policy of borrowing money abroad increases our imports from year to year. Our fiscal policy must inevitably result in increased customs duties from year to year. I do not say that income taxation should be entirely abolished, but there should be no opposition to the amendments which I have outlined. The amounts received from the taxation of incomes dining recent years have been as follows : -1923-24, £11,057,555; 1924-25, £11, 136,344; 1925-26, £10,858,046; and for 1926-27, £11,126,278. The estimate for the current financial year is £9,800,000, which will probably be exceeded. Income taxation was first imposed by the Commonwealth to meet its war expenditure.In those strenuous times the peopleof Australia were prepared to submit to taxation which they would not countenance to-day. The time is opportune to review the incidence of taxation in order that a scheme may be devised whereby the burden of taxation will fall upon those best able to bear it. The amendments which I have foreshadowed will, if agreed to, assist the primary producer, the man with a family, and remove the present unsatisfactory diminishing exemption. Amended in that way, the bill would be a great improvement on the present measure. I trust that in committee my amendments will be agreed to.

Sitting suspended from 6.15 to 8 p.m.

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

[8.0]. - The debate on the second reading of this bill has been somewhat restricted owing to its technical nature, and, as it is a measure which can be more effectively debated in committee, I need not refer at length to points raised on the second-reading speeches. I wish, however, to refer to some assertions of the Leader of the Opposition (Senator Needham), who enavored to justify his opposition to the measure, on the ground that owing to our large debt the Government is not justified in remitting a portion of this form of taxation. His argument, however, concerning the Commonwealth debt, is based on wrong premises. First of all, there has been a substantial reduction in the dead-weight debt. The Leader of the Opposition pointed out that taking our dead-weight debt and our revenue producing debt, the net debt has increased by some two millions. That is quite corect but whilst the revenue producing debt has increased, the dead-weight debt has been reduced. The revenue producing debt represents money borrowed for the extension of postal buildings and services, leaving out of account, of course, money borrowed for the States, which I understand the honorable senator did not include, as that has tobe repaid by the States. The revenue producing debt not only pays interest on the capital involved, and working expenses, out also pays a fixed amount to a sinking fund, which will extinguish the debtinthelifeofthe asset. That is soundfinance. We are reducing the dead-weight or non-revenue producing debt at a very fair rate, and the revenue producing debt, as I have said, will be extinguished in a given period of years. If allthe State Labour Governments had proceeded on these lines, Australia would be in a much better financial position than she is today. The Leader of the Opposition went on to make a comparison between direct and indirect taxation, and endeavored to make it appear that the wage-earners of this country paid the whole of the indirect taxation, and that only the wealthy people paid the direct taxation. He suggested that by reducing direct taxation, the Government is relieving the burden on the wealthy and leaving the poorer section of the community still to shoulder the same financial responsibilities. The honorable senator knows quite well that, under the tariff proposals now before another place, the Government proposes reductions of revenue to the extent of £400,000 per annum. When we analyse the position to see who pays the bulk of customs duties, we find that it is not as he states. There are many persons who do not look into the figures, hut jump to the conclusion that indirect taxation is paid largely by the wage-earners of this country. If those who hold that opinion would only study the statistics supplied from time to time, and analyse the figures concerning the imports upon which duty is payable, they would see how false that argument is. A cursory glance at some of the figures is interesting. Bulletin No. 23 of overseas trade for the year 1925-26, which is the latest available, shows some interesting facts. I have taken the value of imports from that year, as given in this publication, as being approximately £60,000,000. We must remember, however, that Australia has a very large free list. Of the imports for that year, valued at £60,000,000, motor vehicles represent nearly £12,000,000. These are dutiable, but the wage earners do not pay that duty. Included in the £60,000,000 there is also nearly £4,000,000 worth of tea, on which there is no duty. Petrol and other liquid fuels represent £6,500,000. Does the worker pay the duty on those commodities? Metal manufactures of various kinds total £9,500,000, the duty on which, again is not paid by the workers. Finally we have imports of iron and steel to the value of £5,500,000, on which also the duty is not paid by the wage earners. The amounts I have mentioned represent £37,000,000 of the total imports of £60,000,000 for that year, and as I have said, there are other items which are not dutiable. If the Leader of the Opposition studies these figures he will cease to repeat the parrot cry that the whole of the customs duties are paid by the workers. He spoke also of the increasing burden of customs revenue - again, of course, on the assumption that it is borne by the workers. Let us assume that it is - which is not correct - and refer again to the Quarterly Summary of Australian Statistics issued by the. Commonwealth Bureau of Census and Statistics, bulletin No. 107, for the year 1927. In this we find a very interesting comparison. I was unable to get the figures for 1921. which the Leader of the Opposition quoted, but I find that from 1922 to 1926 the increase in the basic wage was equal to £18 4s. a year, whereas the increase in customs duties was £1 10s. 6d. per head. Assuming, as is done when fixing wages, that every wage earner is married and has a family of three children, which is altogether a false assumption, since a considerable number of men are not married and the average family of a wage earner is under 1 per cent. - the amount would be £7 12s. 6d. per year. As the basic wage has increased by £18 4s., taking the premises of the honorable senator the wages increase was more than double that which took place in the customs duties during the same period. Before the honorable senator makes such assertions, he should study the facts. If he did, he would not be so free in making them.

