Senate
7 August 1930

12th Parliament · 1st Session



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

page 5488

PUBLIC ACCOUNTS COMMITTEE

Senator O’HALLORAN, as Acting Chairman, brought up the report of the Joint Committee of Public Accounts on Tasmania’s Disabilities, togetherwith a copy of “The Case for Tasmania 1930.”

Report ordered to be printed.

page 5488

PUBLIC WORKS COMMITTEE

Senator REID brought up the report of the Parliamentary Standing Committee on Public Works, togetherwith minutes of evidence relating to the proposed establishment of an automatic telephone exchange at Arncliffe, New South Wales.

page 5489

PAPERS

The following papers were presented : -

Development and Migration Act - Development and Migration Commission - Report, with appendices, for period January, 1929, to 30th June, 1930.

Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance No. 12 of 1930 - Housing. Buildings of temporary character, Civic Centre,. Canberra - Statement respecting.

page 5489

QUESTION

TARIFF

Fine Woollen Fabrics

Senator DALY:
Vice-President of the Executive Council · SOUTH AUSTRALIA · ALP

– On the 10th July Senator Cooper asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. Is it a fact that, owing to the incidence of the present high rate of tariff, fine wool dress fabrics have risen in price to the extent of between 18s. and 20s. per dress length?
  2. If so, will not such an increase in price have the effect of creating a greater demand for artificial fabrics, which Would be, to a certain extent, to the detriment of the wool industry in Australia?
  3. To what extent are fine wool fabrics of a weight of 3 oz. and 4 oz. per square yard manufactured in Australia?

I am now able to furnish the honorable senator with the following information: -

  1. Inquiries made indicate that prices of the imported article have been increased to the extent of between 15s. and 20s. per dress length.
  2. While it is considered in some quarters that high prices of light wool fabrics may have the effect of increasing the demand for artificial silk and/or cotton fabrics, the general opinion appears to be that it is too early yet to speak definitely on this aspect.
  3. Three mills arc at present manufacturing light wool fabrics of the kind indicated, and another mill will shortly be producing them.

page 5489

QUESTION

CARBURETTORS

Manufacture in Australia.

Senator DALY:
ALP

– On the 29th July Senator Carroll asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. How many companies are engaged in the manufacture of carburettors in Australia?
  2. Where are the factories of the companies so engaged situated ?
  3. Who are the directors, or, alternatively, tbe managers of the companies concerned?
  4. How many employees are engaged in the Industry ?
  5. What amount per annum is being paid in salaries and in wages?

I am now able to furnish the honorable senator with the following information: -

  1. Two, comprising one partnership and one limited company. The latter assembles carburettor parts that are manufactured by four other firms.
  2. The partnership address is Park-road, Glebe, New South Wales. The address of the company is 21 Victoria-avenue, Woollahra, New South Wales.
  3. The directors of the limited company are Jessel A. Alexander (chairman), Lucien L. Cunningham, John Crosby, Alexander B. Shaw, David E. Iveson, Alfred E. Dobson, Henry L. Smith.
  4. The company employs two permanent aud two temporary hands with a part-time secretary. The partnership is unable to state the number of hands and wages paid as none of the employees is engaged in the manufacture of carburettors exclusively.
  5. £540 per annum in respect of employees referred to in reply to No. 4 plus an approximate expenditure of £173 for temporary and intermittent labour.

page 5489

QUESTION

FEDERAL CAPITAL

Building By-laws.

Senator BARNES:
Assistant Minister assisting the Minister for Works and Railways · VICTORIA · ALP

– On the 24th July, Senator H. E. Elliott asked the following questions, upon notice -

  1. Will the Minister make inquiry as to whether an application has been made on behalf of. a tenant or occupier of premises at Civic Centre, Canberra, for permission to erect a shed of a temporary nature on property occupied by him?
  2. What is the size of the proposed shed?
  3. Is it not a fact that in Melbourne similar erections may be permitted so long as tha temporary buildings are isolated?
  4. What is the reason why such sheds cannot be erected at Civic Centre?
  5. What is the estimated cost of such shed - (a) in galvanized iron; (b) in material as prescribed hy the by-laws or regulations applicable to the Territory?
  6. In view of the temporary nature of the proposed structure, why cannot the by-laws be amended so as to permit of such temporary erections?
  7. Does the Minister recognize that such restrictions must prevent the progress of Canberra?
  8. Have tenants already erected such sheds or timber and galvanized iron?
  9. Is the fact that certain tenants have complied with the demands of the authorities in this respect good ground for refusing reasonable requests by others?
  10. Has the Home Affairs Department directed, or does it propose to direct, the removal of such sheds by such tenants?
  11. What loss will be inflicted on such tenants by such directions, if any?
  12. What is the reason for inflicting such a loss upon the tenants?

I have now been supplied with the following answers by the Minister for Home Affairs : - .

  1. As application was made to erect a galvanized iron shed. It was not intimated that this was to be temporary in character.
  2. The proposed dimensions were 10 feet x 10 feet x 8 feet.
  3. I am not in a position to say.
  4. Because they do not comply with the provisions of the Canberra Building Regulations, which prescribe external walls of brick, stone, concrete, or the like, and fire-resisting construction. 5. (a) £29; (b) £40. A concrete floor is estimated to cost £6 10s. additional in each case.
  5. It is not considered advisable to amend the regulations and admit of construction of an inferior description in Canberra’s principal business centre.
  6. It is not thought that any serious handicap is imposed by the existing regulations. Moreover, the regulations were in force at the time the leases were taken up.
  7. Yes. The action was taken without authority, and contrary to the conditions of the leases.
  8. The conditions of the leases at Civic Centre require compliance with the building regulations, and certain of the lessees have complied therewith. As there is no present intention of altering the leases, it is not thought unreasonable or inequitable to refuse permission to other lessees to erect sheds contrary to the provisions of the regulations. In fact, lessees who have complied would have strong grounds for complaint if the standard in the quality of building were to be reduced in the same subdivision.
  9. The attention of lessees who have erected, or permitted the erection of, sheds contrary to the requirements of the Canberra Building Regulations and without authority, has been invited to the conditions of their leases, and they have been requested to cause the removal of the sheds.
  10. I am unable to say what loss, if any, would be involved, but as the tenants contravened the conditions of their leases, any loss they may incur is their own responsibility. 12. See replies to Nos. 4, 6, and 9.

page 5490

IMPERIAL CONFERENCE

Agenda Paper

Senator DALY:
Vice- President of the Executive Council · South Australia · ALP

by leave - For the information of honorable senators, I desire to make a statement regarding the business to be transacted at the forthcoming Imperial Conference. The British Government has been in consultation with the Dominion Governments respecting the preparation of an agenda for the Conference, with the result that a consider able number of matters have been listed for discussion, and the inclusion of others is under consideration. While the agenda is not yet complete, it has reached a stage which enables me to make a progress statement to the Senate. It has been agreed that the subjects for discussion shall be grouped under the following three main heads: - (1) Inter-imperial relations; (2) foreign policy and defence; and (3) economic.

When dealing with inter-imperial relations, the Conference will consider particular questions arising out of recommendations of the recent Conference on the Operation of Dominions Legislation. That body was constituted in pursuance of a resolution passed at the Imperial Conference of 1926, and consisted of a committee of experts representative of Great Britain and the dominions. The Commonwealth Government was represented by Sir Harrison Moore, and his report, together with the report of the conference itself, has already been made available to honorable senators. The report of the conference specially mentions certain matters as requiring further examination, namely, nationality, including the status of married women, and other questions arising out of the report of the InterImperial Relations Committee of the Imperial Conference of 1926. These questions will accordingly be further examined at the forthcoming Imperial Conference.

As regards foreign policy and defence, the agenda will include questions relating to the development of a general peace policy, including the reduction and limitation of armaments. Various aspects of defence, and also any special questions connected with foreign policy which may require examination will be considered.

On the economic side of the conference, a large number of subjects has been suggested for discussion. This part of the work of the conference is of special importance to the dominions because of the need for developing their external trade, and for fostering closer trade relations between the various members of the British Commonwealth of Nations.

The general question of empire trade, including capital investment, the effect of tariff changes, and the extent and effect of inter-imperial tariff preferences, and also of other factors such as cartels, &c, will form the subject of a general review and discussion.

In the desire to explore all possible means of assisting the marketing of Australian commodities, we have asked the British Government to include in the agenda the question of the bulk purchase of dominion products, and price stabilization.

Consideration will be given to the question of the development of inter-imperial trade by means of trade-commissioner services, exhibitions, and general publicity. The whole question of oversea settlement is tobe considered, and the past and future work ofthe Imperial Economic Committee, the Empire Marketing Board, and the Imperial Institute will be discussed. Questions relating to co-operation in matters of agricultural research, forestry, and minerals have also been included in the agenda.

Under the head of “ Transport and Communications” there will be included a review of the work of the Imperial Shipping Committee, and the Oversea Mechanical Transport Council, a survey of the adequacy of existing steamship services, and the development of civil aviation, cables, radio, broadcasting, and postal and news services. Consideration will also be given to the recommendations contained in the report of the Conference on the Operation of Dominions Legislation in regard to merchant shipping.

It is proposed, concurrently with the Imperial Conference, to hold a subconference to deal with questions relating to industrial standardization, and to consider the report of a sub-conference of representatives of government ‘departments administering research. Dr. Rivett, Chief Executive Officer of the Council for Scientific and Industrial Research, will ‘be in London at the time, and will represent the Commonwealth at this sub-conference. It is proposed to ask the sub-conference to consider also the question of wool research. This is a matter of very great importance to Australia, and presents scope for much useful work in regard to both the productive and the manufacturing processes.

Honorable senators will observe that the proposed agenda covers a very wide range of subjects, and that those sub jects are, for the most part, of vital concern to all members of the British Commonwealth of Nations. The Government hopes that the deliberations of the conference will lead to a better understanding of the problems confronting the various parts of the Empire, and provide a valuable contribution to their solution.

page 5491

ACTS INTERPRETATION BILL

(No. 2).

Motion (by Senator Daly) - by leave - agreed to -

That leave he given to introduce a bill for an act to amend the Acts Interpretation Act. 1901-1918, and the Acts Interpretation Act 1904-1916.

Bill brought up by Senator, Daly, and read a first time.

page 5491

QUESTION

TIMBER DUTIES

Formal Motion For Adjournment

The PRESIDENT (Senator the Hon, W Kingsmill:
WESTERN AUSTRALIA

– I have received a communication from Senator Colebatch intimating that in accordance with Standing Order 64 (1) he intends to move the adjournment of the Senate to discuss a definite matter of urgent public importance, viz., “ The grave injustice done to certain individuals and the community generally because of ther action of the Minister for Trade and Customs in imposing increased duties of customs on the importation of certain classes of timber, such increased duties having been imposed in opposition to the recommendation of the Tariff Board, and, further, to urge upon the Government the amending of the tariff schedule in question. before the rising of Parliament, in order that these injustices may be removed”. Is the motion supported?

Four honorable senators having risen in their places,

Senator Sir HAL COLEBATCH (Western Australia) [3.14]. - In accordance] with the letter that I have forwarded to the President, I move -

That the Senate at its rising adjourn till 9 o’clock a.m. on Friday, 8th August.

I regret the necessity for this motion. I realize that in occupying even a short time of this Senate on what it is expected and hoped willbe the last daybut one of its present sitting, I am taking upon my shoulders a considerable responsibility. I should not. be justified in doing that unless I were prepared to demonstrate the accuracy of the statements made in my motion - (1) That a very grave injustice has been done: (2) That it is competent now for that injustice to be removed, but that unless it is done today or to-morrow it cannot be removed : (3) That this is the only method open to the Senate for raising the subject.

The tariff schedule, at which my criticism will be directed, was tabled on the 26th July, and it is within my knowledge that from that day up to, I might . say, the present moment, the strongest possible representations have been made to the Government for the purpose of informing it fully of the whole of the circumstances, and of inducing it to redress an action which it is felt must have been taken in ignorance of the whole of the facts; an action upon which the Minister for Trade and Customs must have been misled. So far there is no indication of the Government of retracting.

It may be desirable to take a brief survey of the methods by which the duties upon oregon have been increased from 6d. a 100 super, feet to the present tariff charge of 12s. 6d. Oregon is a timber that is worth about 4s. a 100 super, feet, f.o.b., in the country from which it is imported. In most instances these duties have been imposed - and for this the present Government is in no way to blame - in opposition to the recommendations of the Tariff Board, also in opposition to all expert timber opinion. It is well to remember that, in addition to the tariff, there exists t natural protection of about 4s. a 100 super, feet, accounted for by freights and charges.

Up to 1914 the tariff was 6d. a 100 super, feet. In 1916 the Interstate Commission heard evidence following upon a request, for an increase in the tariff, and it found that there was no justification for such an increase. In 1920 the tariff was increased to 4s. a 100 super, feet, and I have been unable to discover that that increase was the result of any recommendation following upon inquiries. In 1925 a request was made for a further increase and the matter was referred to the Tariff Board, which, after careful investigation, refused to recommend any increase. In 1927 pressure was brought to bear on the Government and the matter was again submitted to the Tariff Board, with the result that, with obvious reluctance, as may be gathered from its report, the board recommended that the duty should be increased to 5s. 6d. a 100 super, feet. However, the then Minister for Trade and Customs increased it to Ss., and at that, figure it remained until the new schedule was tabled on the 26th July of this year, when it was increased to 12s. Gd. Three days after that increase the following letter was addressed to the right honorable the Prime Minister, by the chairman and secretary of the Sydney and Suburban Timber Merchants Association : -

Tariff on Oregon (Douglas Fir.)

We desire to bring under your notice the unjust treatment accorded to the members of this and similar associations, and the remarkable manner in which the question of the duties on junk oregon timber has been handled by your Government.

In April last, there was submitted to the Acting Minister for Trade and Customs recommendations and resolutions from the conference of sawmillers, timber merchants, box manufacturers and importers held at Canberra from the 2nd to 4th April, 1930. These resolutions included inter alia the following recommendation for duties on “ Timber sawn n.e.i. in sizes 12 in. by 10 in. (or its equivalent) and over, Douglas Fir (Pseudotsuga Taxifolia), general tariff, 12s. Od. per 100 super, feet “.

As you are aware, in all tariffs in the past 30 years, the base size has been 12 in. by 6 in. (or its equivalent) or over, and the existing duty at the date of the resolution was Ss. per 100 super, feet.

We wish to point out that with the exception of one company having a capital of £200 no representative of timber merchants or importers in New South Wales, and no representative timber merchants of South Australia or Queensland were present. Further, the conference was conducted without their knowledge.

Your Government, on the 10th April, 1930, requested the Tariff Board to arrange a conference with a view to discussing, inter alia, this proposal. Such conference was duly convened and held in Melbourne from the 5th May to 15th May, and the representations truly covered every interested party, including forestry experts, architects and builders.

The Tariff Board, on the 10th June, 1930, delivered its report and recommendation, and on this particular item in question stated at page 29, as follows: -

After having given their utmost consideration to the matter from all aspects, the board is of the opinion that an increase in the present rates of duty on undressed Oregon in sizes 12 in. by 6 in. (or its equivalent) or over would be neither justifiable nor desirable.

Dealing with the question of the change in size of 12 in. by6 in. (or its equivalent) to 12 in. by 10 in. (or its equivalent) on page 30 of that report, the board states -

Reviewing the whole of the circumstances, the board is of the opinion that any advantage which might be derived from the change would be far outweighed by the disadvantages, and therefore recommends against any alteration in the existing minimum junk size, viz. 12 in. by 6 in. (or its equivalent).

The Government insofar as this item was concerned on the 19th June, 1930, adopted completely the recommendation of the Tariff Board and tabled in the House duty at 8s. per 100 super, feet on 12 in. by 6 in. oregon (or its equivalent) and over.

This duty remained in operation until the 26th instant, and with all due deference, and with great regard to your high position, we respectfully ask: -

During the time from the adoption by the Government of the Tariff Board’s report, until the issue of the schedule last week increasing the duties to 12s. Oil. and altering the size to 12 in. by 10 in. and over, are the facts not as follow : -

  1. That the same interested parties responsible for the resolution which your Government rightly referred to the Tariff Board for report have besieged Canberra and brought pressure to bear on the Government to sweep aside the Tariff Board’s report and adopt their own recommendation, notwithstanding that ‘ it was the subject of a fortnight’s conference with the Tariff Board, and was swept aside by the board “ as undesirable and unjustifiable”?
  2. That during that time no representative whatever of the opposing interests was consulted in any way?
  3. That amongst the contending interests for the original resolution are merchants and importers who on every occasion for the last twenty years have opposed and given sworn evidence against increased duties on rates which varied from 6d. to 8s. now are the advocates of the increased duties, purely because of their holding of stocks which are duty paid ?

We respectfully ask you, sir, if it is equitable, just, or morally right that a proposition which had been heard and analysed by the Tariff Board at the request of the Government, and, which, in due course, endorsed that report by giving it the force of law, should bc swept aside and adopted in the original form put up by the said interested parties.

What inferences can possibly be drawn in the light of the facts set out above?

Yours faithfully,

The Sydney and Surburban Timber Merchants Association

  1. E. Heath, President.
  2. H. Corke, Secretary.

If honorable senators will turn to page 27 of the Tariff Board’s report dated the 10th June of this year they will find a statement to the effect that the quantity of oregon then in stock or afloat was estimated to be 63,000,000 super. feet. It must be well within the knowledge of all honorable senators that, because of the prevailing depression and the almost complete cessation of building operations throughout Australia, huge stocks of timber of that kind would be a considerable burden upon those who hold them. The duty has been increased by 4s. 6d. per 100 super feet. As a matter of fact it is more than 4s. 6d. The alteration in sizes from 12 in. x 6 in. to 12 in. x 10 in., makes it probably as much as 6s. per 100 super. feet. If one takes the mean between the two sizes and puts the increase at 5s., which I am informed by those who are interested in the trade is below the actual figure, this increased duty means an increase of not less than £157,000 in the value of oregon in stock. From this it will appear that the action of the Government is tantamount to driving out of business those timber merchants who do not hold stocks of oregon, because it will be utterly impossible for them to carry on with these huge stocks of that class of timber in Australia - huge when one considers the limited market now available - in the hands of persons who paid the lower rate of duty. On page 29 of the report of the Tariff Board there is reference to the application for increased duty, referred to in the. letter which I have just quoted. On that point the board states -

After having given the utmost consideration to the matter from all aspects, the board is of the opinion that anincrease in the present rates of duty on undressed oregon in sizes 12 in. x 6 in. (or its equivalent) and over, would bo neither justifiable nor desirable.

The next paragraph in the board’s report deals with the application for an increase in size of bulk timber, and states -

The proposals under discussion at the conference embodied a provision that the minimum size of junk oregon - at present 12 in. x -6 - in. (or its equivalent) - should be increased to 12 in. x 10 in. (or its equivalent). It was claimed that one of the objects of the proposal to increase ‘the size was the provision of more, labour in Australia.

This is important in the light of what actually has been done. The report continues

Practical timber-millers, including some of those who supported the proposals, agreed that the extra labour would be negligible. The board is satisfied that the principal object of the proposed size increase was to place a further obstacle in the way of importation of oregon.

On the following page the Tariff Board states :-

Reviewing the whole of the circumstances, the board is of the opinion that any advantage which might be derived from the change would be far outweighed by the disadvantages, and it therefore recommends against any alteration in the existing minimum junk size, viz., 12 in. x 6 in. (or its equivalent).

The following paragraph of the report deals with the question of the duty on timber of smaller sizes. It sets out that a general tariff of 14s. on timber undressed, in sizes of 7 in. x 2£ in., or its equivalent and upwards, and less .than 12 in. x 10 in. or its equivalent, would effectively prevent importations, and, therefore, favours its adoption. The importance of this recommendation is that it would be sufficient to prevent the importation of timber in smaller sizes. But what has happened? The Government has ignored the report of the board in regard to the duty that should be imposed on large-sized timber - it increased the duty from 8s. to 12s. 6d. and the size from 12 x 6 to 12 x 10 and then proceeded to adopt the recommendation of the Tariff Board with respect to the duty on timber of smaller sizes. The Tariff Board stated that a duty of 8s. per 100 super, feet on large and of 14s. on small timber would prevent the importation of the latter, and thus provide employment for Australian workmen. The whole anxiety of the Government, and of those pressing it, has been to secure this increased duty in the interests of those who hold big stocks. The Government did not bother its head about the extent to which it was departing from the recommendations of the Tariff Board. A duty of 14s. on the small timber is of no use when the duty on the large sized timber is 12s. 6d. instead of 8s. per 100 super, feet, as recommended by the board. It means that all the oregon now brought in will be of the smaller sizes en which a duty of 14s. will be imposed, so that Australian workmen will be deprived of em- .ployment. My contention that a grave injustice has been done has been fully substantiated. In the first place, the bona fide timber merchants were not consulted, except by the Tariff Board, whose view the board upheld. Behind its back heavy duties have been imposed which will put many merchants out of business, because their competitors have very large stocks on which duty has been paid at the lower rate. In the second place there is the grave injustice to the community of increasing the duty which will inevitably mean that users will be charged an excessive price, and that the Government will not derive any benefit in the form of customs revenue. Money will be taken out of the pockets of the people. It will result in increased building costs, and there will be a further decrease in building activities, thus causing many engaged in the building trade to be thrown out of employment. Thirdly, we have this ridiculous “mess-up” resulting from the single-minded anxiety of some one to give preference and advantage to those who hold large stocks. The Government adopted the Tariff Board’s recommendation in the case of timber of smaller sizes, and ignored altogether the recommendation of the board that a duty of 8s. should be imposed on the big timber. Obviously, the duty of 14s. is of no use at all in the circumstances, and consequently the Australian workmen will be deprived of employment.

There is only one other point with which I wish .to deal. On many occasions I and other honorable senators have raised the strongest possible protest against the system under which customs duties are collected month after month, and, as will be the ease, year after year, without the representatives of the people having a voice in the matter. The Minister for Trade and Customs (Mr. Fenton) has become a complete dictator. In Australia we live under a more despotic system than prevails in any other country. In 1904, not long after the first Customs Act was passed, attention was directed to section 226, which provides that -

No proceeding whether against an officer or otherwise for anything done for the protection of the revenue in relation to any tariff or tariff alteration proposed in Parliament shall except as mentioned in the next section be commenced before the close of the session in which such tariff or tariff alteration is proposed.

The comment on that section at the time was that it was novel to Australian legislation and contrary to the legislation of any other country. Away back in 1904, when that provision was passed, no one ever dreamed of the monumental abuses that have been carried out under it. No one thought for a moment that Parliament would adjourn from time to time, as is now the custom, that sessions would be carried on indefinitely, and that customs tariff schedules brought in in this way might continue in operation and be collected without the representatives of the people being consulted. The present system is a direct attack upon the powers of this Senate. The majority in the House of Representatives can dictate anything to the Government. but the Senate - the only place in which the rights of the smaller States can be protected - cannot do anything until tariff schedules are brought before the chamber for our consideration. By withholding them from the Senate, the smaller States are deprived of this most essential protection which the Constitution intended to give them. Constitutional points are likely to arise if this iniquitous practice is persisted in. Section 6 of the Constitution provides that there shall be a session of the Parliament once at least in every year. High constitutional authorities contend that that section means exactly what it says; that there shall be a session and not a part of a session in every year. It is quite possible that the tariff protection which this and preceding governments have afforded may not be quite so sound as some anticipate. The opinion is held by high constitutional authorities that if any person chose to import goods in respect of which a prohibition has recently been imposed, then action could not be taken against him for smuggling in defiance of the law. Section 226 of the Customs Act would cease to have any protective effect.

I am sorry that I have occupied the time of the Senate so long; but I shall conclude by reading the opinion of Professor Marshall, who for the last half century has been regarded as one of the world’s foremost authorities on the subject of customs tariffs. He says -

Tariffs start on the basis of simplicity: vested interests press and tariffs become intricate. Any tariff, taxation, or other matter that becomes intricate becomes corrupt-not perhaps from the cash point of view - but from the corruption of mind of the politician, caused by the pressure of vested interests.

The case now under consideration is a clear illustration of what pressure and vested interests are capable of doing under the iniquitous tariff system we have adopted in Australia. These things could not happen if Parliament were consulted. They happen only because tariff schedules are withheld from Parliament month after month, and year after year. I trust that, although, so far, no notice has been taken of the vigorous representations that have been made honestly, fairly, and squarely, by people whose proper interests have been ignored, this public protest may, even at this late hour, induce the Government to amend this schedule before Parliament rises.

Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP

– I desire to inform the Senate at the outset that neither the Government nor the party that supports it has listened to the claims of vested interests as opposed to the interests of the community. I ask leave to continue my remarks at a later hour.

Senator Sir George Pearce:

– I rise to a point of order. We are debating a motion for the adjournment of the Senate, and, until that has been decided, how can the debate be adjourned?

The PRESIDENT (Senator the Hon W Kingsmill:
WESTERN AUSTRALIA

– The Leader of the Senate has informed me of his reason for taking this action. It is desired that I should leave the chair for a time. That period will not be set off against the time allowed for the discussion of the motion.

Senator DALY:
Vice-President of the Executive Council · South Australia · ALP

– It is the desire of the Ministry that honorable senators and members of another place shall assemble at a quarter to four to bid bon voyage to the Prime Minister (Mr. Scullin) and the Minister for Markets (Mr. Parker Moloney). I approached the President in the matter, and he kindly agreed that, if application were made to him by me at a quarter to four o’clock he would leave the chair, and resume it at a quarter to 5.

The PRESIDENT:

– In accordance with the wish that has been expressed by the Leader of the Senate, I shall leave the chair until a quarter to 5 o’clock.

Sitting suspended from 8.3b to 4.45 p.m.

Senator DALY:

– I desire on behalf of the Government to repudiate the suggestion of Senator Colebatch that this duty was imposed in order to show preference to merchants holding large stocks of timber. No stronger indictment of any government could be made. If the statement were to go out from the Senate without a denial on behalf of the Government, it might be open to the construction that some member of the Cabinet had used his influence against the nation in the interests of a favoured few. Usually, the honorable senator is exceptionally fair in his criticism of the Government; but on this occasion he has departed from that attitude. The present Government stands solidly for a policy of protection of Australian industries. That policy may be either right or wrong, and with it honorable senators may disagree; but they must admit that the Government has been consistent in its efforts to give effect to that policy. In this particular case, the Government had to consider the interests of two industries - the saw-milling and timber industry proper, and the industry in which the importers and distributors of timber are engaged. Before taking action, the Government carefully considered the representations made to it by representatives of every State, including “Western Australia, who pleaded that in order to keep the Australian bush saw-mills going, with a view to building up a big Australian industry, oregon should be placed on the same footing as other timbers in the tariff schedule. The Government did not act hastily, nor did it listen only to representations made by its supporters. It took action only after very 3trong representations had been made by members of every political party in this Parliament, representing constituencies from northern Queensland to southern Tagmania. In the possession of the Government are letters from various- members of Parliament representing the Nationalist, the Labour, and the Country party interests, pleading for the imposition of higher duties on oregon in the interests of the Australian timber industry.

Senator Reid:

– Were any letters from members of the Australian party?

Senator DALY:

– I am not sure. The members of that party in another place represent districts in which there are no bush saw-mills. I assure the honorable senator that representations in favour of higher duties were made to the Government by prominent members of his own political party in Queensland and Tasmania. In such circumstances, how could the Government have refused to reconsider the matter, notwithstanding that the Tariff Board had reported against an increased duty on timber? After the Tariff Board had made its recommendations in June, the Government introduced a schedule in conformity with its recommendations. The representations to which I have referred were made after that schedule had been tabled. Members of Parliament who made representations on this matter said that they regarded the granting of protection to the timber industry as a nonparty matter. The Government regarded it in that light, and it harkened to the representations of men who had no axe to grind.

Senator Sir Hal Colebatch:

– Will the Minister lay on the table the papers containing the representations to which he has referred?

Senator DALY:

– If the right honorable senator desires it, I shall ask the Minister for Trade and Customs (Mr. Fenton) to place on the table of the Senate the letters received by him from the members of various political parties who urged that the duty on oregon should be increased. Such letters are not confidential documents.

Senator Sir Hal Colebatch:

– I am grateful to the Minister for that undertaking.

Senator DALY:

– I assure honorable senators that the Government has nothing to hide in regard to any of its actions. Doubtless, it will make mistakes, as other governments have done. The Government does not mind being criticized for its mistakes; but when an honorable senator impugns its honesty by suggesting that this duty was imposed in order to show preference to merchants with large stocks of timber; when he insinuates that it knew that those merchants had large stocks, and was prepared to use its power to favour them, at the expense of the nation, particularly in a time of crisis-

Senator Sir Hal Colebatch:

– I did not say that. I said that the Government knows now that those merchants hold large stocks.

Senator DALY:

– The honorable senator said definitely that this schedule had been introduced in order to show preference to merchants holding large stocks of timber. It is probable that he did not wish to convey the impression that the Government knew that these people had large stocks of timber on hand and had deliberately shown them preference as against others holding smaller stocks. I say emphatically that the Government did not show preference to one section of importers. But it did attempt to give preference to an Australian industry. Having considered the representations made by the saw-millers and their employees and others engaged in the industry, backed up by members of Parliament, the Government decided to take action. I put it to honorable senators that to carry a resolution censuring the Government is equivalent in this connexion to censuring every member of Parliament who made representation to it in this matter. I ask them to hesitate before taking such, a step. My undertaking to Senator Colebatch stands ; I am prepared to ask the Minister for Trade and Customs to table the correspondence received by him in connexion with this matter.

Senator Colebatch said that the action of the Government would result in greater unemployment. Evidently the sawmillers, and others engaged in the timber industry in Western Australia and Tasmania, do not think that there will be a cessation of building activities. If oregon is the only softwood which can be used in the construction of buildings, it would be useless for bush saw-millers to urge that its importation be prohibited, seeing that no buildings could be constructed without it, and that consequently there would be no demand for Australian timbers for building purposes. It can scarcely be suggested that they should adopt such a “ dog-in-the-manger “ attitude. We must assume that, as business men, their representations were of a business-like nature.

Senator Chapman:

– Hardwoods cannot be used for roofing purposes.

Senator DALY:

– In times of prosperity we regarded many things as being indispensible; but when faced with adversity, we have proved that necessity is the mother of invention. The Government believes that its action will result in the exploitation of the possibilities of Australian timber being more generally used. For many years there has been a feeling on the part of Australians that certain articles could not be made in this country; but the action of the Government, and the urge of necessity, have proved the fallacy of that contention. I feel certain that, as the result of the scientific investigations now being made into the possibility of a greater use of Australian timbers, the time is not far distant when our requirements of this material will be supplied from within our own borders. As it is unreasonable to suppose that the bush saw-millers desire to cripple the building industry, we must assume that they are confident of their ability to supply timbers equal to those imported from other countries. Among the many who made representations to the Government in this matter, there was not one timber merchant; the representations came from the bush saw-millers and their employees, supported by members of Parliament representing all political parties. That effectively answers any suggestion that may be in the mind of honorable senators opposite that, in adopting this policy, the Government was inspired by some timber merchant with huge stocks. The Government was influenced by the pleadings of its political opponents and of employers and employees engaged in the industry.

Mention was made of the hardship that must result from the action of the Government. I frankly admit that it is causing hardship. I know of some cases in my own State. The facts have been brought under my notice, and I have been endeavouring during the past two days to bring about some via media to relief; I feel very keenly on this matter, but it is very difficult to consult the highest Cabinet authority at a time when the Loan Council is sitting. I made what I considered to be a perfectly reasonable suggestion, but I am sorry that it was not availed of. If this motion is withdrawn I could continue my negotiations, and explore every avenue in an endeavour to provide relief.

Senator Sir HAL COLEBATCH:
WESTERN AUSTRALIA · NAT

-The honorable senator made no suggestion to me in the matter.

Senator DALY:

– I did not; but I believe that the men who approached me also approached the honorable senator.

Senator Sir Hal Colebatch:

Senator Dalyis quite wrong. The whole of the factswere in my possession long before I heard of those gentlemen, who at no timeapproached me.

Senator DALY:

– Probably their presence in Canberra influenced the honorable senator to move his resolution.

Senator Sir Hal Colebatch:

-It had nothing whatever to do with it.

Senator DALY:

– Had I known that, I should have approachedthe honorable senator.. Deputations have been introduced to meby honorablesenators from both sides of the chamber regarding duties on timber. I am prepared to do all that Ican toascertain whether it is legally possible to afford these people some measure of relief. Honorable senators mustrealizethat we are dealing with a matter of general policy. We cannotcome innowwithaschedule to exempt one sectionunder a general policy designed to prohibit imports, for the purpose of balancingour trade and for ihe protection of Australian industries. That is the policy upon which this Government was elected, and upon which it is entitled to claim that it has a mandate from the people. Itis the policy that the Government intends to carry out, until such time as constitutional measures are taken to consult the people again.

Senator Sir Hal Colebatch:

-The Senate has the right to say whether it approves of that policy or not.It has been deprived of that right.

Senator DALY:

– Through an anomaly that exists in our Constitution, senators do not go to the country simultaneously with honorable members from another place. As honorable members in another place have come back with such an overwhelming majority in support of a policy that was prominent in the Labour party’s platform, the Senate is entitled to look more sympathetically towards the policy propounded by the Government. I do not for a moment deny the right of the Senate to correct any abuses that a government may bring about in putting its policy into effect, hut I do claim that this Government was returned to power on a highly protective policy, and that its action in this matter is consistent with that policy.

If the Senate adopted the motion of Senator Colebatch it would simply mean that it censures the Government’s endeavour to carry out the policy which it was sent here to put into effect. It would be a vote of censure upon the Government for trying to balance our trade and toprotect our industries; for doing something upon which its politicalopponents., who are vitally concerned in the timber industry, saw it to make representations. Senator Colebatch represents Western Australia, a State with big timber interests. I venture tosay that the timber-owners of Western Australia and the employees in the bush mills of that State are behind the Government in its action and notbehind the endeavour of the honorable senator to condemn the Government. If Senator Colebatch says, as apparently he does in his denunciation of the tariff, that the Governmentshould not protect our Australian timber-

Senator Sir Hal Colebatch:

– To what extent ; 400 per cent ?

Senator DALY:

-I should protect Australian timbers to the extent of 500 per cent. if the necessityarose,because I feel that unless we increasetheabsorptive capacity of this Commonwealth by exploiting its possibilities and potentialities, we may continue with our migration schemes, filtering a few people into Australia, but we shall never make the advancement that would be effected by the operation of the policy of the Government.

In view of the facts that I have disclosed, and also of my promise that the Government is prepared to give sympathetic consideration to any case of hardship that might be presented to it, consistent with its duty to make its policy as light as it possibly can for the people of Australia, I seriously suggest to Senator Colebatch that he should withdraw his motion and permit the Senate to proceed forthwith with the discussion of other business.

Senator MCLACHLAN:
South Australia

– On the statements made by the Minister, from the documentary evidence that is available, and from the very pointed speech that was made by Senator Colebatch, it would appear that the Government has made a blunder of the first magnitude. Honorable senators are aware that, in response to a request of the Minister for Trade and Customs, of the 10th of April last, a conference was convened between the Tariff Board and representatives of the timber interests in Australia. The following organizations were represented: -

Associated Country Saw-millers of New South Wales; Victorian Hardwood Saw-millers Association; Tasmanian Timber Organization Proprietary Limited; Timber Merchants Association of Melbourne and Suburbs; James Moore and Sons Limited, Melbourne; John Sharp and Sons Limited, Melbourne; Gunnersen, Nosworthy Proprietary Limited; Hillas and Company Proprietary Limited; Alstergren Proprietary Limited, Melbourne; Rennke and Company, Melbourne; Gunnerson, Le Mesurier Limited, Adelaide; Andrew Jamieson Limited, Sydney; Victorian Box and Case Makers Association; Queensland Box and Case Manufacturers Association; Timber Workers Union.

As a result of that conference, at which a settlement of very conflicting opinions was effected among the timber interests, the Tariff Board formulated a recommendation. Its report sets out the proposals that came before the conference for discussion, and upon which the Minister had asked the board to report. The whole subject-matter of the controversy surrounding our timber problems was debated, and as the outcome of compromise on both sides the tariff schedule of June was. ultimately decided upon by the Government. While it may be perfectly accurate, as the Minister claims, that representations were made regarding further duties, they must have been made behind the backs of the people who were called to that conference. Having regard to the fact that the Minister specifically requested the Tariff Board to confer with those representative people, and in face of the recommendations of the Tariff Board, the Government was illadvised and committed a colossal blunder when it failed to give those people an opportunity again to confer with the board. The additional duties were imposed purely on the Minister’s own ipse dixit, without his having sought advice from one single unit among those representatives, and with a, total disregard of the recommendations of the ‘Tariff Board and the compromise that had been arrived at.

Senator Daly claims that this is all a matter of policy; but I submit that the policy of the Government should be administered in a regular way, in the light of day. Do not let us’ have conferences arranged to produce a certain result, and their action then disregarded. The Government of the day is entitled to administer its policy, but not in such a manner as to bring ruin upon a large section of the .timber interests of Australia. Many men in my own State, who have spent a life-time in the timber business, are now brought to the verge of ruin by the action of the Government. Their businesses have practically been taken away from them, as they are unable to compete with those who have been protected, and who possess large stocks of oregon.

I am aware that Senator Colebatch had this matter in hand before any one approached me on the subject. It was at my solicitation that the honorable senator withheld his hand in order to give the Minister an opportunity to collaborate with his colleague the Minister for Trade and Customs, in an endeavour to have extended that sympathetic consideration about which we have heard so much. We are asking for relief, not sympathy. I. think that, even at this late hour, while Parliament is sitting, the Government should”, without violating the law, defer the time from which these duties should operate. If we examine the matter closely, we realize that there has been a reckless disregard of the interests of all classes of the community. Representations have been made to me by the Associated Timber Merchants Association of South Australia, indicating that the levying of these duties will increase the cost of the timber necessary for the construction of a workman’s cottage by £16 10s. per cottage. This is not a small matter. We need not be concerned with what men engaged in bush mills would like to have done. They had their opportunity, when the conference was called, to present their case. The same may be said of the timber- workers, because they were represented at the conference when this . bargain was made. Broadly speaking, the action of the Minister in convening the conference and asking the Tariff Board to adjudicate upon a conflicting issue, was in the nature of a bargain. But the Minister constituted himself a court of appeal. He listened to one side only and decided to make these alterations in the duties to the detriment of important timber interests. The Minister’s action was unjust in the extreme. It is ruinous in its effects upon a large section of the timber merchants and dealers in timber. During the last week several honorable senators on this side, as well as a number of Government supporters, have been active in attempting to right the wrong that has been done. I believe this matter has been brought under the notice of the Government in another place. Unfortunately, up to the present, we have had to be content with an assurance that the representations will receive sympathetic consideration. The Government should act. It should do the right thing by postponing the operation of these later timber duties. This would be a simple act of justice to those merchants who, in the full belief that the June schedule was the Government’s last word, had placed orders overseas. I concede to the Government the right to administer its policy as it deems fit; but I do not concede to it the right to so administer its policy as to affect seriously the in- terests of an important section of the people engaged in a particular industry.

