Senate
6 August 1931

12th Parliament · 1st Session

  1. Senate
  2. 12th Parliament
  3. 1931

The President (Senator the Hon. W. Kingsmill) took the chair at 10 a.m. and read prayers.

page 5014

QUESTION

IMPERIAL PENSIONS

Senator E B JOHNSTON:
WESTERN AUSTRALIA

asked the

Minister representing the Treasurer, upon notice -

  1. What is the position in regard to the payment to Imperial pensioners of the exchange of 30 per cent. due to them on their pensions ?
  2. When may such pensioners expect to receive the arrears promised to them in respect to such exchange?
Senator BARNES:
Vice-President of the Executive Council · VICTORIA · ALP

– The information is being obtained and will be supplied as soon as possible.

page 5014

QUESTION

SALES TAX

Senator E B JOHNSTON:

asked the Minister representing the Treasurer, upon notice -

  1. Has the attention of the Government been drawn to an article appearing in a recent issue of the Perth Sunday Times complaining of the increased burden placed on industry by an alteration in the Taxation Department’s requirements respecting bonds as security for the payment of sales tax?
  2. If the representations are correct, can any relief be afforded to taxpayers in this matter ?
Senator BARNES:
ALP

– A reply will be forwarded to the honorable senator as soon as possible.

page 5014

QUESTION

WAR PENSIONS

Is it a fact that amended regulations are being passed under the Australian Soldiers’ Repatriation Act having the effect of reducing the. payments of pensions or allowances?

Have the reductions, if any, thus being made, been referred for consideration to the committee representing returned soldier organizations?

Senator DOOLEY:
Assistant Minister assisting the Minister for Works and Railways · NEW SOUTH WALES · ALP

– The information is being obtained, and will be supplied to the honorable senator as soon as possible.

Senator Sir George Pearce:

– Will it be made available to-day ?

Senator DOOLEY:

-I hope so.

page 5014

LEAVE OF ABSENCE

Motion (by Senator E. B. Johnston) agreed to -

That leave of absence for one week be granted to Senator Sir Hal Colebatch on the ground of ill-health.

page 5014

WAR PENSIONS

Report of Inquiry Committee

Order of the day called on for the resumption of the debate from the 5th August(vide page 4966), on motion by

That the paper be printed.

SenatorFOLL (Queensland) [10.5]. - In view of the statement of the Minister that the report is now available for honorable senators I move -

That the order of the day be discharged.

Question resolved in the affirmative.

page 5015

APPROPRIATION BILL 1931-1932

Second Reading

Debate resumed from the 5th August (vide page 4965), on motion by Senator Barnes -

That the bill be now read a second time.

Senator Sir GEORGE PEARCE (Western Australia) [10.7]. - Having studied the estimates of receipts and expenditure for the year ending 1931-1932, it does not appear to me that sufficient efforts have been made to reduce the cost of government. A summary of the expenditure shows that, apart from areduction of salaries, no great attempt appears to have been made to cut down departmental expenditure. A comparison of the estimated expenditure this year with that for 1924-1925 shows that, whereas in 1924- 1925 the cost of the Prime Minister’s Department was £1,263,000, it will be £1,411,000 this year. The Home Affairs Department is estimated to cost £182,000 this year ; last year it cost £17 6,000, and in 1924-1925 it was £145,000. Territories of the Commonwealth are estimated to require £571,000 this year, as against £471,000 last year. It may be that the difference of £100,000 is due to the possibility of an election this year, thus making the expenditure the same in both years. The expenditure in 1924-1925 was £311,000. The Attorney-General’s Department this year is estimated to cost £245,000, which is £2,000 less than last year. It cost £169,000 in 1924-1925. The estimate for the Department of Works is £154,000, and the expenditure last year was £140,000. It was £108,000 in 1924-1925. The Treasury figures are respectively £12,373,000, £11,502,000, and £8,400,000. I do not know whether the difference is due. to the present heavy rates of exchange. I shall have something further to say about the Trade and Customs Department presently, but it is interesting to note at this stage that its expenditure this year is estimated at £1,609,000, whereas in 1924-1925 it was only £1,225,000. The Health Department expects to expend £275,000this year, as compared with £291,000 last year and £187,000 in 1924-1925. The Department of Markets and Transport is expected to cost £682,000 this year; it cost £449,000 last year. I cannot understand that enormous increase in the expenditure of the department, for I am not aware that we are doing anything more in regard to marketing our produce or in connexion with transport than was done last year. The estimated expenditure on railways this year is £1,109,000, as against £1,087,000 last year and £742,000 in 1924- 1925.