Question resolved in the affirmative.

Bill read a second time.

In committee :

Clauses 1 to 8 agreed to.

Clause 9 (Average years for income tax).

Senator Sir GEORGE PEARCE (Western Australia - Vice President of the Executive Council) [8.10]. - This amendment is required in consequence of the a new sub-section 11, to be added to secfirst part of amendment d, which provides tion 13 of the principal act. Amendment a means that as regards the excess of allowable deductions over assessable income, all taxpayers, whether carrying on business or not are to remain on the same equal footing as they are at present.

Clause agreed to.

Clauses 10 to 12 agreed to.

Clause 13 -

Section 20 of the Principal Act is amended by inserting at the end of sub-section 1 the words “ or as rebates based on purchases by shareholders from the company.”

Section proposed to be amended -

– (1.) In calculating the taxable income of a co-operative company there shall be deducted, in addition to amy other deductions allowed under this act. so much of the assessable income of the company as is distributed among its shareholders as interest or dividends onshares.

In addition to any other income tax payable by it, a company shall also pay income tax on - (b)the interest paid or credited by the company to any person, who is an absentee, on money raised by debentures of the company and used in Australia or on money lodged at interest in Australia with the company; and

Provided thai a company shall be entitled to deduct and retain for the use of the company from the amount payable to any of the persons referred to in paragraph (b) of this subsection such amount as is necessary to pay the tax which becomes due in respect of that amount.

Senator KINGSMILL:
Western Australia

– I intend to move an amendment to this clause which will have the effect of restoring the measure to practically the condition in which it was introducedin another place. An anomaly is perpetuated which I think is very illogical, even if it is not inequitable. Honorable senator? are aware that there are private activities in all kinds of industry throughout Australia financed to a large extent by money borrowed on debentures from Great Britain. The act, as it will stand, if the bill passes in its present form provides in the first place that income taxation shall be paid by the British lenders on the interest they receive from the Australian borrower. So far so good. Even if the position be defensible I do not think it wise to discourage private individuals from obtaining what are, after all, the necessary sinews of war for our industries for the promotion of which those companies who suffer under this legislation are formed. Furthermore, the provision in theact is futile because it does not achieve its object. It provides that the company working in Australia, which is thereby appointed a collecting agent for the taxation department, must deduct from all moneys payable to the English debenture holders the amount of income tax at which they are assessed. There are two English cases which have laid it down that this action, so far as the English courts are concerned, is

Dot permissible; and as the tax has to be paid, and as it cannot be got from the English debenture holder, the company itselfhas to pay it. That means that if money is borrowed at a certain rate of interest from the English lender he is not touched, although he is the man at whom this legislation is aimed, and the Australian shareholder in the company has to bear what is in effect additional interest on the debentures. This has always been a fairly acute question, but it has probably never been so acute as at the present time when, because of the amount of local money which is absorbed by the internal loans of the Commonwealth and through the Commonwealth, of the States, and by the many loans which are subscribed by the Australian public for municipalities, harbour trusts, and other semi-public activities, there is very little floating capital to put into private investments. Whatever the prospects mayhave been with regard to this floating capital for private use in the past, they will notbe so rosy during the next year or so. People who have had money to put into these investments will not have the same amount of cash at their disposal on account of what threatens to be a somewhat poor season in Australia. It is natural, therefore, that we must lookoutside Australia for money, and as most of the money obtained from outside is used for developmental purposes, and does not go into what honorable senators opposite might be pleased to call “big business,” the position is probably more acute to-day than it has ever been. Without racking my memory, I can refer to the MidlandRailway Company, in “Western Australia, and the Emu BayRailway Company in Tasmania that have both done so much good for their respective States, without any profits to themselves. If the provision in the act sought to tax profits, I should not have any great objection to it, but it is a tax on borrowed money at a fixed rate without any element of speculation, and thus becomes quite a different proposition indeed. In consideration of the fact that in the near future Australia is likely to want a greater proportion of this money than it has wanted in the past, I think my proposal to restore the bill to the form in which it was introduced in another place is fairly reasonable, more especially when it is designed to remove from Australian shareholders and companies working out here with English capital, the necessity for paying an additional’ tax, not on profits, but on money borrowed by them to carry on their business operations.

Senator Sir HENRY BARWELL:
SOUTH AUSTRALIA · NAT

– There is, in addition, a tax on their profits.