We are not unaware of what happened in Canberra between the presentation of the June and the July schedules. Members of the Ministry could not have been blind to certain incidents. I heard one distinguished member of this chamber say that, at about that time, it was almost possible to hear the logs rolling across the wooden floors at the Hotel Canberra. Every one knew what was happening. It is true that lately there has been a change-over in the administration of the Customs Department. One schedule was laid on the table by the Acting Minister for Trade and Customs (Mr. Forde) and the other by the Minister (Mr. Fenton) upon his return from Great Britain. But the Government should be strong enough to now do the right thing. All this trouble may have been due to some official blundering. It is possible that the official who advised the Minister had forgotten all about the arrangement that the Tariff Board should adjudicate in this matter. But, whatever may be the explanation, we should see that British justice is meted out to all the parties. We should conform to one of the first principles of British jurisprudence concerning which the Leader of the Senate and myself have many thoughts in common. I should have no objection if a tariff of even £1 per 100 super, feet were imposed if this course were taken, after inquiry by the constituted authority, because I recognize that the Government must accept responsibility for its policy. What I object to is the imposition of duties in such a way as to lend colour to the belief that pressure may have been brought to bear in responsible quarters. I was glad to hear the Minister immediately refute any such suggestion for I should be loth to believe that a member of this or any other Government would act in such a way as to give ground for an impression that the Government was not dealing out evenhanded justice to all sections of the community.

Senator GREENE:
NEW SOUTH WALES · NAT

– I am sorry that Senator Colebatch, when reading correspondence in connexion with this matter, should have interpolated in his remarks a definite charge of something approaching corruption.

Senator Sir Hal Colebatch:

– I read what other people had written.

Senator GREENE:
NEW SOUTH WALES · NAT

– But the honorable senator cannot read statements like that without identifying himself with the views expressed.

Senator Sir Hal Colebatch:

– I do identify myself with those views.

Senator GREENE:
NEW SOUTH WALES · NAT

– I am sorry to hear the honorable senator say that. 1 have had experience as a Minister for Trade and Customs and I sympathize very much with the holder of that portfolio, because I have some knowledge of the tremendous difficulties that are associated with any radical change in tariff duties.

Senator Daly:

– I rise to a point of order. Senator Greene, referring to n statement read by Senator Colebatch, said that the honorable senator had interpolated into his remarks a definite charge of something approaching corruption. Senator Colebatch then interjected that bc had read what other people had written whereupon Senator Greene said, “ But the honorable senator cannot read statements like that without identifying himself with the views expressed “. To this Senator Colebatch replied, “ I do identify myself with them “. I take exception to the statement of the honorable senator, and ask that he be called upon to withdraw it.

The PRESIDENT (Senator the Hon W Kingsmill:

– Am I to. understand that Senator Colebatch made a charge of corruption against any member of the Government.

Senator Sir Hal Colebatch:

– Certainly not. There is no such charge in the statement which’ I read. I identify myself with the views expressed in the statement in question, but with nothing else.

Senator GREENE:
NEW SOUTH WALES · NAT

– Whenever a radical change is made in tariff duties, it is impossible to avoid injuring the interests of certain sections of the people. Only a few days ago a new schedule relating to duties on petrol was introduced. To some people that was a gift from Heaven, because they had in store millions of gallons upon which duty had been paid at a lower rate. They have not yet raised their prices, but I venture to say that they will. To other oil interests that did not have large stocks of petrol’ the new tariff schedule represented a tremendous loss. All that can be said of them is that they happened to be on the wrong side of the fence when the new duties were imposed. If the people who made these representations to Senator Colebatch had been on the other side of the fence when the new timber duties were imposed they would not have complained.

Senator Sir Hal Colebatch:

– The honorable senator is entirely in error. The people who have written to me have stocks of timber, but they say that they decline to be a party to this sort of business.

Senator GREENE:
NEW SOUTH WALES · NAT

– Much depends upon the size of the timber stocks held by them. We have heard all these, complaints over and over again in connexion with new tariff schedules. But I am assuming that the Minister acted in all good faith. I have no reason to believe otherwise. I am, however, satisfied that, as regards timber duties, if the Archangel Gabriel came down and undertook to prepare a schedule that would please everybody in the timber trade he would fail lamentably. The thing is utterly impossible. I do not care who undertakes the task ; it is quite impossible to prepare a schedule of timber duties without hurting certain sections and without causing trouble.

Senator McLachlan:

– When the honorable senator was Minister, he did not alter the tariff duties in respect of any particular item a month after a new schedule had been presented.

Senator GREENE:
NEW SOUTH WALES · NAT

– The timber interests in South Australia have always led the van whenever there has been a row over timber duties. I can well understand why this should be so, because South Australia is- short of local timber. Consequently, any alteration in the duties always causes more trouble in that State than elsewhere in the Commonwealth. We shall have this trouble in connexion with timber duties until the “ crack of doom,” because of the existence in that business of interests that are absolutely . irreconcilable. The Tariff Board recommended what it considered would be a fair schedule. It may, or it may not, have been satisfactory; but I draw attention to what appears to me to be a glaring anomaly. If honorable senators will look at the schedule which the Tariff Board recommended they will find, in item 29 la, that there is a difference of 6s. 6d. per 100 super, feet between the duties recommended for undressed oregon 12 inches by 6 inches and on the smallest size 7 inches by 2^ inches. In the following item relating to other undressed timber the difference in the duties is only 3s. I do not . think that such a big margin as 6s. 6d. per .100 super, feet has ever been incorporated in a timber schedule before. Clearly, the discrepancy is too great. In such circumstances, that will always happen ; but the Government should have hesitated before adopting one of the recommendations of the Tariff Board and rejecting the other. I do not hold the view that the Government should at all times accept the recommendations of the Tariff Board.

Senator Sir Hal Colebatch:

– It must take the responsibility if it does not.

Senator GREENE:
NEW SOUTH WALES · NAT

– Undoubtedly. Although I was responsible for the introduction of the measure under which the Tariff Board was appointed, I would be the last to suggest that the Government must willy nilly accept its recommendations. I understood Senator Colebatch to say that, so far as he could ascertain, no investigation was conducted prior to the introduction of the 1921 tariff. There was no public investigation as the interstate commission was not then functioning, and the Tariff Board had not been appointed. I spent about eighteen months in personally investigating the tariff schedule then in operation, and it was one of the most strenuous tasks which I have ever undertaken. When I had finally completed my labours, I concluded that the decisions which I had reached in respect to timber were the least satisfactory. I spent many weeks endeavouring to reach a logical basis on which such duties could be fixed; but eventually concluded that there was no real starting point for a scientific investigation.

Senator Sir Hal Colebatch:

– Is not the honorable senator amazed at the moderation of the tariff schedule which he introduced?

Senator GREENE:
NEW SOUTH WALES · NAT

– I was always regarded as the arch priest of high protection; but when I study the schedules introduced by this Government during recent months I wonder sometimes whether in those days I was not really a freetrader. Unfortunately, the Commonwealth Parliament seems to be treating tariff schedules, which are of great importance not only to the trading community but to the people generally, in a very lax manner. I am not referring to the method by- which the Government originally decides to give to its policy of fiscal reform, but to the manner in which Parliament deals with the schedules after they are introduced.

Senator Payne:

– The most unsatisfactory feature is the way in- which the provisions of the Tariff Board Act are disregarded, particularly by this Government.

Senator GREENE:
NEW SOUTH WALES · NAT

– If the’ law is ignored, those affected have a legal remedy. Unfortunately, governments have adopted a habit of introducing tariff schedules, and then allowing many months to elapse before considering them. This Government is not the only sinner in that respect. For years past, other Governments have acted in the same way.

Senator Reid:

– It will be a year before the schedules which have been tabled by this Government can be discussed.

Senator GREENE:
NEW SOUTH WALES · NAT

– The schedule introduced by a previous Government was not disposed of within a year.

Senator Payne:

– The honorable senator does not suggest that previous governments have imposed duties regardless of the recommendations of the Tariff Board?

Senator GREENE:
NEW SOUTH WALES · NAT

– I am not aware of the extent to which any government has erred in that respect. When Minister for Customs I realized that it was impossible for me, with the assistance of the departmental officers, to devote sufficient time to the work of recasting the tariff schedule, and it was on my recommendation that a Tariff Board was appointed. As far as possible a full investigation should be made, and representatives of the parties concerned should be heard before any variations are made in customs duties. It is the responsibility of the board to make a recommendation, and the duty of the Minister to come to a decision before any tariff proposal is submitted to Parliament.

The PRESIDENT (Senator the Hon W Kingsmill:

– The honorable senator’s time has expired.

Senator DUNN:
New South Wales

– This Parliament is now on the eve of a recess.

Senator Daly:

– I thought the honorable senator was about to say on the eve of an election.

Senator DUNN:

– I would welcome a general election, because it would give me and those with whom I am associated an opportunity to justify the action which this Government has taken, not only with respect to tariff schedules, but in connexion with other legislation which has been passed in the interests of the Australian people. During the approaching parliamentary recess I hope to visit the timber districts of New South Wales, and, if possible, Tasmania, to tell the timber-workers that this Government has had .the courage to impose sufficiently high duties on imported timber to enable the timber-milling industry to be conducted with some prospect of success. Senator Colebatch and Senator McLachlan have opposed the duties recently imposed on imported timber ; but, of course, they are opposed to everything which1 this Government does. Owing to this pressure of business Parliament has not yet had an opportunity to debate the items in the tariff schedules introduced; but when an opportunity is afforded the increased duties imposed can easily he justified.

The PRESIDENT:

– The honorable senator is entitled to deal only with the subject-matter of the motion.

Senator DUNN:

– I am leading up to that.

The PRESIDENT:

– Standing Order 64. provides inter alia -

Only the matter in respect of which such motion is made can he debated.

Senator DUNN:

Senator Colebatch, who thinks that the Government has acted to the detriment of certain timber merchants in Australia, should remember that there are others in the community who need protection. When the Scullin Government was elected S.O.S. signals were immediately despatched by the wealthy timber merchants of Australia to those engaged in the industry in the Baltic and in California intimating that in view of the declared fiscal policy of the Labour party there would be heavy increases in timber duties. The inevitable result has been that some timber merchants in Australia have millions of feet of oregon and baltic pine in their yards, which have been brought to Australia in Swedish and German vessels, and are now entering into strong competition with Australian timber. Although some of these merchants have their yards fully stocked they are not in favour of ration-‘ ing it among those who are less fortunately situated. The political hearts of honorable senators opposite are bleeding for their wealthy timber merchant friends who for years have been making fortunes at the expense of the workers cif this community. Although Senator Colebatch represents a State in which large quantities of timber are produced, he favours the imposition of lower duties, so that foreign importations may flood this country to the detriment of the timber industry in Western Australia. According to Senator McLachlan South Australia is, as usual, in difficulties, and I suppose Senator Chapman will soon, be saying that all the timber available in that State is a few mallee roots. According to the Tariff Board’s report 167,000,000 feet of timber, were produced in New South Wales in 1923-24, and 146,000,000 feet in 1927-28, or a decrease in the four years of 21,000,000 feet. Notwithstanding this decline in production in that State alone Senator Colebatch, a worthy knight of the British Empire, is pleading the cause of the foreign exploiter. In Victoria the production was 134,000,000 super, feet in 1923-24, and 100,000,000 super, feet in 1927-28, a decrease of 34,000,000 super, feet. Whenever some of my honorable friends opposite return to Australia from a trip abroad they say, “We are glad to be home in the finest country in the world”; yet they are working to-day in the interests of foreign timber firms, who have exploited and are exploiting the timber market in this country. In Tasmania, the production was 63,000,000 super, feet in 1923-24, and 53,000,000 super, feet in 1927-28, a decrease of 10,000,000 super, feet. We have always been led to believe that Tasmania can produce all classes of woods, including softwoods. Even within the last 24 hours it has been stated in debate that the interior embellishments in this chamber were carried out with wood obtained from Tasmanian forests. In Queensland the production was 141,000,000 super. feet in 1923-24, and 102,000,000 super. feet in 1927-28, a decrease of 39,000,000 super. feet. Until this Government gave the protection that they required, Australian saw-mills were closed, and timber-workers were compelled to walk the streets. I have been handed a letter from Mr. E. W. Quinn, manager and secretary of the Australian Sawmillers Central Executive, whose office is in Manufacturers Buildings, 312 Flinders-street - not in the Trades Hall. One paragraph of it reads as follows: -

Doubtless you are aware that at the present time the saw-mills in Victoria are only working a little over 10 per cent. capacity. Millions of feet of sawn timber has accumulated at country sidings, which necessarily locks up many thousands of pounds of capital, and we find it impossible to dispose of it. Portion of this slump is possibly due to the prevailing depression, but the major reason is the heavy importation of Douglas fir (oregon) from America.

The history of the timber industry in British Columbia makes sorry reading. Thousands of low paid coolies from China, Manchuria, and Japan are working in that sweated industry. If honorable senators, especially my friend Senator Colebatch, feel inclined to contradict that statement, I suggest that they study the publications on the subject that can be obtained in the Parliamentary Library. Mr. Quinn goes on to say -

Baltic pine, flooring, and weatherboards from Norway and Sweden.

It is well known that a famous line of black German steamers trades from the Baltic ports of Germany across to Norway and Sweden, and brings to Australia millions of super. feet of Norwegian and Swedish pine. That is the nation with whom it was said that we would never trade again.

The PRESIDENT (Senator the Hon W Kingsmill:

– The honorable senator must confine his remarks to the motion.

Senator DUNN:

– The report goes on to say -

Taking the figures for the financial year 1918-19 as against 1927-28, we find that the output of Australian hardwoods and softwoods increased 93,000,000 feet, whilst the timber imports into Australia increased by 37 1,000,000 feet. The figures are as follows:-

The PRESIDENT:

-The honorable senator has exhausted his time.

Senator Sir JOHN NEWLANDS (South Australia) [5.53]. - It is not my intention to deliver a Homeric oration on this matter; I merely wish to say a word or two in regard to the timber industry so far as it affects South Australia. The statement that South Australia has practically no timber other than mallee roots, as suggested by Senator Dunn, was rather insulting. There are in that State some very fine timbers that are suitable for flooring and other purposes; but, unfortunately, there is not a great deal of the soft wood that is required for the roofs of buildings. Consequently, softwoods have to be imported. It has been stated that the cost of a cottage in South Australia is £16 10s. greater than it ought to be, because of the necessity for using hardwoods. I have listened to what both Senator Sir Hal Colebatch and the Leader of the Senate (Senator Daly) have had to say, and I condemn neither. It appears to me, however, that a mistake has been made in this matter. The timber merchants of South Australia cannot procure a sufficient quantity of American softwoods for use in the construction of houses for the poorer class of people; therefore, if it is possible to rectify the mistake, action should be taken in that direction. Senator Greene has explained convincingly the position that exists when a tariff schedule is being prepared, and has given it as his opinion that it is impossible to please everybody. But even he considers that a serious mistake has been made in this instance. I do not impute wrong motives to either the Minister for Trade and Customs or any member of his staff. The manly action would be for the Minister to. retrace his steps and correct the error. I am quite sure that many timber mills will be compelled to close, and their owners will be ruined, if these duties are not reduced. That may not cause concern to those honorable senators who believe that South Australia has only a few mallee roots for household fires. This disturbance will end in fire unless the tariff is altered. Both Houses of Parliament have the right to deal with tariff schedules when they are brought forward. It is wrong of the Government to allow a discussion to take place in ohe House and not in the other. If something were done to rectify the mistake that has been made, it would be evidence of manliness and courage, and would give considerable satisfaction to the timber merchants of South Australia and every other part of Australia where soft timbers are required.

Senator Sir HAI COLEBATCH (Western Australia) [6.4]. - When Senator Greene was Minister for Trade and Customs, he found that timber was costing 4s. per 100 super, feet at the port of shipment and another 4s. per 100 super, feet to bring it to Australia. The duty was then 6d. per 100 super, feet, and he increased it to 4s., because he considered that that was not a sufficient protection. Now, the duty is 12s. 6d. Therefore, timber which costs 4s. per 100 super, feet at the port of shipment costs upwards of £1, duty paid and landed in Australia. Some honorable senators opposite have stated that, as a Western Australian senator, I should be concerned regarding the fate of the timber forests of that State. I am concerned about them. In view of the extent to which the forest resources of Australia have been developed, I say wtihout hesitation that, if we cannot exploit them without a protection of 400 per cent., the best thing we can do is to conserve them until a wiser generation comes along which will make use of them, with the assistance, perhaps, of a reasonable protection, but not a prohibitive one. I want the Minister to understand that I should not have repeated statements contained in letters I had received unless I had verified the facts for myself. The position is that certain timber merchants in Melbourne, who for twenty years had joined consistently with their fellow timber merchants in the other States in resisting any tariff increases on timber, came to

Canberra in April of this year and started an agitation for increased duties; that when their plans had matured, and their request had been made, the Government very properly referred the matter to the Tariff Board ; that that body, after the most complete investigation, in the course of which it called to its aid expert foresters and officers of the Council for Scientific and Industrial Research, obtained information from other sources at its disposal, and held a conference of all the interests concerned, decided that the request for additional duties was unreasonable, and that, therefore, they should not be imposed. The next step was that the Government accepted that report, and tabled a new tariff schedule which, while including certain increased duties in certain directions, incorporated the recommendations of the Tariff Board in regard to the particular item dealt with in this motion. That was on the 16th June, 1929. The timber interests, naturally concluding that the matter had been settled, went on with their business in the usual way. The next step was that these same timber merchants in Melbourne returned to Canberra and revived the agitation for higher duties. I do not question the Minister’s statement that letters have been received from supporters of the various political parties in different parts of Australia urging that higher duties on timber should be imposed. We all know that any one who has a purpose to serve can easily get political support for it. The Minister has not denied that, after the Government had arrived at a decision, based on the recommendations of the Tariff Board, the matter was again brought up by those same timber merchants from Melbourne.

Senator Daly:

– I assure the honorable senator that their representations did not influence the Government.

Senator Sir HAL COLEBATCH:

– I have only stated fact’s. It is impossible for me to say by what the Government was influenced.

Senator Daly:

– Surely the honorable senator is prepared to accept my assurance !

Senator Sir HAL COLEBATCH:

– The Government ignored its previous decision, as well as the recommendation of the Tariff Board, and did exactly what those Melbourne timber merchants asked it to do. I accept the Minister’s assurance that the Government was not influenced by their representations. Nevertheless, it did exactly what those merchants asked it to do.

Seeing that the Government has seen fit to ignore the recommendations of the Tariff Board in such circumstances, it must accept both the responsibility and the consequences of its action. In this instance one of the consequences is that a number of persons legitimately carrying on their businesses have been ruined. They were entitled to assume that the decision of the Government in June, 1930, had been arrived at after due consideration, and that they could proceed to place orders abroad, feeling confident that the duties then imposed would not be increased. They placed their orders abroad only to And that they have been saddled with an extra 6s. for every 100 super ft. of timber which they import. That is the first consequence of the Government’s action. The second consequence is that those persons who were responsible for starting, and, later, for reviving, the agitation for increasedduties, have in their yards timber, the value of which has been enormously increased by the Government’s action.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– They will make fortunes.

Senator Sir HAL COLEBATCH.While some people will be ruined others will make fortunes by reason of the Government’s action. When a government, in defiance of the recommendations of the Tariff Board, and in reversal of its own decision, does something which ruins some merchants and puts fortunes into the pockets of their competitors, it accepts a grave responsibility. In addition, it increases the cost of the commodity concerned to the public, which, after all, is the party chiefly interested.

Having ventilated this matter, I still say that I am prepared to believe that the Government was misled. There is, however, still time for it to rectify the mistake it has made. If it does not do so, time will condemn it. I have no wish that the motion shall be carried and that the Senate shall meet at 9 o’clock tomorrow morning - perhaps we shall not have concluded this sitting by then - and

I therefore ask leave to. withdraw the motion.

Motion - by leave - withdrawn.

page 5506

ACTS INTERPRETATION BILL

(No. 2).

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

.- I move-

That Standing Order 134 be suspended to enable a motion to be moved at once rescinding an order of the Senate in connexion with the Acts Interpretation Bill.

As honorable senators are aware, it is anticipated that we shall conclude this session’s legislative programme to-morrow. Should there be no break in the sitting it will be impossible to get the Acts Interpretation Bill to another place. There are certain urgent matters connected with that legislation which it is desired should be agreed to by both Houses of Parliament before they rise for the recess. The Leader of the Opposition has been consulted in this matter, and I understand that he does not regard the bill as being of a contentious nature.

Senator Sir George Pearce:

– With the exception of one clause.

Senator DALY:

– One clause relates to a decision which has not yet been given; but honorable senators will see in the bill a provision that that particular provision shall not come into operation until a proclamation has been issued. I am instructed to give an assurance, on behalf of the Government, that a proclamation will not be issued until the matter has been decided.

The PRESIDENT (Senator the Hon W Kingsmill:

– This matter is governed by Standing Order 134. It may be well to direct the attention of honorable senators to the important provisions of that standing order, which reads -

An order, resolution, or other vote of the Senate may be rescinded; but no such order, resolution, or other vote may be rescinded during the same session, unless seven days’ notice be given and at least one half of the whole number of senators vote in favour of its rescission, provided that, to correct irregularities or mistakes, one day’s notice only shall be sufficient.

Am I to understand from the Leader of the Senate (Senator Daly) that a mistake has occurred?

Senator Daly:

– Yes.

Senator Sir GEORGE PEARCE (Western Australia) [6.13]. - I was not aware that the particular action taken by the Minister was intended; he did not consult me regarding the motion he has moved.

Senator Daly:

– My attention was drawn to the necessity for it only a few minutes ago.

Senator Sir GEORGE PEARCE:

– The motion itself was not mentioned. I was told that an Acts Interpretation Bill was on the notice-paper when the late Government was in office, and I wa3 asked whether I had any objection to that bill being brought forward again. Naturally, I had no objection to it, although I pointed out that it contained a contentious clause which some honorable senators would probably desire to discuss. I, personally, did not desire to debate it, because I had had my opportunity to do so in Cabinet, and I was satisfied with the explanation given there concerning it. I take it that the object of this motion is to enable the Minister to move the first reading of the Acts Interpretation Bill to-day, the second reading later in the day, and the third reading tomorrow.

Senator Daly:

– There would be no necessity for the motion if we were certain that there was to be a break in the sitting; but the Senate might decide to sit right on until the business before it had been disposed of.

Senator Sir GEORGE PEARCE:

– In the circumstances, I have no objection to the motion being agreed to.

Question put.

The PRESIDENT:

– There being an absolute majority of the Senate present, and no voice being raised in dissent, I declare the motion carried.

Ordered -

That so much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through its remaining stages without delay.

Sitting suspended from 6.2S to 8 p.m.

page 5507

QUESTION

WHEAT INDUSTRY

Senator GUTHRIE:
through Senator Sir William Glasgow

asked the Minister representing the Minister for Markets and Transport, upon notice -

  1. Whether it is a fact that New Zealand wheat-farmers are obtaining 6s. per bushel at country railway stations for wheat, and that bread is being sold at lid. the 4-lb. loaf, whereas the price of wheat to the Australian growers is 3s. Id. to 3s. 3d. per bushel at country railway stations, and they are being charged from lid. to ls. the 4-Ib. loaf?
  2. Has the Minister noticed the statement made in the House of Commons by Mr. Baldwin, the Leader of the Conservative party, on the 8th June, 1930, to the effect that unless wheat survived agriculture could not survive, and that one of the first things the Conservatives would do after regaining office would be to fix a guaranteed price for milling wheat?
  3. Has the Minister taken steps to prevent the sale in Egypt of French flour branded as “Best Australian Flour”; if not, will he do so?
Senator DALY:
ALP

– The answers to the honorable senator’s questions are as follow : -

  1. Yes. This reply also covers the reply to the question asked by the honorable senator on the 17th’ July, 1930.
  2. Yes.
  3. This matter was brought under the notice of the Minister for Markets some time ago, and he communicated with the British Commissioner at Cairo and the Hon. J. E. Fenton, Minister for Trade and Customs, who was in London at the time. As a result of representations made by Mr. Fenton to the French Ministry of Commerce and the British Dominions Office, the French authorities in Egypt investigated the matter, found that French flour was imported into Egypt branded as Australian flour, and intimated that measures had been taken to stop the practice and prevent its renewal. The French Ministry of Commerce also advised that in future bags containing French flour imported into Egypt will be marked “ Made in’ France.”

page 5507

QUESTION

POSTAGE RATES ON NEWSPAPERS

Is it a fact that under the amended postal charges recently enacted the rate of postage on newspapers is greater on newspapers sent to Canada than on newspapers posted to the United States of America?

If it is a fact, will the Minister take steps to remedy this anomaly?

Senator BARNES:
ALP

– The answers to the honorable senator’s questions are as follow : -

  1. Yes, the reason being that the rate of postage on newspapers to the United States of America is governed by a special arrangement between the two countries concerned.
  2. Yes; steps aire already in progress to this end.

page 5508

QUESTION

AUSTRALIAN COMMONWEALTH LINE OF STEAMERS

Senator DUNN:

asked the Minister representing the Prime Minister, upon notice -

  1. What was the price for which each vessel of the Commonwealth Line of Steamships waB sold?
  2. What period were the payments spread over, and what interest was payable on the unpaid balances?
  3. Has the whole of the purchase money and interest been paid and the sale contract completed?
  4. Is it. a fact that freights on primary products have been raised since the sale of the Commonwealth Line; and, if so, will he state the number of increases and the amount in each case?
  5. Did Mr. Larkin, thu late manager of the Commonwealth Line, act as negotiator for the sale of such ships with the representatives of the shipping combine?
  6. What position does Mr. Larkin now hold?
  7. What was the aggregate amount paid to Mr. Larkin as salary, travelling expenses, and allowances during the whole term of his employment by the Commonwealth Shipping Board, and was full income tax paid by him on that sum; if not, why not?
  8. What was the total amount of moneys paid to the marine officers and engineers and office staffs by way of compensation upon their services being dispensed with?
Senator DALY:
ALP

– The information desired by the honorable senator is being obtained, and will be made available as soon as possible.

page 5508

QUESTION

TAXATION BOARD OF REVIEW

Senator E B JOHNSTON:
WESTERN AUSTRALIA

asked the Minister representing the Treasurer, upon notice -

  1. What is the reason for the delay in publishing the recent decisions of the Taxation Board of Review in accordance with the provisions of the law?
  2. When will these decisions be published?
Senator DALY:
ALP

– The answers to the honorable senator’s questions ave as follow : - 1 and 2. The matter is being inquired into.

page 5508

QUESTION

COLONIAL SUGAR REFINERY COMPANY LIMITED

Senator E, B JOHNSTON:
WESTERN AUSTRALIA

asked the Minister representing the Treasurer, upon notice -

With reference to the statement made by the Minister in the Senate on the 23rd July last, that he had no information regarding the amount of profit made by the Colonial Sugar Refinery Company Limited in (a) Australia, and (6) New Zealand and Fiji, for the twelve mouths ending 31st March, 1930, will the Government cause this information tr> be obtained and placed before the tribunal which is being appointed to inquire into the sugar industry?

Senator DALY:
ALP

– The proposal will be duly considered.

page 5508

QUESTION

ARTIFICIAL FERTILIZERS

Senator GUTHRIE:
through Senator Lawson

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

In view of the serious position of the primary producers in Australia and the advisability of encouraging the more extensive use of superphosphates on our crops and pastures, will the Government remove the duties and primage upon the ingredients used in thu manufacture of artificial fertilizers?

Senator DALY:
ALP

– Any representations for the removal of any customs duty on ingredients used in the manufacture of fertilizers will receive consideration on its merits. As regards primage duty, it has not been thought advisable up to the present to make any exemptions by proclamation.

page 5508

QUESTION

ITALIAN MIGRANTS TO AUSTRALIA

Senator GUTHRIE:
through Senator Lawson

asked the Leader of the Government in the Senate, upon notice -

  1. Is it a fact that for the six months ended 30th June, 1930, the number of Italians entering Australia was 961, or 3.12 per cent, of the total arrivals, as compared with 961 or 2.46 per cent., the numbers for the corresponding period pf 1929, when the Bruce-Page Government was in power?
  2. What precautions docs the Government intend to take to maintain the Australian population as 98 per cent, of pure British stock ?
Senator DALY:
ALP

– The answers to the honorable senator’s questions are as follow : -

  1. The actual percentages of Italian arrivals during the six months ended 30th June, 1930, were 3.12 of the total European arrivals, and 2.90 of the total arrivals; for the corresponding period in 1929, the percentages were 2.48 and 2.32, respectively.
  2. When the present Government came into office one of their first actions was to arrange for the quotas allotted for the migration to Australia of certain alien nationals to be reduced by 50 per cent. The Bruce-Page

Government had agreed to 3,000 Italians coming to Australia for the year 1929, but it happened that only a small proportion arrived during the first half of the year.

With respect to the 98 per cent. British proportion of the population of6,500,000, the present small rate of alien immigration does not materially affect the position. There was actually an excess of 333 alien departures during the half year ended 30th June, 1930, and as the excess births in Australia were 48,623 for the year 1929, and would amount to approximately half that number for the half year period mentioned, the position as regards British preponderance is more favorable at present than it was twelve months ago. The whole position as regards alien immigration is being very carefully watched by the present Government.

page 5509

QUESTION

SALES TAX

Senator GUTHRIE:
through Senator Lawson

asked the Minister representing the Treasurer, upon notice -

  1. Is it a fact that the sales tax in Canada has been reduced to 1 per cent., and that for the past year it has yielded £13,000,000?
  2. If so, will not a 2½ per cent. tax as proposed in Australia result in a much greater amount being paid by the people than has been estimated and prevent a decline in the cost of living?
Senator DALY:
ALP

– The answers to the honorable senator’s questions are as follow : -

  1. It is understood that the present rate of tax in Canada is 1 per cent. and that the yield of the tax is now approximatelv £4,500,000.
  2. No. The estimated yield of the tax in Australia is based on Australian statistics, with allowance for the proposed exemptions.

page 5509

QUESTION

MERINO SHEEP

Prohibition of Export

Senator GUTHRIE:
through Senator Lawson

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

Is it a fact that at the Convention of the Graziers Federal Council of Australia held in Brisbane, 10th to 18th June, 1930, the following resolution was carried unanimously: “ That the export of merino breeding sheep from Australia he absolutely prohibited”.

Senator DALY:
ALP

– Yes; but it may be mentioned that a proclamation prohibiting the exportation of stud sheep, exceptwith the consent of the Minister for Trade and Customs, has been in operation since 28th November, 1929.

page 5509

CENTRAL RESERVE BANK BILL

Report of Select Committee.

Motion (by Senator Sir William Glasgow) proposed -

That the time for bringing up the report of the Select Committee on the Central Reserve Bank Bill be extended until the seeond Thursday after the first meeting of the Senate on its. resumption after the forthcoming adjournment.

Senator DALY:
Vice-President of the Executive Council · South Australia · ALP

– I hope that the Senate will not pass this motion. If carried it simply means that the Government will not be able to proceed with its banking legislation until, probably, March of next year. For the reasons that I advanced on the sceond reading of the bill, I submit that it is absolutely essential that the Senate should proceed immediately to deal with the Central Reserve Bank Bill. I have read the report of the committee, and I believe thatthe matters upon which its members are still in doubt could very well be settled in committee. The select committee, as a whole, appear to favour the principle of a central reserve bank. It took evidence as to whether the present time is opportune for its introduction, also on other matters upon which it was in doubt, and I submit that sufficient information is in its hands to enable this Senate to proceed immediately with this legislation.

Senator Sir George Pearce:

– How could we deal with it until after the adjournment?

Senator DALY:

– I see no reason why we should not do so. I may be biased in favour of the measure, but I cannot see anything wrong with it. Honorable senators must admit that it received the fullest consideration in another place, where it was passed. If I thought that any good purpose could be served by postponing the time for bringing up the report I should be prepared to agree to that procedure, but I am of the opinion that a postponement would harass the Government, and prevent its putting into operation the most desirable piece of legislation that has come before Parliament for a considerable time. If the bill to control banking in this country were considered immediately by the Senate, the Prime Minister (Mr.

Scullin) would be able to leave for the United Kingdom with the knowledge that the nation had full control of its own credit.

Senator DUNCAN:
NEW SOUTH WALES · NAT

.- I think that the request of the committee for a further extension of time is, in the circumstances, a most extraordinary one. I concede that the committee has had a big job to perform, but I think that it has had ample time since the closing of the inquiry to prepare and submit its final report to the Senate. It is possible that even had that report been submitted to-night, as we anticipated, we could not have finalized this legislation before the close of the session, but at least honorable senators would have learned the committee’s views on the subject, and would have been able to make their own. investigations in the matter during the recess. That would have enabled honorable senators to attend the next session fully acquainted with the facts and ina position to give to the country as perfect a measure as is possible. If we agree to a further postponement nothing will be done until some weeks after the commencement of the next sitting of Parliament. The committee should have had its report ready to-night.

Senator Sir Hal Colebatch:

– It is ready.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– Then why is it not presented to Parliament in the proper way ?

Senator E B Johnston:

– An interim report has been presented, a most valuable document.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– The final report should have been presented by this time, so that the Senate could have had the benefit of the committee’s deliberations.

Senator Sir William Glasgow:

– Has the honorable senator read the interim report ?

Senator DUNCAN:
NEW SOUTH WALES · NAT

– I have, and I realize that it advances certain reasons why the committee has not finalized its deliberations. They do not convince me that a further postponement of the matter is justified.

Senator LAWSON:
Victoria

.- I do not suggest that Senator Duncan has not read the report, but apparently it has made no impression on his mind, and the reasons for the recommendations, con tained in the document, are not understood by him. The committee is not to blame for not having presented its final report. It has sat on nearly every day since its appointment when the Senate has not been sitting, and it has presented its progress report with the utmost expedition.

Senator Daly:

– All the information contained in the report could have been secured from text-books in the parliamentary library.

Senator LAWSON:

– That is not so. The committee considered the proposal from the point of view of Australian finance. It took evidence from those who are best qualified in this country to advise on central banking and the constitution of such an institution. All ofthe witnesses, except one, expressed the opinion that the present was an inopportune time to make a drastic change in our financial system. The evidence showed conclusively that there was nothing which a central bank could now do that was not being done by the Commonwealth Bank in cordial co-operation with private trading banks.

The PRESIDENT (Senator the Hon, W Kingsmill:

– I would point out that, in the discussion on this motion, it is impossible to avoid anticipating the debate on order of the day No. 2 - Central Reserve Bank, consideration of progress report. I suggest, therefore, that the debate be postponed until after the consideration of the order of the day mentioned.

Senator LAWSON:

– Very well, Mr. President. I ask leave to continue my remarks.

Leave granted; debate adjourned.

page 5510

APPROPRIATION BILL 1930-31

Second Reading

Debate resumed from 6th August (vide page 5407) on motion by Senator Daly -

That the bill be now read a second time.

Senator Sir GEORGE PEARCE (Western Australia) [8.20]. - It is to be regretted that the only opportunity afforded to the Senate to discuss this measure is given on practically the closing day of the session. This hill contains the votes for all the departments, and represents the financial policy of the

Government so far as expenditure is concerned. I propose to discuss it from the stand-point of the States. It is fitting that the Senate, as the chamber which especially represents the States, should consider the budget proposals of a government from that angle.

The outstanding feature of the bill is the provision for an expenditure of £1,000,000 in excess of the expenditure for 1929-30 which, in its turn, exceeded the amount expended during the previous year. This, too, at a time of general depression, of widespread unemployment, and when the national income is enormously reduced.

SenatorRae. - How much of the additional expenditure is represented by increased interest?

Senator Sir GEORGE PEARCE.The lion in the path to a re-adjustment of the finances of the States is the federal interference with railway administration. If honorable senators will turn to page 6 of the report of the conference between the Commonwealth and State Ministers in May, 1929, they will notice that the then Prime Minister, Mr. Bruce, emphasized that it was impossible for the State Ministers to balance their budgets, unless the restrictions imposed by Commonwealth legislation on railway finance were removed. The intrusion of the Commonwealth into the field of arbitration as it affects State instrumentalities is the greatest obstacle to a re-adjustment of State finances. What is the use of our talking pious platitudes about balancing budgets, if we refuse to face these essential facts? Only a few days ago, the Premier of Victoria, Mr. Hogan, who, like other State Premiers, is at his wits end to know how to balance his budget, discovered that he could save £50,000 in the cost of the State railway departments, if he could eliminate expenditure inrespect of merit pay to certain sections of the employees above the ordinary rates of pay. He passed the suggestion on to the Railways Commissioners, only to be informed that the Federal Arbitration award stood in the way. Mr. Hill, the Labour Premier of South Australia, is also right up against extraordinary financial difficulties. He is unable to find sufficient money to pay the wages bill of the State Public Service. He is forced to save £1,000,000 somehow, and is endeavouring to do it by cutting all expenditure to the bone. This drastic policy will, of course, render the State Public Service almost unworkable, but it is forced upon him. The expenditure of the railway department in that State has been increased by £900,000 by federal arbitration awards. And much the same condition obtains in all the other States.

I turn now to the federal budget. I regret to say that no attempt whatever appears to have been made by this Government to face the facts. Expenditure under this bill has to come out of the pockets of the community by means of general taxation. Unfortunately, the people are suffering, as perhaps they have never suffered before. They have to be content with an income from 20 per cent. to 25 per cent. less than they received last year, and yet they are to be called upon to find an additional £1,000,000 to meet the increased cost of Commonwealth administration. The Government should bring the expenditure on Parliament and the administrative services into harmony with the reduced national income. It declines to do that. If Commonwealth expenditure could be reduced by £1,000,000, and I maintain that it canbe, the burden on the community would he lightened to that extent. A 10 per cent. reduction on nearly £11,000,000 for the Government, Parliament, and Public Service would mean a saving of over £1,000,000 and relief to that extent would be given to the general taxpayers whose income, as I have shown, has been reduced by at least 20 per cent. State Ministers, exploring every possible avenue of additional taxation, will be forced, willynilly, to adopt the most drastic measures to reach their objective, and the Commonwealth Government could relieve the taxpayers to the extent of at least £1.000,000.

Senator Sir GEORGE PEARCE.The suggested reduction of 10 per cent, in governmental expenditure has not been adopted by the Government.

In order to show that this Government has been forced to act contrary to its inclinations and in direct opposition to the policy which its supporters outlined prior to the last general election, I remind honorable senators that a short time ago, when the Prime Minister (Mr. Scullin) met the representatives of various Public Service organizations in Canberra, he implored them not to take advantage of the federal arbitration law by seeking increases in salaries or wages. On that occasion he contended that the financial position of the country was such th.it if additional rates were granted they could not possibly be. paid. But only a few months before he was denouncing the Bruce-Page Government because it proposed to amend the Public Service arbitration system, and in doing so, dispense with numerous extraneous payments, which, in the opinion of the Public Service Board, were quite unnecessary. These persons who had denounced the then Government because it proposed to make certain alterations in the Public Service arbitration system, had to support the Prime Minister in his request that public servants should not ask for any increases in pay because it was useless to expect them. By the Commonwealth withdrawing from the field of arbitration, the States would have been able to adjust their railway finances. Until that is done, it is impossible for the States to progress.