Honorable senators are aware of the enormous decrease in customs revenue. I have not the figures with me; but I imagine thattherevenue from customs in 1924-1925 was double what it will be this year. Yet the department is expected to cost over £300,000 more this year. A study of the details of expenditure for the Customs Department reveals, further, that there has been little or no reduction in the number of officers employed, although the revenue has decreased enormously. In Victoria this year there are 345 officers in that department, as against 349 last year. In New South Wales there has also been a reduction of four officers,the respective figures being 533 and 537. Queensland now has 191 officers, as against 198 last year. In Western Australia the department has reduced its staff from 148 to 147, while in Tasmania there has been no change. It would appear reasonable that, with only about one half the revenue collected two years ago, the number of officers should be reduced to a greater extent. The smaller volume of business should not require so many officers as previously to handle it.

Senator Sir GEORGE PEARCE.The expenditure for the whole department this year is estimated at £1,609,000, as against £1,634,000 last year.

A few months ago we were provided with a sensational report by Mr. Coleman, the honorable member for Reid in another place, on Australian activities in London. His report, which is now a parliamentary paper, is dated London, 14th August, 1930. That report was given tremendous publicity throughout Australia with the deliberate object of creating the impression that previous governments had been most prodigal in their expenditure in London, and that this new saviour of the Commonwealth had come to the rescue. On page 51 of his report, Mr. Coleman states that his recommendations, if given effect, would mean a saving of £182,307.

Senator Sir GEORGE PEARCE.That is so; but the impression was created in the public mind by the publicity officers of the Prime Minister’s department that this huge saving was being effected in Australia House. As a matter of fact that report camouflaged the true position, and was intended only for public consumption. A comparison of it with the Estimates shows that the Government has not implemented the report in the way suggested by its publicity officers. A good deal of the expenditure referred to had relation to the business and departmental activities of the Commonwealth and States governments and had no real concern with Australia House. The various Agents-General of the States have big business undertakings under their care, and these were taken into account by Mr. Coleman in arriving at the figures that I have quoted.

Another element was considered which should not have been considered. The expenditure in England on the three arms of our defence force was taken into account as though it affected Australia House. If we are to have a defence force it should be effective even though small. Defence in these days is a science, and our officers must be trained in modern science on scientific lines. In the Mother Country a number of training establishments have been set up at a cost of millions of pounds for the efficient training of men in the scientific branches of defence. If Australia were to attempt to set up similar establishments in proportion to her small defence force, the upkeep of them would undoubtedly run into hundreds of thousands of pounds annually. In preference to setting up such establishments here, the previous governments of Australia have taken advantage of the generous offer of the British government to train specialists in the navy, army and air force in their establishments in England. We have provided for only the salaries and sustenance of our officers who were in training there, while the Mother Country has met the whole of the overhead costs. Yet, all this expenditure is included as a charge against Australia House. As a matter of fact, the training of these officers has been carried out on much more economic and efficient lines than would have been possible in Australia.

I come now to a legitimate criticism of the expenditure on Australia House. On page 46 of Mr. Coleman’s report a table is set out which shows what are alleged to be savings of £29,471 on Australia House; but, when we turn to the estimates of expenditure on the High Commissioner’s office, we find that a saving of only £4,616 is proposed. That is a very different amount from what the people were led by the Government’s publicity officers to expect would be saved. Included in the proposed saving of £4,616 is £1,260, which is to be saved through the abolition of all advertising and publicity in connexion with Australia House. Last night an officer of the Markets Department gave a lecture in King’s Hall on the Australian dried fruits industry. The salary of this gentleman is paid by the Government, but the publicity campaign in which he is engaged is required not in Australia, where the people know a good deal about our dried fruits industry, but in Great Britain where we have to build up a market for our fruit. Yet the Government proposes to discontinue all publicity and advertising in connexion with Australia House.