Senator KINGSMILL:

– Yes; this tax is in addition to the tax paid by companies on their profits, if any. The amendment is necessary to do away with a situation that is anomalous and futile, and I have not the slightest hesitation in moving -

That the words “by inserting at the end of sub-section 1 the words ‘ or as rebates based on purchases by shareholders from the company ‘ “, be left out with a view to insert in lieu thereof the words: - “ by inserting at the end of sub-section 1 the words ‘or as rebates based on purchases by shareholders from the company ‘;

  1. by omitting paragraphb of subsection 2 ; and
  2. by omitting the first proviso to subsection 2.

Paragraph b, which it is proposed to strike out, is as follows : -

  1. The interest paid or credited by the company to any person, who is an absentee, on money raised by debentures of the company and used in Australia or on money lodged at interest in Australia with the company; and

The word “ absentee “ has not the meaning usually attributed to it.It does not mean a man who has left Australia and gone elsewhere to live for the rest of his life. For taxation purposes it means a man who may or may not have lived in Australia. The proviso alluded to is as follows : -

Provided that a company shall be entitled to deduct and retain for the use of the company from the amount payable to any of the persons referred to in paragraph b of this subsection such amount as is necessary to pay the tax which becomes due in respect of that amount :

That would be quite all right if the amount were recoverable from the English lender. But that is not possible.

Senator McLachlan:

– It must be paid by the Australian shareholders.

Senator KINGSMILL:

– Absolutely. It falls back on thepersons whom I presume the Government does not desire to penalize; but it does not affect the English lender who is, I apprehend, supposed to make extreme profits out of the Australian borrowers. The act is penalizing our own people, and -in so doing is stopping the development ofthe country for which we must get money from somewhere or other. The proviso is absolutely futile.

Senator McLachlan:

– It is worse than that; it is an injustice to the Australian shareholders compared with the . foreign shareholders.

Senator KINGSMILL:

– That is so.

Senator Sir GEORGE PEARCE (Western Australia - Vice-President of the Executive Council [8.28]. - I find myself in a very difficult position, because Senator Kingsmill is attempting to restore the bill to the condition in which it was introduced in another place. Governments, however, like other people, have to recognize when they are faced by anunmovable majority. The Government felt then, and feels now, that the law should be altered as the honorable senator proposes; but, unfortunately, it was not able to convince its own supporters or the Opposition in another place.

Senator Sir Henry Barwell:

– Nevertheless the Senate must do what it considers to be right.

Senator Sir GEORGE PEARCE:

– I hope that honorable senators will not support this amendment, because it will not be acceptable in another place. The Prime Minister, the Treasurer, and other Ministers did all they could to try to alter a stubborn majority, but they failed. There was a considerable unmovable majority opposed to their proposal, and I cannot see what good would come of sending the honorable senator’s amendment to another place. I can only hope that the stern logic of facts and the arguments that have been used will filter through public opinion, and that the people will begin to realize that, after all, the Government was right in its proposal. But it is of little use to deny the fact that not only in Parliament, but outside, this proposal is misunderstood. It is made to appear and is popularly regarded as an attempt to let off from taxation the wealthy absentee shareholders of Australian companies. I have no doubt that as this debate proceeds we shall hear that view expressed in this Chamber.

However, because we fear that there is not the slightest chance of another place accepting the amendment, and because we realize that it is only a waste of time to send it on only to be rejected, the Government very regretfully feels that it must oppose it.

Senator NEEDHAM:
Western Australia

– I do not know to what extent the Leader of the Senate (Senator Pearce) will influence the opinions of Government supporters in regard to the amendment, but I feel confident that, if it is carried, it will not be accepted in another place. As I see it, the proposal is to give preference to foreign, as against English, investors.

Senator McLachlan:

– It is to right an injustice to Australian shareholders.

Senator NEEDHAM:

– I do not regard it in that light. Clearly it is intended to apply to absentee debentureholders and, in my opinion, will interfere with a reciprocal arrangement existing with Great Britain.

Senator McLachlan:

– It does not touch that point.

Senator NEEDHAM:

– So far as I can see, ihe difference between this proposal and the original provision in the bill is the difference between Tweedledee^ and Tweedledum. Britain taxes Australian investors who make profits in Great Britain. Why, then, should we not do the same in respect of company debenture-holders not resident in Australia ?

Senator McLachlan:

– At present we are unduly taxing the Australian shareholders in Australian companies.

Senator NEEDHAM:

– If the amendment is carried the revenue will suffer. It would be preferable to amend the company law.

Senator McLachlan:

– This does not touch the company law. lt has to do with international relations.

Senator NEEDHAM:

– Obviously the intention is to restore the bill to its original form by the insertion of certain words that were deleted in another place after a lengthy debate. As a matter of fact, I consider Senator Kingsmills Amendment to be double-barrelled. The honorable senator admitted that he was asking the committee to re-insert words that were deleted by another place. No honorable senator can be dogmatic in thi disscussion of a measure such as this ; but from my reading of the amendment, I am satisfied that it should not be accepted. I shall, therefore, vote against it.