Senator Sir GEORGE PEARCE.I am merely stating facts. The salaries and wages paid in the States’ railway sendees constitute the largest item of expenditure. It is sheer humbug to say that it is possible for the States to balance their budgets under our present arbitration system.

Senator Sir GEORGE PEARCE.The South Australian Government cannot possibly balance its budget without taking into consideration railway expenditure which is the prime factor, and which is influenced largely by the effect of Federal Arbitration Court awards.

If the Minister had attended a recent meeting of the Loan Council in Canberra, at which Commonwealth and State Ministers were present, he would have heard similar sentiments voiced by the present Premier of South Australia, Mr. Hill.

Senator Sir GEORGE PEARCE.The Premier of South Australia said that railway expenditure in that State could not be reduced because of the obligations cast upon it in consequence of Federal Arbitration Court awards. The difficulty of that State and many others is not due to State enactments, but to the Commonwealth Conciliation and Arbitration Act, over which it has no control. The South Australian Government, and also the Victorian Government, must, eventually, face the position because they have not the money to meet these awards. During the past two or three years they have been able to carry on merely with the assistance of bank overdrafts; but now the financial institutions have said that no further accommodation can be granted. What is the use of talking all this “twaddle” about a reduction in wages. The States have not the money to pay. By reducing unnecessary federal expenditure, particularly in the matter of Government services, a wider field of taxation would be made available to the States.

I suggest rli.it if honorable senators supporting The Government would devote less time to trying to throw Ac blame for the present financial situation upon the shoulders of the late Government and endeavour to devise some means of overcoming our present difficulties, they would be rendering a service to the community. I deny that the late Government is responsible. One of the general statements made is that our financial position is due to excessive borrowing. By whom was this borrowing done? In the eleven years, from 1919 to 1930, our war debt increased by £2,102,532, and other debts from £27,645,611 to £90,566,839, an increase of £66,921,228, or a . total increase in the Commonwealth debt of £69,023,760.

Senator Sir GEORGE PEARCE.Because it is the eleven years following the war. If I were to take the five or six years in which the Bruce-Page Government was in office I could show an even more favorable result. During the five years that Government was in office the war debt was actually decreased by over £30,000,000, although other debts increased during that period. Let us now consider the position of the States’ debts. In 1919 these amounted to £397,47.1,560, and, in 1930, to £727,639,836. In the eleven years in which the federal debt increased by £66.921,228, the States’ debts increased by £330,168,276. When honorable senators opposite speak of excessive borrowing they should realize who is responsible.

There have also been allegations of waste and extravagance against the late Government. I noticed that Senator O’Halloran, speaking at a1 theatre, where, apparently, he did not have too pleasant a reception, said recently that the preceding Government had squandered its surpluses. During the time that Government was in office the surpluses amounted to £10,000,000. How were those surpluses squandered, as Senator O’Halloran suggested? We paid approximately £7,000,000 to replace the obsolete vessels of our naval fleet. Not one penny of debt lies upon those ships, nor has any interest to be found by the taxpayers of Australia as a result, of the Government’s action. For grants to the States for the development of main roads, £1,250,000 was spent out of surplus funds. For the extension of scientific and industrial research, £600,000 was spent, and for marketing primary production £500,000. In addition ‘£250,000 was spent on air service equipment; £200,000 on civil aviation; £220,000 on prospecting for oil and precious metals; and £100,000 on radium supplies for the treatment of cancer. That is the way in which the previous Government spent surpluses amounting to £10,000,000. I invite honorable senators opposite to closely study these figures and to see if money has been squandered.

Senator Sir GEORGE PEARCE.The expenditure incurred in that connexion resulted- in a saving of £2,000,000 to the Commonwealth in the matter of naval expenditure. During the period of which I am speaking, there has been a large increase, in our population, an extension of public services, and consequently an increase in. salaries and wages granted, not by the Government, but by the Public Service Arbitrator. In 1921-22, the cost of the Commonwealth Public Service, Excluding business undertakings, was 10s. 7d. per head of the population, while in 1928-29 it was 9s. 5£d. per head. That is the only instance in which a reduction of expenditure per head of the Public Service can be shown. Those who make these charges of extravagance against’ the late Government canriot, disprove these facts. Recently Sir Otto Niemeyer, who is recognized as one of the world’s leading authorities on finance, has engaged in conference in Canberra with representatives of the Commonwealth and State Governments. I wonder what that gentleman will think when he . finds that the cost of services of the Commonwealth is £2,000,000 more than it was two years ago. This year the people are to be taxed to the extent of an additional £12,500,000 which is more than the whole of the direct taxation previously imposed. The cost of Government in this country is being increased by £1,000,000.

Senator Sir GEORGE PEARCE To the presence on the treasury bench of a Government that has not the courage to face the position,

Senator SIR GEORGE PEARCE.That interjection is unworthy of the Minister. No one on this side of the chamber has suggested a reduction in oldage pensions. What we have suggested, and what I am suggesting now, is that the expenditure upon the services of the Commonwealth should be reduced by the sum of £1,000,000. There are other savings that could be -made; but, that would require an amendment of different laws. This is within the competence of Parliament to do immediately. The Government’ and Parliament should set an example, by passing a measure providing for the reduction of the salaries of Ministers and members^ and calling also upon the Public Service to come into line with the general community by having their salaries reduced by 10 per cent. That would save an expenditure of over £1,000,000, and would bring the expenditure to the level at which it stood last year. When the bill reaches the committee stage, I propose to move a request to another place that that be done. The re-adjustment of our finances is the most urgent and most important matter that we have to consider.

Senator PAYNE:
Tasmania

.- I endorse the remarks that have been made by the Leader of the Opposition (Senator Pearce), by way of criticism of the policy of the present Government, as disclosed in the budget papers and the bill that we are now discussing. I agree with the definite statement of the right honorable senator that the Government has absolutely refused to face the position in which Australia stands to-day. Through its leader, it has said that it will not accept any dictation. It may not accept dictation from a minority in another place, or- even from a majority in this chamber ; but I say definitely that it will be compelled to accept the verdict of a much more powerful section - the electors themselves. The day is fast approaching when whatever government is in power will be compelled to reduce the expenditure upon government in Australia. The suggestion of the Leader of the Opposition is a reasonable one. We should set an example to the rest of the community by reducing immediately the cost of Parliament, and by following up that action with a reduction of the salaries of public servants.

Senator Daly:

– The honorable senator wanted to increase the expenditure by the payment of a bounty on evaporated apples.

Senator PAYNE:

– We have been assured by the Prime Minister that he will not consider such a suggestion as reduction of Government expenditure. Throughout the period that he has led the present Government; he has urged the already hardest-worked section of the community to put forward still further efforts - I refer to the wheat-growers and other primary producers. But he has carefully refrained from appealing to those upon whom he and his supporters depend to work harder and to give of their best to the industry in which they are engaged, because he is afraid to do so. He has never suggested to the leaders of organized workers that they should keep their hands off the men, and refrain from interfering with their operations. He has closed his eyes repeatedly to the efforts that have been made by the socalled industrial leaders to restrict output. Every action that has been taken by the Government has tended to increase the cost of production, and to make it more difficult for the business man and the community generally to carry on. It must not be forgotten that the community has to make ends meet with a much smaller income than it had last’ year. Everything possible should be done, by legislative action, to diminish the cost of living, not to increase it. Time after time I have protested against impositions being placed upon the people of Australia without due consideration by this Parliament.

That brings me .to a matter that I feel I am justified in referring to. This wonderful measure that we now have before us contains provisions for the maintenance of the Tariff Board, and the administration of the Customs Department. In Volume XIX. of the Commonwealth Statutes I find the Tariff Board Act, which was placed on the statute-book after full consideration by both Houses of Parliament. During the last week I have taken the trouble to read the debates that took place on that measure; and I have found that those who are now flouting its principles were then strenuous advocates of it, and suggested that it should be made rigorous in its application, because of the benefits that it was likely to confer on the community. “What are the principles of that act ? I believe it is universally admitted that the success of any country depends upon its indus trial and commercial prosperity. The object of the Tariff Board Act was to ensure to the business community of Australia, and to the people generally, continuity of operations. In view of the fact that that which was likely to have the greatest effect upon the community was an alteration of the tariff, the act laid it down that no alteration should be made until the Minister had referred it to the Tariff Board for investigation and report. If honorable senators read the relevant section they will find that it says that the Minister “ shall “ refer these matters to the board. The late Mr. Pratten, who afterwards became Minister for Trade and Customs, wished to have it a permissive instead of a mandatory provision, and moved for the substitution of the word “may” for “shall”; but he was defeated, and accepted his defeat like a man. Consequently, the section provides that the Minister shall not take any action in regard to increases or decreases of duties, or the introduction of new duties, until he has received a report from the Tariff Board. Why’ was that done? The object was to prevent the dislocation of Australian industry .at the whim of a government, and to give the people of Australia an opportunity to bring evidence either for or against any proposed alteration of the tariff. What has happened? Last November a new tariff schedule was tabled in another place.

The PRESIDENT:

– Does the honorable senator propose to’ connect his remarks with the bill?

Senator PAYNE:

– The bill makes provision for a large expenditure for the continuation and maintenance of the Tariff Board; I propose to ask the Senate whether it is wise to vote that amount, in view of the fact that the operations of the board have ‘been rendered null and void by the action of the Government. Last November a tariff schedule was tabled. It contained approximately 220 items, relating to alterations of existing rates of duty, and the imposition of new duties. The Government then had in its possession reports from the Tariff Board with respect to only 19 of those items. Therefore, the” action of the Government with respect to the remainder of the items was contrary to the instructions that are contained in the Tariff Board Act of 1921. Soon after that schedule was tabled I asked whether the Minister had considered the legal position that was created by his flagrant violation of section 15 of the Tariff Board Act, and the reply given to me was that he was quite satisfied in regard to the legality of his action provided that it was ratified by Parliament. If I were to meet the Minister (Mr. Fenton) and the Assistant Minister (Mr. Forde) in the street, and knock them down, and leave them half dead, what would be said of me if, upon being challenged regarding the legality of my action, I said “ I am quite satisfied of its legality, provided that it is ratified by Parliament”? I should be told that I was mad; and I would be mad. I say advisedly, that these members of the Cabinet are mad with the lust of power. They know that they are in a position to dictate to the people in regard to the duties that they shall pay. In view of these facts, which cannot be disputed, are we not justified in considering whether we should incur the proposed expenditure upon a Tariff Board which is working under an act that has been flouted by the Government? In the Customs Act of 1921 there is a section which deals with deferred duties. It reads -

If the Tariff Board certifies to the Minister that any goods in the schedule, upon which a deferred duty is imposed, will not be made or produced in Australia in reasonable quantities and of satisfactory quality on or immediately after the date specified in the schedule, for the collection of the duty, the Minister may, by notice published in the Gazette, defer the duty from time to time until the date specified by the Tariff Board as being the date by which in its opinion the goods will bc made or produced in Australia in reasonable quantities and of satisfactory quality.

My reading of that section convinces me that the purpose of a deferred duty is to give Australian manufacturers an opportunity of producing articles.

The PRESIDENT (Senator the Hon W Kingsmill:

– When dealing with an appropriation bill, the honorable senator may not discuss details of the Customs Act.

Senator PAYNE:

– I mentioned this matter, because the administration of the department costs the people of Australia a lot of money. In this bill we are asked to vote that money. Am I not in order in endeavouring to show the futility of our being asked to pass this item without having an opportunity of ascertaining whether we are getting value for our money ?

The PRESIDENT:

– The honorable senator is quite in order so long as he puts his statements in that way. If he continues to do so, I shall not interrupt him.

Senator PAYNE:

– A short time ago the Minister further deferred certain duties which were shown as deferred duties in the tariff schedule of 1926. The last time that he did that was in May of this year, when he deferred the duties until the following August. The assumption was that by August the articles referred to would be manufactured in Australia. Having deferred the duties, he then caused to be issued a proclamation which practically nullified it. I have here some valuable information in this connexion.

The PRESIDENT:

– The honorable senator must connect his remarks with the subject before the Chair.

Senator PAYNE:

– I wish to place before the Senate some information in order to prove that that action of the Minister will have the effect of handicapping a very important Australian industry. I could quote from catalogues published by a well-known Melbourne firm to show that this particular duty-

THE PRESIDENT. - The honorable senator is going too far.

Senator PAYNE:

– If I am not permitted to refer to this matter now, I may have an opportunity to do so in committee. Regarding the general policy of the Government, I point out that we shall not extricate ourselves from our present difficult position if any action of a Minister considerably increases the cost of production in any industry upon which the prosperity of this country depends. Let us for a moment consider the position of the tomato-growing industry. Since the action of the Minister, to which

I have referred, tomato-growers have to pay an additional £1 per case for the glass required for their glass-houses, notwithstanding that Australia produces no sheet glass, and that the glass purchased by these growers has been held in stock for months by the very company in whose interests the question of deferring the duty was raised.

The PRESIDENT:

– I hope that the honorable senator is not wilfully disobeying my ruling.

Senator PAYNE:

– I assure you, Mr. President, that I am not. I am the last man to desire, to do that; but, feeling strongly about this matter, I find it difficult to keep within the Standing Orders. During the last few months I have mingled with business men and artisans, and I say without hesitation that the problem of unemployment is very much more acute to-day, than it was nine or twelve months ago. The position is becoming worse week by week. “When in Melbourne about a fortnight ago I came across four instances of business men being compelled to dismiss employees because of legislation passed by this Parliament during the present session. In two instances whole staffs were dismissed, and in the other instances 50 per cent, of the employees were put off. I am desirous of assisting the Government. If I cannot do so by moral suasion, I shall use all the force at my disposal. Almost anything is justified if it brings the Government to a realization of the action necessary to restore the stability of the Commonwealth.

Senator Barnes:

– Then why does not the honorable senator support the Government which is doing that?

Senator PAYNE:

– I have been endeavouring to show that the Government has been doing exactly the opposite. Either the Government does not realize the seriousness of our position, or some outside force is preventing it from taking the steps necessary to put matters right. Australia is largely dependent on the goodwill of those countries which are good customers for our produce. I regret, therefore, any action which has tended to antagonize those countries. Our duty as legislators is to restore a feeling of con- fidence and goodwill towards Australia in the minds of the people of other countries. Australia cannot be entirely selfcontained, as some honorable senators suggest. It is true that we may manufacture all the goods we require for our own consumption, but to be entirely self-contained we must do more than that; we must consume all that we produce. In a country of large dimensions and a small population that is impossible. This country is so wonderfully productive that we are able to produce four or five times as much as we can consume. We must, therefore, find markets outside. We should do nothing to antagonize countries which are good customers of ours by refusing to allow goods produced by them to enter Australia.

The PRESIDENT:

– I cannot allow, the honorable senator to discuss the tariff in a debate on an appropriation bill.

Senator PAYNE:

– I apologize if I have gone further than I intended. I regret that the people of Australia are being called upon to pay increased taxation this year. During the war taxation in Australia was heavy, but from time to time one form of that taxation was reduced. Unfortunately, the burden is gradually being increased again in that direction, and in addition other burdens, such as increased postal rates and a sales tax, are being placed on the people. Sooner or later, the Government must realize that what is necessary is a reduction of expenditure, both in connexion with this Parliament and the departments of the Public Service. The Government must do what an ordinary business man is compelled to do when faced with financial difficulties. It must economize. No business man can afford to spend more than 20s. for every £1 he receives. Yet

Ave, as a nation, have endeavoured to do so. Now, in order to maintain our heavy expenditure, the people of this country are being compelled to pay heavier taxation. I trust that an effort will be made to reduce the burden on the taxpayers.

Senator DUNN:
New South Wales

, - I am reminded of an old press slogan - “Be brief or be butchered.”

Senator Payne referred to the use of a club to bring the Government to its senses. If the honorable senator intends to use a club, I shall have to ask the Minister for Defence to allow me to use the big gun near the Canberra railway station to defend myself. If the honorable senator really desires an opportunity to criticize the Government, he will have it on the hustings next year.

Senator Sir William Glasgow:

– Is that a threat or a promise ?

Senator DUNN:

– That is straight from the horse’s mouth.’ All this beating of the wind about what the Government has and has not done . can best be judged by the people of Australia, and I hope that their- decision will be sought at an early date. I have no fear of the result.

The Leader of the Opposition (Senator Pearce) indulged in a general review of the activities of the Bruce-Page Government, and a series of more or less scathing references to the present Government. I remind Senator Pearce that the Bight Honorable William Morris Hughes, P.C., who represents the constituency of North Sydney in another place, has stated repeatedly on the hustings and elsewhere that when he relinquished the office of Prime Minister and handed over to the Bruce-Page Government the federal coffers were overflowing; that there was, in fact, a surplus of £7,000,000. But when this Government assumed office, it found that the profligacy of ‘ its predecessors had denuded the Treasury. Consequently, we have had a hard row to hoe.

Senator Pearce allowed his imagination free reign when lauding the endeavours of the Bruce-Page Government to build up the Australian navy. I contend that its achievement in that direction was not very creditable. It let contracts overseas for the construction of the submarines Oxley and Otway which, by the way, are fast becoming obsolete. Those two vessels were passed as O.K. by both the constructing dockyards and the British Admiralty Board. When making their maiden voyage a few days later they ran into a minor gale in the Bay of Biscay - and limped into harbour at

Gibraltar in serious difficulties. The contractors were compelled to send a corps of artificers to that naval port, and it was eight months before the vessels could again put to sea. Many defects have also been traced in connexion with the gun turrets of the Canberra and Australia. Personally, I see no reason why any of those vessels should have been constructed. We had just concluded the war that was to end all war, and already possessed the cruisers Brisbane, Melbourne and Adelaide and other vessels that would have served our purpose in the piping days of peace quite satisfactorily. But the spending mania was upon our predecessors; the junkers of the nation had to be satisfied.

The Leader of the Opposition discreetly refrained from drawing attention to the extravagance of the Bruce-Page Government with regard to the appointment of royal commissions. Its friends had but te raise a bogy, and, forthwith, a royal commission was appointed to investigate the matter, perambulating the continent in the process. In that manner the trifling sum of £600,000 was dissipated. A further £9,000 was lavished on the overseas jaunts of responsible Ministers to the Washington and other conferences. It ill becomes the honorable senator to accuse this Government of embarking upon fantastic schemes with the object of frittering away millions of pounds. I admit that the present Government has allocated £2,000,000 for the purpose of alleviating unemployment, but is that not a praiseworthy endeavour? I also point out that it has checked expenditure in all directions; that it has reviewed our system of defence, and effected a saving to the nation of £400,000 in that matter alone. I am proud of the achievements of this Government during the short period it has been in office, and I am quite prepared to go to the country and render an account of its stewardship to the people. The attitude of honorable senators opposite recalls to my mind the psychology of the modern woman. I recently met some of my female cousins who told me that they had seen a certain picture five times, simply because it worked up their emotions, and allowed them to have a good cry. I shall suggest that they come to Canberra during the parliamentary session and listen to honorable senators opposite. Their utterances almost move me .to tears.

As to the calibre of the Bruce-Page Government, I recall that the present Deputy Leader of the Opposition in another place stated that Dr. Earle Page was the most tragic Treasurer that was ever inflicted upon Australia. I repeat, I shall’ welcome the day when we go to the hustings. My majority on the last occasion was 75,000, and I am confident that it will be greater next time. I am just about fed up with the humbug in which honorable senators opposite indulge

The PRESIDENT (Senator the Hon W Kingsmill:

– I shall not allow any honorable senator to use such language. Senator Dunn must withdraw the remark.

Senator DUNN:

– With all due respect to you, Mr. President, I fail to see why I should be called to order for using the word “humbug”, I do not consider that it is- unparliamentary.

The PRESIDENT:

– My ruling is that it is unparliamentary, and I insist upon the . honorable senator withdrawing it. .. - ,..

Senator DUNN:

– I submit that the word is a’ familiar one in the English language. We are not in a kindergarten or Sunday school-

The PRESIDENT:

– Order! Does the honorable senator refuse to obey my ruling?

Senator DUNN:

– I respectfully bow to your ruling, Mr. President, and withdraw the word “ humbug “.

Senator GREENE:
NEW SOUTH WALES · NAT

– In view of what Senator Dunn has just told us, it would seem that this will be the last occasion on which I shall have an opportunity to say anything on a budget in this Parliament. I do not know whether that will bring tears to the honorable senator’s eyes. If it does, he must blame himself.

If time permitted, I should like to traverse quite a number of subjects which have relation to the budget, and which warrant discussion- in a time of great emergency such as this. There is one point, at all events, upon which “every honorable senator must be in complete agreement and that is, that at whatever cost, we must this year balance our budget. We must cover pur expenditure with the taxation that we raise, no matter what sacrifices have to be made. It has been the failure to recognize .that necessity, on the part of both State and Federal Parliaments, that has led to the very acute position in which we now find ourselves. I do not say that it is entirely owing to that. It is not. But we should have been in much better shape to face the present position if the Leader of the Opposition (Senator Pearce) had ‘ been able to announce that instead of leaving an accumulated deficit of £5,000,000 the Bruce-Page Administration had passed on to this Government the surplus of £7,000,000 which it found when it took office. I propose a little later to show how this deficit arose. The figures which I intend to quote were supplied to me by the Treasury officials at my request so there can be no doubt as to their authenticity or correctness.

It must be generally admitted that Australia is getting more or less out of economic step with the rest of the world. Many of our present difficulties are due to this fact. During the last few months we have been forced to realize that there has been an extraordinary diminution in the national income. It is difficult to state by what amount it has been reduced, but it must be by a very large sum indeed. Besides receiving much less for our exportable surplus of wheat, wool, butter, metals, &c, we have also had to face an alarming decline in our internal revenue by way of dividends from business enterprises and in many other directions. It is out of the total income of the community that we all live. If the financial pool from which all sections of the community draw sustenance is getting smaller and smaller, and if the number of people drawing from it is getting larger and larger, the result must be obvious to all. No one will deny that we must retrace our steps to some extent. If we endeavour to stand “ pat “, there is nothing ahead but national bankruptcy. There is nothing to be gained from any attempt to -keep our beads in the clouds. We must come down to earth and face the position. I am not one to advocate an indiscriminate reduction in wages. Many people with whom I have discussed our national problems have urged that we should throw overboard all Arbitration Court awards and return to the conditions under which private contracts may be made between man and man.

Senator Rae:

– Everybody then will be scrambling for a job.

Senator GREENE:
NEW SOUTH WALES · NAT

– I do not think it is possible to have again the open shop in this country. That is beyond the bounds of possibility. I doubt that the democracy of the Commonwealth would stand for that. But at the same time the obligation rests upon every one who appreciates the gravity of the present position, to tell the people frankly what must be done in order that Australia may get back to a sound working basis. The future standards will not, I admit, be as high as they are to-day, but proportionately the people will be just as well off.

I think that the Government, in the preparation of its budget, is to be commended in many respects. I refer particularly to its attempt to spread the burden of additional taxation over as wide an area as possible. I have seen comment, in certain quarters, that the Government should have raised an additional £4,000,000 from income taxation by reducing the exemption to £150. I do not know whether those who offer this suggestion have taken the trouble to ascertain what would happen to the various classes of taxpayers if the Government adopted that course and attempted to raise another £4,000,000 from income taxation. The figures which have been supplied to me by the Treasury are intensely interesting, and I am sure they will be helpful to honorable senators in the consideration of the peculiarly difficult problem which confronts the Commonwealth to-day. Senator Pearce said, in the course of his remarks that the national income had been reduced by approximately 25 per cent., and Senator

Colebatch interjected, saying that the reduction was nearer 40 per cent. I am prepared to accept the figure mentioned by Senator Pearce. I consider it is a fairly close estimate of the amount by which the national income has been reduced this year. The Treasury was unable to furnish me with the gross income tax figures relating to last year, and instead gave me the figures for the year 1927-28. When, as every one will admit, the aggregate income of the community was much higher than in 1928-29. Consequently if we assume the national income this year has been reduced by 25 per cent, on the figures for 1927-28, we shall be well within the mark. The figures supplied to me show th,at if the present income tax exemption were lowered to £150 the net additional receipts from income taxation, that is to say, the amount received, after providing for the extra cost of collection, would be only £820,000. I am convinced that the people who suggest that the exemption limit should be reduced to £150 have not the faintest idea of the effect which this course would have on taxpayers with taxable incomes ranging from £500 up to £1,200, at which stage exemption privileges disappear. If the Government did this, and if it attempted to raise an additional £4,000,000 from income taxation, the class of taxpayers mentioned would have their burdens increased by 100 per cent. In the circumstances it is natural that the Treasurer should have hesitated to take that course. Instead he looked for some other fairer and easier way of raising the additional revenue required after allowing for the lowering of the exemption. The attempt to raise £4,000,000 by added income tax would also fall with stunning effect upon taxpayers with taxable incomes of over £1,200, who at present pay about 92 per cent, of the total receipts from this source. On the assumption that the total aggregate income on which income taxation is levied this year was 25 per cent, below the 1927-28 figures, which is a conservative estimate, the position in regard to what respective incomes would be is shown in the table which I shall submit. We must also remember that, in addition to federal imposts, State taxation, which is often heavier than that of the Commonwealth, has to be paid. A person with an income of £20,000 would find that possibly, thewhole amount would have to be paid in income taxation, and that he would, possibly, have to borrow more to meet the demands of the Taxation Commissioner. It is utterly impossible for the Treasurer to raise any considerable amount by dealing with income taxation on the lines suggested in some quarters. I now submit the following figures, which may prove of interest to honorable senators in studying our financial position : -

  1. What neta mount, after deducting extra cost of collection, is estimated would be derived from a reduction in the exemption of income tax to £150-

    1. between £150 and present exemption? -£820,000.
    2. extra taxation on present taxpayers? -£1,300,000.
    3. what percentage increase does (ii) represent? The only present taxpayers affected are those residents with net incomes of £1,200 and under. These taxpayers pay at present (1929-30 rates) £1.322,000 tax. The percentage increase would therefore be to them approximately 100 per cent.
  2. What increased rate would it be necessary to levy on above basis to raise an additional £4,000.000? - The latest particulars available regarding the incomes of taxpayers are for 1928-29 (income year 1927-28). Assuming that the incomes for 1929-30 (1928-29 income year) were similar to those for 1928-29 (income year 1927-28) with 1920-30 rates applied to the incomes, the tax that would be payable would be as follows: -

With the figures discounted by the percentages shown above, it would be necessary, in order to raise an additional revenue of £4,000,000 from all individual taxpayers (resi dents and absentees), with incomes for residents over £150 and absentees on their total net income (as at present), to apply a percentage increase as follows: -