Senator KINGSMILL:
Western Australia

.- Dealing first with .the warning uttered by. the right honorable the Leader of the Senate (Senator Pearce), let me say that I have evidence of a probable change of heart in another place. I understand that more than one honorable member of that chamber voted under a misapprehension as to the effect of this proposal. Let me put it also to honorable senators that the Senate is not obliged always to accept the dictum of another place. If we think that a mistake has been made there and that it could be rectified by an amendment to the bill in the committee of the Senate, clearly it is our duty to so amend it. But apart from the ethical considerations connected with this matter, let me point out that one gentleman who voted against this proposal in another place, admitted in a short walk from the Hotel Canberra to Parliament House that he had’ supported the amendment submitted there to omit this provision in the belief that it was a proposal to tax, not interest on capital, but profits earned by shareholders. If it were a tax on shareholders’ profits, I should not have a word to say about the matter. The English courts have laid it down that English absentee debenture-holders in an Australian company are not liable to pay the Commonwealth tax on interest so earned. In effect the provision in the act is a tax on the working capital of a company which secures the whole or part of its capital from English, debenture holders.

Senator GRANT:

– That is all right.

Senator KINGSMILL:

– The honorable senator may think it is. I do not. English investors do not lend money for the good of their health or sport. They expect to receive the agreed upon rate of interest. When ‘ they take up debentures in an Australian company a definite contract is made as between the company and the English debenture holders. The Commissioner of Taxation, however, claims the right to levy taxation on the interest received by the English investors, and since the English courts have ruled that it is not recoverable from the absentee debenture holder, the commissioner levies the tax on the company as the collecting agent. Therefore the burden falls upon the Australian shareholders.

Senator Sir Henry Barwell:

– And if the capital earns profits those profits are taxed in addition.

Senator KINGSMILL:

– That is so. This impost, is really a tax on working capital.

Senator Herbert Hays:

– It has not been ruled that the tax is not recoverable in Australia?

Senator KINGSMILL:

– No, and that is the reason why the provision is irksome to Australian shareholders. It affects somewhat seriously the Emu Bay Railway Company in the honorable senator’s State, because although it is a losing concern that company has to pay a tax on the interest due to the English debenture holders.

Senator Herbert Hays:

– In other words the company is not allowed to deduct from the amount of interest the tax chargeable to the British debenture holders ?

Senator KINGSMILL:

– No. It is an obvious absurdity in our taxation legislation, because while the company is authorized to deduct the amount of tax, the English courts hold that it is not recoverable from the absentee debenture holders. It is to correct this anomaly and to remove this injustice upon Australian shareholders that I am asking the committee now to agree to my amendment. Notwithstanding what the Leader of the Senate has said as to the probable fate of this amendment, if it goes to another place, I think it is well worth a trial, especially as some honorable members of that branch of the legislature have since admitted that they voted under a misapprehension as to the intention of the provision. I may »add that if we can secure the inclusion of this provision in the bill Australian investments will be much more attractive to British money-lenders. This is the more important in view of the fact that some difficulty may be experienced in obtaining in Australia the necessary capital for these concerns. I hope that the Leader of the Senate will not put undue pressure upon his supporters to defeat the amendment. He has practically .said that the present condition of affairs is indefensible. Because a week ago a majority of honorable members of another place favored the withdrawal of this provision, it does not necessarily follow that that majority exists now. They may have given the matter further consideration. If the honorable member, to whom I have referred, voted under a misunderstanding, there may be many others in a similar position.

Senator Sir George Pearce:

– No vote was taken.

Senator KINGSMILL:

– Then I am further encouraged to ask honorable senators to make another attempt to remedy what I consider is an anomaly with respect to the legislative aspect, and an injustice to Australian shareholders in companies that have raised a portion of their capital by way of English debentures. I hope that my amendment will be carried.

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

[8.47]. - I ask the honorable senator to have some regard to the embarrassing position in which the Government would be placed if the bill were returned to the other House with this provision restored. I understand that no vote was taken there, but the Government realized that there was an overwhelming majority definitely against its proposal. No one would accuse the Prime Minister of not being clear when he explains any matter. He explained this on more than one occasion, but without effect. Because one member of the House of Representatives, during a stroll in the garden, informed the honorable senator that he was under a misapprehension, the Government is not bound to assume that there has been any change of either heart or conviction. I ask hon orable senators to reject the amendment, realizing that there is an implacable majority against it in another place-

Senator Kingsmill:

– Did not the Government place itself in this awkward position?

Senator Sir GEORGE PEARCE:

– It withdrew the provision, because a majority of honorable members was definitely opposed to it.

Senator Sir HENRY BAR WELL (South Australia) [8.48].- This is a bill, the object of which is the removal ofsome of the anomalies and inequities that exist in the present IncomeTax Assessment Act. We have had an anomaly pointed out and explained clearly by Senator Kingsmill. That honorable senator, quite rightly, has moved an amendment aid asked us to agree to it. What is the position in which we find our selves? Apparently we are asked to reject thisproposal,whichwethinkisjust and reasonable, because the Government forsome reason or other saw fit to withdraw a similar provision when the bill wasbefore another place. I am not disposed to vote against my own conscience. I didnot know that the amendment of thehonorable senator was similar to the provision which was withdrawn in another place until that statement was made to-night. Two members of the other House explained the position to me, but notintermssimilartothoseinwhichit hasnow been explained. I was told that it was a tax on profits, and I agreed that the Government acted unwisely in bring ingthe matter forward; but now we are told that it is a tax on interest which has to be paid by the Australian shareholders of companies that borrow money abroad. If the honorable senator persists with his amendment I promise him my wholehearted support. If he accepts the suggestion of the Government and withdrawsit,aswasdoneinanotherplace,I shallbe sorry. I cannot see that it will place the Government in any false or embarassing position. Honorable senatorsnow know that there was a misunderstanding when the provision waswithdrawn. Surely, then, the Government would be justified it supportingtheamendmenthere, and sending it on to see if something can be done. When the matter is fully explained there may be a majority of honorable members in anotherplace in favour of it. I cannot understand any reasonable man opposing it. Iam perfectly certain that the two honorablememberswhospoketome would not have opposed it if they had realized its effect. I therefore urge the Government not to adhere to the stand it has taken up, and I suggest that Senator Kingsmill should stand firm.

Senator Kingsmill:

– That is my intention.

Senator FINDLEY:
Victoria

– I understand Senator Kingsmill to say that money is borrowed abroad to assist in the formation of companies and to aid established companies in Australia, and that when they make profits; those profits are taxed under the existing provisions of the act. We know that the individuals who receive dividends from such companies are taxed, and that the tax on profits is paid not only by the company, but also by the shareholders.

Senator Kingsmill:

– This is a tax, not on profits, but on interest.

Senator FINDLEY:

– What is the difference between borrowing money and using debentures? The object of both is to help the companies. Those who lend the money participate in the dividends of the companies.

Senator Kingsmill:

– This applies to companies that do not make profits.

Senator FINDLEY:

– Very few companies that are not sound and solid are assisted by oversea lenders.

Senator Kingsmill:

– I could mention half a dozen.

Senator FINDLEY:

– It cannot be argued that those who have either money or debentures to lend will assist companies of whose solvency and soundness they are not assured.

Senator Kingsmill:

– They have done so.

Senator FINDLEY:

– Can the honorable senator mention an oversea lender who has assisted companies in Australia and not received some benefit from them?

Senator Kingsmill:

– Certainly.

Senator FINDLEY:

– Does the honorable senator say that they have lost their money?

Sen atorKingsmill. - Yes.

Senator FINDLEY:

– When there are losses, no tax is paid.

Senator Kingsmill:

– The companies have to pay tax on the interest.

Senator FINDLEY:

– The interest, of course, has to be taken into consideration. What is the reason for this anxietyon behalf of the people, who, in the first instance, come into these propositions, not for philanthropic purposes, but to augment their incomes.

Senator Sir Henry Barwell:

– If they make profits they are taxed on them.

Senator FINDLEY:

– The honorable senator pointed out that according to a decision of the English courts, we can impose the tax on interest received by absentee debenture holders, but cannot collect it from them. The Australian Commissioner of Taxation tries to get what he and the Government think they are entitled to receive. This matter was well- threshed out in another place, and the provision then in the bill was withdrawn to meet the wishes of a majority of honorable senators, including a number of strong Government supporters. Is not the taxation department cognisant of all the facts, and is it not reasonable to suppose that the Government understood the measure when it submitted it to Parliament? The committee would be well advised to follow the example of another place, and reject the amendment.

Senator GRANT:
New South Wales

– I am rather pleased to see Senator Kingsmills anxiety to amend the principal act. He does not seem to realize that in every respect it is a tax upon industry. Why does he squeal about such a small affair as this? He appears to me to be straining at a gnat and swallowing a camel. I challenge him to point to one section of the act which does not tax industry, and penalize a man for everything that he does. So soon as a person engages in any business he is pounced upon by the tax-gatherers and fined every year in proportion to the work he does. This is an insignificant, microscopic matter. Every portion of the bill penalizes the thrifty. No man in this country legally earns an income unless he renders a service to the community! Why should a man be penalized because he renders a service to the community? If we are to have this class of taxation, why should Senator Kingsmills friends escape? Honorable senators who ask for protection should be given more and more protection and those who believe in income tax should not squeal when their friends are hit.