3. *(a)* What would then be the respective income taxes, on. taxable income of £600, £760, £1,000, £6,000, £10,000 and £20,000 ? 3. *(b)* What are the respective Income Taxes payable under the Government's proposals in respect of the taxable incomes of £500, £750, £1,000, £5,000 £10,000 and £20,000 ? I now come to the question of the extent to which it is possible for the Government to economize. I recognize that reductions have been made in some directions upon which the Government is to be commended. Economies have been effected, for instance, in the Department of Defence, concerning which I should like to say a few words. The Leader of the Opposition **(Senator Pearce)** will remember that when he and I were colleagues the right honorable member for Cowper **(Dr. Earle Page)** took advantage of the opportunity when the Estimates were before another place to compel the Government of the day to reduce the expenditure in the Defence Department. The Government was, virtually, compelled to withdraw its Estimates. That was the only occasion during my parliamentary life that I remember such a course being taken. The Leader of the Opposition was then the Minister for Defence, and, for me, that incident had some tragic significance. Later on I was sent, much against my will, but I did so for the benefit of my party, to take over the Defence Department under definite instructions to reduce expenditure. {: .speaker-K0F} ##### Senator Sir George Pearce: -- That was after the Washington Naval Conference. {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- So was the other. I w'ent to the Defence Department under instructions and had a difficult task to perform, but I carried it out to the best of my ability. Expenditure in that department was materially reduced, but I was defeated at -the following election. {: .speaker-K0F} ##### Senator Sir George Pearce: -- That course was not followed as the result of the motion moved by the right honorable member for Cowper; but in consequence of the decisions reached at the Washington Naval Conference. {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- I cannot agree with the Leader of the Opposition. I know what was done at that time, and I say, deliberately and with a knowledge of all the circumstances, that unless that reduction had been made the Country party, with the assistance of one or two others, would have thrown the Government out of office. The subsequent move which the Government made was because of the attitude of the Country party. I had to bear all the brunt of that incident; I know all about it. But what I complain of is that when the right honorable member for Cowper joined my right honorable friend, all the good work I had performed was undone, and the expense in that department again rose. My friends opposite are now undoing all the work of their predecessors. I come now to the question of total expenditure and how our present position has been brought about by what has happened during the past few years. I wish to say, in the friendliest possible manner to my old colleagues, that in dealing with the finances of this country there has been developing a practice which is exceedingly dangerous. It is misleading tothe Parliament and to the country. The Leader of the Opposition **(Senator Pearce)** has also been misled. I give the right honorable gentleman credit for making in the utmost good faith the statement that, during, the BrucePage régime, the surpluses amounted to £10,000,000. I am certain that he made it with perfect candour. I have, however, the actual figures, which I shall quote, and show how they have been made up. The practice followed by the ex-Treasurer wasto pass into trust funds huge sums of money, and to use those sums on the current expenditure of the year without bringing them into account in the annual statements of actual expenditure placed before Parliament. {: .speaker-K0F} ##### Senator Sir George Pearce: -- The surpluses were always brought into account in the following year. They would not be known until the end of the financial year. {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- If the Leader of the Opposition will goback to the time when the late **Mr. Andrew** Fisher dealt with trust funds which had been established in connexion with the construction of the Navy, he will find that, on every occasion when expenditure from trust funds was allocated to the Navy, it was included in the expenditure of the year, and was shown in the budget. The expenditure of the year was met by deducting the expenditure from the trust fund, and Parliament knew to a penny what the actual expenditure was for the year. That practice has been abandoned, with a result that Parliament does not know what the actual position is. I have had a good deal of experience of public finance; I have made a study of it. I do not think that I am altogether a fool, but I know that it tests my powers to the utmost in going through the budget papers to-day to make up my mind whether they include all the moneys which the Treasurer proposes to spend for the year. I asked the Treasury to supply me with the expenditure from revenue, plus the expenditure from trust funds for the years 1921-22 to 1929-30 inclusive, giving the total expenditure from revenue and trust funds in order to ascertain the amount of the surpluses and deficits for those years. SenatorRae. - Including loan money? {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- No, simply expenditure from revenue and trust funds for specific years, showing the final surpluses and deficits for each year. The information supplied is as follows : - Over that period the position is that the actual surpluses were £4,073,000, and the deficits £16,939,000. That explains how the late Government inherited surpluses of £7,000,000, and left a deficit of £5,000,000. That is the real story. I am perfectly satisfied that this Parliament, would never have permitted it to continue if the accounts had been presented, as I say they ought to have been presented, and as the AuditorGeneral of the Commonwealth says, they ought to have been presented by bringing to account in each year the expenditure from the trust funds plus the expenditure from revenue. The country would then have recognized the real nature of the drift in our finances, and long before now remedies would have been applied. As Treasurer, **Dr. Earle** Page was always talking about, special appropriations, and saying that they could not be touched. The one thing that he forgot to tell the public was that he added very materially to those special appropriations by acts of this Parliament for which he was responsible. Twice during his term of office he raised the old-age pension. When we have an over-flowing Treasury there is reason for these eleemosynary grants by Parliament to the indigent poor; but as the figures show that there waa a huge deficit in both of the years when the old-age pension was increased, where was the justification for adding to our special appropriations, and laying upon this country a burden which will stretch almost to eternity? Only a few moments ago honorable senators repudiated the bare suggestion that old-age pensions should be touched. There is nothing easier in this world than to raise them; but when it comes to reducing them, it is another' story. I could refer to a number of things which were done by the last Government, that it would not have attempted to do had a true picture of the finances been placed before Parliament. I do not for a moment disparage the personal honour or the integrity of the right honorable gentleman who for seven years had charge of the Treasury; but I say that, from the day that he assumed office until he left it. he was never honest with this country. That, however, is not all the story. These figures show that the expenditure during his term of office was increased by £10,000,000. I point out, however, that in the year 1921-22 a number of large items were met out of revenue that have not since had to bc met. The figures that I am about to give are official; they have been supplied to me, at my request, by the Treasury. {: .speaker-KTR} ##### Senator McLachlan: -- When? {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- The date is the 23rd July last. In the year 1921-22 the expenditure out of revenue upon repatriation and sundry war services was £1,600,000 greater than the current expenditure. Other items that have not now to be met, but that were paid for out of revenue in that year, were, defence officers' compensation, £300,000 - a reduction that I had to make - construction of fleet, £336,000; reserve of rifles, £226,000; and munitions, £214,000; making a total of £2,676,000. In addition, the sum of £990,000 was paid out of revenue in that year for post office works, and £291,000 for munitions plant. The succeeding Treasurer discharged these latter commitments out of loan funds thereafter. It will thus be seen that approximately £4,000,000 was found out of revenue in 1921-22 that was not so found in 1928-29. That £4,000,000 must be added to the £10,000,000 by which the expenditure rose during that period. These are authentic figures, about which there can be no controversy, and -to which there can be no reply. I admit quite willingly that some of that money - not all of it, by any means - was used in the reduction of debt; but that does not get away from the fact that we were drifting to the bad practically the whole of the time that **Dr. Earle** Page was occupying the Treasury, and the country did not know it. I venture to assert that even Parliament did not know it. On one occasion I began to tell the story, but I was not very successful. For one thing, I had not then the opportunity that I now have of obtaining official figures, and I had to prepare them myself with the aid of some outside assistance, which in the long run did not prove very reliable. But I was able to follow the figures sufficiently to know what was taking place. As I felt that in all probability thi* would be the last occasion upon which I would hare an opportunity of addressing this Parliament on the budget, I wished to deal with this one point above all others; because, unless this practice is stopped, neither Parliament nor the country will know what is going on. Had the story been told, a3 it ought to have been, year by year, we would never have got into the mess that we are in to-day. {: .speaker-KOZ} ##### Senator Hoare: -- Does the honorable senator think that **Dr. Earle** Page knew the tale -himself ? - {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- One can only assume that he had the capacity to read the figures that were presented to him from time to time in the course of his administration of the Treasury. {: .speaker-KTR} ##### Senator McLachlan: -- Where is the vice in the methods that enabled that to be done? {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- I thought that I had made that abundantly clear. The honorable senator probably knows that, under our Constitution, any surplus revenue of the Commonwealth has to be paid to the States. I assume, also, that he is well aware of the subterfuge^ - if I may be permitted to use that term - by which this Parliament succeeded in evading that provision. It passed the Surplus Revenue Act, under which the Treasurer at the end of each year collars all the money that happens to be surplus, and puts it away in various trust funds which are available for expenditure. I say that the expenditure from trust, funds should be shown in the budget alongside that from revenue, under the items to which it is allocated; that the whole of it should be brought together at the end of the budget, where the true expenditure for the year is shown; and that there should^ then be a reconciliation between revenue and expenditure. {: .speaker-KLU} ##### Senator Sir William Glasgow: -- Has that practice been followed this year? {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- I do not know, and I do not care whether it has or has not been. What I' have said is that the practice of which I complain has grown up in recent years, and that it ought to cease immediately. {: .speaker-KTR} ##### Senator McLachlan: -- Is it. the practice of which the Auditor-General complained? :' {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- Partly. So far as I have been able to follow his criticism, the effect is the same. Honorable senators know perfectly well the procedure that was adopted to overcome the objection of the Auditor-General. Under our Audit Act, if that officer does not approve of the way in which the accounts are kept, he has the right to direct that they shall be kept in some other manner; and he did so direct. But the Audit Act contains another provision that enables the Government to pass an order in council which in effect says " It shall be done as we direct, not as the Auditor-General directs ". The last Government took that extreme action. Had it not done so, the country would have known what the true position was very much sooner than it did. Just one more word in regard to this budget, by way of comparison with what has been done within recent years. A question that I asked the Treasury was: "Assuming that the budgets of the last three years were balanced - that is to say, that we raised sufficient from taxation to pay our way - what would be the *per* *capita* taxation of those years compared with this, when, ostensibly at all events, the budget is being balanced?" I was supplied with, figures which show that, for the year 192S-29, the actual taxation per *capita* was £8 17s. 8d., and the amount required to balance the budget was £9 5s. 2d. . For the year 1929-30 the actual taxation *per capita* was £9 ls. 5d., and the amount required to balance the budget was £9. 6s. This year the amount required to balance the budget, and the amount which the Treasurer proposes to raise, is £9 4s. 2d. per *capita.* In other words,, had the budget been balanced in the last two years, our per *capita* taxation in those years would have been greater than it is this year. Those figures show how great was the leeway. It is of no use to throw out one's chest and say that. the *per capita* taxation has gone down, if one has a deficit of £5,000,000 or £6,000,000. We must, compare the figures for the year in which ostensibly the budget is to be balanced, with what they would have been in other years had the budget been, balanced. On that basis the proposed collections this year - whether they will be realized or not remains to be seen- {: .speaker-KLU} ##### Senator Sir WILLIAM GLASGOW:
QUEENSLAND · NAT -- Whether they will balance the budget remains to be seen. This is an estimate; the other was actual. {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- This huge amount of new taxation is additional in the sense that itis new, though the position is that it does not represent an addition to the *per capita* levy if the previous budgets had been balanced. {: .speaker-KLU} ##### Senator SirWilliam Glasgow: -- Does the honorable senator mean both direct and indirect taxation? {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- Yes. The amount this year is less than it would have been in either of the two preceding years. Very few avenues for a reduction of expenditure, other than in connexion with the cost of Parliament and of the Public Service, are open to the Treasurer. A very big gap has to be bridged by new taxationof some sort. It has been suggested in. some quarters that the contribution to the States under the Federal Aid Roads Agreement should be withdrawn. Even if that were done, it would not improve the position very much. It might assist the Commonwealth a little, hut would it help the States ? The Leader of the Opposition **(Senator Pearce)** pleaded for greater assistance by the Commonwealth to the States. I agree with him; but I point out that in this orgy of public expenditure which has been going on for some years, the States have easily led the van. We may all agree that the Commonwealth has been extravagant. If we deduct from Commonwealth expenditure items connected with the war and contributions to the States, and then compare our present expenditure with that of pre-war years, we shall find that the increase is considerable. But if we consider the position of the States on the same basis, by including in their expenditure contributions to them by the Commonwealth, we shall see that the expenditure of the States has been much greater. It has trebled during recent years. Blameworthy though the Commonwealth may be, the States are far more to blame. It is in the State sphere that extravagance is particularly noticeable. Others have suggested that pensions should he reduced. {: .speaker-K1Z} ##### Senator Rae: -- The Government will not do that. {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- In my opinion, every pension should he Overhauled. I am not sure that in many instances the circumstances of individual pensioners have not materially changed since their pensions were granted to them. I think than an overhaul of pensions would show that there are some pensioners enjoying the bounty of the Commonwealth who are not entitled to it. I do not know what machinery the Commonwealth has for surveying pensions from time to time, but I know of some pensions which ought not to be paid. Probably other honorable senators know of other cases. I suggest that the Treasurer should arrange for a thorough examination of every pension - invalid, old-age and War. If he were to do so, he would probably find that £1,000,000 per annum could be saved. {: .speaker-KLU} ##### Senator Sir William Glasgow: -- The cost of pensions increases by £500,000 a year. {: .speaker-KNF} ##### Senator GREENE:
NEW SOUTH WALES · NAT -- I am aware of that. , Nevertheless, I feel confident that, without injuring any deserving person, a considerable saving could be effected in that direction. The result of such an examination would astonish many people, and probably annoy others. It has also been suggested that Commonwealth payments to the States in connexion with roads should be discontinued. If that were done, and the taxation of motorists left as it is now, large numbers of men would be thrown out of work. In every State, funds are being raised by direct taxation to find work for' the unemployed. How would the discontinuance of these payments assist the States, or relieve the unemployment problem? It is true that the Commonwealth burden would be slightly lessened ; but it must be remembered that in this matter the Commonwealth has entered into a most solemn obligation with the States. I have never agreed with the Federal Aid Roads Agreement. When legislation affecting it was before us, I said that we were pledging the credit of the country too far ahead. But the agreement was entered into, and for us to go back now would not he to improve the position at all. Another suggestion for reducing expenditure is that the maternity bonus should be restricted to necessitous cases. By that means, a considerable saving could undoubtedly be made; it may yet be found necessary to' adopt that means of reducing expenditure. I am not sure that the Treasurer's budget is the last word which the Treasurer will be able to say to Australia this year on the question of expenditure. I have serious doubts whether the amount which it is proposed to raise through the Customs' House will be realized, notwithstanding the new duties. If, in the course of the next few months, the Treasurer finds that he is getting behind, I urge him with all the earnestness of which I am capable not to wait until the end of the year, but to tackle the question without delay. I do not think that we shall get through thi3 year and balance the budget without something more drastic in the way of reducing expenditure having to be done. As I said earlier, there is a common pool ; the amount in it is getting less, and the number of persons drawing upon it is increasing; and inasmuch as we are all dependent on the contents of the pot we must all be content - the Government along with the rest - to accept less than in the past. {: #subdebate-20-0-s5 .speaker-K1Z} ##### Senator RAE:
New South Wales -- Every honorable senator must have gained a great deal of enlightenment from the figures quoted by the honorable senator who has just resumed his seat, and his lucid exposition of them; the Senate is indebted to him. It is to be hoped, that the criticism which he levelled against the methods of keeping our national accounts will bear . fruit in the near future. At any time the. ordinary man in the street has sufficient difficulty in understanding financial statements, but when, as is frequently the case, the figures are coloured by party conflict, they are more difficult to understand, because the deductions drawn from them are not always reliable. The . honorable senator explained that the figures quoted by him were supplied by the Treasury, so that their authenticity and accuracy can be vouched for, and we shall find when we . peruse ' them in *Hansard* that they are even more illuminat ing than they appeared to be when we heard them from the lips of the honorable senator. It is' not my intention to- spoil the effects of such an enlightening speech by attempting to deal with the matters to which the honorable senator referred. I desire to refer to one or two matters mentioned by the Leader of the Opposition. I do not want to enter into a discussion as to who has been most responsible for squandering public money, building up deficits, or wasting accumulated surpluses. The fact remains that the finances of this country are in a very serious condition. As the party to which I belong did undoubtedly receive a mandate from the people to take over the reins of office, and did foreshadow some of the methods by which it proposed to deal with financial problems, honorable senators must admit that the proposals of the Government to wipe out the deficits must be given a fair chance. It is useless for honorable senators to build up fantastic budgets of their own, although I admit that it is the function of the Opposition to point to any errors or deficiencies in the budget presented to them. I, personally, am not diffident about referring to the proposal to reduce the salaries of public servants and of the members of this Parliament by 10 per cent. I see nothing fair in that proposal so far as it affects public servants, because if our income tax is based on a sound foundation, with a sliding scale of taxation according to the amount of income, then it would be only fair, in the event of an all-round deduction of salaries of public servants, that -that reduction should also be on a sliding scale according to the amount of income. No doubt, every honorable senator considers, that he himself is worth the amount he receives for his services. Consequently, whatever the public may think, he is not disposed to agree to a. reduction of his salary on the ground that he is not worth it. If that assumption is correct, any argument for a reduction of salary must be based on the existence of a national emergency. To reduce salaries, or ration employment- which is really a reduction of salary - is to adopt a wrong method to overcome a depression. In my opinion, it is a most absurd method of meeting our financial difficulties: instead of relieving the general economic difficulties, it only accentuates and intensifies them. Obviously, a reduction of salaries must decrease the purchasing power of the persons concerned. Their reduced purchasing power reacts on every class of business, bringing about further reductions, and so we get into a vicious circle which must inevitably reduce the standard of living. Excellent as was the speech of **Senator Greene,** I think that he failed to deal sufficiently comprehensively with the illustration that he advanced with regard to there being a pool from which we must all draw our sustenance. If there is such a common pool it eventually depends not so much on how much each draws from that pool, but on how many are putting into it, and what they put into it. A good deal of the cause of the depression from which we are suffering is not due to there being an under-production on the part of those who are the real producers of wealth, but to the fact that there are so many of the semi-parasitical class who create no wealth whatever. One of the chief functions of honorable senators opposite seems to be to defend the position of those who are, from an economic point of view, of no use to the community.We are told from time to time that we must cut down expenses, and increase production. I remind honorable senators that we have been given many instances in this chamber of the evils of over-production. Only last night, in a measure that was rejected in this chamber, wc learned of the difficulties confronting the primary producers engaged in the production pf hops, and were told that propositions had been made, and were being seriously considered, to pay a. number of those primary producers a fixed sum for a number of years in order to persuade them to discontinue producing hops. {: .speaker-KOJ} ##### Senator Herbert Hays: -- That is because the costs of production in Australia are so high that we cannot export our produce. {: .speaker-K1Z} ##### Senator RAE: -- At the same time, hops are being imported into Australia. I do not wish to transgress the Standing Orders, but honorable senators are aware that strong evidence was advanced to show that a good deal of the high cost of production of hops in this country was due to the employment of inefficient methods. {: .speaker-KOJ} ##### Senator Herbert Hays: -- That is not so. Quality for quality, our hops compare with anything in the world. {: .speaker-K1Z} ##### Senator RAE: -- One might grow iu a flower pot wheat of an exceptional quality, but that would not prove one's ability to grow and market wheat on a commercial scale. The honorable senator's argument does not prove that the most economic methods of production are being employed in the Australian hop industry. I remind honorable senators that a similar state of affairs is general throughout the world. Only a few years ago the production of cotton in the southern States of the United States of America was so great, the crops were so magnificent, and the yield so splendid, that the growers met and decided that they must destroy one-third of the crop on each holding. Some of the growers, having had a run of bad luck for a number of years, wanted to obtain the advantage of the good yield, and refused to fall in with the desires of the majority. Thereupon organized corps of night raiders went around the country and burnt out the crops of those who would not fall in with the will of the majority. Only recently we read that it was proposed to destroy 4,000,000 bags of coffee in Brazil in order to improve the price of the remainder of the crop. These instances are not isolated. Overproduction is general, and drastic steps have to be taken in order to maintain satisfactory prices. Yet some honorable senators claim that the one panacea for all our economic ills is for the toilers to work harder, and put in longer hours for less wages. That is a doctrine of abomination. Owing to a contingency that has arisen, and which I need not explain, I ask leave to continue my speech at a later stage. Leave granted; debate adjourned. {: .page-start } page 5528 {:#debate-21} ### CONCILIATION AND ARBITRATION BILL Appointment of Managers. Bill returned from the House of Representatives with the following message: - >The House of Representatives returns to the Senate the bill intituled " A Bill for an Act to amend the Commonwealth Conciliation and Arbitration Act 1904-1928' ", and acquaints the Senate that the House of -Representatives insists on disagreeing to the amendments insisted upon by the Senate,and requests the Senate to grant a conference on the amendments. > >In the event of a conference being agreed to the House of Representativeswill be represented at the conference by five managers. Motion (by **Senator Daly)** agreed to - >That the desire of the House of Representativesfor a conference on the hill for " An Act to amend the' Commonwealth Conciliation and Arbitration Act 1904-1928 ' ", communicated in MessageNo. 83 of the House, be compliedwith, and that the following senators bc appointed managers of the conference, viz., Senators Daly, Barnes, **Sir GeorgePearce,** Mclachlan, and K. B.Johnston. > >Thatthe conference meet in the Senate CommitteeRoom (main floor) at the hour of halfpast twelve a.m. on Friday, 8th August. {: .page-start } page 5529 {:#debate-22} ### APPROPRIATION BILL 1930-31 {:#subdebate-22-0} #### Second Reading Debate resumed. {: #subdebate-22-0-s0 .speaker-K1Z} ##### Senator RAE: -- If it becomes necessary, as a national emergency, to reduce the salaries of members of Parliament and of civil servants, a comprehensive scheme will be introduced which will, as far as possible, deal justly wtih every one concerned. All honorable senators know as well or better thanI do that the cost of maintaining two homes involves them in expenses which are not apparent to the ordinary citizen, and that there are many calls upon parliamentarians which do not leave any remarkably great surplus from their apparently good pay. If our salaries are to be reduced, I do not care whether by 10 per cent. or 20 per cent., everybody else in the community should have his income lopped down correspondingly. {: .speaker-KLU} ##### Senator Sir William Glasgow: -- There are very few who are not already suffering from a greater reduction than that. {: .speaker-K1Z} ##### Senator RAE: -- Interjections do not alter the effect of what I am saying. Those who are already below such a margin will not feel the clash of the scythe and will, therefore, have nothing to grumble about. If our incomes are to be reduced, and we have to live upon £900 a year, the difference should be confiscated and put into the Treasury for the purpose of liquidating the commitments of the nation. And that should be a general procedure. If I can live on £900 a year, I do not see why **Sir Samuel** Hordern and others cannot do likewise. They would still be receiving four times as much as those on the basic wage. As we are supposed to believe that the basic wage is the lowest amount on which a citizen can live in decencyand maintain a family, all above that amount is, strictly speaking, unnecessary. If the great percentage of our fellow citizens can live on the basic wage, there is no reason why the people to whom I have referred cannot live on £900 a year. I recollect times when I kept myself and family on a great deal less than the basic wage. I could do so again - provided that others did likewise. I contend that if a salary reduction is to be made, not on the score of the value of work done, but in order to meet a national emergency, we. should be in the same position as persons cast adrift from a sinking ship in boats, trying to make their way to the shore. Each shares alike in the food and water available, and in any privations to which they may be subjected. If the nation is in danger of running on the financial rocks, and if, to avert disaster, sacrifices are expected of the people generally, the strong arm of the law, wielded by the Government, should be employed to slice off all incomes above a certain level. I should have no objection to a substantial reduction providing all sections of the community wore treated alike. Honorable senators opposite cannot refute the justice of this proposal. I object to any honorable senator merely making a gesture, and by the voluntary return to the Treasury of portion of his salary, giving the public an impression that he is a very good fellow. It is open to all now to do this as private citizens. My own income is considerably reduced by loans and gifts. I may add that the one word applies to both. I have no doubt that other honorable senators have had the same experience, so that, actually, many of us are voluntarily reducing our income without making any declaration about the matter from the housetops. If this country is in such a desperate plight, if the clouds of depression loom so darkly on the financial horizon, let us spread sacrifices that may be necessary, as evenly as possible over the whole community. I have said on numerous occasions that Australia, in common with other countries, is suffering from a world-wide depression and a dislocation of all economic conditions. If we could produce more of those commodities for which the world is hungry, and they seem to be few just now, well and good. But it is of little use producing commodities unless we can find a market for them. Unfortunately, practically every country is suffering the aftermath of the war. The purchasing-power of the people in all countries has been so reduced that they are not able to buy the commodities which we are able to supply. The financial depression from which we are now suffering is largely due to reckless land speculation in recent years. During the time of boom prices for bur primary1 products, enormous prices were paid for land. Now that the overseas markets have either collapsed or declined seriously many thousands of our people engaged in primary production are unable to meet their obligations. Honorable senators opposite are staunch supporters of the private trading banks, which do not produce one ounce of wealth. They are simply the gleaners of wealth produced by others. I do not suggest that they do not perform some useful function, but they are not wealth producers. {: #subdebate-22-0-s1 .speaker-KPQ} ##### The PRESIDENT (Senator the Hon W Kingsmill: -- The honorable senator must confine his remarks to the bill before the Senate, {: .speaker-K1Z} ##### Senator RAE: -- If members of this Parliament are to be called upon to make some sacrifice by way of a reduction in salary, then why not introduce the system of paying sitting fees? {: .speaker-K1L} ##### Senator Barnes: -- Why talk about that matter ? {: .speaker-K1Z} ##### Senator RAE: -- I am sorry if my suggestion disturbed the Assistant Minister. But it has occurred to me that, at a time" like this, we should explore every avenue for the purpose of effecting economies, and I remind the Assistant Minister that the constant repetition of a slogan Or ideal gradually secures for it wider publicity and recognition. There was a time when, if a man mentioned anything about socialism he was regarded as a dangerous character. A few years later a member of the British Cabinet actually stated from his place in the House of Commons that nowadays everybody was a socialist. Similarly, if a man in these days talks about revolution some people conceive the idea that he is carrying bombs in his pocket, whereas revolution merely means a change in the existing social system. We all recognize that additional revenue . by way of taxation is required to enable the Government to. carry on the business of this country. But taxation, and especially proposals of such a dragnet nature as those now under consideration, are justifiable only as emergency, measures. If we succeed in righting the affairs of this country - I doubt that we shall, because the world outlook is gloomy in the extreme, and there may soon come a financial crash involving many nations - I hope that the various methods of taxation which have been adopted lately will then be swept aside. It has been said in the course of this debate that in the process of stabilizing the finances of this country, the standard of living must come down. What does that mean? It means, of course, that the standard of living of the wage-earners and manual workers - those men who lose so much time through wet weather and from other causes, that they rarely receive the full basic wage - must be still further reduced. It does not mean that the standard of living of persons in the higher grades of society will be interfered with to the extent that they will not be able to get three good meals a day or that they will be forced to sleep on rough couches in shacks and hovels. I shall object to any proposal involving sacrifices unless they are spread evenly over all sections of the community. {: #subdebate-22-0-s2 .speaker-KOZ} ##### Senator HOARE:
South Australia -- If **Senator Payne** had been in his place while **Senator Greene** was speaking to-night, he would not have made so many complaints about the present Government, or said So much in praise of the previous Administration. The honorable senator and others opposite advocate a reduction in parliamentary and Public Service salaries. The Leader of the Opposition **(Senator Pearce)** and **Senator Payne** who are anxious to reduce the allowance of honorable senators should also suggest that all moneys received in interest on bonds and other such securities should be paid into the Consolidated Revenue. By that means we should reach the rich man. Under the present system, practically the whole of the burden of direct and indirect taxation is borne by the working man. The Labour party is strongly opposed to the reduction of salaries or wages; it considers that economies can be effected in other ways. Reduction in wages interferes with the purchasing power of the community. This has a detrimental effect on trade and leads to further unemployment. Honorable senators opposite have said, from time to time, that the only way in which to improve our economic position is to increase production; but when this Government endeavoured to assist the farmers by submitting a measure providing for the payment of 4s. a bushel on wheat delivered at railway sidings, it met with their strenuous opposition. Their policy is to encourage the primary producers to work longer hours, and at the same time to advocate a reduction in wages. **Senator Payne,** who referred to customs duties, is a strong protectionist on some occasions; but is opposed to high duties when they operate .against his personal interests. The tariff schedule introduced by this Government has been submitted with the intention of benefiting the 'whole community, and .particularly those engaged in secondary industries. Some honorable senators who are opposed to the Government's fiscal policy overlook the 'fact that the people of Australia are at present paying an additional 6d. a lb. for butter in order to assist those engaged in the dairying industry. The Leader of the Opposition said that the present unsatisfactory economic position of the States, particularly in the matter of railway finances, is due to .the effect of the federal arbitration system. The railway : finances in South Australia are in an unsatisfactory state in consequence of the action of the Nationalist Government which .appointed a **Mr. "Webb,** an alleged American railway expert, to control the railway services. His appointment was an insult to Australian railway engineers. **Mr. Webb** was to rehabilitate the whole South Australian railway -system -at;. a cost of £4,000,000; "but up to .date, £11,000,000 has been spent and the work is not yet complete. {: .speaker-KPQ} ##### The PRESIDENT (Senator the Hon W Kingsmill: -- I ask the honorable senator to connect his remarks with some phase of Commonwealth finance. {: .speaker-KOZ} ##### Senator HOARE: -- Perhaps I shall be in order in referring to the Commonwealth Arbitration Court. Although applications have recently been made to the Arbitration Court for reductions in wages, it is hoped that they will not be granted. The present standard of living should be maintained. When remunerative rates are paid for labour, there is a keen demand for products of our secondary industries. That -results in additional employment being made available in our factories. The Leader of the Opposition endeavoured to show that the Bruce-Page Government handled the finances of the Commonwealth in a verysatisfactory manner. But **Senator Greene** placed a totally different construction upon the right honorable senator's figures, and disclosed that the financial statements submitted to Parliament by that Government were very misleading. When the Bruce-Page Government assumed office, there was a surplus of approximately £7,500,000, but after sis and a half years it showed a deficit of £5,000,000. In a period of six and a half years it had incurred a loss of £12,500,000. {: .speaker-K2L} ##### Senator Reid: -- But in that year it reduced the war debt by £46,000,000. {: .speaker-KOZ} ##### Senator HOARE: -- That may be so. but our national -debt increased. When the Fisher Government came into power, it was confronted with a deficit; but it went out of office showing a substantial, surplus which was soon expended by its political opponents. Economies cannot be effected by reducing old-age pensions as suggested by some honorable senators opposite. **Senator Greene** said that old-age pensions should be reviewed. They have been, and are continually being, reviewed. Old-age pensioners are frequently put to a good deal of trouble. Every year they .are sent a form that they have to fill in and cart round the country to get a justice of the peace to witness their signature. I agree with **Senator Greene,** however, that that is necessary. It is doubtless , an eminently fair, system, from which, anybody who is honest has nothing to fear. In conclusion, I wish to emphasize the fact that whenever taxation is increased by this Government, the burden will be placed upon the shoulders of those who are well able to bear it. {: #subdebate-22-0-s3 .speaker-K1L} ##### Senator BARNES:
Assistant Minister · Victoria · ALP -- Honorable senators are well aware of the position into which Australia has been driven by force of circumstances. Nothing is to be gained by indulging in recrimination. The Government is not complaining because it has been loft a legacy of trouble; all that it asks is that it be given every assistance to put the position right. Whatever sacrifices are necessary must be made. Although there may be disagreement with the methods that the Government proposes to adopt, they, at least, should be given a trial. The Prime Minister **(Mr. Scullin)** is leaving Australia shortly to represent it at the heart of the Empire - the country from which came many years ago those who pioneered this continent and laid the foundations of its future, greatness. They had nothing but their courage and their great hearts, but they won out. When the Mother Country needed help, 360,000 of the sons who had sprung from those pioneers went to her assistance. Yet we are now being urged by that country to pay our debts. I was under the impression that they had already been paid in blood. I ask honorable senators to face the position fairly. It is true that the Government proposes to spend £1,000,000 more than was spent last year. I point out, however, that there are tens of thousands of hungry men and women in this country, and it is in an endeavour to feed them that that extra expenditure is being incurred. Does any honorable senator object to that being done? As an Australian I say that we must face our responsibilities, and perform the task that has been entrusted to us. I ask the Senate, therefore, in all confidence, to facilitate the passage of this measure. Question resolved in the affirmative. Bill read a second time. *In committee:* Clause 1 agreed to. Clause 2 (Issue and application of £17,204,259). **Senator Sir** GEORGE PEARCE (Western Australia) [11.23]. - I move - >That the House of Representatives be requested to reduce the amount of the appropriation by fi. as an intimation to the Government that, in the opinion of the Senate, the expenditure upon the Parliament, the' Government, and the Public Service should be reduced by at least £1,000,000. {: #subdebate-22-0-s4 .speaker-KTR} ##### Senator MCLACHLAN:
South Australia -- In supporting this request, I desire to make a few observations on the bill. I shall not offer any complaint, because I realize that complaint is futile in the case of a Government which is committed to the policy that was enunciated some months ago in the Governor-General's speech. The paragraph in that speech that made a deep impression upon my mind at the time, and which convinced me that the Government had failed utterly to realize the position was that in which it was declared that it would be a policy of despair to bring about a reduction in the cost of production. Accepting that as the basic principle that has been adopted by the Government in regard to taxation and administration, it is not astonishing that Parliament has had submitted to it such a budget as that which we discussed recently, and such an Appropriation Bill as that which we now have before us. The responsibility for that administration, and for the consequences that must result from it, rests entirely upon the Government. I feel, however, that the Government has not been consistent. It has retrenched certain employees of the Commonwealth on the one hand, and on the' other hand has made provision for more lavish expenditure. During the debate that took place on this bill at an earlier hour, I was pained at the intrusion of a certain amount of personal feeling by an honorable senator whom we all respect, **Senator Greene.** I do not propose to enter into the personal controversy that has been bottled up for so long, between that honorable senator and the gentleman who, prior to the advent of this Government, occupied the position of Treasurer. The honorable senator used certain figures which he had obtained from the Commonwealth Treasury as late as July last, for the purpose of making an attack upon that gentleman. I draw his attention to the fact that those figures could have been obtained by him from page 11 of the budget papers for this year. He there will find set out the transactions of the Commonwealth, the surpluses and deficiencies, and the amount of the accumulated surplus, from 1907-8 right up to the estimated balance for this year. {: .speaker-JTL} ##### Senator Daly: -- I rise to a point of order. I submit that neither the figures that appeared in a previous budget, nor the statements made by **Senator Greene** in relation to them, can by any stretch of the imagination be held to refer to the issue and application of £17.204,259 for this year. {: #subdebate-22-0-s5 .speaker-K3L} ##### The TEMPORARY CHAIRMAN (Senator Sampson:
TASMANIA -- I ask the honorable senator to confine himself to the clause. {: .speaker-KTR} ##### Senator McLACHLAN: -- This clauseis the kernel of the bill. Having regard to the manner in which the last stage of the bill was passed, it ill becomes the Loader of the Government to take exception to my remarks, even though they may be out of order. {: .speaker-JTL} ##### Senator Daly: -- I rise to a point of order. I regard that statement of the honorable senatoras a reflection upon the Government, and I resent it. {: .speaker-KTR} ##### Senator McLACHLAN: -- It is not a reflectionupon the Government. {: .speaker-JTL} ##### Senator Daly: -- I understood the honorable senator to refer to the fact that he appeared to be shut out of the debate at the second reading stage. I point out to him that on the third reading he will have an opportunity to debate the measure if he so desires. {: .speaker-KTR} ##### Senator McLACHLAN: -- I maintain that I arn not out of order. Clause 2 provides that the Treasurer may issue out of the Consolidated Revenue Fund, and apply towards making good the supply granted to His Majesty for the service of the year ending the 30th June, 1931, the sum of £17,204,259. **Senator Pearce** has moved that that amount be reduced by only £1, but he has done so with a desire to effect a saving of £1,000,000. If you,. **Mr. Chairman,** rule that I am not to be allowed to proceed with a discussion on previous surpluses, I suggest that in dealing with this particular item I may deal with the financial position of the Commonwealth right back to 1921, as has already been done this evening. On page 11 of the budgetpapers are some figures relating to deficits. Honorable senators almost held their breath when **Senator Greene** referred to deficits amounting to over £16,000,000, as against surpluses of a little over £4,000.000. There is nothing very remarkable about that. I take exception to the remark that the exTreasurer in the previous Government was not honest in the presentation of his accounts to Parliament. I refer honorable senators to page 11 of the budgetpapers for this year. They will see there that for 1923-24 there was a deficit of £4,837,421, and also a foot-note to the following effect: - >The ordinary transactions of the year 1923-24 resulted in a surplus of £2,578,334. which, with the surplus brought forward, made an accumulated surplus of £10,006,908. Of th is amount £4,915,755 was applied to debt redemption, and £2,500,000 to provide for naval construction and a reserve for defence. The accumulated surplus thus remaining at 30thJune. 1924, was £2,591,153. {: .speaker-JTL} ##### Senator Daly: -- What has all this to do with the item under discussion. I did not take exception to the honorable senator's remarks until he went far beyond the limits allowed by the Standing Orders. {: .speaker-K3L} ##### The TEMPORARY CHAIRMAN (Senator Sampson: -- I remind the honorable senator that we are discussing clause 2. He missed his opportunity to speak on the second reading, but if he desires to refer to matters not covered by clause 2, he will have a further opportunity to do so on the third reading. {: .speaker-KTR} ##### Senator McLACHLAN: -- I support the request moved by **Senator Pearce.** It represents the views of honorable senators on this side of the Government's financial proposals. It would appear that at last the Government recognizes that Australia is passing through a crisis. Unless steps are taken immediately to reduce Commonwealth expenditure, the Government will soon find itself forced to do something. Expenditure must be reduced, or the States will be driven further along the road to despair. In the last resort, the Commonwealth must maintain the sovereignty of the States. This Parliament should give a lead to the nation. {: #subdebate-22-0-s6 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP -- I hope that the committee will reject the proposal. We have heard a good deal lately of the word "gesture." We are told that, we must make a gesture in this and that direction. The trouble is that we have been making too many gestures. It is time that Parliament realized its responsibility in this matter, and ceased making them. The purpose of the Leader of the Opposition **(Senator Pearce)** in moving for a reduction of £1, is to accomplish a reduction of expenditure to the extent of £1,000,000. As a gesture to the rest of Australia, the right honorable senator suggests that the salaries of public servants and members of Parliament should be reduced. If this Parliament controlled the ' financial institutions of the country, it could find various ways of assisting to balance the ledger. But seeing that Parliament has not that control, honorable senators opposite pick out one section of the community to carry the burden. If that is a true definition of justice, I must say that my conception of justice hitherto has been erroneous. Why should one section of the community be. singled out to provide this £1,000,000? There is not one senator in this chamber who is prepared to point his finger at a public servant and say that he is overpaid. {: .speaker-K0F} ##### Senator Sir George Pearce: -- The shearers have had to accept a reduction of wages amounting to 25 per cent. {: .speaker-JTL} ##### Senator DALY: -- Their wages are fixed under a system of arbitration ; they have been reduced under that system. The salaries of public servants also are fixed by arbitration, and if they are to be reduced, they should be reduced by the proper method. Honorable senators admit that public servants earn every penny they receive, but they say that in the present circumstances their salaries should be reduced by 10 per cent. {: .speaker-K0F} ##### Senator Sir George Pearce: -- The earnings of the community have come down 10 per cent. {: .speaker-JTL} ##### Senator DALY: -- Not of that section which is in employment. I admit that the income of the unemployed has come down 100 per cent. The Leader of the Opposition knows that, apart from wages which have been reduced under our arbitration system, there has been no general reduction of wages. {: .speaker-JQP} ##### Senator Cooper: -- There has been a rationing of employment. {: .speaker-JTL} ##### Senator DALY: -- There has been no suggestion that the whole of the employed section of the community should suffer a reduction of 10 per cent.; the proposal refers only to public servants. Only yesterday, honorable senators opposite strongly urged that graziers, doctors, lawyers, chemists, and others should be allowed to deduct from assessable income contributions to the Graziers Association, the Medical Association, the Law Society, and the Pharmaceutical Society. Yet those men are employed; many of them earn good money. They must be granted privileges in the way of deductions from income, but the civil servant is to be called upon to sacrifice 10 .per cent, of his earnings ! I say, unhesitatingly, that such a proposal is dishonest, and that the Government will not stand for it. {: #subdebate-22-0-s7 .speaker-K2L} ##### Senator REID:
Queensland .- The Minister, by attempting to throw dust in our eye.s, has avoided the point at issue. He has asked why we should make victims of the public servants and allow others to escape. That is so much " flapdoodle ". The whole community has suffered a reduction of income. Profits, rents, interest, and other sources of income show reduced returns. Soon we shall have before us a bill dealing with the sales tax, which will mean an increase in the cost of living. {: .speaker-JTL} ##### Senator Daly: -- The civil servant will have to pay his proportion of that increase. {: .speaker-K2L} ##### Senator REID: -- The cost of living is coming down all round. In Queensland, the Government appealed to the Arbitration Court to reduce the wages of government employees by 6 per cent, on the ground that the cost of living had come down. {: .speaker-KOZ} ##### Senator Hoare: -- That is a Nationalist Government, which believes in low-paid labour. {: .speaker-K2L} ##### Senator REID: -- That court is composed of two ex-labour officials and one lawyer, all of whom had an early training in the aims and objects of labour. The Nationalist Government exhibited broad-mindedness when it renewed the appointment of the members of the court. I do not know any honorable senators who have a particular desire to victimize the federal public servants, but the country is faced with an exceptionally difficult task, and all should do their utmost to assist in its recovery. **Senator Daly** claimed that honorable senators on this side are fond of making gestures, but that they are of the wrong kind. I claim that the present gesture has behind it the desire to extricate the country from its present difficulties. The Government is simply postponing the evil day. I am certain that, unless the sales tax brings in millions more than is anticipated, it will be necessary to subject federal public servants to a reduction in salaries next year. The Government would be setting an excellent example if it reduced the salaries of members of Parliament. If it will not take the initiative and introduce a bill for that purpose, let the matter be submitted to the Arbitration Court. Even **Senator Rae** has admitted the unfortunate economic position in which the country finds itself, but he claims that our desire is to get at the "bottom dog." One could scarcely claim that the civil servant was a "bottom dog." Civil servants will benefit by the reduced cost of living that will be brought about by the wage reductions that are taking place. It is an economic axiom that the cost of living is dependent upon the purchasing power of wages. If there is a general reduction in wages, there must be a fall in the cost of living. Unfortunately, the sales tax introduced by the Government has prevented an immediate fall in the cost of living. {: .speaker-JTL} ##### Senator Daly: -- I thought the honorable senator claimed that there had been a drop in the cost of living. {: .speaker-K2L} ##### Senator REID: -- Actually there has been a drop, and that is why those in comfortable positions can afford a 10 per cent. reduction. {: .speaker-JTL} ##### Senator Daly: -We, in Canberra, still pay the same for our board. {: .speaker-K2L} ##### Senator REID: -- All the federal civil sen-ants are not in Canberra. Those who are here receive a special cost of living allowance. {: .speaker-JTL} ##### Senator Daly: -- I think the honorable senator will agree that they also pay an extra £1 a week for their rent. {: .speaker-K2L} ##### Senator REID: -- I quite admit that. I have done all that I could to mitigate that evil. I submit, in all sincerity, that Parliamentarians should make an encouraging gesture to the people by voluntarily submitting to a reduction in their salaries. Progress reported. {: .page-start } page 5535 {:#debate-23} ### CONCILIATION AND ARBITRATION BILL Message from the House of Representatives received intimating that it had agreed to the time and place appointed by the Senate for holding the conference of managers on the amendments insisted upon by the Senate in this bill. *Sitting suspended from 11.58 p.m. to 3.5 a.m.* *Friday, 8 August 1930* {: .page-start } page 5535 {:#debate-24} ### APPROPRIATION BILL, 1930-31 *In committee:* Consideration resumed. {: #debate-24-s0 .speaker-K2L} ##### Senator REID:
Queensland -- I have very little more to say. A reduction of members' salaries would set a good example. It would show the people outside that the Commonwealth Parliament has the welfare of Australia at heart. Seeing that so many persons have reduced incomes at the present time and, as **Senator Rae** has said, that the country is in a very serious financial position, we should all pull together. A reduction of members' salaries, I say, would be an excellent gesture; it would indicate that this Parliament is anxious to serve the interests of the country. Question- That the House of Representatives be requested to reduce the amount of the appropriation by £1 (Senator Sir George Pearce's amendment) - put. The committee divided. AYES: 14 NOES: 4 Majority . . 10 AYES NOES Question resolved in the affirmative. Request agreed to. Clause agreed to subject to a request. Clause 3 agreed to. First schedule agreed to. Second schedule - *Proposed votes* - Parliament, £77,620 ; Prime Ministers Department, £314,500; Department of The Treasury, £639,160 ; AttorneyGeneral's Department, £183,000, and Department of Home Affairs, £265,160 - agreed to. Department of Defence. *Proposed vote,* £3,748,950. **Senator Sir WILLIAM** GLASGOW (Queensland) [3.12 a.m.].- The last Government left £400,000 in a trust fund for seaplanes for the new seaplanecarrier, and re-equipping the Air Force. I should like to know if the fund is still available? Proposed vote agreed to. *Proposed votes.* - Department of Trade and Customs, £913,100; Department of Works, £272,000; Department of Health, £135,000; Department of Markets, £.116,950; Department of Transport, £30,810 ; Miscellaneous Services, £782,650; Refunds of Revenue, £1,100,000; Advance to the Treasurer, £2,000,000; War Services Payable Out of Revenue, £1,418,614; and Commonwealth Railways, £635,550 - agreed to. Postmaster-Gen eral's Department. *Proposed vote,* £10.709,782, {: #debate-24-s1 .speaker-KTR} ##### Senator MCLACHLAN:
South Australia -- Under the vote for New South Wales there is an item, "Adjustment of salaries due to variation in the cost of living, £54,800 ". The aggregate under this heading for the various States is £137,344. I should like to know if the Government is committed to the payment of that sum, or is it simply voted and retained in the event of a fall in the cost of living? {: .speaker-K1L} ##### Senator Barnes: -- That provision is necessary as a result of Arbitration Court awards. {: .speaker-KTR} ##### Senator McLACHLAN: -- Has there been a new arbitration award, or was the award in force towards the end of the last financial year? {: .speaker-K1L} ##### Senator Barnes: -- The liability came to this Government from its predecessor in office. {: .speaker-KTR} ##### Senator McLACHLAN: -- There was no vote last year. {: #debate-24-s2 .speaker-K2L} ##### Senator REID:
Queensland -- Recently in another place an attack was made upon **Mr. A.** P. Brown, the Director of Postal Services. **Mr. Brown** has appeared on several occasions as a witness before the Public Works Committee, and I and other members of that body have been much impressed by his efficiency. I have also had many conversations with high officials in the Postal Department. Without exception they speak very highly of **Mr. Brown's** ability as an administrator. He thoroughly understands all phases of the work in his department, and by his high standard of efficiency has saved this country hundreds of thousands of pounds. Proposed vote agreed to. North Australia. *Proposed vote.* £100,458. **Senator Sir** GEORGE PEARCE (Western Australia) [3.20 a.m.]. - I have received a memorandum signed by and on behalf of a large number of residents of Darwin protesting against the action of this Government in providing for the adult franchise for the election of members of the town council. The signatories represent the settled population in Darwin. As we all know, there is a considerable floating population in that town, and the result of the Government's action has been to place control of local affairs in the hands of the migratory section of its people - those persons who have no real interest in the welfare of the town. Whilst something may be said for the principle of adult franchise in the case of a community with a settled population, it is most unwise for a town like Darwin. I had intended to read the letter to the Senate, hut unfortunately, I have mislaid it, so I shall have to content myself with saying that the people there strongly protest against the action of the Government. {: #debate-24-s3 .speaker-K1L} ##### Senator BARNES:
Assistant Minister · Victoria · ALP -- The Government has received no complaint from Darwin with regard to the system of local Government in force there. If complaints had been made surely they would have been brought under the notice of the Ministry. Proposed vote agreed to. *Proposed votes* - Central Australia, £28,148; Federal Capital Territory, £312,945; Papua, £47.132- agreed to. New Guinea. *Proposed vote,* £5,000. {: #debate-24-s4 .speaker-K09} ##### Senator PAYNE:
Tasmania -- I should like the Minister in charge of the department to explain why the annual vote of £10,000 has been reduced to £5,000. The money has been used exclusively by the administration in providing medical attention, and generally for the welfare of the native population. It appears to me to be strange that, in view of the rapid development in New Guinea, the difficulties of the administration should be added to by a reduction in the vote. {: #debate-24-s5 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- In 1925 the Commonwealth approved of an annual grant of £10,000 for the administration of New Guinea, to be used in the interests of the native races. Each year a grant of a similar amount has been made available. The money has been expended in connexion with the medical treatment of natives, for their instruction in improved methods of agriculture and on other services for the benefit of the natives. At the close of the financial year 1927-28 there was an unexpended balance of £3,405 5s. 6d., and the amount available for the following year was £13,304 5s. 6d. At the end of that year there was an unexpended balance of £1,800 which, with the grant of £5.000, the sum available for this year, will be £6,800. {: #debate-24-s6 .speaker-K09} ##### Senator PAYNE:
Tasmania -- I do not regard the explanation of the Minister as satisfactory. I happen to know why the amount voted was not fully expended in the years mentioned by the honorable gentleman. The administration was then constructing a new hospital and other buildings. The reduction in the amount of the vote may deprive the administration of facilities to give the native population the necessary medical attention and other services originally intended for them. I trust the Minister will give us an assurance that, if the administration is in need of a little further assistance, it will be provided in the supplementary Estimates. {: #debate-24-s7 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP -- The policy of this Government is to secure economy through efficiency. In reducing the grant it was actuated by the reasons which, I have no doubt, prompted honorable senators a few moments ago to request the House of Representatives to reduce the total appropriation by £1. The amount set aside for this year for the administration of New Guinea will be £6,800. If the circumstances warrant, and if an application is made to the Government for further assistance, the money will be made available. Proposed vote agreed to. *Proposed votes* - Norfolk Island, £4,000; Grants to States towards Relief of Unemployment, £1,000,000 - agreed to. Preamble and title agreed to. Bill reported with a request; report adopted. {: .page-start } page 5537 {:#debate-25} ### CANNED FRUITS EXPORT CONTROL BILL Bill received from the House of Representatives. Standing and Sessional Orders suspended and bill (on motion by **Senator Barnes)** read a first time. {:#subdebate-25-0} #### Second Reading {: #subdebate-25-0-s0 .speaker-K1L} ##### Senator BARNES:
Honorary Minister · Victoria · ALP -- I move - That the bill be now read a second time. ' The Canned Fruits Export Control Act, which was brought into operation in 1926, provided for the establishment of the Canned Fruits Control Board to organize the overseas marketing of canned apricots, peaches, and pears. The board as it is at present constituted consists of three members - one appointed by the Governor-General as the representative of the Commonwealth Government, one elected to represent co-operative and State controlled canneries, and the third elected to represent proprietary and privately-owned canneries. As the act now stands, the basis of voting for any election held under the act is the production of canned fruits during the 1925-1926 canning season. As there have been considerable fluctuations in the quantity of canned fruits produced by individual canners since that season, it is desirable that the basis of voting should be in respect of the production during the season immediately preceding the election. This proposal is given effect to in clause 2 of the bill. It is proposed to increase the membership of the board by' providing in clause 3 of the bill for direct representation for State-controlled canneries, instead of the present arrangement whereby those interests are grouped for the purpose of representation on the board with the cooperative canneries. There is at present only one State-owned cannery in Australia, and that is the Leeton cannery, of New South Wales. During the last two seasons this cannery exported overseas 242,163 dozen 30-oz. tins, as against 232,726 dozen 30-oz. tins exported by the whole of the proprietary and privatelyowned interests, which are already directly represented on the board. The Canned Fruits Control Board is in favour of its membership being increased by giving separate representation to the Statecontrolled interests and, as it is not considered advisable to provide for the election of representatives of such interests, it is' proposed that this representative shall be nominated by the State Government concerned and appointed by the Governor-General to hold such office during the Governor-General's pleasure. The increase in the membership of the board from three to four members will necessitate severalslight amendments to section 10 of the act relating to meetings of the board as is proposed in clause 4 of the bill. In the case of a full meeting of four members, it will be necessary to give the chairman a casting vote as well as a deliberative vote, otherwise a deadlock would arise in the event of an equality of votes. Clause 5 of the bill is on similar lines to the last clause of the Dried Fruits Export Control Bill. This will be introduced for the consideration of the Senate later in the day. Question resolved in the affirmative. Bill read a second time. *In committee:* Clause 1 agreed to. Clause 2 (Definition of "cannery"). **Senator Sir GEORGE** PEARCE (Western Australia) [3.42 a.m.]. - This clause reads - >Section three of the principal act is amended - > >by omitting from the definition of "cannery" the words and figures "canning season of 1925-1926" and inserting in their stead the words "year ended the thirtieth day of June , immediately preceding the election"; and I ask the Honorary Minister **(Senator Barnes)** if the election referred to in this clause is a general election for the Federal Parliament or an election of a hoard to control theexport of canned fruits? Is it an election that has been held or is to beheld? {: #subdebate-25-0-s1 .speaker-K1L} ##### Senator BARNES:
Honorary Minister · Victoria · ALP -- This clause relates to the election of a board of representatives of those engaged in the canned fruits industry, who have power to decide when an election shall be held. Such elections are held in October or November. Clause agreed to. Clauses 3 to 5 agreed to. Title agreed to. Bill reported without amendment; report adopted. Bill read a third time. {: .page-start } page 5538 {:#debate-26} ### LOAN BILL Bill received from the House of Representatives. Standing and Sessional Orders suspended and bill (on motion by **Senator Daly)** read a first time. {:#subdebate-26-0} #### Second Reading {: #subdebate-26-0-s0 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- I move - >That the bill be now read a second time. This bill is similar to that which is customarily introduced to obtain the approval of Parliament in connexion with the raising and expending of certain sums of money. Its object is to enable urgent works and services to be carried on during the financial year 1930-31. The works for which it provides are those that were announced in the budget. The net loan expenditure in recent years is set out in the following table: - It will therefore be apparent to honorable senators that the proposed expenditure is £1,164,000 less than the expenditure for the year 1929-30, and £4,104,000 less than that for 1928-29. Comparative details for the three years mentioned will be found in the budget papers at pages 46 to 49. Many savings have been made, and the complete loan programme is receiving the very careful consideration of the Government at the present time. If there is any further' information that honorable senators desire, I shall be pleased to give it. {: #subdebate-26-0-s1 .speaker-K0F} ##### Senator Sir GEORGE PEARCE:
The only item in this bill to which I desire to draw attention is the provision of £50,00( · Western Australia [3.49 a.m.]. for' the construction of a survey boat to be utilized in connexion with the development of the fisheries industry. I suggest that that is a luxury item, the expenditure upon which might very well stand over for another year. Even though the amount is only £50,000, the Government' might very well save that expenditure at a time like the present, when every thousand pounds is important. {: #subdebate-26-0-s2 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP -- I assure the Leader of the Opposition that it is with very great regret that the Government has found it necessary to postpone the construction of this vessel. I do not agree, however, that it is a luxury. Anybody who has studied the fishing industry in Australia and the reports of the conferences that have been held, and- who is acquainted with the wonderful possibilities of the industry from the point of view of building up an absorptive capacity in the Commonwealth, must admit that the time is ripe for a survey to be made of our waters. But for the heavy curtailment that the Government has found necessary in connexion with its works programme, the construction of this particular vessel would have been proceeded with. If it is possible to proceed with the work during the course of the year, action in that direction will be taken by the Government. If .we are to exploit the wonderful possibilities of this industry in Australian waters, we shall have to apply more scientific methods than have been applied in the past, I should not have spoken upon this matter had not the Leader of the -Opposition referred to. this as a luxury item. {: .speaker-K0F} ##### Senator Sir George Pearce: -- Perhaps that was a wrong term to apply to it. {: .speaker-JTL} ##### Senator DALY: -- It is not a luxury item. It is to be regretted that the Government, temporarily at any rate, finds it necessary to postpone it. {: .speaker-K7F} ##### Senator Sir Hal Colebatch: -- It is a matter of the greatest satisfaction. Question resolved in the affirmative. Bill read a second time. *In committee:* Clauses 1 to 5 agreed to. Schedule. {: #subdebate-26-0-s3 .speaker-K2L} ##### Senator REID:
Queensland .- Did I understand the Leader of the Senate to say that it had been definitely decided not to proceed with the construction of the survey vessel in connexion with the development of the fisheries industry, or that it would be put in hand if money were available for the purpose ? {: #subdebate-26-0-s4 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP -- It is easy to authorize the raising of meney, but it is not so easy to raise it. The bill merely gives the Government the authority to raise this sum. The difficulty that it is experiencing at the present time is to raise an amount sufficient to carry out other more urgent works. I reiterate what I said previously, that it would be a very good thing for the Commonwealth, if it could secure this particular vessel. At the present time our importations of fish total £1,500,000 annually. That amount could be saved if we could catch our requirements of fish i.u our own waters. The object of inserting this particular item was to empower the Government to expend the amount if it, were available. {: #subdebate-26-0-s5 .speaker-K2L} ##### Senator REID:
Queensland -- "What I want to understand is, whether it is the intention of the Government to put this work in hand if it should find that it has sufficient funds available for the purpose? {: .speaker-JTL} ##### Senator Daly: -- I assure the honorable senator that the Prime Minister has definitely stated that it will not be gone on with this year. Schedule agreed to. Title agreed to. Bill reported without amendment; report adopted. Bill read a third time. {: .page-start } page 5540 {:#debate-27} ### INVALID AND OLD-AGE PENSIONS APPROPRIATION BILL (1930) Bill received from the House of Representatives. Standing and Sessional Orders suspended and bill (on motion by **Senator Daly)** read a first time. {: #debate-27-s0 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- I move - >That the bill be now read a second time. This bill is introduced for the purpose of providing from the Consolidated Revenue Fund the sum of £10,000,000 for the payment of invalid and old-age pensions. From time to time Parliament makes appropriations of a similar nature, and the amounts provided are transferred under the authority of the Appropriation Acts to the Trust Account, from which payments are made to pensioners. The total amount previously appropriated was £111,250,000, of .which £109,087,452 had been expended up to 30th June, 1930. The balance under previous-appropriations at the 30th June, was, therefore, £2,162,548. The balance is sufficient to meet payments only until the middle of September, and a further appropriation is necessary. The bill is for the usual amount of £10,000,000, and will fully provide for payments under existing rates and conditions for the current financial year. Question resolved in the affirmative. Bill read a second time. *In committee:* Clause 1 agreed to. Clause 2 (Appropriation of £10,000,000 for invalid and old-age pensions). {: #debate-27-s1 .speaker-K2L} ##### Senator REID:
Queensland .Can the Minister inform us whether the whole of the £10,000,000 appropriated last year was expended? If not, what. balance still remains? {: #debate-27-s2 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of Executive Council · ALP -- The balance under the previous .appropriations at the 30th June. 1930, was £2,162,548. {: #debate-27-s3 .speaker-JYB} ##### Senator DUNN:
New South Wales -- I am pleased that the Government is continuing to grant assistance to necessitous persons under this beneficient legislation. In another place the Opposition endeavoured to decrease these pensions. {: .speaker-K0F} ##### Senator Sir George Pearce: -- That is not correct. {: .speaker-JYB} ##### Senator DUNN: -- I believe that the country should come to the assistance of those in need, and that this legislation serves a very useful purpose. **Senator Sir** GEORGE PEARCE (WestAustralia) [4.4 a.m.]. - I object to the honorable senator endeavouring to get into *Ilansard* statements reflecting on members of the Opposition in another place and saying them in so low a voice that honorable senators on this side of the chamber .have difficulty in hearing them. So far as I am aware, no member of the Opposition in either chamber has suggested that invalid and old-age pensions should be discontinued or reduced. Clause agreed to. Preamble and title agreed to. Bill reported without amendment, report adopted. Bill read., a" third time. {: .page-start } page 5540 {:#debate-28} ### WAR PENSIONS APPROPRIATION BILL (.1930) Bill received from the House of Repre-' sentatives. Standing and Sessional Orders suspended, and bill (on motion by **Senator Daly)** read a first time. Secondreading. {: #debate-28-s0 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP -- I move - >That the bill be now read a second time. This Appropriation Bill is to make provision for payment of war pensions at the same rates and under similar conditions as obtain at present. Parliament regularly makes these appropriations, the total of which up to date is £85,622,632. The total expenditure to date is £80,013,975. The balance of appropriation is therefore £5,608,657. This bill is for the usual appropriation of £10,000,000, and will cover payments up to approximately the end of the next calendar year. Question resolved in the affirmative. Bill read a second time andpassed through its remaining stages without amendment or debate. {: .page-start } page 5541 {:#debate-29} ### GRAFTON TO SOUTH BRISBANE RAILWAY BILL Bill received from the House of Representatives. Standing and Sessional Orders suspended, and bill (on motion by **Senator Daly)** read a first time. {: #debate-29-s0 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP -- I move - >That the bill be now road a second time. This bill may be described as a hardy annual. It proposes to appropriate a further sum of £100,000 to complete the railway from Grafton to South Brisbane. The completed cost is now estimated at £4,450,000. Honorable members will remember that the last bill in connexion with this railway was submitted towards the close of 1929 when an appropriation of £350,000 was made, bringing the total appropriation to that date up to £4,350,000. Should honorable senators desire any further information regarding this work, I shall be pleased to give it. {: .speaker-KTR} ##### Senator McLachlan: -- The explanation will be the same as it has been on various occasions during the last four years. {: .speaker-JTL} ##### Senator DALY: -- And the same note of optimism that this appropriation will be sufficient to complete the work. Question resolved in the affirmative. Bill read a second time. *In committee:* Clauses 1 and 2 agreed to. Clause 3 (Authority to make advances). {: #debate-29-s1 .speaker-JQP} ##### Senator COOPER:
Queensland -- Can the Minister give us any idea of the date on which this railway will be completed? {: #debate-29-s2 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP -- It is anticipated that the Assistant Minister **(Mr. Forde)** will open the line in the spring - probably in September. {: #debate-29-s3 .speaker-JYB} ##### Senator DUNN:
New South Wales -- Honorable senators will remember that some months ago wheu another Government was in power, I said rhat whatever party was in office in New South Wales the right thing was being done in constructing a railway from Casino to Kyogle and on to the Queensland border. The country through which this line passes is subject to floods, and, therefore, I hope that special care will be taken in the building of the embankments. {: #debate-29-s4 .speaker-K2L} ##### Senator REID:
Queensland a.m.] - Can the Minister say whether the appropriation now asked for will be sufficient to complete the railway, or is it merely another advance? {: .speaker-JTL} ##### Senator DALY: -- All I can say is that the Government is extremely hopeful that this will be the last amount to be advanced for the completion of this line. {: #debate-29-s5 .speaker-KOJ} ##### Senator HERBERT HAYS:
Tasmania -- I should like to know what steps have been taken from time to time to ascertain the Commonwealth commitments in connexion with this undertaking, When Parliament agreed to share the cost of constructing this railway it was definitely stated that the amount then appropriated would be sufficient to complete the line. Since that time, however, several further appropriations have been made. When Parliament is asked to commit the country to an undertaking of this kind, it should have some definite knowledge of the probable cost. It should be the duty of some officer to prepare careful estimates of the cost of undertakings which involve the expenditure of public money. This is becoming a hardy annual. The Minister stated that the additional cost is due to floods "and other things." I should like to know precisely how much is due to floods. I should also like an explanation as to why the early estimates have heen so greatly exceeded. There is only one clear course. Undertakings such as this should be governed by the contract system, so that we should know exactly where we were. The Senate should be told with some degree of certainty whether this amount will enable the work to be completed. SenatorRAE (New South Wales) [4.18 a.m.]. - I think that there is every reason to believe that this expenditure will complete the line so far as the. Commonwealth is concerned. The opening was to take place this month, but recent floods have hrought about a postponement, and I believe that the opening will now take place in September. I should like to know what proportion of the expenditure is being contributed by New South Wales and Queensland. {: #debate-29-s6 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP -- Replying to **Senator Rae,** the States are standing up to their liabilities as set out in the act. This £100,000 is the Commonwealth's proportionof the additional expenditure. I point out to **Senator Herbert** Hays that a large section of this railway had to be constructed through mountainous and broken country, subject to a heavy annual rainfall, so that the cuttings and embankments were more expensive than is Usually the case. Recently, exceptionally heavy rains hrought about bad washaways of the earthworks, which involved the parties to the agreement in a good deal of additional expenditure. It is anticipated that the line will be opened in September, so that we can be more confident than was previously the case that this will be the last expenditure that the Commonwealth will have to bear in connexion with this line. SenatorREID (Queensland) [4.20 a.m.]. - Has the Minister any knowledge as to whether New South Wales will be able to carry out its part of the contract with regard to the bridge over the Clarence? I am wondering whether the present period of financial stringency will affect its progress. These subsidences of deep embankments are not at all unusual in country that is subjected to exceptionally heavy rains. {: #debate-29-s7 .speaker-JYB} ##### Senator DUNN:
New South Wales -- I may be able to assist **Senator Reid.** I understand that the second span of the Clarence river bridge is now being floated into position. That section of the country from Kyogle to O'Grady's Creek is subject to a particularly heavy rainfall, and during the period in which the embankments are settling one may expect trouble of the sort that has occurred. A peculiar kind of clay is common to that district. It soaks up the rain, and is later spewed out beneath the railway line. Similar trouble was experienced with the line from Macksville through Kempsey to Wauchope and Taree, but as time passed the ground settled, and no trouble is now experienced. No doubt that will he the case with the Kyogle to South Brisbane railway. {: #debate-29-s8 .speaker-K1Z} ##### Senator RAE:
New South Wales -- **Senator Herbert** Hays has expounded upon the alleged benefits of the contract system. I remind the honorable senator that in New South Wales and some of the other States where contracts have from time to time been let for the carrying out of big works the system has led to greatly increased costs. In some cases the contractors have become insolvent and the Government has had to finish the work, in others the unscrupulous conduct of the contractors has involved the Government concerned in very expensive litigation. The whole record of contract work has been the most miserable that one could conceive. The system is associated with corruption and "crook" work, and has brought about unfortunate scandals that could best be buried beneath the deep embankments of which we have heard. I deny that railways can be constructed more cheaply by contract than by day labour. Clause agreed to. Title agreed to. Bill reported without amendment; report adopted. Bill read a third time. {: .page-start } page 5542 {:#debate-30} ### DRIEDFRUITS EXPORT CONTROL BILL Bill received from the House of Representatives. Standing and Sessional orders suspended, and bill (on motion by **Senator Barnes)** read a first time. Second Beading. {: #debate-30-s0 .speaker-K1L} ##### Senator BARNES:
Victoria · ALP . - I move - >That the bill be now read a second time. Parliament passed the Dried Fruits Export Control Act in 1924 in order to give the dried fruits industry the necessary statutory powers to organize the overseas marketing of currants, sultanas and lexias on a satisfactory basis. Under that act, a board known as the Commonwealth Dried Fruits Control Board was established, which at present consists of a Commonwealth Government representative, two members with commercial experience, appointed by the GovernorGeneral, three representatives elected by the growers in the combined States of Victoria, South Australia and New South Wales, and one representative elected by the growers of Western Australia. The number of growers in each State is, Victoria, 2,314; South Australia, 2,124; New South Wales, 536 ; and Western Australia 400. The average production . of dried vine fruits in those Statesduring the past three years was : Victoria 39,000 tons; South Australia 14,700 tons; New South Wales 3,000 tons and Western Australia 1,900 tons. The high average production in Victoria, as Compared *pro rata* with the figures for the other States is explained by the fact that the majority of Victorian growers engage solely in the production of dried vine fruits, whereas in South Australia a large proportion of the yield is utilized for wine-making, and in New South Wales and Western Australia many of the growers produce citrus and other fruits in addition to dried fruits. The present system under which the three representatives are elected to represent the growers of Victoria, South Australia and New South Wales, gives a New South Wales nominee only a very remote chance of being elected to the hoard, in view of the small number of growers in that State as compared with the number in Victoria and South Australia. This is borne out by the result of previous elections, the New South Wales candidates in each instance having been defeated by Victorian and South Australian candidates. It is, therefore, proposed in clause 2 to provide for separate representation on the board for these three States - New South Wales and South Australia to elect one representative each and Victoria two representatives. This will increase the growers' representatives on theboard by one. The object of giving Victoria two representatives is that the average production of dried fruits in that State is greater than the aggregate production in the remaining States. Clause 3 of the hill has been framed to give the board wider powers in its application of moneys derived from a levy imposed on dried fruits exported. Under section 21 of the act, as it how stands, the board is empowered to use its funds for the general administrative expenses of the board and for display and publicity purposes. The additional powers asked for would enable the hoard to expend moneys for experimental and other purposes with the object of improving the quality of Australian dried fruits and promoting their sale. The several amendments to this act, as proposed in the bill, aire concurred in by the Commonwealth Dried Fruits Control Board, and they are designed to provide such further powers as are necessary for the efficient organization of this important industry. {: #debate-30-s1 .speaker-KQZ} ##### Senator LAWSON:
Victoria -- I invite the Assistant Minister to inform the Senate of the policy the Government proposes to pursue in order to assist the dried fruits industry, particularly those who are engaged in the industry in the Mildura district. Many settlers who have been residing for years on their blocks have had to leave them. The position is almost desperate, and an appeal has been made to the Government for relief. No doubt the Minister has some remedy to propose and some statesmanlike proposition to propound. I should like him to tell us what steps the Government proposes in an endeavour to stabilize the dried fruits industry and assist the necessitous settlers. {: #debate-30-s2 .speaker-K1L} ##### Senator BARNES:
Assistant Minister · Victoria · ALP -- A conference convened by the Minister for Markets willbe held later in the month. This hill, however, does not propose to give any help to the people who are engaged in the dried fruits industry. It proposes merely to enable them to govern themselves. They are not asking for help. {: .speaker-KQZ} ##### Senator Lawson: -- They have been asking for help for some time past. {: .speaker-K1L} ##### Senator BARNES: -- They do not expect to get it under this bill. The GoTernment accepts no financial responsi bility under this bill. When the bill passes, the dried fruit-growers will meet and arrange their own affairs. Question resolved in the affirmative. Bill read a second time. *In committee:* Clause 1 agreed to. Clause 2 - >Section four of the principal act is amended by omitting paragraph (b) of sub-section (2.) and inserting in its stead the following paragraph: - " (b) two representatives elected by growers, in the State of Victoria and one representative elected by growers in each of the States of New South Wales, South Australia and Western Australia; and". > > *Section proposed to be amended -* > >4....... > > *The Boardshall consist of -* > > *one member* (in *this act referred to as Government representative) who shall be appointed by the GovernorGeneral as representative of the Commo n weal th Government ;* > > *three representatives elected by growers inthe States of New South Wales. Victoria, and South Australia, and one representative elected by the growers of the State of Western Australia.* > > *Two memberswith commercial ex perience ...* > > *The member appointed in pursuance of paragraph* (c) *of sub-section* (2) *of this' section shall be appointed for a term of two years, but may be removed from office by the Governor-General uponthe recommendation of the Board.* {: #debate-30-s3 .speaker-K1L} ##### Senator BARNES:
Assistant Minister · Victoria · ALP -- I move - >That the following new paragraph be inserted - "and (b) by omitting from sub-section 6 the word 'member ' and inserting in its stead the word ' members ' ". This is to rectify a verbal omission in section 4. Amendment agreed to. Amendment (by **Senator Barnes)** agreed to - >That the following new sub-clause be inserted - " (2.) The amendment effected by paragraph (b) of the preceding sub-section shall be deemed to have commenced on the date of the commencement of section 4. of the principal act." {: .speaker-KP8} ##### Senator E B Johnston: -- To what extent will the amendments increase the size of the board? {: .speaker-K1L} ##### Senator BARNES: -- The. amendments merely make provision in the election of members to the board for better State representation by the people who are interested in the industry. Clause also verbally amended and, as amended, agreed to. Clause 3 agreed to. Title agreed to. Bill reported with amendments; report adopted. Bill read a third time. {: .page-start } page 5544 {:#debate-31} ### WINE OVERSEAS MARKETING BILL Bill received from the House of Representatives. Standing and Sessional Orders suspended, and bill (on motion by **Senator Barnes)** read a first time. {:#subdebate-31-0} #### Second Reading {: #subdebate-31-0-s0 .speaker-K1L} ##### Senator BARNES:
Assistant Minister · Victoria · ALP -- I move - >That the bill be now read a second time. The Wine Overseas Marketing Act was passed only last year and the Wine Overseas Marketing Board which has been established under that legislation to organize the overseas marketing of Australian wine, consists of eight members, of whom five have been elected to represent proprietary and privately-owned wineries and distilleries and two to represent co-operative wineries and distilleries. The remaining member was appointed by the Governor-General as the representative of the Commonwealth Government. The Board has recommended that the act be amended, as set out in clause 2, to provide for the constitution of an executive committee consisting of the chairman and three members of the Board, to be elected annually by the Board. The establishment of an executive committee would enable the Board to effect a considerable saving in expense, as it would then be in a position to reduce the number of full board meetings. From time to time matters arise which demand prompt attention, but do not warrant the expense of a full meeting. It is with a view to handling such matters expeditiously and with due regard to economy that the Board desires the establishment of an executive committee. The remaining clause of the bill is on similar lines to the last clause in each of the Dried Fruits and Canned Fruits Control Bills. Question resolved in the affirmative. Bill read a second time and passed through its remaining stages without amendment or debate. {: .page-start } page 5545 {:#debate-32} ### FLAX AND LINSEED BOUNTIES BILL Message received from the House of Representatives intimating that it had agreed tn the amendment made by the Senate in this bill. {: .page-start } page 5545 {:#debate-33} ### ACTS INTERPRETATION BILL (No. 2). {:#subdebate-33-0} #### Second Reading {: #subdebate-33-0-s0 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- I move - >That the bill be now rend a second time. There are two acts relating to the interpretation of acts of Parliament and for the shortening of their language, namely, the Acts Interpretation Act 1901-1918, and the Acts Interpretation Act 1904- 1916. This short bill, as the long title states, amends both of these acts. It supersedes the bill introduced in another place on 20th November last which has been discharged from the notice-paper. With the exception of clauses 2 and 3, the bill is identical with the one lately withdrawn and with the bill which was read a second time last year in that place on the motion of the then Attorney-General, now the Leader of the Opposition. The bill is a purely machinery measure. Section 10 of the Acts Interpretation Act 1904 requires, *inter alia,* that where an act confers power to make regulations, all regulations so made shall be laid before both Houses of the Parliament within 30 days of the making thereof, or, if the Parliament is not then sitting, within 30 days after the next meeting of the Parliament. There is some doubt as to the meaning of the expression "if the Parliament is not then sitting " and, consequently, as to the period provided within which regulations may be tabled. It frequently happens that although Parliament is sitting on the date when regulations are made, it is adjourned shortly after that date, and it is not possible to comply with the section. Clause 3 provides that, in future, all regulations are to be tabled within fifteen sitting days from the date on which theyare made. Clause 4 enacts that acts are to be construed subject to the Constitution. Where a measure deals with a subject as to which legislative power is divided between the Commonwealth and the States, and the line of demarcation between the respective powers of the Commonwealth and States has not been completely laid down, it has been found necessary, in certain cases such as the Navigation Act to make provision, in terms similar to those appearing in clause 2 of this bill, to declare the intention of the legislature not to exceed its powers and to secure the application of the bill up to the limit of those powers and no further. Such a provision, it is considered, protects the act in which it appears from being declared wholly invalid where any portion of it would, but for this provision, have been capable of an unconstitutional construction. The High Court held in 1910 that where the valid and invalid provisions of an act are inseparable or " wrapped up in the same word or expression " the whole must fail *(Bootmakers Case.* 11 *C.L.I?.* 1 pp. 54, 55; *Owners of* SS. *Kalibia v. Wilson, 11 CLR..* 689,' 713).. The argument of inseparability was in 1921 used against the Navigation Act in *Newcastle and Hunter River Steamship Co., Ltd., and others* v. *the AttorneyGeneral for the Commonwealth and another,* 29 *C.L.R.,* 357. The fact that the act contained a provision which is now proposed to be made common to Commonwealth legislation was the reason given why the argument failed and accordingly certain sections of the act were declared to remain effective to the constitutional limit decided by the court. The object of clause 4 of the bill is tosecure the application to all acts, past and future, of the principle of construction shown to have been effective in the Navigation Act. It is also proposed to obviate the necessity of including in each act in which Territories of the Commonwealth are referred to,a definition providing that a reference to a Territory includes a Territory governed by the Commonwealth under a mandate. This is effected by clause 5of the bill. In certain acts provision is made for their administration by a specified Minister of State or for their control by a specified Department of State. Notable instances are - the Lighthouse Act 1911- 1919, which provides, in section 4, that " this act shall be administered by the Minister for Trade and Customs or the Minister for the time being administering the Department of Trade and Customs," and the Navigation Act 1912-1926, which provides in section 8 that "this act shall be administered by the Minister for Trade and Customs and the Department of Trade and Customs shall be the department to carry it. into effect." This provision prevents the administration of the acts being allocated by OrderinCouncil to otherMinisters or departments where such action is, by reason of disproportionate allotment of Ministerial duties, or otherwise, found to be necessary. The position is proposed to he dealt with by a section contained in clause 5. This section provides that any such references to Ministers or departments appearing in such cases as those above quoted shall be read as references to the appropriate Ministers and departments specified in any Order-in-Council effecting an allotment of the administration of the statutes of the Commonwealth. Section 32 of the existing act accords to expressions used in regulations or other instruments made under an act the same meanings as those expressions have in the act under which the regulations are made. This saves the repetition in regulations of the list of definitions appearing in the act. It is proposed by clause 7 to extend this principle so that the interpretations contained in the Interpretation Act itself shall he applied to regulations and thereby avoid the necessity of defining in regulations expressions which, although not used in the parent act, are defined in the Acts Interpretation Act. I commend the bill to the approval of honorable senators. I think it will be recognized by honorable senators that this is purely a machinery measure, and as no new principle is involved, I trust that it will have a speedy passage. SenatorRae. - Why should it be necessary to have two Acts Interpretation Acts with the dates overlapping? Could they not be consolidated? {: .speaker-JTL} ##### Senator DALY: -- Two acts are referred to in the hill. They are consolidated, and no difficulty has been experienced. Question resolved in the affirmative. Bill read a second time. *In committee:* Clause 1 agreed to.: Clause 2 (Commencement). {: #subdebate-33-0-s1 .speaker-KTR} ##### Senator McLACHLAN:
South Australia -- This clause reads, " This act shall commence on. a date to be fixed by proclamation." Will the Minister explain why the act shall commence as stated in the clause? {: #subdebate-33-0-s2 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP -- A case is at present before the Privy Council, and as the Government has no desire to prejudice the litigants the act will not be proclaimed until a decision has been given. Clause agreed to. Clause 3 (Regulations). {: #subdebate-33-0-s3 .speaker-KTR} ##### Senator McLACHLAN:
South Australia -- Will the Minister explain why the words " that House " is used in the concluding portion of the clause, which reads, "each House of the Parliament within fifteen sitting days of that House after themakingof the regulations." I presume that it is intended to cover the case in which only one House of the Parliament is sitting. {: #subdebate-33-0-s4 .speaker-JTL} ##### Senator DALY:
ALP -- Yes. Clause agreed to. Clauses 4 to 7 agreed to. Title agreed to. Bill reported without amendment; report adopted. Bill read a third time. {: .page-start } page 5546 {:#debate-34} ### SALES TAX ASSESSMENT BILL (No. 1). Bill received from the House of Representatives. Standing and Sessional Orders suspended, and bill (on motion by **Senator Daly)** read a first time. Second Beading. {: #debate-34-s0 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP -- I move - >That the bill be now read a second time. I feel sure that honorable senators will appreciate the urgent necessity, for the introduction and early passage of this bill. A sales tax will apply to a " sale value " in the case of all sales and transactions which are in the nature of dispositions of goods in the ordinary course of trade, effected in Australia on and after the 1st August, 1930. This will include importations of goods made on and after the 1st August, 1930. Persons who import goods on or after that date, and before the bills become law, will be called upon later by the Commissioner to pay the tax. Sales, tax will not apply to the sales value of the goods for the sale of which contracts were definitely entered. into on or before the 9th July, 1930, but tax will be payable on the sale value of goods delivered to. a purchaser on or after the 1st August, 1930, under contracts entered into on or after the 10th July, 1930. The Government has been advised by **Mr. E.** M. Mitchell, K.C., and **Dr. Evatt** K.C., both of Sydney, eminent constitutional lawyers, that, in view of High Court interpretations of section 55 of the Commonwealth Constitution, and the fact that those interpretations are not exhaustive, the safest course for the Government to follow is to have an assessment act and a rate3 act dealing with each separate subject of taxation or each subject of taxation which the Court might possibly be obliged to regard as a separate subject of taxation, falling under the general scope of the Government's proposed sales tax. Speaking broadly, the sales tax will be charged on a ''sale value" in every case. The term " sale value " has been employed instead of sale price, because there are numerous business transactions which it is considered are proper subjects for the proposed tax, which are not actual sales. For example, goods are leased for ordinary rent or for rental in the shape of royalty. Whilst the right of property in the goods does not pass to the user, the right of user is practically perpetual, and the acquisition of that right is, in substance, a purchase, from a vendor of the right. It is necessary, in order to preserve effectively the protective incidence of the tariff, that sales tax shall be payable at some time or another in respect of all imported goods which are not specifically exempted. The general scheme of this tax, which is that it shall be payable by the last vendor to a retailer or direct to a consumer, coupled with the necessity to levy the tax in respect of all imported goods, requires that a retailer who imports goods shall pay the tax at the time of entry of the goods at the Customs for home consumption. It is necessary to fix a " sale value " upon which the tax will be payable in such cases. This is done in the appropriate bill on the basis of the "duty paid value" where such a value exists, and where there is no such value, because the goods may be free of duty, or subject to duty at a specific rate, the sale value will be determined by the Commissioner at what would have been the duty paid value if the goods had been subject to an ad valorem duty. Goods leased for rent or royalty must have the sale value determined by the Commissioner. In the case of goods obtained tax . free by a purchaser who is registered by the Commissioner of Taxation, and applied to his own use, the sale value will be the fair market value which, in the opinion of the Commissioner, would be charged for the goods if that purchaser had sold them in the ordinary course of trade. In cases where sales of goods are made by one entity to another, and those entities are so closely related to each other that -the two are owned substantially by the same person or persons, it may happen that the sale price which would be subject to sales tax is depressed below the fair market value which would apply to a similar transaction between independent entities. Appropriate provision is made in all of the assessment acts which require it, to authorize the commissioner to charge tax on that fair market value. To achieve the object of the tax, namely, that it shall be paid by the last vendor to a retailer, or direct to the consumer, on the sale value charged by him to that person, it is necessary to provide for the registration with the Commissioner of Taxation of all manufacturers and wholesale merchants, in order that the many transactions which take place between them before a sale is made to a retailer may be free from tax. Accordingly, any person who is not a manufacturer or a wholesaler in the ordinary commercial understanding of that term will not be registered, but will be required to pay the tax in respect of goods imported by him at the time of importation, or, in respect of Australian made goods, on the sale value of any sale of goods made by him to a retailer or to a consumer. Retail merchants will not be registered; therefore, in respect of goods imported by them they will pay the tax at the time of entering the goods for home consumption at the Customs Department. A consumer will not be registered; therefore, a vendor who sells to a consumer will pay the tax on the sale price of that transaction. The various transactions, acts or operations, which will be covered by the general scope of the sales "tax, are as follow : - Goods Manufactured in Australia. - In the case of goods that are sold by the manufacturer to an unregistered person or applied by the manufacturer to his own use, the tax is payable by the manufacturer. In the case of goods which are purchased from , the manufacturer by a registered person free of tax and then sold by him to an unregistered person, the tax is payable by the registered person who purchased from the manufacturer. In the case of goods that are -sold to an unregistered person by a registered person who is neither the manufacturer nor a purchaser from the manufacturer, the tax is payable by the registered person who sells the goods to the unregistered person. In the case of goods which are purchased by a registered person and applied by him to his own use, the tax is payable by the registered person on the fair market value at which the goods would have been sold by him in the ordinary course of trade if so sold. In the case of goods which are sold or transferred by the owner to another person subject to payment of a royalty, whether or not that payment is associated with any other kind of payment in respect of the goods, the royalty is to be taken into consideration in ascertaining the sale value for the purpose of the tax. In the case of goods which are subject pf a lease granted by the owner, the terms of the lease are to be taken into account in ascertaining the sale value for the purpose of the tax. Imported Goods. - Where goods are imported by an unregistered person, the tax is payable by the importer at the time of entry of the goods for home consumption. Where goods are imported by a registered person and sold by him to an unregistered person, the tax is payable by the registered person on the sale price of the goods. In the case of imported goods that are sold to an unregistered person by any person in Australia other than the importer, the tax is payable by the vendor who sells to the unregistered person. In the case of imported goods which are sold or transferred in Australia by a registered person subject to the payment of a royalty, whether or not that payment is associated with any other kind of payment in respect of the goods, the royalty is to be taken into consideration in ascertaining the sale value for purposes of the tax. In the case of imported goods which are the subject of a lease granted by the owner, the terms of the lease are to be taken into account in ascertaining the sale value for purposes of the tax. In the case of imported goods which are imported or purchased by a registered person and applied to his own use, the registered person is to pay the tax on the value at which the goods would have been sold by him in the ordinary course of trade. Where there are transfers of goods between a manufacturing section of one general business which retails goods to consumers, and the retail sections of that business, the tax is to be paid by the owner of the business upon the wholesale value of the goods. Other provisions relate to the exemptions that are to be made from the tax, the returns that will be required, the methods that are proposed for the recovery of the tax, the refunds that will be allowable, and the rights of taxpayers in relation to objections and appeals. The question that the Senate has to decide is, whether it is prepared to allow the Government to tax the people by means of this sales tax. The machinery clauses and the exemptions can be conveniently discussed in committee. But I draw particular attention to the fact that, in the framing of the budget, the Government considered the exemptions that ought to be granted, and the list that appears in the schedule to the bill is the result of that consideration. Therefore, I cannot hold out any hope of any departure from it. If we were to add to the list of exemptions, we should curtail the revenue that the Government estimates that it will receive from this tax. I commend the bill to honorable senators. **Senator Sir** GEORGE PEARCE (Western Australia) [5.22 a.m.]. - I confess that I approach the task of addressing myself to the second reading of this bill with an absolutely hopeless feeling. The announcement that it was proposed to impose this taxation was sprung upon a staggered Australia about three weeks ago. Since that time the Senate has been sitting fairly continuously, and has been dealing with bills so intricate in their nature that practically the whole of ihe time of honorable senators has been devoted to the study, and to the task of making themselves *au fait* with their provisions, so that they might deal with them intelligently. We have had suddenly thrust upon us this mass of bills dealing with a subject that is entirely new to Australia. We had no warning that this legislation was to be brought forward, nor any hint that would have enabled us to study similar legislation that is in operation in Canada or elsewhere; yet we are expected to discuss these bills intelligently and to give a considered vote upon them. [ suppose that when the criticism has reached its peak, the Government will shelter itself behind the excuse that Parliament has passed the law. I disclaim all responsibility for thi3 legislation. The Senate has not had a fair chance to study it; and in the circumstances in which we have been placed, it has been impossible for us to give to it the consideration that would enable us to vote intelligently upon it. There is only one phase of this legislation that we could discuss, and upon which we could express an opinion; we could form an idea of the items that we are expected to discuss, and could make up our minds whether the proposed tax in relation to those items is just and equitable. But the Leader of the Senate would rob us of even that consolation. He has warned us that the budget has been framed in the anticipation that the whole of this legislation will be passed, and that consequently the Government cannot be expected to consider any requests that we may make, because the granting of them would result in the upsetting of its budget. I am not disposed to agree to that. Our responsibility in connexion with the protection of the taxpayers is equal to that of the Government. We shall exercise our undoubted right to see that injustice is not done, by this class of taxation. I intend to exercise freely my right to criticize these measures, aud, if necessary, to add to or take from the list of exemptions. I agree that the Government must accept the sole responsibility for imposing such taxation as is necessary to bridge the gap between revenue and expenditure ; but that does not prevent us from taking such action as will ensure that the taxation .which is imposed is apportioned equitably. I shall, therefore, disregard entirely the statement of the Leader of the Senate, and I hope that other honorable senators will follow my example. This legislation will impose upon the people a tremendous burden of taxation, and I am afraid that the whole of it will not find its way to the Treasury. The estimated return is between £5,000,000 and £6,000.000. I believe that another £2,000,000 will be taken from the pockets of the taxpayers by those who pay the tax. The tax will undoubtedly add to the cost of living and therefore to the cost of production, because under our system of wage fixation anything that adds to the cost of living adds to the cost of production. At a time like this, that is nothing short of a calamity, because our very existence depends on our being able to decrease the cost of production, and, with it, the cost of living. This taxation will, increase both. The liability to this tax has existed since the 1st August, although Parliament has not yet passed the law. Indeed the statement of the Vice-President of the Executive Council indicates that some contracts made before that date would be taxable from the time that they were made. I believe that in operation it will be found that in the case of large machines, vehicles, and possibly ships, some things which were ordered 12 months before the tax was imposed will, on arrival, be liable to tax. The effect of this legislation on the business community cannot be estimated. Obviously, those who plan to fit out factories, farms, stations or businesses, or those engaged in the shipping industry, make their calculations as to the amount of capital required for the successful conduct of their business. Now, on top of other expenditure, comes this crushing tax on the plant as it enters this country. There is also the primage tax. In some directions the effects of the legislation will be disastrous; it will have a crippling effect on the industries of this country. It is taxation of this nature which would justify the appointment of an efficient and effective interstate commission - a body of experts to whom questions of this kind could be referred, so that we should not have to depend on the views of taxation officials. In practice the legislation brought before us is largely the product of taxation officials- - men quite competent in their own line, but unable to advise Parliament as to the economic effects of their proposals. That is a most important point. Owing to the hurried manner in which this legislation has 'been prepared and brought before Parliament, taxpayers throughout the Commonwealth are already incurring liabilities of an unknown character under its provisions. In the distant parts of the Commonwealth traders cannot possibly know what liabilities they are incurring in connexion with the sales they make from day to day. The Government should at least have sent throughout Australia, in sufficient time to reach the persons concerned, information which would enable traders to know something of the nature of this tax. These bills will cause friction, annoyance and loss, which will eventually be visited on the head of the Government in a very unpleasant form. {: .speaker-JYB} ##### Senator Dunn: -- The Government is prepared to accept the responsibility. {: .speaker-K0F} ##### Senator Sir GEORGE PEARCE: -- The Government is heaping up trouble for itself by introducing this legislation. It is idle to deny that considerable doubt exists in the mercantile community as to where merchants stand in regard to the sales tax. That a number of inequities have already revealed themselves is shown by the sheaves of interpretations, and amendments of interpretations, which have been published from day to day. I do not know the experience of other honorable senators in this matter, but I hold in my hand a bundle of communications which I have received in connexion with the sales tax within the last three or four days. Those letters are evidence that the people do not understand this tax. The writers of them do not all ask for the same thing. Some of them want the tax to be added to the invoice as a separate line; others state that that would be a manifest injustice. The divergence of views expressed in these communications shows the confusion which this legislation has caused in the public mind. In the more distant States that confusion is infinitely greater than, it is in those States within easy mail reach of Canberra. The position of people who have to rely upon telegraphic communication is infinitely worse than that of people living in Melbourne and Sydney who, in addition to being within easy reach of regular mails, can, if thought desirable, send agents to Canberra to get the information they require. Some of my correspondents advocate the rejection of these measures altogether; but, in my opinion, that is a responsibility which the Senate cannot take. The responsibility for balancing the ledger rests on the Government; it must take whatever action it thinks fit to accomplish that result. However inequitable the Senate believes the sales tax to be, and however faulty the measures before us because of the rush methods employed in their preparation, the Senate would not, in my opinion, be justified in throwing them out. Let us for a moment consider some of the questions raised in the correspondence to which I have referred. There is, first, the question of authorizing the registered firms to enter the tax as a separate item on invoices. In that matter the interests of the wholesaler and of the retailer are diametrically opposed. It would take the Senate some time to decide which is the best way to deal with this tax. It might be that it would be better to enter the item separately on the invoice from the wholesaler, because then the retailer would not be charged with the wholesaler's profit on the amount of tax. If he includes the tax in his selling price he charges his percentage of profit - say 25 per cent, or 30 per cent. - on the value of the goods plus the sales tax. From the point of view of the consumer it would be better that the tax should appear on the invoice as a separate item. But all the protests that I have received from retailers are opposed to that course. They appear to think that that system would throw on them the onus of collecting the tax. Then there are time payment purchases, some of which are very involved. Let us look at the involved nature of these transactions and consider on what value the tax is payable. If it is to be payable on the value of the article sold, we should remember that under the time-payment system, payment for the article is spread over a somewhat lengthy period, and interest is charged on the balance outstanding. I have not yet been able to find out whether the tax is to be paid on the interest as well as on the value of the article. Again, let us consider the case of agricultural machinery. At least 80 per cent, of the machines delivered to the farmers of Australia are sold on hire-purchase terms. The Commissioner of Taxation states that the sales tax will be payable on the contract, which includes interest and charges on the delivery of machinery made in the State where purchased, and in distant States, such as Western Australia, the contract will include rail and steamer freights, wharfage, insurance, as well as assembling and interest charges. These contracts are generally for a period of three years. It is therefore probable that the farmer will actually pay 20 per cent, more tax on his machine than if the tax were levied on the cash price in .the State where produced. Most of the agricultural machinery used in Western Australia comes from Victoria. In the latter State the tax will be 2^ per cent., unless interest is also taxable. But- when to the cost of the article steamer freight, insurance, wharfage and other charges are added, we find that by the time the machine gets to Western Australia, from 10 per cent, to 15 per cent, has been added to its cost, so that the sales tax to a Western Australian farmer on agricultural, machinery will be double the amount charged to a Victorian farmer. That is inequitable. There is another reason why agricultural implements should ' be exempt from this tax. In order to promote the cultivation of wheat so that exports may be stimulated, and thus increase the volume of funds available overseas for payment of interest and sinking fund payments on the external debt, it is essential that farmers' costs of production should be reduced. With the decreased prices for wheat now ruling in the world's markets, the profit from wheat-growing is already low, and further increases in the cost of production will inevitably result in a contraction of the area sown. Australian manufacturers of farm implements gave an undertaking, when the . importation of certain classes of implements was prohibited, that unless the cost of labour or material increased, they would maintain their selling prices at a level at least 5 per cent, lower than that obtaining immediately prior to the operation of the embargo. The sales tax does not increase either labour or material, yet the Australian manufacturer is because of it compelled to increase his selling prices, thus breaking his agreement with the Government. The manufacturers feel that the Government, in causing them to increase their prices, has not kept faith with them. Farm produce is exempt from taxation, as are also certain commodities used by farmers, namely, bags and sacks, fertilizers, fodder for stock, and woolpacks. Farm machinery and implements, equally with the exempt items, affect the farmers' ability to produce profitably. Owing to adverse climatic conditions during recent years, wheat-growers throughout the Commonwealth are now, as a class, in serious financial difficulties, and are unable to bear the further burden of an increase in the cost of their tools of trade. The tax will result in farmers endeavouring to continue working with worn-out and obsolete implements. In consequence the yield of wheat will be diminished. Already, from the effects of the poor seasons to which I have referred, both the Australian manufacturer and the importer of farm implements are carrying large stocks. A diminution of the demand for implements, caused by increased prices, will force manufacturers to further curtail production, thus throwing more workers out of employment. Those are some of the consequences that may arise from the operation of this measure. I understand that my colleague, **Senator Johnston,** intends to move an amendment to provide for the further discussion of this matter, and I shall have no hesitation in supporting him if be does so. I do not, know of any other law that has operated in the same way as this has done. Before the law saw the light of day it came into operation. Such a procedure is likely to bring about the instability of securities at a time when it is almost impossible to obtain an overdraft, no matter how good one's securities may be. The whole pro,ject is likely to bring disaster upon many of our mercantile firms. I am not satisfied that, there will not be dual taxation of sales, and in regard to that matter as well as in regard to the frequency with which the payments have to be made, and the exemptions of certain things that are of useto gold-mining and other mining. I desire some explanation. Certainly the application of the tax in those spheres will bring about a very precarious position. I raise another point - the operation of the sales tax with regard to vessels. It has often been claimed in this chamber that the operation of the coastal clauses of the Navigation Act interferes with the effective development of Australia, because overseas shipping is shut off from our coastal trade, and, owing to the increase that has taken place in wages, the cost of running our local shipping is very high, reflecting itself in the high freights that are charged. I take a casual interest in the reports of the shipping companies operating in Australia, and for some time I have watched to see whether they are making the exorbitant profits that some allege is the case. I have discovered that for a number of years their profits have declined, until to-day nobody can claim that the ship-owners of this country are even earning interest on their capital. It is obvious that if the sales tax is to apply to vessels, it will act as a further bar to the development of the country, by adding to the cost of ships, and causing shipping companies still further to increase fares and freights. That would be particularly disastrous to the distant States. I have been supplied with a copy of a letter that was written to the right honorable the Prime Minister on the subject. It is so much to the point that I propose to read it. It was written by the Steamship Owners' Federation on the 4th August last, and reads - >SALES TAX. > >Vessels. Subsequent to my letter, dated 29th ultimo, requesting that vessels purchased overseas by shipowners in Australia to trade on the Australian coast should be exempt from primage duty, the nine assessments under the bill relating to sale taxes have been tabled. It is noted that assessment No. 5 is headed "A bill for an act relating to the imposition, assessment and collection of a tax upon the sale value of goods imported into Australia, and for other purposes ". This federation trusts that there is no intention on the part of your Government to bring under the operation of thiB bill, vessels purchased overseas by Australian shipowners and brought out to trade on the Australian coast. I am respectfully to submit that vessels, each of which as a single article represents an enormous sum of money, and which arc not imported with the intention of being sold, but to provide a service for the carriage of primary produce, coal, and other commodities, should he exempted from this tax as well as from the primage duty. In this connexion I am to point out that coal and primary products are exempt from the sales lux. It is only reasonable that the vessels which arc used in the conveyance of such goods should also be exempt, otherwise the exemption granted to these commodities will be indirectly nullified in view of the fact that if the vessels conveying them are subject to these taxes, the freight charged on these commodities must be increased to meet the extra capital cost of the vessels represented by these duties. This is inevitable if the duties have to be paid on the vessels, otherwise it would not bo a business proposition to import them, and thereis a very grave danger that no new vessels will be brought on to the coast, and that it will be impracticable to replace existing tonnage. I am to point out that vessels up to 1,000 tons gross are now subject to a customs duty of 50 per cent., British preferential tariff60 per cent. intermediate tariff or 70 per cent. general tariff. If primage duty and sales tax are also made applicable it would mean that no less than three import duties would be imposed upon imported vessels. These taxes would have a crushing cumulative effect upon the industry. In order to illustrate this, the case may be taken of a vessel under 1,000 tons gross, costing, say, £50,000, built in the United Kingdom : - It will thus be seen that a vessel which is built in the United Kingdom for £50,000 would, by the time it had paid these duties have cost the company no less than £81,200. It is considered that your Government in framing these bills could not have intended that vessels were to be regarded as coming within their scope. I am requested to stress the disastrous results which must result if these taxes are imposed on vessels and to urge that they may be regarded as not falling within the category of "goods entered for consumption in Australia", or, alternatively, that they should be definitely exempted by proclamation from these taxes. The case for their exemption, cither administratively or by proclamation, is so strong that the Federation confidently submits their requests for your favorable consideration, and urges that the necessary steps may at once be taken to secure the exemption of vessels from the operation of both the sales tax and the primage duty. {: .speaker-KOJ} ##### Senator Herbert Hays: -- How will the sales tax operate with regard to a vessel that is built overseas to the order of an A ustralian owner ? {: .speaker-K0F} ##### Senator Sir GEORGE PEARCE: -- That is one of the things that I want to know. In my judgment it will operate, and, from an answer given in another place to a question that was asked, I believe that it is intended to operate in such a case. I direct the attention of the Leader of the Government in the Senate to clause 6 of Bill No. 9 and ask him, when replying, to inform the Senate whether the exemption therein mentioned applies to such a vessel. It would appear from certain information that was supplied to me that it does not apply to ships imported by the owner, but that it applies to chartered ships. {: .speaker-JTL} ##### Senator Daly: -- That is so. {: .speaker-K0F} ##### Senator Sir GEORGE PEARCE: -- I take it that if a ship were purchased in the circumstances outlined in the letter that I have quoted, the tax would have to be paid on it. I understand that vessels are exempt from the Canadian sales tax, andthat the exemption is specified at page 121 of the Canadian legislation of 1919-20. Vessels are not "landed," and when can they be said to he imported ? In the tariff there is a clear line of demarcation - those that trade on the coast for a period of not less than three months. There is no such line of demarcation in the Sales Tax Assessment legislation, and it would appear that all British and foreign vessels coming to Australia will be taxable. {: .speaker-JTL} ##### Senator Daly: -- Does the right honorable senator know that the Government proposes to introduce an amendment relating to interstate and intra-state vessels? {: .speaker-K0F} ##### Senator Sir GEORGE PEARCE: -- I have not heard of it. {: .speaker-JTL} ##### Senator Daly: -- I understand that the Prime Minister promised such an amendment. I shall move it in this chamber, and will explain it at a later stage. {: .speaker-K0F} ##### Senator Sir GEORGE PEARCE: -- I shall be very interested in the honorable senator's explanation. It is alarming to think that there is a likelihood of vessels of that description having to pay import duties, primage duties, and sales tax. That would make shipping costs around our coast absolutely prohibitive. Shipping companies are not philanthropists, and would have to pass on the burden by means of increased freights and fares, to the further detriment of those States which depend so much on sea transport. Again, these vessels are really " containers," as they carry the goods that are either exempt or subject to the sales tax. The Prime Minister undertook to consider some of the matters to which I have referred, and it may be that the Government has come to a decision that will afford some relief in this regard. There is much more that I could say on the subject, though I make no pretence of having given the bills anything like exhaustive consideration. I have been able to snatch only fragments of the scanty time at my disposal for their study. 1 again disclaim any responsibility for their effect', and throw it upon the Government. {: #debate-34-s1 .speaker-KQZ} ##### Senator LAWSON:
Victoria -- I find myself in complete agreement with what the right honorable the Leader of the Opposition **(Senator Pearce)** has said. At 6 a.m. on the con- eluding day of the session, after the experience of the past few days, one is in the mood to ask - quoting from a well-known play - "Aren't we all?" Yet it seems inevitable in the conduct of parliamentary proceedings to have these end-of-session rushes. The measures that are left for consideration during the concluding hours of the session are usually those of paramount importance, relating as they do to finance. Finance is the serious problem with which the country has to grapple, and in our existing economic circumstances it would be folly for the Senate to involve itself in a constitutional struggle with another place. Although the power of request is exceedingly strong, and the Senate's power to reject is unabated, nevertheless the responsibility rests on the Government to balance the budget, and the popular conception is that the power of the purse resides with the other chamber. In these circumstances we must, I presume, content ourselves with expressing our hostility to this legislation, our disapprobation of the haste which has attended its introduction, and such sympathy as we must have with the unfortunate community which is staggering under and bewildered by its introduction. The number of bills brought down, and their complexities, make it difficult to understand the proposals of the Government. I cannot say that I have received as many communications as **Senator** Pearce has exhibited to the chamber, but all honorable senators have received telegrams and letters urging them to, vote against these bills.. We must assume, however, that these correspondents have not a due appreciation of the responsibility of Parliament to balance the budget. The Minister has been good enough to supply honorable senators with a list of the additional exemptions made as the result of the consideration of these measures in another place, but I have received a telephone communication from the secretary of the State Electricity Commission of Victoria drawing attention to an anomaly which has been created by one of the amendments that have been made. Under the measure as originally introduced, goods sold by State government departments were exempt from taxation.' After discussion it was decided to remove that exemption, and on the whole I presume its removal is quite fair, because a State which is engaged in trading should have tax levied on the sales value of the goods it sells equally with its competitors. Under the original provision, brown coal briquettes manufactured by the State Electricity Commission of Victoria would clearly have been exempt. Primary produce being exempt, coal being such a product, is exempt; but the briquettes, which are brown coal pressed into a convenient shape and size, and with the. moisture removed, would probably be ruled on technical grounds to be not a primary product. I understand that the Government of Victoria has been in communication with the Commonwealth Government on this point, and I have had an opportunity to confer with the Minister regarding it. I hope that he will be able to suggest an amendment which will remove the anomaly to which I have drawn attention, so that the briquettes made by this State instrumentality will not be put on an unfair competitive basis with coal. {: .speaker-JTL} ##### Senator Daly: -- I have made inquiries since the honorable senator made his representations to me, and I can inform him that briquettes will be exempt. {: .speaker-KQZ} ##### Senator LAWSON: -- I thank the Government for that. It is inevitable that this tax will increase the cost of living. At any rate it will prevent any downward tendency in the cost of living. {: .speaker-JTL} ##### Senator Daly: -- The sales *tax u* the fairest system of tax that could be devised. {: .speaker-KQZ} ##### Senator LAWSON: -- It will not be paid by the wholesaler or the manufacturer if cither can pass it on. I have not the heart to detain the Senate long at this hour. Honorable senators have been sitting continuously for a long time, and it is impossible for a chamber, physically fatigued and mentally tired, to give to the consideration of these measures the close attention which their importance demands, or to function efficiently as a chamber of review. We are not able to scrutinize the proposals that come before us with the care which we usually devote to any legislation submitted to us. Already to-night we have passed ten bills through all stages. We must reduce the cost of primary production. **Senator Pearce** has already dealt with the sales taxation of agricultural implements, and has pointed out the anomalies that will be created by the application of the tax on the hire-purchase system. The great bulk of the agricultural machinery is sold on hire purchase, and the tax will, therefore, add to the burdens of the primary producer. I hope that the Minister will determine the position of vessels. I was glad to hear from him that a measure of relief would be afforded in regard to them. The following is a telegram I have received :- >Softgoods section Melbourne Chamber of Commerce strongly urges that provision be included in Sales Tax Act making it compulsory to state separately on every invoice the amount of the tax. We understand this is in accordance with the Canadian act on which the bill now before Parliament has been modelled. {: .speaker-JTL} ##### Senator Daly: -- The opinion of **Mr. E.** M. Mitchell, K.C., is against that course. {: .speaker-KQZ} ##### Senator LAWSON: -- Apparently it would be unconstitutional to do as requested. I am afraid that the Government will bump into many other constitutional troubles in the administration of the act. {: .speaker-JTL} ##### Senator Daly: -- I think we have successfully evaded them. {: .speaker-KQZ} ##### Senator LAWSON: -- If so it has been extremely clever. Here is another telegram I have received - >Melbourne seed trade strongly urge imported seeds exempt sales tax. First necessity all primary producers and there is urgent need national extension permanent pastures and greater supply foodstuffs and replenishment fodder reserve depleted by drought. I notice that Australian-grown seeds are exempt. I do not know what the Minister can do in regard to the request of the seed trade. The following is an extract from a letter written by the Victorian Chamber of Manufactures: - >The effect of the bill as submitted will produce many complications and discriminations and will be seriously detrimental to the manufacturing industries. If it were necessary that such a tax should be imposed it should have been on the retail sales, in which case a lower rate of tax would only have been required on account of collection on higher sales value, and if such could be brought about it would remove many difficult positions that will necessarily arise. Another gentleman writes - " The bill ought to be killed ; shot at dawn ". "If we cannot get the bill killed," he says, " we want salt to be free, as it is the basis of most food trades, besides being used on the land very largely. The quantity sold in grocery shops is small compared with that used in meat works, butchers' shops and bakeries." I understand that semolina is exempt, and it is suggested to me that wheatmeal flakes, flavoured or compressed, made in Australia, should be exempt. A very contentious subject is "cakes and pastry ". I understand that under the Canadian system both are exempt. The Chamber of Catering Industries, Melbourne, writes asking that cakes should, be exempted. I submit these matters at this stage -so, that the Minister may have an opportunity to consider them. I reiterate what has been said so well by **Senator Pearce,** that responsibility for this legislation is not on this chamber. It is true that we have the power to reject the bills, but in existing circumstances I do not see that we would be justified in assuming the responsibility of throwing out the financial proposals of the Government. It is true that we have a majority, but as things are we should not be justified in using that strength tyrannically. We therefore say to the Government, " These are your proposals. You must take the responsibility for them." We cannot accept the responsibility of rejecting them, making confusion worse confounded, and throwing the finances of the country into absolute chaos and disorder. {: #debate-34-s2 .speaker-KP8} ##### Senator E B JOHNSTON:
Western Australia -- At this late hour of the morning 1 shall be brief in stating my objection to this legislation. I object to the enormous load of taxation that is proposed to be placed on the shoulders of an already overburdened taxpayer. This tax will bring into the Treasury about £6,500,000 a year. For the remaining ten months of the current financial year it is estimated that the receipts from it will amount to £5,000,000. We have had hardly an opportunity to study the bills. Copies of them have been available only within the last few minutes. I object to the action of the Government in digging up from the middle ages this obsolete form of taxation, which is so abhorrent to all British communities. So far as I am aware, this system of taxation is being applied in only one portion of the British Empire - the Dominion of Canada - and there the rate of the tax has been reduced to the lowest possible limit. This legislation will increase the cost of production and the cost of living at a time when every effort should be made to reduce them so that Australia may hold its position in markets oversea. I have received a large number of telegrams from persons engaged in primary industry in Western Australia, protesting against the burdens which this legislation will impose upon them. It would appear from the nature of the protests made that the interests of primary producers in that State, at all events, have been entirely overlooked. But I suppose this need not occasion surprise, in view of the distance separating Western Australia from the seat of government in Canberra. Many requests have been made to me to induce the Government to extend the list of exempted goods, and when the bill is in committee I shall move for the exemption of the principal requisites for the mining, agricultural, and pastoral industries. {: .speaker-JTL} ##### Senator Daly: -- I shall be obliged if the honorable senator will tell me how the estimated revenue will be obtained if the exempted list is extended. {: .speaker-KP8} ##### Senator E B JOHNSTON: -- I tell the Minister plainly that the primary producers in Western Australia are not in a position to bear additional taxation burdens. Already they are called upon to pay 12 *i* per cent, more for their machinery and other agricultural requisites than is charged to primary producers in the eastern States, these increased prices being due partly to the incidence of the Navigation Act and to the fact that the principal secondary industries are established in the eastern States. This sales tax will add to the load, and as agricultural requisites are, in the majority of cases, sold on hire-purchase terms,* the burden will be all the heavier on that account. The struggling farmers in the more distant States will be still further handicapped by a sales tax on commodities the price of which is, as I have shown, higher in Western Australia than in the eastern States. The mining industry, particularly gold-mining, as well as the agricultural and pastoral industries, cannot bear these additional burdens. The Prime Minister **(Mr. Scullin),** shortly after he took office, realizing the part played by the primary producers of Australia in maintaining the overseas exchange position, issued an urgent appeal to our farmers to grow more wheat. {: .speaker-JTL} ##### Senator Daly: -- And the Senate rejected the Wheat Marketing Bill. {: .speaker-KP8} ##### Senator E B JOHNSTON: -- This chamber rejected that measure because it would have placed on the citizens of a State such as Western Australia, burdens enormously heavier than are laid upon the people of other States such as Queensland, which has done so well under federal legislation. 1 trust that, when the bill is in committee, the Minister will accept suggestions to extend the list of exemptions, and so lighten the incidence of this new taxation on the mining, agricultural, and pastoral industries. {: #debate-34-s3 .speaker-K09} ##### Senator PAYNE:
Tasmania -- I endorse all that has been said by those honorable senators who have preceded me concerning the action of the Government in introducing this important legislation at such a late hour in the session. It is impossible to discuss it fully in the short time at our disposal. We are forced te take it as we find it. We should, nevertheless, enter an emphatic protest against a continuance of this procedure. These sales tax amendment bills have attracted a great deal of attention, particularly from the commercial section of the community. The full weight of this new taxation must inevitably fall upon the purchasers of those commodities upon which the tax is levied. In other words, the tax must be passed on to the purchaser or consumer. I very much regret that, in the preparation of these measures, no attempt was made to provide that nothing more than the amount of the taxation levied upon each article should be passed on to the general public. It is, I think, inevitable that in many instances the charge to the consumer will be higher than the amount of the tax. This will apply particularly to the purchasers of the cheaper commodities, for this reason : As the smallest coin in our currency is one-halfpenny, it is probable that, if the tax breaks into a fraction of one penny, an extra halfpenny will have to be paid by the purchasers or consumers of the articles affected. In some instances the extra charge to them will represent, not 2) pe? cent., but perhaps 5 per cent. or 7$ per cent. I wish to refer also to the Minister's explanation of the position of the retailer who also is :in importer. The Minister explained that such a person would pay the tax when passing entries through the customs. That transaction, I submit, will not be payment of a sales tax, but an addition to customs duties. {: .speaker-JTL} ##### Senator Daly: -- An entry through the customs by a retailer who imports goods will be, in law, regarded as a sales tax. {: .speaker-K09} ##### Senator PAYNE: -- I do not agree with the Minister's interpretation of the bill. If I were an importer, and if I received an invoice showing that goods to the value of £1,000 would arrive by a certain vessel, I would have to pay, according to the Minister's statement of the case, a sales tax on the whole of the goods imported at the time of passing the entries, although, at that stage, I might not have sold one pennyworth of the goods in question. It is possible that I would not be able to sell 10 per cent. of those imported goods. An importer who is a wholesaler is in a different position from an importer who sells goods retail, because he will pay the tax on the sale of his imported goods to a retailer. With **Senator Lawson,** I hope that, when these bills are in committee, provisions will be inserted in them, requiring the amount of tax paid to be shown on all the goods sold. This is the only fair way in which the act can be administered. Let me cite an illustration which, I hope, will convey to honorable senators what I mean. Suppose two men are competitors in the same class of business. One man may be scrupulous in all his transactions, and determined to pay 20s. in the £1 ; the other may not be quite so scrupulous. He may be slightly embarrassed financially. If he is not required to show the amount of tax payable on all goods sold, he may decide to undercut his competitor by omitting to pass on the amount of the tax. In this way he would be able to compete unfairly against his more scrupulous business rival, and possibly injure him in his business. I recognize, that it would not be. wise for the Senate to attempt to defeat these taxation proposals. The Government must raise additional revenue in order to carry on the affairs of this country. But I do protest most strongly against the presentation of these bills on the closing day of the session, when it is impossible to discuss them adequately. {: #debate-34-s4 .speaker-KTR} ##### Senator MCLACHLAN:
South Australia -- I shall not detain the Senate for more than a few minutes. I endorse the statement of the right honorable the Leader of the Opposition **(Senator Pearce)** that we wash our hands of all responsibility with regard to these nine new terrors to existence which have been forced upon us in the form of these taxation proposals. This day in August will mark one of the most crushing economic disasters that Australia has experienced. {: .speaker-K3L} ##### Senator Sampson: -- This is Germany's black day. {: .speaker-KTR} ##### Senator McLACHLAN: -- I sincerely trust that it will not be Australia's black day. Besides increasing the cost of living, these proposals will act as a deterrent, preventing people from purchasing goods in the markets ' of this country. If, as the Minister has stated, this taxation is to be imposed principally on luxuries, there would be some justification for the introduction of the measure. But many necessary commodities are also to be taxed, and this will seriously affect practically every (section of the community, and also have a serious effect upon our economic life. It will be another terror to the commercial community, and particularly to the consumers, who will eventually have to pay the tax. I recognize that the Government is perfectly consistent in introducing this class of legislation, as its only effect will be to increase the cost of living, which it has already done in other ways. It is quite consistent with the policy to which effect is being given by this Government, and with statements made a few months ago, when its supporters said that it was impossible to reduce the cost of production. Numerous representations have been made to me in connexion with this legislation, and it is impossible for me to answer the numerous inquiries I have received from all portions of the Commonwealth about it. Some days ago the Minister **(Senator Daly)** was good enough to say that the Prime Minister would supply to the .press a *precis,* to enable commercial men in the other States to understand the proposals of the Government. I understand that information was telegraphed to the newspapers in the various States, but from the information I have received the *precis* published made confusion worse confounded. There are one or two matters which I should like to bring under the notice of the Minister. For instance, I have received a telegram from the Lord Mayor of Adelaide, asking if the sales tax is to be imposed on goods sold to municipal councils and other selfgoverning bodies. If that is the case, the measure will have the effect of restricting the work to be undertaken by municipal bodies, and will consequently lead to further unemployment. I do not know whether sales made to governments are to be exempt; if they are not, it means that, the Commonwealth Parliament will be imposing further liabilities upon the States. I understand that representations have already been made to the Government concerning egg pulp, and that an amendment was moved in another place to have that commodity placed on the exempted list. Eggs, which are a primary product, are to be free, but the kegs in which eggs are placed are to be taxed. I also understand that pastry is to be exempt and that certain striking anomalies exist in connexion with cakes and pastry. For instance,- the tax is to be imposed on cakes produced by wholesale manufacturers, but those produced at home are to be exempt. {: .speaker-JTL} ##### Senator Daly: -- That, is to encourage domestic economy. {: .speaker-KTR} ##### Senator McLACHLAN: -- The Government needs more knowledge of political economy. Representations have also been made with respect to the specification of the tax on invoices; but the Minister has said that it is impossible to make legislative provision for that without violating certain sections of the Constitution. I assure the Minister that before this legislation has been in operation very long its constitutionality will be tested. Eucalyptus bil, which is a primary product, is to be taxed. Representations have been made from several quarters to have this produet placed on the exempted list. I believe that after this legislation is enacted, it will be necessary to establish another costly department, a procedure to which the members of this Government, when in opposition, raised a good deal of objection. {: #debate-34-s5 .speaker-K1L} ##### Senator BARNES:
Honorary Minister · Victoria · ALP -- I regret that I should find it necessary to speak on the second reading of this measure, but I consider it my duty to remind honorary senators opposite that they have no right to endeavour to protect any section of the community from bearing its full share of responsibility in providing revenue to carry on the government of the country during a period of extreme financial stringency. It has been contended by some honorable senators that this form of taxation will be passed on to the consumer by those on whom it is imposed, and that it will eventually have to be borne by the workers. It is, however, the workers who have on many occasions pulled this and other countries out of their difficulties. But why should honorable senators opposite wish to protect those persons who have never previously been taxed to any appreciable extents - the wholesale merchants ? This form of taxation is being introduced for the first time in Australia in an earnest endeavour to get the country out of its financial difficulties. I repeat that honorable senators opposite should not endeavour to relieve any section of the community of its fair share of responsibility at a time when the country is urgently in need of revenue. {: #debate-34-s6 .speaker-JQP} ##### Senator COOPER:
Queensland -- I direct the attention of the Minister to the fact that self-raising flour, which is not a luxury but a commodity used extensively in every household, is to be subject to this tax. When the measure is in committee it is my intention to move an amendment to have this product placed on the exempted list. Fully 94 per cent, of the flour used in the average Queensland home is of the self-raising variety, and if its cost is increased it will be necessary for housewives to resort to the old method of mixing carbonate of soda and cream of tartar with the ordinary flour. {: .speaker-K1Z} ##### Senator Rae: -- Self-raising flour is used only by those who do not wish to go to the trouble of mixing the commodities mentioned. {: .speaker-JQP} ##### Senator COOPER: -- Self-raising flour is considered to be a superior product; because it is scientifically mixed, it is considered to be more satisfactory for cooking purposes. The self-raising product is used very extensively in the country by persons who are already heavily taxed, and I sincerely trust that the Government will agree to the amendment which I intend to move. I agree with the opinion expressed by the Assistant Minister **(Senator Barnes)** that every section of the community should bear its burden of taxation, and endeavour to assist the country out of its present financial difficulties. I consider, however, that the primary producers are at present bearing more than their share of taxation, and I strongly protest against any further imposition upon them. {: #debate-34-s7 .speaker-K6I} ##### Senator CHAPMAN:
South Australia -- I also wish to protest strongly against the imposition of this tax which, in addition to being unjust, will cause a great deal of confusion among the commercial community. Assuredly this: will increase the cost of living, which every economist says that we should doour utmost to reduce. I protest against, the manner in which the Government has given effect to this tax. Although the tax ha3 been collected since the 1st August this Senate is only now considering the measures that are designed to operate it. This is the first occasion in the history of the Commonwealth that such action has been taken. Honorable senators have been inundated with telegrams from persons who are anxious to know the position in which they are placed by this legislation. Even the Government itself realizes that the wholesalers cannot stand this tax. In Adelaide, some wholesale companies have not been able to pay their usual dividend, and in addition they have been compelled to dismiss a number of their hands. The tax has to be passed on. The first definite information which Adelaide traders had of it was conveyed by the *Adelaide Advertiser* of the 31st July last, which announced that the tax was to be operative from the following day, and that the bills had been explained in the House of Representatives by the Prime Minister. A telegraphed summary was all that appeared. Then the same newspaper on the following day announced the fact that the tax was in operation and stated in its headlines that there was confusion in trading circles, and that no official intimation had been received by those whose duty it was to administer it. The position of the traders has been well voiced by **Mr. S.** McGregor Reid, the president of the Taxpayer's Association in Adelaide, in the following terms : - >It shows a complete disregard for the welfare of trade and industry. A Government which included any one with a knowledge of the difficulties of commerce would never have been responsible for such roughshod methods. The Prime Minister has stated that the administration of the tax will be simple. This may be true from the point of view of the Government, who has merely to collect cheques, but it will certainly not be true for the merchant who has to pay the tax, especially during the first months of its operation. Not even the local Taxation office, which will have to administer the tax in South Australia, has any information, and there will not be time for the merchants to receive copies of the bills before they will be subject to the liabilities which the bills create. That is the position in a nutshell. Many traders do not know upon what goods they will have to pay tax. I therefore suggest to the Minister that, where there is failure to adjust prices because of lack of information, and business firms have been saddled with charges that they did not pass on owing to this lack of information, tin; Commissioner should be empowered to refund the tax. {: #debate-34-s8 .speaker-KOJ} ##### Senator HERBERT HAYS:
Tasmania -- No taxation measure has caused more concern than this, which imposes an additional burden upon an already heavily taxed people, whose incomes within the last couple of years hare been considerably reduced. The difficulties with which the Government is faced are well known, and every honorable senator is anxious to co-operate with it in devising means for removing them; but it is hardly fair to the people that this form of taxation, which is so far-reaching in its incidence, should be introduced in the dying hours of a lengthy session. Last week-end I paid a visit to Tasmania, where I was besieged with inquiries for information in relation to this legislation. Beyond saying what the rates would be, I could not furnish any information in regard to its provisions. Reference has been made to the fact that this tax will apply to ships. That aspect of the matter is of the greatest importance to Tasmania, because, according to the declaration of the PostmasterGeneral, the Government has made provision for an augmentation of the shipping service to that State within the next three years. If tax is to be paid on ships that are imported, the company that is to operate that service must raise its freights and fares to recoup itself for the additional outlay. It is idle for any honorable senator to suggest that this will he merely a temporary tax. Once it is imposed it will operate for some time to come. I ask the Leader of the Senate to give favorable consideration to the request that seeds which are imported for primary producers shall be exempt from the tax. The amount of revenue involved is not considerable. The Government should give every encouragement to the importation of seeds because of the effect of that importation upon the wealth of this country. If the Minister does not express his willingness to include this item in the schedule, I shall move an- amendment to that effect when the bill reaches the committee stage. {: #debate-34-s9 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP . - I trust that honorable senators will realize that at this stage I cannot reply to the different suggestions that have been put forward. I shall do so when the bill is in committee. Question resolved in the affirmative. Bill read a second time. *In committee:* Clause 1 agreed to. Progress reported. *Sitting suspended from 7.4 to 10 a.m. (Friday.)* {: .page-start } page 5560 {:#debate-35} ### CONCILIATION AND ARBITRATION BILL Report of Conference. {: #debate-35-s0 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- I bring up the report from the conference of the managers appointed by the Senate and the managers for the House of Representatives on the Conciliation and Arbitration Bill, as follows - >The Senate managers have met the managers for the House of Representatives on the subjectmatter of the amendments made and insisted on by the Senate in the Conciliation and Arbitration Bill, and with which the House had disagreed. The managers of the respective Houses have, after conferring, mutually agreed to deal with such amendments as follows: - > >That Amendments Nos. 1-11, 13, 14, 16, 20, 23, 24, 27, 28 made by the Senate be agreed to; > >That Amendments Nos. 12, 15, 18, 25 made by the Senate be not agreed to; > >That Amendments Nos. 17, 19, 21, 22, 26, 29, 30 made by the Senate be agreed to with modifications; and > >That the necessary consequential amendments be made in the bill. *Ordered -* >That the report be adopted, and taken into consideration in conjunction with message 83 from the House of Representatives in committee forthwith. *In committee:* Consideration of report of managers and House of Representatives' message. Motion (by **Senator Daly)** proposed - >That amendments 1 to 11 inclusive, 13, 14, 16, 17, 19, 20, 21, 22, 23, 24, 20, 27, 23, 2!) and 30 be still insisted upon. **Senator** **Sir GEORGE** PEARCE (Western Australia) [10.6 a.m.]. - It would be as well if the committee were given some idea of what has been done. It is difficult to follow these amendments. Those numbered 1 to 9 deal with clause 9 relating to the removal of the conciliation commissioners from office. Honorable senators will remember that **Senator Colebatch** raised the question whether both Houses of Parliament should confirm their removal. In the bill either House could do so. The procedure has been reversed, and it is now practically the same as that laid down in the Judiciary Act for the removal of a judge. Both Houses have to agree to their removal. Amendment No. 10 relates to clause 12, dealing with applications to the High Court for the declaration of the existence of a dispute, the effect of the Senate's amendment being to maintain the right to apply to the High Court. Amendment No. 11 aims at maintaining in section 24, relating to agreements, the words " or that it is not in the public interest that it should be certified." Amendment No. 13 deals with the question of appeal. As there was no appeal in the bill against the decisions of conciliation commissioners the Leader of the Government in the Senate proposed that an appeal board would be constituted. Amendment 13 is a consequential amendment which inserts in sub-section 1 of section 31 the words " except as in this act provided" before the words "no. award or order of the court shall be challenged . . . in any other court." The amendment allows an appeal. Amendment 16 applies to clause 24, and deals with a question raised by **Senator Colebatch** regarding the powers of the High Court. The bill substituted "court" for "High Court." By the Senate's amendment the words "High Court" have been restored. Amendment 20 refers to clause 35, which deals with preference to unionists. The clause as it came to the Senate left out the words " other things being equal." The Senate restored those words, and its amendment has been accepted. Amendment 23 is not very important It refers to clause 44 dealing with the penalties upon organizations for interfering with awards. The Senate deleted the words ''and the officials of such organization " because it had inserted another new clause dealing with penalties on officials. The amendment was consequential on a new clause 44a covered by amendment 24. This provides for penalties against officers of organizations who incite members of their organizations to refrain from entering into a written agreement or accepting employment or offering for work or working in accordance with an award. The new clause has been accepted. Amendment 27 deals with the supplying of lists of members of an organization. Clause 5 of the bill omitted the obligation to supply lists of members. That amendment has been accepted with a further amendment by which the Registrar can give authority to inspect the lists kept by organizations. Amendment 28 ' is consequential and provides that the list of members shall be open to inspection. Dealing now with amendments agreed to with modifications, I point out that amendment 17 is the appeal clause which was put forward by the Government and amended in the Senate. It deals with the times within which awards shall operate. The Senate inserted the words - >Any such appeal shall be made in the manner and within the time prescribed by the rules made in accordance with section 43 of this act. An award or order of a conciliation commissioner or a conciliation committee shall not have effect until the expiration of the time within which such appeal may be made. A modification to this has been agreed to, the effect of which is that, if both parties agree, the award comes into operation forthwith. The clause stands with that modification, which is in accordance with the desire of the Senate. The wording of amendment 17 is rn be- >An award or order of a- conciliation commissioner or a conciliation committee shall not, except by consent of all' the parties, have effect until after the expiration of 21 day* from the making thereof. The modification of amendment 19 reinserts clause 33 which reads - >Section 38» of the principal act is repealed. This section provided for the cancellation of an award if an organization had done anything in the nature of a lockout Or strike. That is a penalty provision against officers or associations doing something against- an award. It has been agreed to subject to the omission of the words "has done anything in the nature of a lockout or strike ". In a prior clause we left out penalties against striking or engaging in a lockout, and it was thought logical to leave them out of the other clauses. Amendment 21 relates to the time in which wages can be recovered. The bill originally provided for a period of twelve months, while the amendment of the Senate provided for one of six months. As a compromise a period of nine months has been agreed upon. Amendment 22 retained the provisions relating to secret ballots. It has been agreed that these shall be omitted, except thatwhich gives the judge power to order a secret ballot. The provision by which ten men could claim that a ballot be taken has been deleted, while that providing penalties for offences in connexion with secret ballots has been retained. Amendment 29 deals with a number of penal provisions which originally provided for a penalty of £500. As a modification that has been altered to £100. Amendment 30 restored to the court the power.given in section 89b to cover penalties to protect itself against those who committed certain offences against the court. The penalties were to be recovered in a civil court. That has been modified to harmonize with other clauses that have been left out. I wish tosay that an excellent spirit prevailed at the conference. Both parties attended the conference obviously animated by the desire to arrive at an agreement if that could be done without sacrificing principles, and, I think, that the Senate may rest assured that in all matters of importance its views have been met in a very reasonable way. Motion agreed to. {: #debate-35-s1 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP -- I move - >That amendments Nos. 12, 15, 18 and 25 be not further insisted upon. Amendment 12 omits clause 20, which amends section 27, to read- {: type="1" start="27"} 0. On the hearing or determination of any industrial dispute an organization may be represented by a member or officer of any organization, and any party not being an organization may be represented by an employee of that party; but no party shall (except by leave of the court and consent of all the parties) be represented by counsel or paid agent. It has been agreed that this amendment should be made in section 27. Amendment No. 15 sought to limit the right of appeal under section 31. The limitation, it is agreed, should be removed. The effect of amendment No. 18 was to omit the proposal of the Government that the court must not include in any award a provision, requiring an employee to notify an employer that he is a member of an organization bound by an award. It has been agreed that this provision shall remain in the bill. By amendment 25 the Senate retained certain paragraphs in section 60, relating to applications for cancellation of registration. It is agreed that these paragraphs shall be omitted from the section. Motion agreed to. {: #debate-35-s2 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- Amendments Nos. 17, 19, 21, 22, 26, 29 and 30, insisted upon by the Senate, relate to the clauses dealing with penalties and secret ballots, which were agreed to by the conference, subject to modifications. These will be made in another place. There are certain other consequential amendments, particulars of which are embodied in a memorandum that has been supplied to the Leader of the Opposition. A copy of the report of the conference will be forwarded to another place for its attention, and the consequential amendments will be effected there. Resolutions reported; report adopted. {: .page-start } page 5562 {:#debate-36} ### SALES TAX ASSESSMENT BILL (No. 1). *In committee:* Consideration resumed from page 5560. Clause 2 agreed to. Clause 3 (Definitions). **Senator Sir GEORGE** PEARCE (Western Australia) [10.27 a.m.]. - I have here a copy of a letter that was sent to the Prime Minister, by Messrs. Foy and Gibson Proprietary Limited, of Melbourne. It rather indicates that an injustice may be done under these definitions. If the injustice is to be removed, it must be done by dealing with the definition of " manufacturer " and " taxpayer." I ask the Government to give the matter consideration. Clause agreed to. Clauses 4 to 17 agreed to. Clause 18 (Sale value of goods). **Senator Sir GEORGE** PEARCE (Western Australia) [10.33 a.m.].- The Victorian Chamber of Manufacturers also suggests the following amendment : - >In respect of goods sold on which sales tax is payable, the purchaser shall be furnished with a written invoice on which the amount of the sales tax shall be stated separately, and although such amount shall not be deemed to be part of the sales value for the purpose of this section, it shall, ipso *facto* become a charge on the goods and be recoverable by the tapayer in a court, of competent jurisdiction. There appears to be a great deal of feeling over this matter, because I have had more telegrams and representations concerning if than almost any other principle in the bill. {: #debate-36-s0 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP -- The Government obtained an opinion from **Mr. E.** M. Mitchell, K.C., of Sydney, a very high authority on constitutional law with regard to the point raised by the right honorable gentleman. **Mr. Mitchell** advised as follows : - >I am not satisfied that this amendment can be put in without risk, and that it would not, on the face of the statute, alter the character of the act and convert the tax into a tax on the purchaser instead of being a tax on the vendor, as stated in my previous memorandum. In addition, I do not think this amendment would be workable, because, in its present rigid form, it would not fit in with section 18 (3) of No. 1 Act or with section 25 of the No. 1 Act, and with corresponding sections of other acts, or with section 4 of the No. 9 Act. But, on the main point, I do not feel satisfied that the acts would not either be altered in character or alternatively deal with more than one subject. > >A further difficulty about the proposed section 19a is that it might be held to deal, not with the imposition of taxation, but with reimbursement of tax paid, and, it might be held that, on that account, it could not be validly incorporated with the Rates Act. If it were incorporated with the Rates Act it might be held that it was inseparably connected with the condition of liability of the tax, and that if it fell for invalidity, or was deemed to be of no effect because it did not deal with the imposition of taxation, then section 19, with which it would be intimately connected as a sort of condition, might fall also. **Mr. Mitchell** pointed out that the amendment suggested might be construed by the- court into a tax on the purchaser instead of being a tax on the vendor. Consequently, the section, and other sections to which it relates, might he held to be invalid. Clause agreed to. Clause 19 agreed to. Clause 20- >Notwithstanding anything contained in the last preceding section, sales tax shall not be payable under this act by the person specified in that section upon the sale of - > >goods made to the order of individual customers by persons who sell exclusively by retail; or > >goods sold exclusively by. retail by an individual who manufactures some or all of those goods and total value of whose average yearly sales is not, or would not be,in the opinion of the Commissioner, in excess of £1,000. {: #debate-36-s1 .speaker-K09} ##### Senator PAYNE:
Tasmania -- I move - >That the following new paragraph be inserted: - *(ea)* goods manufactured in the industrial departments of institutions for the blind. I am submitting this amendment at the request of the authorities controlling institutions for the blind. As honorable' senators are aware these institutions have industrial departments in which blind inmates are employed in the manufacture of brushware, wickerware, mats and matting. As all the work is done by hand higher prices are charged for the articles manufactured by them than is charged by retail establishments for similar goods manufacured by machinery. The fact that the articles are hand-made limits the patronage of these industrial departments, and the managers are afraid that if the sales tax is imposed upon goods manufactured by the blind it may not be possible to provide certain of the inmates with useful employment. Every one knows what a blessing employment is to persons afflicted with blindness. I have met many instances of men and women who have been restored to normality simply because they have been usefully occupied in these institutions. I trust that the Minister will accept the amendment. {: #debate-36-s2 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- **Senator Payne** was good enough to inform me before the adjournment this morning, that he intended to submit this amendment, so I had an opportunity to consult with the taxation authorities and the Prime Minister. The Government would be only too pleased to accept the amendment if it were possible to isolate the class of goods covered by it: but I point out that, if goods manufactured by inmates of blind institutions were exempt from the sales tax, there would be no logical reason why it should be imposed on goods manufactured by limbless soldiers, or by inmates of orphanages, or other charitable institutions. In the circumstances I trust that the honorable senator will not press his amendment. {: .speaker-K09} ##### Senator Payne: -- I intend to press it. {: .speaker-JTL} ##### Senator DALY: -- Then I must endeavour to persuade the committee that it should not be accepted. This new system of taxation has been thoroughly investigated by the authorities. The proposals submitted are estimated to return a certain amount of revenue. If we exempt charitable institutions - and there is no logical reason why we should not if we exempt the goods manufactured in institutions for the blind - obviously the revenue to be received from the sales tax will be considerably less than is estimated. In any case, the authorities controlling the institutes for the blind will not be in any worse position, from the point of view of competition, if goods manufactured by the blind are subject to taxation under this law. {: .speaker-JXZ} ##### Senator DUNCAN:
NEW SOUTH WALES · NAT -- They will be in the same relative position. {: .speaker-JTL} ##### Senator DALY: -- That is so. The Government is not doing anything to prejudice the interests of the institutions in question. If the amendment is carried, the Government will have no alternative but to reject it in another place. Apart from sentimental reasons, this committee would then find it difficult to insist upon it. **Senator Sir** GEORGE PEARCE (Western Australia) [10.46 a.m.]. - The arguments put forward by the Minister arc unanswerable. If a concession is to be granted in the case of blind institutions, other institutions will have to be included. If blind institutions have to pay a sales tax on the commodities manufactured by their inmates they will not, as the Minister pointed out, be at a disadvantage. {: .speaker-K09} ##### Senator Payne: -- They are already at a disadvantage, because their products are manufactured by hand, and, consequently, cannot bo sold at as low a price as those of their competitors. {: .speaker-K0F} ##### Senator Sir GEORGE PEARCE: -- There are a number of religious and semi-religious institutions and reformatories which utilize the services of the persons whom they are trying to assist in doing certain work which would also have to be included. There is also an institution in which partially incapacitated soldiers are doing manufacturing work in n small way. In view of the difficulties which may arise, I suggest that **Senator Payne** should not press the amendment. {: #debate-36-s3 .speaker-K09} ##### Senator PAYNE:
Tasmania -- The Minister **(Senator Daly)** gave me a definite assurance last night that he would accept the amendment. He said he would not call for a division. {: .speaker-JTL} ##### Senator Daly: -- I did not do anything of the sort. {: .speaker-K09} ##### Senator PAYNE: -- I waited throughout the night in order to move this amendment, and am now surprised to hear the Minister say that he did not give me any such assurance. Apparently something has happened in the meantime. I am astounded at the paltry attitude he has adopted. It *is* unreasonable that any impost, however light, should be placed upon organizations performing such wonderful work on behalfof these unfortunate people. It is unreasonable to compare the products of these institutions with those of other manufacturing concerns, because all the work undertaken in a blind institution is done by hand. If they have to pay this tax, they will not be in the same relative position as they were before. I am astounded that the Leader of the Opposition should make a comparison between a boys' reformatory and a blind institution, the inmates of which are reputable citizens who must be employed to enable them to get some pleasure, if only to a small degree, out of life. A communication which I received from one of these institutions states - >The institution would certainly be in a better position if the taxation is removed in view of the great handicap wc have to-day on account of the articles we produce. The amount involved by this amendment is small, and as there is a long list of exempted goods, many of which have not as much right to be included as those manufactured by the blind, I intend to press the amendment. **Senator Sir JOHN** NEWLANDS (South Australia) [10.53 a.m.]. - In the Minister's constituency in South Australia there is a fine institution in which a number of blind people are accommodated, and who are supported partly by pensions and partly by money provided by the institution. I think it would be a great hardship if the products of blind asylums were to bc subject to this tax. I should like to assist these people who are assisting themselves. As these institutions have to bear the cost of training the inmates, the Government should endeavour to help them whenever possible. In a sense, they are in a more unfortunate position than the inmates of many other institutions. They are endeavouring to help themselves when they could live entirely on charity, and I hope something will be done to assist them in the direction indicated. {: #debate-36-s4 .speaker-KOJ} ##### Senator HERBERT HAYS:
Tasmania -- I trust that the Minister will reconsider his decision. This appears to be the first attempt ever made to tax the products of blind workers who are endeavouring under most trying conditions to lead a useful life. {: .speaker-JTL} ##### Senator Daly: -- But the tax can be passed on. {: .speaker-KOJ} ##### Senator HERBERT HAYS: -- Yes. But they are already at a disadvantage as compared with other manufacturers. If they are to be taxed, the amount paid will have to be made up by contributions possibly from State funds. {: .speaker-JTL} ##### Senator Daly: -- Would the honorable senator suggest that the same principle should be applied to institutions in which limbless soldiers are working? {: .speaker-KOJ} ##### Senator HERBERT HAYS: -- I do not understand the nature of their work, but . I believe that in some cases machinery is employed. The Government should not tax these institutions, which are instructing those afflicted with blindness in various trades and helping them to lead useful lives. It is surprising to find that this Parliament is so devoid of means of raising revenue that it proposes to tax the product of these unfortunate people, with whom I. am sure we all sympathize. If the amendment is pressed to a division, I shall support it. {: #debate-36-s5 .speaker-KTR} ##### Senator MCLACHLAN:
South Australia . -Perhaps some of these institutions are already covered by paragraphs *e* and *g.* Goods made by inmates of an institution, ] think are entitled to claim the benefits provided under the former paragraph. I believe the inmates do not derive any direct benefit from the sale of the products which they manufacture. I realize that the Minister is in a difficult position, and that if the amendment were adopted possibly other institutions would have to be included. I suggest that the honorable senator allow the clause to remain as it is at present. If its operation were extended in the way that he, quite worthily, desires, I am afraid that complications would ensue that at present we cannot foresee. {: #debate-36-s6 .speaker-K09} ##### Senator PAYNE:
Tasmania -- Paragraph *e* supports the attitude that I am adopting, in pressing for the acceptance of this amendment. It provides that any individual who manufactures goods of a value not exceeding £1,000 per annum shall be exempt. These blind people cannot be dealt with as individuals, because all the transactions take place with the institution, which sells their product in the aggregate. The sales would not represent anything like a value of £1,000 per annum per man. Persons who enjoy the blessings of unaffected eyesight are to be exempted, while these unfortunate blind people, who are dependent upon the successful operation of this industrial department, are to be penalized. I appeal to the Minister to withdraw his opposition to the amendment. If it goes out that the Commonwealth Government insists upon placing a burden, no matter how light it may be, upon these unfortunate blind people, the community will be both disappointed and disgusted. Question - That the paragraph proposed to be inserted be so inserted (Senator Paynes amendment) - put. The committee divided. (The Chairman - Senator Plain.) AYES: 10 NOES: 11 Majority 1 AYES NOES Question so resolved in the negative. Amendment negatived. {: #debate-36-s7 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- I move - >That paragraph *d* be left out, with a view to insert in lieu thereof the following paragraph : - {: type="a" start="d"} 0. goods sold exclusively by retail by a person (not being a person who manufactures articles for human wear), whose principal business consists of the manufacture of goods to the order of individual customers. This is in substitution of an amendment that waa inserted by another place with the object of exempting small manufacturers whose businesses are practically confined to making up goods to the order of individual customers. Upon examination, that amendment appeared to make it possible to exempt very large retailers who, *inter alia,* make up goods, more especially clothing, to the order of individual customers. The amendment now proposed will effectively limit the exemption to the persons contemplated, except in the case of tailoring and similar establishments; which, however, will he subject to the exemption provided by paragraph *e.* Amendment agreed to. {: #debate-36-s8 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- I move - >That the words " an individual ", paragraph e, be left out, with a view to insert in lieu thereof the words " a person " . This will ensure that a company is not excluded from the benefits of the exemption. Amendment agreed to. {: #debate-36-s9 .speaker-KTR} ##### Senator McLACHLAN:
South Australia -- May I take it that paragraph *b,* which relates to goods sold by. a dispensing chemist, meets the point that was raised in debate last evening; and that the exemption of the products derived from the maintenance of poultry includes eggs and egg pulp ? {: #debate-36-s10 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP -- Eggs will be exempted, and egg pulp when it is sold to the manufacturers of cakes. Clause, as amended, agreed to. Clauses 21 to 25 agreed to. Clause 26 (Refunds of tax). **Senator Sir GEORGE** PEARCE (Western Australia) [11.12 a.m.]. - This clause provides that where the Commissioner finds that a tax has been overpaid he may refund the amount that has been so overpaid. Should not the word "may" be altered to "shall"? Obviously, there should be a refund; the matter . ought not to be left to the discretion of the Commissioner. {: #debate-36-s11 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- The language of this clause is similar to that of the Income Tax Act, in connexion with which it has been held that the word " may " is mandatory, not permissive. Clause agreed to. Clauses 27 to 44 agreed to. Clause 45 (Offences). {: #debate-36-s12 .speaker-KQZ} ##### Senator LAWSON:
Victoria -- The administration of such a law as this necessarily entails penal provisions. It is essential that the Commissioner shall be endowed with power to collect the sales tax. In connexion with such a novel measure, so far as Australia is concerned, there is bound to be some misconception and misunderstanding. While no one wants to protect the wilful wrongdoer - the person who deliberately evades his obligations to the country - I should be glad to have from the Minister an assurance that in the administration of this measure there will be an attitude of helpfulness and sweet reasonableness on the part of the Taxation Department until the community affected by this legislation really understands its provisions and the administration is working smoothly. I am sure that the department will act reasonably,but I should like to have the Minister's assurance to that effect. {: .speaker-JTL} ##### Senator Daly: -- I give the honorable senator that assurance. Clause agreed to. Clauses 46 to 53 agreed to. Clause 54 (Taxation prosecutions; how instituted). SenatorRAE (New South Wales) [11.20 a.m.]. - Why is it necessary that action taken under this clause must be in the High Court of Australia or the Supreme Court of a State ? Is it not likely that some of the cases will be too trivial to require such weighty machinery to deal with them? {: #debate-36-s13 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- If the amount is under £500 the case may be dealt with in a county court. Clause agreed to. Clauses 55 to 65 agreed to. Clause 66 (Release of Offenders). {: #debate-36-s14 .speaker-KQZ} ##### Senator LAWSON:
Victoria -- I should like to know whether there is any precedent in our legislation for a clause of this kind. {: .speaker-JTL} ##### Senator Daly: -- The clause has been copied from income and customs acts. Clause agreed to. Clauses 67 to 70 agreed to. Clause 71 (Access to books, &c). {: #debate-36-s15 .speaker-KTR} ##### Senator McLACHLAN:
South Australia -- Is it intended to levy taxes upou sales to municipalities or to the Government of a State or of the Commonwealth ? Representations have been made to me by the Lord Mayor of Adelaide that such sales should be exempt. I realize the difficulty of the position, but I should like to know if, in any of the several bills relating to the sales tax, there is a provision to exempt the sale of goods to particular classes of purchasers. {: #debate-36-s16 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- If the vendor is either a wholesaler or a manufacturer, it matters not to whom the sale is made. The tax is payable. Clause agreed to. Clause 72 agreedto. Clause 73- >The Governor-General may make regulations, not inconsistent with this act, prescribing all matters which by this act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed, for carrying out or giving effect to this act, and, in particular, for prescribing penalties not less than £1 nor more than £20 for any breach of the regulations. {: #debate-36-s17 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- I move - >That after the word " particular " the following be inserted: - " (a) for providing for the making of such refunds as are, in the opinion of the Commissioner, necessary for the purpose of obviating double taxation of the sale value of any goods under two or more acts of the Parliament relating to the payment of sales tax; and (b)". This amendment is connected with the amendments of clause 6 of acts Nos. 3, 4, 7 and 8, by which it is proposed to omit the provisions exempting, under each of those acts, any goods the sale value of which has been taxed under some other act. Those provisions were intended to prevent double taxation wherever it was capable of arising. They have been found, however, to he inadequate for that purpose. Moreover, the effect of exempting any goods in respect of which sales tax has already heen paid would defeat the intention to impose the tax . on the sale by the last wholesaler who handles the goods. Instead, therefore, of extending to other acts the exemptions in acts Nos. 3, 4,6 and 7, it is proposed to provide for the making of regulations to prevent, double taxation wherever it is likely to arise That will not only ensure the proper incidence of the tax, but will also be a safeguard against any unintended cases of double taxation which may be shown to exist when the somewhat complex scheme of legislation is put into practice. Amendment agreed to. Clause, as amended, agreed to. First schedule - >The following goode manufactured in Australia: - > >Bacon and hams. > >Bags and sacks used for marketing primary products as described in paragraph (g) of section twenty of this act and items specified in this Schedule. Beer. Bread. Boxes, cases and crates, and wood in shooks for the manufacture of boxes, cases and crates, used in marketing any goods specified in this schedule, or in paragraph (g) of section twenty of this act, when the Commissioner is satisfied that the boxes, cases and crates have been or will be so used within such time as the Commissioner considers reasonable in the circumstances. Butter, including margarine and similar substitutes for butter. Cheese. Cigarettes. Cigars. Compressed air. Cream. Dried fruits. Electric current for lighting or power. Fertilizers and raw materials for use in the manufacture of fertilizers. Flour, including bran, pollard and semolina. Foods for poultry, birds and live stock. Gas, commercially known as coal gas. Meat, raw. Metals as recovered from ores. Milk products, viz., casein, milk powder, milk, condensed or concentrated. Newspapers. Pastry, but not including cakes or biscuits. Petrol. Sugar. Tobacco. Water supplied by public bodies or public authorities; and Wool packs. **Senator DALY** (South Australia- Vice-President of the Executive Council) [11.29 a.m.].- I move- >That the following item be inserted - " Briquettes ". The exemption of briquettes will not affect the estimated revenue from the sales tax, as the estimates were made on the assumption that sales by any authority under a State Government would be exempt. The specific exemption of State Government products was withdrawn because of the contention in another place that the exemption of the commercial enterprises of any government would give that government an unfair advantage in competition with private enterprises. That condition has no application to the exemption of briquettes, in the production and sale of which there is no competition in Australia. {: .speaker-KTR} ##### Senator McLachlan: -- Do not briquettes compete with firewood? {: #debate-36-s18 .speaker-JTL} ##### Senator DALY:
ALP -- They would, of course, compete with firewood; but I understand that there is not a sufficient quantity of either to satisfy the demand. Amendment agreed to. {: #debate-36-s19 .speaker-KP8} ##### Senator E B JOHNSTON:
Western Australia -- I have several amendments to the schedule that I hope the Government will accept, particularly as they affect primary production - the mining and agricultural industries. **Senator Daly** is aware of the difficulties under which the mining industry is carrying on. Mines are closing down at Broken Hill and elsewhere because of the prevailing low prices for their product, and I believe that the Prime Minister **(Mr. Scullin)** has expressed his sympathy in the matter. I hope that the Minister will give favorable consideration to my amendment. I move - >That the following item be inserted: - " Copper sulphate." Copper sulphate is used as a re-agent for flotation purposes in the mining industry, also for pickling wheat as a preventative against rust, and for spraying in orchards. {: #debate-36-s20 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- I sincerely hope that honorable senators will not adopt the course that **Senator £.** P>. Johnston evidently proposes to adopt. He has already warned us that he has several amendments to move. If we were to create a* long list of exempted items, it would not be much use to have a sales tax bill. The "Government has found it necessary to collect a certain amount of revenue by this method of taxation, and the subject of exemptions was exhaustively debated in another place, where the list was increased to the very maximum. The capital value of the exempted goods amounts to £300,000,000. {: .speaker-K0F} ##### Senator Sir George Pearce: -- Could not an exchange be effected by deleting from the list cigars, cigarettes, and tobacco, and substituting more important items relating to primary industries. {: .speaker-JTL} ##### Senator DALY: -- Cigars, cigarettes, and tobacco already carry very heavy customs and excise duties. That is why they are excluded from the sales tax. I have no doubt that there are many laudable items that could be included in the schedule of exemptions; but I urge honorable senators to realize the exceptional position in which the Government finds itself. It has gone to the farthest limits in exempting goods from the sales tax, and if the Senate insists upon moving further amendments to that list it will be impossible for the Government to accept them, in view of its financial position and the amount of revenue that it desires to raise from the tax. I appeal to honorable senators not to impose further hardships on the Government by moving that additional items be added to the schedule. It certainly would be much more equitable to move for the deletion of some of the items now on the exempt list, with a view to substituting others. I know that honorable senators realize how necessary it is that Australia should restore its credit. That can be done only by balancing the budget. The Government expects to raise £5,000,000 by the operation of the sales tax. I put it to honorable senators that, if they restrict this form of taxation, the endeavour to balance the budget will be checkmated. Unless there are cases of serious hardship which present a stronger case than that put forward by **Senator Johnston,** I ask honorable senators not to press for further exemptions. **Senator Sir HAL** COLEBATCH (Western Australia) [11.36 a.m.]. - While the Minister urges that honorable senators should advance a stronger case than that submitted by **Senator Johnston** he has not answered that case. We are told that the capital value of the exempted goods amounts to £300,000,000. It sounds quite a lot of money. I take it that there are reasons for those exemptions. Are we to accept it that the people who happened to get in first with their applications for exemption, and thereby build up the list to £300,000,000, have, exhausted the possibilities of further exemption, and that cases of even greater urgency are to be cast aside? I assume that these exemptions have been granted because it is considered to be wise to take that action in the interests of the revenue and of the country, rather than to subject them to additional taxation, and to further burden the industries concerned. Would it not be wiser for the Government to grant an exemption if a sound case can be made out that the failure to do so would burden an industry that is steadily going down hill, and threatens to go out of existence? I take it that the exemption proposed by **Senator Johnston** would not increase the £300,000,000 by any appreciable amount, but that it would be of considerable advantage to the industry. I do not think that **Senator Daly** advanced a very good argument by stating that the Government had already exempted goods to the capital value of £300,000,000, and that the list could not be increased. That might be a strong argument against the hurried passing of legislation of this nature, but it is not a valid argument for refusing to exempt an item, the exclusion of which is extremely desirable. {: #debate-36-s21 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- **Senator Colebatch** entirely misunderstood the proposition that I advanced. This sales tax is introduced to enable the Government to collect revenue on the sale of goods. The Government felt that it should, as far as possible exempt our struggling primary industries from the operation of the tax. {: .speaker-K7F} ##### Senator Sir Hal Colebatch: -- Is not mining a primary industry, struggling harder than any of the others ? {: .speaker-JTL} ##### Senator DALY: **- Senator Johnston** is asking for the exemption of copper sulphate, which is used to sprinkle fruit trees. {: .speaker-KP8} ##### Senator E B Johnston: -- No. It is also used as a re-agent for flotation purposes in the mining industry, and for pickling wheat. {: .speaker-JTL} ##### Senator DALY: -- The list of exemptions is practically confined to the primary industries and commodities, to items already covered by a special revenue tariff, or items technically sold by governments or public bodies. I put it to honorable senators that the Government has gone as far as possible in exempting primary products from the operation of the sales tax. {: .speaker-KP8} ##### Senator E B Johnston: -- What relief has the mining industry received? {: .speaker-JTL} ##### Senator DALY: -- There is a suggestion of an existing anomaly with regard to oregon used in mines. I admit that that is a special case worthy of special consideration by the Government. **Senator Sir** GEORGE PEARCE (Western Australia) [11.43 a.m.]. - I am prepared to accept **Senator Daly's** challenge. I shall support him if he will move to delete from the exemption list the items cigarettes, cigars, and tobacco. The honorable senator has claimed that they cannot be omitted because they are already subject to heavy taxation. I quoted an instance where a vessel valued at £50,000 in England has to pay £20,000 in customs duty, and which will in addition be subject to the sales tax. I venture to suggest that an examination of the list would reveal any number of items that are subject to both customs duty and the sales tax. Cigarettes, cigars, and tobacco are luxuries, whereas copper sulphate is a necessity. {: .speaker-JTL} ##### Senator Daly: -- I am afraid that **Senator Johnston** would not support the right honorable senator's proposal. {: .speaker-K0F} ##### Senator Sir GEORGE PEARCE: -- I am not sure about that. I submit that it is an extremely rational one, and would provide a *quid pro quo* to the Government. {: .speaker-KTR} ##### Senator McLachlan: -- I suggest that **Senator Johnston** be invited to unlimber his whole battery and give us the full list of goods which he desires to hare exempted. We may then be able to come together in a spirit of sweet reasonableness, and, perhaps, reach finality. {: .speaker-K0F} ##### Senator Sir GEORGE PEARCE: -- I am prepared to move to lift cigars and cigarettes from the list of exempted goods in order to have inserted some of the goods which **Senator Johnston** wishes to have exempted. {: #debate-36-s22 .speaker-KP8} ##### Senator E B JOHNSTON:
Western Australia -- My only purpose is to obtain some relief for those engaged in our primary industries. In this morning's local newspaper there appears a report that Sydney manufacturers have decided to add 3 per cent, to the price of goods in order to pay this new taxation. I would rather see the Government levy a straight-out tax of 3 per cent, on sales of certain commodities if the primary industries, and, particularly gold-mining, could be given some relief. The goods which I wish to have exempted in No. 1 bill include copper sulphate, cyanide, explosives, flotation re-agents, machinery *(a)* agricultural (fc) mining and (c) for treatment of metalliferous ores, including renewals. The exempted list in bill No. 5 should include - explosives, seeds, flotation reagents, machinery for mining and treatment pf metalliferous ores, and oregon in certain sizes. {: .speaker-K0F} ##### Senator Sir George Pearce: -- I suggest that **Senator Johnston's** amendment be temporarily withdrawn so that I may move to leave out of the schedule the words "cigars; cigarettes". If this is carried I will move, later to leave out "tobacco". Amendment - *by leave* - temporarily withdrawn. Amendment( by **Senator Sir George** Pearce) proposed - >That the items "Cigarettes; Cigars;" be left out. Question - put. The committee divided. (Chairman - Senator Plain.) AYES: 12 NOES: 9 Majority 3 AYES NOES Question so resolved in the affirmative. Amendment agreed to. Amendment (by **Senator E.** B. Johnston) agreed to - That the following item be inserted: - "Copper sulphate" ; {: #debate-36-s23 .speaker-KP8} ##### Senator E B JOHNSTON:
Western Australia -- I move - >That the following item be inserted: - "Cyanide"; Cyanide is absolutely essential to the carrying on of the gold-mining industry under the new as well as the old *process.* The ore has to be ground and roasted, deposited for a certain period in huge vats filled with cyanide, and then the gold in solution is run through zinc' tailings and extracted. {: #debate-36-s24 .speaker-KUP} ##### Senator MILLEN:
Tasmania -- I appreciate the action of **Senator Johnston** in endeavouring to have exempted goods which are essential to the carrying on of the gold-mining industry; but I would point out that if every honorable senator secures exemption for goods which, in his opinion, should be placed in the schedule, there will be left very little upon which taxation may be levied. We ought to make some selection. Personally I should like to have exempted oregon in sizes 12 inches x 6 inches for use underground, and re-agents used for flotation purposes. These are essential to an industry which is working on a very slender margin. {: #debate-36-s25 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- Again I appeal to the committee to adopt a reasonable attitude. I was pleased to hear **Senator Millen** take up the cudgels on behalf of the Government in this matter. **Senator Johnston** is uncompromisingly opposed to the sales tax. If he had his way he would exempt practically all classes of goods. I again remind honorable senators that if the list of exemptions is extended, the estimated revenue will not be received, and we shall not be able to balance our budget. Consequently, our credit will be impaired. I do not think honorable senators are desirous of submitting unreasonable amendments, but it is unfair to expect the Government to exempt all the items which **Senator E.** B. Johnston has suggested. I have invited the honorable senator to state his order of preference and he has now been urged by **Senator Millen,** who admits the reasonableness of my suggestion, to make a selection of those which he considers most important. Honorable senators cannot expect the Government to accept a large number. It would be useless to send them to another place where they would only be rejected. {: #debate-36-s26 .speaker-KQZ} ##### Senator LAWSON:
Victoria .- I am sure that it is not the desire of honorable senators to unduly increase the list of exemptions. . If we are to have a sales tax some principle should be established. We could, for instance, suggest the exemption of those articles which affect primary production, the mining industry or perhaps some other industry which honorable senators have in mind. We should only submit those which we think have a reasonable prospect of being accepted. The Government is charged with the responsibility of balancing the ledger, and there seems to be an obligation upon us to establish some guiding principle. As suggested by **Senator McLachlan** I wish to submit for the consideration of the Government a list of articles which I think should be exempted. I do not intend to go to the extent of moving an amendment; but perhaps the Minister would agree to postpone the schedule until the effect of these exemptions upon the Government's proposals is determined. I have a number of requests which I intend to submit for the consideration of the Government, and shall rely upon it to give them fair consideration. For instance, I have a communication from a person named L. Kaley, stating that the sales tax on firewood will ruin the industry. I also have a telegram despatched to **Senator McLachlan,** which he has asked me to read, which states- Cake manufacturers employ thousands unionists and pay high wages. Grossly unfair exempt small cake makers with £1,000 turnover and who compete against legitimate manufacture; employees union support our request for total exemption of cakes from sales tax. Would you move amendment accordingly? Both cakes and pastry are exempted under Canadian act. {: .speaker-JTL} ##### Senator Daly: -- If the amendment submitted by **Senator E.** B. Johnston were withdrawn the committee could discuss the position. SenatorE. B. JOHNSTON (Western Australia) [12.7]. - I shall be agreeable to withdraw my amendment if the Minister gives me an assurance that consideration will be given before the schedule is passed to the list I have prepared. Amendment - *by leave* - withdrawn. {: #debate-36-s27 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP -- In the circumstances. I suggest that further consideration of the first schedule be postponed. If honorable senators hand to the representative of the Customs Department the list of the articles on which they think the tax should not be paid, they will be scrutinized. I will then be advised as to the position. First schedule postponed. Second schedule agreed to. Progress reported. {: .page-start } page 5572 {:#debate-37} ### SALES TAX ASSESSMENT BILL (No. 2). Bill received from the. House of Representatives. Standing and Sessional Orders suspended, and bill (on motion by **Senator** Daly) read a first and second time. *In committee:* Clauses 1 to 12 agreed to. Schedule. Amendment (by **Senator** Daly) agreed to - >That the following item be inserted: - " Briquettes." Progress reported. {: .page-start } page 5572 {:#debate-38} ### INCOME TAX ASSESSMENT BILL Message received from the House of Representatives intimating that it had agreed to certain of the amendments made by the Senate in this bill, disagreed to one, and agreed to another with an amendment. *In committee:* (Consideration of House of Representatives' message). *Senate's amendment.* - After clause 19 insert, the following new clause: - " 19a. After section fifty-one of the principal act the following section is inserted: - 51b. Notwithstanding anything contained in this act a taxpayer who. is dissatisfied with any opinion, decision or determination of the Commissioner under this act (whether in the exercise of a discretion conferred upon the Commissioner or otherwise) and who is dissatisfied with the assessment made pursuant to or involving such opinion, decision or determination shall, after the assessment has been made, have the same right of objection and appeal in respect of such opinion, decision or determination and assessment as is provided in sections fifty, fifty-one and fifty-one a of this act.' " *House of Representatives' message.* - Amendment amended as follows: - Motion (by **Senator** Daly) agreed to - >That the amendment made by the House of Representatives upon the Senate's amendment, be agreed to. Clause 12- >Section twenty-five of the principal act is amended - > >by inserting, after paragraph (e), the following paragraph: - *" (ea)* any periodical subscription by a person in respect of his membership of an association (whether corporate or unincorporate) unless - > >that subscription is expressly allowable as a deduction under any of the provisions of this act; > >the carrying on of a business, or the exercise of a vocation or calling, from which assessable income is. derived by him is conditional upon such membership; or > >the association carries out, on behalf of its members, during the year in which the assessable income of the person was derived, any activity of such a nature that, if carried out by that person on his own behalf, its expense would be an allowable deduction . to that person under this act : > >Provided that in a case to which this sub-paragraph applies the person shall be entitled to a deduction of only so much of his subscription as bears to the whole of the subscription the same proportion as the losses or outgoings so incurred by the association in carrying out that activity bear to the total losses and outgoings (not being in the nature of losses and outgoings of capital) of the association for that year;"; > > *Senate's amendment,.* - Leave out paragraph (a). > > *House of Representatives message.* - Amendment disagreed to for the following reason:- > >This amendment will greatly reduce the total field of taxable income thereby reducing thu estimated revenue from income tax which has been included in the budget estimates fur the current financial year. Motion (by **Senator Daly)** agreed to - >That the amendment be not insisted upon. Resolutions reported; report adopted. {: .page-start } page 5573 {:#debate-39} ### PUBLIC WORKS COMMITTEE {:#subdebate-39-0} #### Concrete Roads, Canberra **Senator REID** brought up the report of the Parliamentary Standing Committee on Public Works, together with minutes of evidence, relating to the proposed construction of concrete roads within the city area of Canberra. {: .page-start } page 5573 {:#debate-40} ### ACTS INTERPRETATION BILL (No. 2). Bill returned from the House of Representatives, with amendments. *In committee:* (Consideration of House of Representatives' amendments). Clause 2- >This act shall commence on a date to bo fixed by proclamation. > > *House of Representatives' amendment. -* Omit the clause. Clause 4 - >After section fifteen of the Acts Interpretation Act1901-1918 the following section is inserted: - "15a. Every act, whether passed before or after the commencement of this section, shall be road and construed subject to the Constitution, and so as not to exceed the legislative power of the Commonwealth, to the intent that where any enactment thereof would, but for this section, have been construed as being in excess of that power, it shall nevertheless be a valid enactment to the extent to which it is not in excess of that power." > > *House of Representatives' amendment.* - Add the following sub-clause: - "2. This section shall not commence untila date to be fixed *by* proclamation." {: #debate-40-s0 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP .- After the bill had left the Senate, it was found that the clause relating to the proclamation of the act covered the whole of the Acts Interpretation Acts. Had we waited for the decision of the court in the case I mentioned earlier, it would have meant holding up the operation of the whole of these acts. Certain administrative acts, such as that dealing with navigation, are covered by the clause. As the proclamation clause was expressly limited to the particular section to which that decision refers, the amendment became necessary. I move - >That the amendments be agreed to. Motion agreed to. Resolution reported; report adopted. {: .page-start } page 5573 {:#debate-41} ### DRIED FRUITS EXPORT CONTROL BILL Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate in this bill. {: .page-start } page 5573 {:#debate-42} ### INCOME TAX BILL (1930) Bill received from the House of Representatives. Standing and Sessional Orders suspended, and bill (on motion by **Senator Daly)** read a first time. {:#subdebate-42-0} #### Second Reading {: #subdebate-42-0-s0 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP -- I move - >That the bill be now read a second time. This is thp usual annual rates bill to give effect to the Income Tax Assessment Act which has already been before the Senate. It provides the necessary machinery for the collection of the tax imposed by that measure. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or requests. {: .page-start } page 5574 {:#debate-43} ### RETIREMENT OF MR. F. U'REN {: #debate-43-s0 .speaker-KPQ} ##### The PRESIDENT (Senator the Hon W Kingsmill: -- I take advantage of this break in our ordinary business to call the attention of honorable senators to an impending event. Before the Senate meets again - I am taking a long adjournment for granted - an officer who has had a long and distinguished career in its service will have severed his connexion with the Federal Parliament, as a consequence of reaching the age of retirement : I allude to **Mr. F.** U'Ren, the ClerkAssistant of the Senate. **Mr. U'Ren** has had a long connexion with Parliament. Before his appointment to the Senate he had already served ten years in the Victorian *Hansard* Department - from ]891 to .1901. When one looks at **Mr. U'Ren** it seems hard to believe that he has had so , long a career in the department. Undoubtedly, time has been very kind to him. In 1901, he was private secretary on the Commonwealth Celebration Committee staff, which had charge of the celebrations in connexion with the inauguration of the Federal Parliament. Later - on .the 24th June, 1901- he was appointed clerk and shorthand writer to the Senate. Since chat time his career has been a succession of promotions. He was made Clerk of the Papers and Accountant to the Senate in July, 1908, and Usher of the Black Rod on 1st July, 1915. He succeeded to his present position of Clerk Assistant in August, 1920. During the session of 1925, in the temporary absence of **Mr. Monahan,** the Clerk of the Senate, **Mr. U'Ren** performed that gentleman's duties, with the title of Acting Clerk of the Senate. Honorable senators are sometimes inclined to think that the work of Parliament begins and ends in this chamber ; but, when one has an opportunity of seeing behind the scenes, he becomes fully aware that that is not the case. It is hard to realize the painstaking and extremely accurate work that has to be undertaken by the officers of the House in order to provide material for the deliberations of honorable, senators. This work **Mr. U'Ren** has, during the career which I have recounted, carried out admirably and well. It would be a reflection on the Senate if we were to allow an officer who has been so long in its service to depart from among us without paying some little tribute to the work which he has performed for the Parliament of the Commonwealth. That is my only excuse if, indeed, excuse is needed, for these remarks. I am sure that I express the feelings of honorable senators when. I say it is our wish and hope that in years to come - may they be many - after **Mr.. U'Ren** has retired from the service of this Parliament, he will enjoy the rest and leisure which by faithful devotion to duty he has well earned. **Mr. U'Ren** has always struck me as being a man to whom the task which he was appointed to carry out meant very much. For my own part, let me say that I am sorry to lose **Mr. U'Ren.** I hope that his life may be prosperous and happy, and that he may have a really good time after he leaves the service of this branch of the Federal Parliament. {: #debate-43-s1 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- I desire to join with you, **Mr. President,** in the expression of good wishes that you have extended to **Mr. U'Ren.** I have not known **Mr. U'Ren** very long; but, ever since I entered this chamber - both while occupying the position of Leader of the Opposition and as Leader of the Government - I have received from him the greatest courtesy and consideration. He is a man of few words, but a man who is most approachable and obliging, as well as capable an painstaking. With other honorable senators, I join with you, sir, in expressing our good wishes to **Mr. U'Ren** on his retirement from active service in the federal political sphere. **Senator Sir GEORGE** PEARCE (Western Australia) [12.45]. - May I be permitted, not so much in my capacity as Leader of the Opposition, but as one entitled, by length of tenure, to be called the "father of the Senate," to support the expressions of goodwill offered to **Mr. U'Ren.** When you, sir, mentioned 1901, it came somewhat as a shock to me to remember that I also became associated with the Senate so far back as that year. I should, therefore, like in my dual capacity, to associate myself with the remarks that were so happily worded by you, **Mr. President,** and the Leader of the Government in the Senate. I wish Mr.U'Ren every happiness and prosperity in his retirement, and I hope that he may long be spared to enjoy the rest that he has so well earned. **Senator Sir JOHN** NEWLANDS (South Australia) [12.46]. - I cannot allow this opportunity to pass without endorsing what has been said with regard to Mr.U'Ren, the Clerk-Assistant of the Senate. When the Federal Parliament moved from Melbourne to Canberra, **Mr. U'Ren** was called upon to perform very responsible and onerous duties. He discharged them carefully, thoroughly, and efficiently. **Mr. U'Ren** has the happy knack of doing his work well, and with due regard to the responsibilities of other people. During the time that I occupied the presidential chair, I was constantly in contact with **Mr. U'Ren,** and I have the most pleasant recollections of that association. I found him at all times most anxious to do his duty thoroughly and well. I join with you, sir, and the previous speakers in hoping that **Mr. U'Ren** may spend many years of enjoyable retirement in the bosom of his family. His long devotion to duty certainly entitles him to a peaceful and happy respite from further parliamentary work. {: #debate-43-s2 .speaker-KPQ} ##### The PRESIDENT(Senator the Hon W Kingsmill:
WESTERN AUSTRALIA -- **Mr. U'Ren,** who has formed the habit of listening rather than of speaking to honorable senators, desires me to express to the Senate, his very high appreciation of the remarks that have been made in his honour by various honorable senators who have spoken. *Sitting suspended from 12.48 to3 p.m.* {: .page-start } page 5575 {:#debate-44} ### PAPERS The following papers were presented : - >Canned Fruits Export Control Act - Fourth Annual Report of the Canned Fruits Control Board, year ended 30th June, 1930, together with a statement by the Minister for Markets regarding the operation of the Act. > >Dairy Produce Export Control Act - Fifth Annual Report of the Dairy Produce Control Board, year ended 30th June, 1930, together with a Statement by the Minister for Markets regarding the operation of the Act. > >Superannuation Act - Eighth Annual Report of the Superannuation Board, year ended 30th June, 1930. > >Wine Overseas Marketing Act - Second Annual Report of the Wine Overseas Marketing Board, year ended 30th June, 1930, together with Statement by the Minister for Markets regarding the operation of the Act. > >Lands Acquisition Act - Land acquired at Escape Island and Legendre Island, Western Australia - for Lighthouse purposes. > >Seat of Government (Administration) Act - Statement of Receipts and Expenditure of the Federal Capital Territory for the period 1st May, 1930. to 30th June, 1930. {: .page-start } page 5575 {:#debate-45} ### SALES TAX ASSESSMENT BILL (No. 1). *In committee:* Consideration resumed from page 5572. Postponed first schedule. {: #debate-45-s0 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP -- Prior to the adjournment I intimated that, if honorable senators would furnish me with a list of the several items which they desired to have included in the list of exempt goods, I would instruct the officials of the Taxation Department to prepare figures showing the probable loss of revenue which would result if the suggestions were adopted. I am advised that if tobacco, cigars and cigarettes are made subject to the sales tax, the gain to the Commonwealth will be approximately £1 30,000 ; but that if we acceded to the requests made by **Senator E.** B. Johnston and other honorable senators, the loss of revenue would be approximately £400,000. {: .speaker-KP8} ##### Senator E B Johnston: -- Can the Minister furnish us with detailed information ? {: .speaker-JTL} ##### Senator DALY: -- Yes. Allowing for a reduction of 20 per cent. in the gross receipts from the sale of tobacco, cigars, and cigarettes, the total gross sales would be £5,453,963. Bread, cakes and pastry are expected to realize £8,373,196 ; copper sulphate, £14,672 ; cyanide, £6,122 ; cyanide potassium sodium, £44,194; canned fruit, £4,717,501; arms and explosives, £613,605; imported explosives, £97,997; imported seeds, £772,585; mining machinery and plant, £227,765; oregon timber for mining, £36,731 ; agricultural machinery, £3,516,404; salt, £261,714. No figures are available for firewood or self-raising flour, which were among the items mentioned. {: .speaker-K0F} ##### Senator Sir George Pearce: -- Was there a calculation made with regard to vessels? {: .speaker-JTL} ##### Senator DALY: -- No. During the luncheon adjournment I discussed these matters with the right honorable the Prime Minister **(Mr. Scullin),** who authorized me to say that he would favorably consider requests from the Senate to exempt oregon for mining purposes and flotation re-agents; but he urged me to endeavour to persuade honorable senators not to further extend the list, because of the heavy loss of revenue which would be involved. Even if the Government felt disposed to accept the requests of the Senate to levy tax on tobacco, cigars, and cigarettes, it could not fairly ask the users of those commodities to bear an additional burden, because already those items are heavily taxed. I feel confident that, if requests are made with respect to the two items mentioned, it will be accepted by another place. But, if further requests are made, it seems to me that we shall have an interminable discussion between the Senate and another place, because the Government willbe forced to try to reason with the Senate, and persuade this chamber of the efficacy and fairness of its proposals. SenatorE. B. JOHNSTON (Western Australia) [3.8]. - I shall certainly accept the suggestion of the Leader of the Senate **(Senator Daly)** concerning the exemption of flotation re-agents and oregon timber for mining purposes. I should, however, be glad if the Minister could sec his way clear to exempt mining and agricultural machinery. When he suggested this morning that I should place my suggestions in their order of preference. I put mining and agricultural machinery first on my list. {: .speaker-JTL} ##### Senator Daly: -- The Government could not possibly consider a request to exempt those items. {: #debate-45-s1 .speaker-KP8} ##### Senator E B JOHNSTON: -- If cigars, cigarettes, and tobacco are made taxable, could not the Government make some concessions with regard to mining and agricultural machinery? {: .speaker-JTL} ##### Senator Daly: -- The Government could not accede to a request to levy this tax on cigars, cigarettes, and tobacco, because, as I have stated, those commodities are already heavily burdened. Additional taxation would kill the tobacco industry in Australia. {: .speaker-K7F} ##### Senator Sir Hal Colebatch: -- Firewood is taxable except when it is sold to manufacturing industries for the purpose of fuel. Would firewood, sold to mining companies for fuel, be in that classification ? {: .speaker-JTL} ##### Senator DALY: -- I am instructed by the Commissioner, who will be called upon to interpret this act, to say that he would regard firewood purchased by mining companies for the purpose of fuel as exempt. {: #debate-45-s2 .speaker-KQZ} ##### Senator LAWSON:
Victoria .- There is one other matter. Sheep dips, orchard sprays, and fungicide for pickling seed wheat and one or two other essentials used by primary producers were mentioned before the. luncheon adjournment. Has the Leader of the Senate obtained any information as to the amount of the gross sales of those items. {: .speaker-JTL} ##### Senator Daly: -- We cannot obtain figures relating to those items. SenatorLAWSON. - There was also a request to exempt imported seeds. Can the Minister say approximately what is the amount of gross sales? {: .speaker-JTL} ##### Senator Daly: -- About £770,000, annually. {: .speaker-KQZ} ##### Senator LAWSON: -- Then I assume that the Government would not consider a request to exempt imported seeds. {: #debate-45-s3 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP -- The Government considers that the primary producers have very little to complain about. The exemption list includes the following goods manufactured in Australia: - Bacon and hams, bags and sacks used for marketing primary products, boxes, cases and crates, butter, cheese, cream, dried fruits, fertilizers, and raw materials for use in the manufacture of fertilizers, flour, food for poultry, meat, milk products, including milk powder, milk, condensed or concentrated, sugar and wool-packs. About 90 per cent. of the exempt goods are the product of or are used in connexion with, our primary industries. The secondary industries are not receiving anything like the same consideration. **Senator Sir GEORGE** PEARCE (Western Australia) [3.13].- When I submitted my amendment to omit from the list of exempt goods cigars and cigarettes, I thought that probably, the Government would accede to the request. In view of the statement of the Leader of the Senate I have no desire to press the matter further, nor do I intend to move an amendment to omit tobacco from the schedule. {: #debate-45-s4 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- I assure the honorable senator that the Government is not acting in a spirit of pique in declining to accede to the Senate's request to tax cigars, cigarettes and tobacco. I have already shown that the users of those commodities are paying a heavy impost by means of customs and excise duties. The Government believes that the items should not be further taxed. {: .speaker-K0F} ##### Senator Sir George Pearce: -- I shall not object if the Leader of the Senate moves to re-commit the schedule with a view to re-inserting cigarettes and cigars. {: #debate-45-s5 .speaker-JQP} ##### Senator COOPER:
Queensland -- As I understood the Minister **(Senator Daly)** to say that there are no records of the sales of self-raising flour, no injury would be caused if that item were included in the exempted list. {: .speaker-JTL} ##### Senator Daly: -- If self-raising flour is included it would also be necessary to add such commodities as egg pulp. Plain flour is in the exempt list. {: #debate-45-s6 .speaker-KP8} ##### Senator E B JOHNSTON:
Western Australia -- I move - >That the following item be inserted: - " Flotation re-agents for mining purposes,". {: .speaker-JTL} ##### Senator Daly: -- I shall accept that amendment. Amendment agreed to. {: #debate-45-s7 .speaker-KP8} ##### Senator E B JOHNSTON:
Western Australia , - The representations I have received from Western Australia are of such a nature that I feel it my duty to submit a further amendment for the consideration of the committee. I move - >That the following item be inserted: - "Machinery (a) agricultural (including renewals), (b) mining and treatment of metalliferousores (including renewals),". The organizations interested in agricultural and mining machinery regard such an amendment as vital. As the Minister has said that concessions have been given on sales to the value of £300,000,000, surely this exemption in the interests of the primary producers of Western Australia should be agreed to. The bulk of the exempted commodities which the Minister said were of benefit to primary producers are not purchased by the farmers, but are sold by them. These exemptions have been given not in the interests of the men and women on the land, but to benefit persons living in those two economic monstrosities - Sydney and Melbourne. If concessions can be granted to those people to the extent I have mentioned, why should not agricultural and mining machinery, on which the wear and tear is very heavy, also be included? As the Opposition has assisted the Government by removing from the exempt list cigarettes and cigars perhaps the Minister will accept the amendment. {: .speaker-JTL} ##### Senator Daly: -- Of the £300,000,000 worth of sales mentioned, nearly £200,000,000 worth is represented by primary products or goods relating to primary production. {: .speaker-KP8} ##### Senator E B JOHNSTON: -- Yes ; products that are sold hut not purchased to any large extent by the primary producers. As urgent requests have been forwarded to me in this connexion, I trust that the Government will not deny us that slight victory which I thought we had secured when the Minister said, "Give us some revenue from some other source". The Leader of the Opposition **(Senator Pearce)** then moved to strike out from the exemptions cigarettes and cigars, in the hope of obtaining some relief for the primary producers. I earnestly hope that the Government will accept the amendment. Amendment negatived. First schedule, as amended, agreed to. Title agreed to. Bill reported with amendments. *Ordered -* >That the billbe recommitted for the reconsideration of the first schedule. *In committee:* (Recommittal). First schedule. Motion (by **Senator** Daly) agreed to - >That the following items be inserted: - " Cigarettes, Cigars,". Bill reported with a further amendment; reports adopted. Bill read a third time. {: .page-start } page 5578 {:#debate-46} ### SALES TAX ASSESSMENT BILL (No 2.) *In committee:* Consideration resumed from page 5572. Schedule. {: #debate-46-s0 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- In order to bring the schedule into line with the measure just passed, it will be necessary for **Senator E.** B. Johnston to move a similar amendment to the schedules of the bills relating to importations. Schedule, as amended, agreed to. Title agreed to. Bill reported with an amendment; report adopted. Bill read a third time. {: .page-start } page 5578 {:#debate-47} ### SALES TAX ASSESSMENT BILLS (No. 3 and 4.) Bills received from the House of Representatives. Standing and Sessional Orders suspended, and. bills passed through all stages with consequential amendments. {: .page-start } page 5578 {:#debate-48} ### SALES TAX ASSESSMENT BILL (No. 5). Bill received from the House of Representatives. Standing and Sessional Orders suspended and bill (on motion by **Senator** Daly) read a first and second time. *In committee.* Clauses 1 to 3 agreed to. Clause 4 - >For the purposes of this act, the sale value of goods imported into Australia on or after the first day of August, 1930- - shall be an amount which exceeds by 20 per cent, the sum of the following - > >the duty paid value of those goods, tad {: #debate-48-s0 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP .- I move- >That the words " duty paid value " paragraph (i) sub-clause 1, 'be left out, "with a view to insert in lieu thereof the words " Value for duty ". The Canadian term is used in the clause, but it is felt that the term "value for duty " which appears in the Customs Act should be inserted in its stead. Amendment agreed to. Clause also consequentially amended, and, as amended, agreed to. Clause 5 agreed to. Clause 6 - >Notwithstanding anything contained in the last preceding section, sales tax shall not be payable under this act by the persons specified in that section upon the sale value of the goods specifiedin the schedule to this act. {: #debate-48-s1 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP -- I move- >That the following words be added to the clause : " or any goods being vessels trading intra-state or interstate, or otherwise employed in Australian waters for a continuous period of less than three months." Amendment agreed to. **Senator Sir GEORGE** PEARCE (Western Australia) [3.51.]. - Is the Minister prepared to include vessels broughtin for continuous trading around the Australian coast ? {: .speaker-JTL} ##### Senator Daly: -- The clause is modelled on the Customs Regulations. **Senator Sir GEORGE** PEARCE.Would a vessel imported by an Australian company, for continuous trading on the Australian coast be exempt from sales tax? {: .speaker-JTL} ##### Senator Daly: -- It would not be exempt. Clause, as amended, agreed to. Clauses 7 and 8 agreed to. Clause 9 consequentially amended, and, as amended, agreed to. Clauses 10 to 13 agreed to. The schedule - >The following goods imported into Australia : - > >Bags and sacks used for fertilizers and for marketing primary products as described in paragraph *g* of section 20 of the Sales Tax Assessment Act (No. 1) 1930. Cigars. Cigarettes. Fertilizers and raw materials for use in the manufacture of fertilizers. Films. Newsprint. Petrol. Tobacco. Wireless valves, and Woolpacks. Amendments (by SenatorE. B. Johnston) agreed to - >That the following items be inserted: - "Flotation re-agents for mining purposes." " Oregon for mining purposes." Amendment (by **Senator Daly)** agreed to - >That the following items be inserted: - " Passengers' personal effects." " Passengers' furniture and household goods which have been in actual use by such passengers, for at least one year, not exceeding £100 in value for each adult passenger (two members of a family being children being for the purposes of this item regarded as one adult)." **Senator Sir GEORGE** PEARCE (Western Australia) [3.57]. - I move - >That the following item be inserted: - " Vessels." As I pointed out in my second-reading speech, vessels of over 1,000 tons imported into Australia are subject to a heavy duty. They will also have to pay the primage tax. If they have to pay this tax in - addition, a vessel which originally cost £50,000 would actually cost upwards of £80,000. Not many vessels of this class will come to Australia. Honorable senators will realize that by increasing the cost of a vessel from £50,000 to £80,000 the running costs are increased. I trust that the Minister will accept the amendment, whichis fair and reasonable. {: #debate-48-s2 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP -- Has the right honorable senator seen the amendment to which we have just agreed? {: .speaker-K0F} ##### Senator Sir George Pearce: -- It relates only to vessels trading in Australian waters for three months or less. It does not affect vessels brought in for continuous trading. {: .speaker-JTL} ##### Senator DALY: -- I remind the right honorable gentleman that other honorable senators moved amendments which afterwards they agreed to withdraw. If we accept this amendment why should we not include the others? Vessels would probably come about fifteenth in the order of preference. I hope that the committee will not accept the amendment. {: #debate-48-s3 .speaker-KTR} ##### Senator McLACHLAN:
South Australia -- If there is one thing more than another that we need to reduce in this country it is the cost of transport by sea and on land. If we inflict this additional tax on the people who bring ships to Australia, because we cannot build them here, we shall increase those costs, to the detriment of Australia. I take a very live interest in this matter, and I feel sure that if the Minister will examine the subject sympathetically he will fall in with my views. Question - That the item proposed to be inserted be so inserted (Senator Sir George Pearce's amendment) - put. The committee divided. (Chairman. - Senator Plain). AYES: 11 NOES: 4 Majority . . 7 AYES NOES Question so resolved in the affirmative. Amendment agreed to. Schedule, as amended, agreed to. Title agreed to. Bill reported with amendments; report adopted. Bill read a third time. {: .page-start } page 5579 {:#debate-49} ### SALES TAX ASSESSMENT BILLS (Nos. 6 to 8). Bills received from the House of Representatives. Standing and Sessional Orders suspended, and bills passed through all stages with consequential amendments. {: .page-start } page 5580 {:#debate-50} ### SALES TAX ASSESSMENT BILL (No. 9). Bill received from the House of Representatives. Standing and Sessional Orders suspended, and bill passed through all stages without amendment or debate. SALES TAX BILLS (Nos. 1 to 9) 1930. Bills received from the House of Representatives. Standing and Sessional Orders suspended, and bills passed through all stages without requests or debate. {: .page-start } page 5580 {:#debate-51} ### LONDON NAVAL TREATY BILL Bill received from the House of Representatives. Standing and Sessional Orders suspended, and bill (on motion by **Senator Daly)** read a first time. {:#subdebate-51-0} #### Second Reading {: #subdebate-51-0-s0 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP -- I move - >That the bill be now read a second time. The object of this measure is to enable effect to be given to a treaty that has been entered into between His Majesty the King, the President of the United States of America, the President of the French Republic, His Majesty the King of Italy, and His Majesty the Emperor of Japan, for the limitation and reduction of naval armaments. That treaty was signed at London on the 22nd April, 1930. In view of the lateness of the hour, I shall not deal at length with this matter. A copy of the report of the Australian delegation to the London conference which drew up this treaty has been tabled for the information of honorable senators. They will find therein a very complete account of the negotiations that led up to the treaty, and a summary of the treaty itself. {: #subdebate-51-0-s1 .speaker-KQZ} ##### Senator LAWSON:
Victoria -- I submit that a matter of this significance should not be dealt with five or ten minutes before the Senate proposes to go into recess for several months. Its introduction at this hour illustrates the necessity for adopting the recommendation that was made recently by a select committee of the Senate, for the establishment of study circles in the Senate, in order to deal with questions such as this; not for the purpose of obtaining confidential and secret information, but to enable honorable senators to inform their minds and to place themselves in a position to discuss intelligently matters of this kind. In my judgment, this bill is too important to be introduced at the eleventh hour, to be dealt with in a casual way, and to be taken as a formal piece of legislation. {: #subdebate-51-0-s2 .speaker-JTL} ##### Senator DALY:
VicePresident of the Executive Council · South Australia · ALP . - I should not like a misapprehension to be caused by what **Senator Lawson** has just said. This particular bill is not regarded by the Government as in any sense a formal one. It was impossible for the Government to bring it down prior to to-day. It is necessary, of course, if the treaty is to be ratified, for the bill to be passed by this Parliament before it goes into recess. The honorable senator will realize- {: .speaker-KQZ} ##### Senator Lawson: -- I realize the difficulty; but I say that it is unfortunate. {: .speaker-JTL} ##### Senator DALY: -- I agree entirely with the honorable senator that it is unfortunate; butI think that he also will agree that, after one has had about five months of parliamentary sittings, one begins to become stale, and when there is the slightest chance of obtaining a vacation every one puts his best foot forward so as to bring nearer the time when " Good-bye " can be said to Canberra until probably the beginning of next winter. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. {: .page-start } page 5580 {:#debate-52} ### APPROPRIATION BILL1930-31 Bill returned from the House of Representatives, with a message intimating that it had not made the amendment requested by the Senate. *In committee:* (Consideration of House of Representatives' message). *Senate's request.* - That the appropriation be reduced by £1. Motion (by **Senator Daly)** proposed - >That the request be not pressed. **Senator Sir** GEORGE PEARCE (Western Australia) [4.59]. - Those honorable senators who sit on this side hoped that the Government might display a deathbed repentance. Apparently, however, it is still unprepared to take the step that it inevitably will have to take later. I only hope that time will teach it better sense. Motion agreed to. Resolution reported; report adopted. {:#subdebate-52-0} #### Third Reading Motion (by **Senator Daly)** proposed - >That the bill be now read a third time. {: #subdebate-52-0-s0 .speaker-K6I} ##### Senator CHAPMAN:
South Australia -- I refrained from speaking earlier on this bill, or in connexion with the Sales Tax Bills because I desired to say a few words at this stage. They are prompted by the attack which **Senator Greene** made yesterday on the Leader of the Country party **(Dr. Earle Page),** who was Treasurer in the late Government. **Senator Greene** accused **Dr. Earle** Page of having misled the members of this Parliament, and the people generally, in the presentation of his budget statements. The honorable senator quoted deficits and surpluses from 1921-22 to 1929-30. He gave the deficits and surpluses for those years, and said that his figures gave the real deficiencies and surpluses for those years. *J.* have examined the budget statement for 1928-29, and also that for the financial year 1929-30, and I find that the figures quoted by **Senator Greene** are exactly the same as those given by **Dr. Earle** Page in the budgets mentioned. Although **Senator Greene** said that **Dr. Earle** Page's figures were misleading, he himself quoted them as being correct. I regard his statement as a reflection, not only on **Dr. Earle** Page, but also on the members of this Senate who based their demand for economy on the figures quoted in the budget. When an amount is allocated to trust funds, the whole of it is debited to expenditure in the budget. For instance, each year £2,000,000 is allocated for Federal Aid main roads. But the Auditor-General, in his report, says that that is not the actual expenditure for the year. He takes the expenditure from the trust fund into account, which is often not nearly so great. On page 10 of his report for 1928-29, the Auditor-General stated - >It will thus be seen that the 1928-29 budget, covering the transactions for 1927-28, showed a deficiency of £5,450,237, while an analysis of the expenditure revealed a deficiency of £4,209,492, or £1,240,745 less than the budget figure. If we take the basis adopted by the Auditor-General, then **Dr. Earle** Page's figures for that year would have shown a more satisfactory condition of affairs to the extent of £1,240,745. On the 30th June, 1928, there was an unexpended balance of £5,178,049 in the trust fund. On the 30th June, 1929, the unexpended balance was £3,141,483. Honorable senators will therefore see that, if the method advocated by **Senator Greene** had been adopted, the expenditure of the Bruce-Page Government would not have appeared so large as it did in **Dr. Earle** Page's budgets. Question resolved in the affirmative. Bill read a third time. {: .page-start } page 5581 {:#debate-53} ### SPECIAL ADJOURNMENT Motion (by **Senator Daly)** agreed to - >That the Senate, at its rising, adjourn till a day and hour to be fixed by the President, which time of meeting shall be notified to each Senatorby telegram or letter. {: .page-start } page 5581 {:#debate-54} ### CENTRAL RESERVE BANK BILL Report of Select Committee. Debate resumed from page 5510, on motion by **Senator Sir William** Glasgow - >That the time for bringing up the report of the Select Committee on the Central Reserve Bank Bill be extended until the second Thursday after the first meeting of the Senate on its resumption after the forthcoming adjournment. {: #debate-54-s0 .speaker-KQZ} ##### Senator LAWSON:
Victoria .- Continuing with, I hope, commendable brevity the few remarks I made yesterday, I desire especially to draw the Minister's attention to paragraph 9 of the report of the select committee. The committee feels that wc should not lose the golden opportunity of getting the utmost light upon this subject. There is at present in Australia a financial expert of unique knowledge and experience whose advice would be invaluable. This recommendation is made to the Government, by the committee in good faith. The committee desires to obtain the fullest possible information before making its final report. The motion submitted by **Senator Glasgow** is in accordance with paragraph 10 of the committee's report. Question resolved in the affirmative. Motion (by **Senator Lawson)** agreed to - >That the progress report of the select committee on the . Central Reserve Bank Bill be _ adopted. {: .page-start } page 5582 {:#debate-55} ### LEAVE OE ABSENCE TO ALL SENATORS {:#subdebate-55-0} #### Valedictory Remarks Motion (by **Senator Daly)** - *by leave* - proposed - >That leave of absence be granted to every member of the Senate from the determination of thesitting this day to the day on which the Senate next meets. In moving this motion, it is appropriate that, as the Leader of the Government in the Senate, I should express my very keen appreciation of the courteous treatment that has been meted out to the Ministry by you, **Mr. President,** and honorable senators in opposition. This is a remarkable chamber. Both sides seem to regard the treatment meted out to each measure as a victory to their cause. The Opposition may carry a resolution against the Government ; the Government regards it as something achieved, and files it away carefully ready for the time when it can be brought out as one of the reasons why the numbers of the Labour party in this Senate should be increased. When the Government gains a victory the Leader of the Opposition assures us that we are putting into picklearod for our own backs. In that happy spirit of conciliation and mutual goodwill, we have been able to steer through the stormy political session so kindly forecast for us by the press. All I hope is that the same feelings of goodwill and harmony will continue to exist in this Senate when we re-assemble in March next. I desire publicly to thank the Leader of che Opposition **(Senator Pearce)** and other honorable senators opposite for their very courteous treatment of the Government's legislation in this chamber. I thank you, sir, the Chairman of Committees, and the staff, including the Clerk of the House, the Assistant-Clerk, and *Hansard,* for the consideration and help extended to us, and also express satisfaction at the way in which the press has reported the proceedings of the Senate. On behalf of the Government, and I think I may also claim, on behalf of the Opposition, I express the hope that you and the staff will enjoy a very pleasant vacation, and that we may be privileged to meet you again at the beginning of the next session, refreshed and invigorated to carry out the very high and onerous duties which fall to the lot of the President of the Senate. **Senator Sir** GEORGE PEARCE (Western Australia) [5.17]. - I second the motion of the Vice-President of the Executive Council **(Senator Daly)** and associate myself with what he has said with regard to yourself, **Mr. President,** the Chairman of Committees, the officers of the House, including *Hansard,* from whom we have received the greatest courtesy and assistance. All honorable senators on this side have admired the distinguished ability with which the Vice-President of the Executive Council has conducted the business of the Senate. Honorable Senators. - Hear, hear! **Senator Sir GEORGE** PEARCE.The honorable senator has carried on in most difficult circumstances owing to the limited number of his party in the Senate, and to the fact that he has only one Minister to support him. Further, the honorable senator is new to ministerial office. He has acquitted himself admirably, has exhibited continual good temper, and has certainly shown a remarkable astuteness, aptitude, and that cleverness that gets things done in politics. One would imagine, from the way in which he manages the business entrusted to him, that the honorable senator had served a very long apprenticeship in politics. I suspect that he has received a secret training in the science. On more than one occasion I have been foolish enough to divide the Senate, only to find the honorable senator leading a greater number than I. I congratulate him. Although, on occasions, there has been hard hitting on both sides, there has never been any hitting below the belt. I hope that if the conflict that was hinted at by **Senator Daly** eventuates next year, it will be fought out in a similar spirit. {: #subdebate-55-0-s0 .speaker-JYB} ##### Senator DUNN:
New South Wales -- As Government Whip, I desire to thank the Leader of the Opposition **(Senator Pearce),** my fellow whip, **Senator Sampson,** and honorable senators in opposition for the courtesy and kindness that they have extended to me when carrying out my liaison duties. This has been my first endeavour in the field of politics. I am a young man and a novice at the business, but, no doubt, like wine, I shall mellow and improve with age. Within the next few weeks, New South Wales senators on this side will participate in the State elections, and we shall then be able to dilate upon the political sins of honorable senators opposite. I thank you, **Mr. President,** for the advice and courtesy that you have extended to me. At various times, your advice was opportune, and it was appreciated by me. I. likewise tender my thanks to the Clerk of the Senate, the Clerk-Assistant, *Hansard,* and the remainder of the staff. The **PRESIDENT (Senator the Hon. W. Kingsmill)** (Western Australia) [5.21]. - Before putting the motion, I should like to acknowledge the kind things the Leader of the House **(Senator Daly),** the Leader of the Opposition **(Senator Pearce),** and the Government Whip **(Senator Dunn)** have said about myself and the staff. I assure the Government Whip that if my advice was sometimes given a little late, it was only because I did not wish to hurt his feelings. I agree with what honorable senators have said in regard to the good feeling which has prevailed. During my experience in the Senate, I cannot recollect ever having seen a body more united or more free from personal political feeling than is the present representation in this chamber. Such a contingency must lead to successful work. I attribute not a little of that desirable state of affairs to the influence of the Leader of the Government in the Senate. I have had a very long political career, and have occupied a position similar to that now occupied by the honorable senator, and I must confess that he has displayed a knowledge of tactics and strategy- I can never separate theone from the other, probably because of my lack of military training - that has won my admiration. The honorable senator has handled the most difficult positions in a very astute way, giving as little pain as possible to his political opponents and avoiding their darts with celerity and consummate adroitness. I congratulate him on the eminent success that he has achieved during his first endeavours as Leader of the Senate. I thank **Senator Daly** and the seconder of the motion for their kind utterances, not only on my own behalf, but on behalf of those to whom I owe so much - the Senate staff. I reciprocate the cordial wishes extended to me with regard to a pleasant vacation, and a resuscitation to health, which, fortunately, has not suffered overmuch under the extremely strenuous circumstances of the past day or two. Question resolved in the affirmative. *Sitting suspended from 5.24 to 6.10 p.m.* {: .page-start } page 5583 {:#debate-56} ### CONCILIATION AND ARBITRATION BILL Bill returned from the House of Representatives with the following message: - >The House of Representatives returns to the Senate the bill intituled "A Bill for an Act to amend the' Commonwealth Conciliation and Arbitration Act 1904-1928 '", and acquaints the Senate that the House of Representatives has now agreed to amendments Nos. 1-11, 13, 14, 16, 20, 23, 24, 27 and 28 made and insisted on by the Senate; has agreed to amendments Nos. 19, 21, 22, 26, 29 and 30 with the amendments indicated by the annexed Schedule; and has agreed to amendment No. 17 with the amendment and the consequential amendment as shown in the said Schedule. > >The House of Representatives desires the concurrence of the Senate in the amendments and the consequential amendment to the amendments of the Senate. *In committee* (Consideration of House of Representatives' Message) : > *Senate's amendment.* - No. 19 - Clause 33, leave out the clause. > > *House of Representatives' message.* - In lieu of leaving out clause 33, which repeals section thirty-eight d of the principal act, amend section thirty-eight d of the principal act by omitting from sub-section (.1.) the words- "(i) has done anything in the nature of a lockout or strike; or (ii)". > > *Senates amendment.* - No. 21 - Clause 41, leave out the clause. > > *House of Representatives' message.* - Omit from clause 41 of the hill the word " twelve " and insert in its stead the word " nine ". > > *Senate's amendment.* - No. 22 - Clause 43. leave out the clause. > > *House of Representatives' message.* - In lieu of omitting sections fifty-six a to fifty-six o (both inclusive) of the principal act, omit sections fifty-six a, fifty-sixb, fifty-six c, fiftysix e, and fifty-sixf. > > *Senate's amendment.* - No. 26 - Clause 46, leave out proposed section 61, insert the following new section: - > >A member may resign his membership of any organization - > >If he accepts employment in an industry other than that represented by the organization; or > >) on giving one month's notice and the payment of all dues to the date of his resignation. > > *House of Representatives' message.* - Omit from paragraph *b* of the proposed new 'section sixty-one the words " one month's ", and insert, in their stead the words " three months ". > > *Senate's amendment.* - No. 29 - Clause 54. leave out the clause. > > *House of Representatives' message.* - In lieu of omitting sections eighty-six a, eighty-sixb, eighty-six c. eighty-sixd, and eighty-seven of the principal act, omit sections eighty-six a, eighty-sixc, eighty-six D, and eighty-seven, and amend section eighty-six b by omitting the ° words " Five hundred " and inserting in their stead the words " One hundred ". > > *Senate's amendment.* - No. 30 - Clause 50, leave out the clause. > > *House ofRepresentatives message.* -In lieu of leaving out clause 56 of the bill which repeals section eighty-nineb of the principal act, amend section eight-nineb of the principal act by omitting the words " eighty-five or eightysix, d " and inserting in their stead the words " or eighty-five ". Motion (by **Senator Daly)** agreed to - >That the amendments made by the House of Representatives upon the Senate's amendments Nos. 10, 21. 22. 26, 29 and 30 be agreed to. > >Senate's *amendment.* - After clause 24 insert the following new clause: - "24a. After section thirty-one of the principal act, the following section is inserted in Division 3 of Part III.: - 31a. - (1.) An appeal shall lie to the Court constituted by the Chief Judge and not less than two other Judges against any provision in any award or order of a Conciliation Commissioner or a Conciliation Committee affecting - > >wages; > >hours: > >any condition of employment which in the opinion of the court is likely to affect the public interest. > >Any such appeal shall be made in the manner and within the time prescribed by the rules made in accordance with section forty-three of this act. (3.) On the hearing of an appeal under this section the court may - > >take fresh evidence: > >) confirm, quash or vary the award or order or part thereof which is under appeal ; > >refer the award or order, or any part thereof, back to the Conciliation Commissioner or Conciliation Committee, as the case may be, for reconsideration, and with or without such directions or suggestions as the court thinks fit; or > >make an award or order dealing with the matters under appeal : Provided that no such award or order shall include any provision which would be outside the powers of the Conciliation Commissioner or Conciliation Committee, as the case may be. (4.) An award or order of a conciliation Commissioner or a Conciliation Committee shall not have effect until the expiration of the time within which such appeal may be made.' " > > *House of Representatives' message.* - Omit sub-section (4.) of proposed new section thirtyone a of the principal act, and insert in ite stead the following sub-section: - " (4.) An award or order of a Conciliation Commissioner or a' Conciliation Committee shall not, except by consent of all the parties, have effect until after the expiration of twenty-one days from the making thereof." > > *Consequential amendment made by the House of Representatives.* - Clause 21, after paragraph *(a)* insert the following new paragraphs: - (ab) by inserting in sub-section (1.) after the word " subject " the words " to section thirty-one a of this act and"; (ac)by omitting from sub-section (1.) the words " of the award " and inserting in their stead the words " upon which the award comes into force ". Motion (by **Senator Daly)** agreed to - >That the amendment made by the House of Representatives upon the Senate's amendment No. 17, and the consequential amendment made by the House of Representatives in clause 21 be agreed to. Resolutions reported; report adopted. *Sitting suspended from 6.30to 7.45 p.m.* {: .page-start } page 5584 {:#debate-57} ### SALES TAX ASSESSMENT BILL (No. 1). Bill returned from the House of Representatives with a message intimating that it had agreed to certain of the amendments made by the Senate in this bill, and had disagreed to one amendment for a reason. *In committee:* (Consideration of House of Representatives'' message). Schedule - > *Senate's amendment.* - Insert the item " Copper sulphate ". > > *House of Representatives' message.* - Amendment disagreed to for the following reason: - > >As this amendment is. not in all the Sales Tax Assessment Bills, it creates an anomaly, and renders equitable administration impracticable. {: #debate-57-s0 .speaker-JTL} ##### Senator DALY:
Vice-President of the Executive Council · South Australia · ALP -- The House of Representatives has met the Senate very reasonably in regard to these measures ; it has agreed to the amendment of **Senator Johnston** to include oregon in the list of exemptions, and of **Senator Pearce** to include "vessels". That being the case, I move - >That the amendment be not insisted upon. SenatorE. B. JOHNSTON (Western Australia) [7.48]. - The Government ought to agree to this amendment. It is shocking that it will not meet the wishes of primary producers even in this small matter. Motion agreed to. Resolution reported; report adopted. {: .page-start } page 5585 {:#debate-58} ### COMMONWEALTH EMPLOYEES COMPENSATION BILL Bill returned from the House of Representatives without amendment. {: .page-start } page 5585 {:#debate-59} ### SALES TAX ASSESSMENT BILLS (Nos. 2 to 8). Bills returned from the House of Representatives with messages intimating that it had agreed to the amendments, made by the Senate. {: .page-start } page 5585 {:#debate-60} ### PAPER The following paper was presented: - >Report, together with Appendices, of the Royal Commission appointed to inquire into Allegations affecting Members of the Parliamentary Joint Committee of Public Accounts in connexion with Claims made by Broadcasting Companies against the Commonwealth Government. {: .page-start } page 5585 {:#debate-61} ### TARIFF BOARD {:#subdebate-61-0} #### Annual Report {: #subdebate-61-0-s0 .speaker-JTL} ##### Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP .- I lay on the table of the Senate the annual report of the Tariff Board for the year 1929-30. The report is complete with the exception of a few summaries of recommendations relating to tariff revision matters which have been recently made by the board, and which have not yet been considered by the Government. When these reports have been dealt with they will be laid on the table of the Senate. In respect of the board's summaries and recommendations in connexion with deferred duties and by-law items of the tariff, and questions reported on by the board arising under the Customs Tariff (Industries Preservation) Act 1921-1922, the action taken is set out in the schedules to the report in respect of each recommendation. In. view of the fact that where action has been taken on. deferred duty, by-law and Industries Preservation Act recommendations, notification has already appeared in the *Government Gazette,* it is not proposed to print the papers annexed to the report. Senate adjourned at7.56 p.m. (Friday) till a day and hour to be fixed by the President.

Cite as: Australia, Senate, Debates, 7 August 1930, viewed 22 October 2017, <http://historichansard.net/senate/1930/19300807_senate_12_126/>.