Senator KINGSMILL:
Western Australia

– Senator Findley asked me to quote one instance in which this tax had to be paid, even though there were no profits. If the honorable senator will investigate the affairs of the Midland Railway Company of Western Australia or the Emu Bay Railway Company of Tasmania, he will find that both companies are financed largely by debenture holders in England. Those debenture holders are not required to pay taxation on the interest they receive; but as the lax must be paid by some one, it is paid by the Australian company in Australia. Moreover, it is not recoverable by the company from the debenture holders in England. I could mention other companies aud firms which, to a great extent, conduct their operations with the aid of debentures issued to people in England. I do not blame the honorable senator for thinking that a man in England who lends money at a certain rate of interest should be taxed on that interest, irrespective of whether profits are made by the company to which the money is lent. The position would be different if there were profits ; but this is not a tax upon profits, bit upon interest. I do not ask the honorable senator to agree with me; but his attitude appears to me to be both inpolitic and unjustifiable. I shall regret it very much if the Government will persist in placing me in an awkward position. I do not like to see anyone placed in an awkward position; but I remind the committee that when the creation of awkward positions was begun, the first step was taken by the Government. It introduced a bill containing a provision which it evidently deemed to be right, a4d then withdrew that clause without testing the opinion of the chamber in which the bill was being debated. I do not feel inclined to follow that example. My amendment is equitable, and if agreed to, vill improve our existing legislation. Feeling, as I do, about my amendnent, I, as a private member, am placel in a position as awkward as that Df the Government. In my opinion, w should do what has been done many time in the past, namely, ask another pla<*<? ti reconsider a conclusion at which, in relity, it never arrived ! I consider that 3 should be false to myself as well as illorical, if I were not to ask the committee whether it is in favourof giving to another place the opportunity to express its opinion in this matter.

Senator GRANT:
New South Wales

– I should like to know from Senator Kingsmill what virtue there is in his amendment, when compared with that section of the act whichnow taxes a farmer in proportion to the value of the increase in his livestock. Why has the honorable senator remained silent year after year while that unjust legislation has been in operation ? Does he not know that from start to finish income tax is a tax on industry? Why should these persons who receive interest be exempted from paying what other citizensare called upon to pay? The principle that the more a man works, the more taxes he shall pay, seems to be generally accepted. I cannot understand why this section of the community should receive such consideration. If relief from taxation is good for them, it should be good for every one else. I oppose the amendment.

Senator HERBERT HAYS:
Tasmania

– A taxation measure introduced by a government can rightly be regarded as an important item of legislation. It, therefore, seems extraordinary that a taxation proposal which was introduced in another placeshould have been withdrawn after it had been debated for some time. But are we greatly concerned in this chamber with what happened in another place? I understand the position to be that money is borrowed from debentureholders in England and that no deduction is allowed in Australia for the interest paid to the British money-lender or debenture-holder.

Senator Kingsmill:

– That is the position.

Senator HERBERT HAYS:

– In that case, it seems extraordinary that the borrower in Australia, who has to pay interest to debenture-holders overseas, is compelled to pay in Australia income tax on interest which is transmitted to London. I take it that that is the position.

SenatorKingsmill. - That is so.

Senator HERBERT HAYS:

– Then I cannot understand why the Government should oppose the amendment, or the reason for the withdrawal of the clause in another place. I feel impelled to support the amendment.

Question - That the words proposed to be left out be left out (SenatorKingsmill’s amendment) - put. The Senate divided.

AYES: 7

NOES: 12

Majority . . . .5

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Clause 13 (Taxation of Companies).

Senator GRANT:
New South Wales

– It was my intention at this stage to move the amendments I foreshadowed in ray second-reading speech, namely to exclude increases in live stock from taxation ; to provide that the exemption of £300 shall not be diminished; and also that further exemptions be granted in respectof wives and children ; but in view of the well-known opposition of this committee to these reforms, I shall not take up time by dividing the committee. I shall avail myself of a more opportune time to move those amendments.

Clause agreed to.

Clauses 14 and 15 agreed to.

Clause 16-

Section twenty-six of the principal act is repealed and the following section inserted in its stead: - “ (2) In addition to any deduction which may be made under the last preceding subsection in respect of any loss, a taxpayer shall be entitled to a deduction of any similar loss, or of part of any similar loss, incurred by him in any of the four years next preceding the year in which the income was derived, if no deduction of that loss, or (as the case may be) of thatpart of that loss, is allowable, under this section, in assessments for financial years preceding that for which the assessment is made :

Provided that -

no deduction shall be allowed of any amount of loss which would have been allowable as a deduction in an assessment for any financial year preceding the financial year commencing on the first day of July, One thousand nine hundred and twenty-seven, ifthe provisions of this section had been in force for the purposes of assessments for all financial years subsequent to the financial year commencing on the first day of July, One thousand nine hundred and twenty-two, and had applied only to losses incurred and income derived on or after that date, or on or after the commencement of the accounting period substituted for the financial year commencing on that date under sub-section (3) of section thirtytwo of this act.

Section proposed to be amended -

Where a taxpayer makesa loss in any year in carrying on a business either alone or as a partner with other persons, he shall be entitled to deduct the loss from any assessable income derived by him in that year from other sources. The loss shall be deducted in the first place from any income from personal exertion of the taxpayer, but if that income does not amount to the lose to be deducted, the difference shall be deducted from the taxpayer’s income, if any, derived from property in the year mentioned.

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

[9.16]. - I move -

That the following words be added at the end of proposed new sub-section 2 b : - “ and no amount of loss, incurred prior to the first day of July, One thousand nine hundred and twenty-six, or prior to the commencement of any accounting period substituted under sub-section (3 ) of section thirty -two of this act for the financial year commencing on that date, shall be taken into account under sub-section (8) of section thirteen of this act in ascertaining the excess of allowable deductions for the year in which the loss was incurred, which would not have been allowable as a deduction in the assessment of income derived (prior to that date or that commencement) in any financial year or accounting period subsequent to the year or period in which the loss was incurred, if the provisions of this section had been so in force and had so applied.”

As it may be somewhat difficult for honorable senators to follow the meaning of the amendment, let me explain that it is to achieve the same result in regard to losses incurred prior to the 1st July, 1926, as the proviso to sub-section 1 achieves in regard to losses incurred on or after the 1st July, 1926. That is to say, it is to prevent the losses from being brought into account twice in ascertaining the average income by reference to which the rate of tax is to be calculated. As the provision stands there will be a double deduction in ascertaining such average income for the purposes of assessments for the financial years 1927-28 to 1930-31, of so much of any loss incurred prior to the 1st July, 1926, as is deductible under sub-section 2 of the new section in the assessments for those years. This position, which will be rectified by the amendment, did not become apparent until the new section had been applied, by way of test, to a number of specific cases.

The explanation of the position is as follows :- Section 13 (8) provides that the excess of allowable deductions over the assessable income of any year shall be taken into account in calculating the average income. If a taxpayer makes a business loss in a year in which he has no income from other sources the amount to be taken into account, as the section 13 (8) excess for that year, in calculating the average income of the next four years will be, leaving out of consideration the statutory exemption, the amount of that loss. Under sub-clause 2 of new section 26 as it- stands, however, the amount of that loss will be “carried forward as a deduction in ascertaining the taxable income of the next year or of the next two, three, or four years, as the ease may require. As deductions in ascertaining taxable income are. also deductions in arriving at the average income, it follows that, unless the case is provided for, there will be two deductions in respect of one loss in arriving at the average income, namely, the deduction of the “ Section 18 (8) excess” for the year of loss and the deduction consequential uponcarrying forward thatexcess as an allowance from the taxable income of the succeeding year or years. The proviso to sub-section 1 of new section 26 was inserted to obviate this duplication of deductions, but as the new section is to apply for the first time in assessments of income derived in the year 1926-27, that proviso is limited to losses incurred after the 1st July, 1926, and hence is ineffective to prevent a double deduction of losses incurred prior to that date, some of which losses will,in certain circumstances, be carried forward under sub-section 2 as deductions in ascertaining the taxable incomes of the years 1926-27, 1927-28, 1928-29, and 1929-30. The following example will illustrate the position: - A taxpayer, who commenced business during the year 1925-26, made a loss of £5,000 in that year and a profit of £10,000in the year 1926-27. As the provision stands his average income for 1926-27 would be calculated as follows : -

Hence there is no rate to apply to the taxable income of £5,000. In other words, although the taxpayer’s net income for the two years was £5,000, he would entirely escape tax. Under the proposed amendment the average income would be calculated as follows: -

Taxpayers would be assessed on £5,000 at the rate applicable to £2,500. It is not every loss incurred in the four years prior to the 1st July, 1926, that is deductible in assessments of income derived in the years 1926-27 to , 1929-30, and where a deduction is allowable in those assessments in respect of any such loss, it is not necessarily the whole of the loss that is deductible. The proposed amendment aims at the elimination from the “ Section 13 (8) excess “ of the year of loss of that part only of the loss which is allowable as a deduction in those assessments. That is to say, a taxpayer who commenced business in 1924-25, made a loss of £5,000 in that year, a profit of £1,000 in 1925-26, and a profit of £10,000 in 1926-27. Under the provision as it stands his average income for 1926-27 would be calculated as follows : -

The taxpayer would be assessed on £6,000 at the rate applicable to £666. Under the proposed amendment the income for 1926-27 for averaging purposes would be:-

The taxpayer would, -therefore, be assessed on £6,000 at therate applicable to £2,000. The £5,000 loss of 1924-25 becomes £1,000, because £4,000 of that loss is deductible, under new sub-section 2, proviso b, from the 1926-27 income.

Amendment agreed to.

Clause, asamended, agreed to.

Clauses 17 to 32 agreed to.

Title agreed to.

Bill reported with an amendment.

Standing Orders suspended; report adopted.

page 2853

LAND TAX BILL

Bill received from the House ofRepre sentatives.

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

[9.35].- I move-

That so much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through all its stages with out delay.

My purpose in moving this motion is to enable the second reading of the bill to be moved to-night. I do not ask the Seriate to go on with the debate on the second reading;but it is desirable that this step be taken so that we may have business to go with to-morrow.

Senator NEEDHAM:
Western Australia

– My attitude towards motions for the suspension of the Standing Orders is well known; but I realize that there comes a time when, in order to facilitate the passage of legislation and enable the business of the session to be brought to a close, the suspension of the Standing Orders is justifiable. I realize that this is one of those occasions, and, therefore, I offer no objection to the motion.

Question so resolved in the affirmative.

Bill (on motion by Senator McLachlan) read a first time.

page 2854

INCOME TAX BILL

Second Reading

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

[9.39]. - I move -

That the bill be now read a second time.

This bill provides for the rates at which income tax shall be levied for the financial year 1927-28. These represent a reduction of 10 per cent. in the rates of tax formerly in force in the case of taxpayers other than companies. No reduction in the rate payable by companies is being proposed. The former minimum amount of tax of £1 is also being reduced to 10s. The main difference between the proposals for the present year and those of former years is the specification of the rates of tax to be paid by a trustee in respect of income assessable to the trustee in his representative capacity. The necessity to specify the rates of tax payable by a trustee has arisen through a decision of the High Court in the case of Kuhnel v. Deputy Commissioner of Taxation, in relation to the war-time profits tax. In that case a trustee company was trustee for the estate of a shareholder in a company, and the court was asked tostate the amount of income tax payable by the company in respect of the value of the interest of the estate in the profits of the company which were subject to war-time profits tax. The court decided that the tax payable should be calculated by reference to the ratepayable by the company on the assumption that the interest in the profit belonged to it. . This meant that, when income tax was payable in respect of any income of a trust estate, the rate of tax would vary according as the trustee happened to be a company or an individual. If the trustee were a company the rate of tax would be1s. in the £1; if he were an individual the rate would be the rate applicable to the income of an individual, which might be more or less that1s. in the £1. By this bill that anomaly is now being rectified.

Debate (on motion by Senator Needham) adjourned.

page 2854

LAND TAX BILL

Second Reading

Senator McLACHLAN:
Honorary Minister · South Australia · NAT

– I move -

That the bill be now read a second time.

This is a short bill to give effect to the policy of the Government as announced in the budget to grant taxation relief by reducing the rate of the land tax by 10 per cent. It presents none of the complications of the measure that the Senate has been considering during this sitting. It is a straightout cut of 10 per cent. in the present rate. The Commonwealth Land Tax was first imposed in 1910-11, the rate of the tax being1d. where the taxable value was £1, increasing uniformly by l/30,000d. with each increase of £1 in the taxable value until a maximum rate of 6d. was reached. This rate remained constant in further increases in the taxable value. In 1914-15 the rates were increased by approximately 30 per cent. The uniform increase was l/18,750d. instead of l/30,000d., and the maximum rate was increased to 9d. In 1918-19 the rates of tax were increased by 20 per cent. This was done as a war measure. In1922-23 they were reduced by 20 per cent. The rate applying last year was thus that which was imposed in 1914-15. The Government now proposes to make a reduction in existing rates of 10 per cent. This reduction in the rate of tax, together with the other concessions outlined in the budget, and dealt with in the Land Tax Assessment Bill is estimated to result in the actual collectins for this year being £445,900 less than those of last year. It may interest honorable senators to learn that the actual collections in recent years have been: -

Whatever may have been the original intention, the fact now is that the land tax is a revenue measure, and its effect on the breaking up of estates is negligible. The reason for the reduction in the rate is that the Government found it possible in framing the budget for this year to finance the Commonwealth with less taxation than it received last year, and, as the reduction of taxation has such beneficial effects on trade, commerce, and industry, it was decided to give relief in both land tax and income taxes to the fullest extent possible. The formula: laid down in the Land Tax Acts of earlier years are not being altered, but the bill now before the Senate provides that, notwithstanding anything contained in the existing law, the land tax payable in the future shall be the present rates less 10 per cent. This is considered to be the simplest way of providing for the reduced tax now desired.

Debate (on motion by Senator Needham) adjourned.

page 2855

ESTIMATES AND BUDGET PAPERS, 1927-28

Order of the day for the resumption of the debate (on motion by Senator Sir William Glasgow), “That the papers be printed,” read and discharged.

page 2855

ADJOURNMENT

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

[9.47]. - I move-

That the Senate do now adjourn.

As honorable senators areaware, there is a function at Government House to-morrow, and as some will no doubt wish to attend, it is proposed that the “Senate shall rise at 1 o’clock; and not reassemble in the afternoon.

Question resolved in the affirmative.

Senate adjourned9.48 p.m.

Cite as: Australia, Senate, Debates, 8 December 1927, viewed 22 October 2017, <http://historichansard.net/senate/1927/19271208_senate_10_117/>.

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