I am dealing with the proposed economies at Australia House. Included in the estimates of expenditure on the High Commissioner’s office last year were the following items: “Financial adviser to the High Commissioner, £2,000” and “Official secretary of the Commonwealth of Australia in Great Britain, £2,000 “, whereas this year it is proposed to vote only one amount of £2,000 for “official secretary and financial adviser”. That seems to show a’ saving of £2,000, but actually there is no saving whatever, for the salaries of both officers are still being paid. We, therefore, see that in these two items alone, which total £3,260 of the alleged saving of £4,616, the Estimates actually omit any mention of a salary of £2,000 which is still being paid. We all know that Mr. Trumble and Mr. Collins are both drawing their salaries. The campaign, which has been indulged in in respect to Australia House expenditure, has been designed to damage the reputation ofthe previous government and to make it appear that it was extravagant. An effort has also been made to make it appear that a saving of £182,000 has been made at Australia House in consequence of Mr. Coleman’s report and that a saving of £129,471 is being made in the High Commissioner’s office, whereas the Estimates show a saving of only £4,616, which is effected by the sweeping away of all advertising and publicity expenditure, and by omitting any mention of a salary of £2,000 per annum which is still being paid.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– It appears to me that the right honorable senator has been confusing the figures in the estimates of expenditure on the High Commissioner’s office with the figures given in Mr. Coleman’s report, which show that a saving of 30 per cent. has been effected in London. The estimated expenditure of the Trade and Customs Department shows a saving this year of £115,306 over the actual expenditure of last year. We all know that the revenue of that department has fallen heavily. I am not familiar with the internal working of the department, but the figures in the Estimates show that the total expenditure in 1930-31 was £613,306 and that the estimated expenditure this year is £498,000. I do not know whether the right honorable senator is complaining because we are not receiving more revenue from this department, but the policy of the Government is to prevent huge quantities of goods manufactured in foreign countries from coming into Australia. We desire our countrymen to do their own work here. I think it was Abraham Lincoln who advised his fellow-citizens to keep their work and their money in their own country. It was by pursuing that policy that the United States of America became one of the foremost countries in the world. If Australia is to become great she must adopt a similar policy. I have no apologies to make for the tariff policy of the Government. We have deliberately erected a high-tariff wall to prevent goods from overseas flowing into Australia in the hope that thereby we may make this country as self-supporting as possible and keep in it as much money as we can.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Clause 2 (Issue and Allocation of £19,586,111).

Senator LYNCH:
Western Australia

– I direct the attention of the committee to the absence of ordinary business methods in the presentation of this measure. The committee is asked under this clause to sanction the expenditure of £19,586,111, which is supposed to represent a reduction of 20 per cent. in the expenditure of the previous financial year. While I have no doubt that the Government is faithfully endeavouring to live up to its undertaking there is no evidence before the committee, unless one laboriously wades through over 300 pages of the bill now beforeus, that such a reduction has been made. The expenditure for last year and the pro- posedexpenditurethisyeararesetout; butitwouldhavebeenasimplematter to prepare a summary showing in which departments effect has been given to the Government’s undertaking to reduce expenditure by 20 per cent. If that were done, honorable senators would be able to see at a glance what now requires considerable research. For instance, the Prime Minister’s Department is divided into sixteen sub-departments, and it will be necessary for honorable senators to peruse the expenditure of no less than 100 sub-departments in order to satisfy themselves that the Government is living up to its undertakings. Paper and ink are cheap, and since, as the Leader of the Opposition (Senator Pearce) has said, there appears to be no inclination on the part of the Government to dispense with members of the clerical staff, labour should be plentiful. If a summary such as I have suggested had been submitted, the committee would be able to determine whether full effect has been given to the financial plan adopted at the recent conference of Commonwealth and State Ministers. I suggest that the clause be postponed until the departmental expenditure has been considered by the committee. Possibly some reductions may be suggested.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

.- It is difficult to supply off-hand details of the reductions made; but I may state that the expenditure forthe financial year 1929-30 was £21,760,000, whereas the estimated expendituref or the present financial year is £17,202,000, or as reduction of £4,558,000. That is equivalent to an all-round reduction of approximately 20 per cent.

Senator McLachlan:

– The consideration of this clause should be postponed until the schedules have been disposed of.

Senator Sir George Pearce:

– The usual practice in cases of this kind is to postpone clauses 2 and 3 until the schedules have been dealt with. If no requests have been made these clauses can then be passed. It is usual for the Minister in charge of the Appropriation Bill to move that these clauses be postponed.

Senator Barnes:

– I am agreeable to that being done.

Clause postponed.

Clause 3 postponed.

Clause 4 agreed to.

First schedule postponed.

Second schedule -

Senator KINGSMILL:
Western Australia

.- I take this opportunity to refer to the sub-item “Refreshment Rooms, £3,815 “ on page 13. I do not suppose that there is any department in the Public Service, small though it may be, around which more rumours have circulated or which has been subject to more criticism than the Parliamentary Refreshment Rooms. As I do not think that honorable senators have had an opportunity to ascertain the actual position, at all events for the past year or two, I consider it advisable to place before the committee, as briefly as possible; a statement of what has happened during the last two years.

Senator Barnes:

– I have done my best to assist that department in balancing its budget.

Senator KINGSMILL:

– The efforts of the Leader of the Government in the Senate have been conspicuous by their ability and magnitude. The Senate it to be congratulated because, owing to the influence he has obtained from these much-criticized rooms, it has gained many jewels of wit and wisdom. It has been admitted for some considerable time that a re-organization of the refreshment rooms was needed. It is quite easy to talk of re-organization, but it is more difficult, as honorable senators will realize, to carry such a re-organization into effect. With the object of effecting a change in the system and obtaining the requisite knowledge, I embarked, as a commencement, upon an investigation. In September and October of last year I travelled many thousands of miles and interviewed the controlling authorities in four of the State Parliaments in order to get the line, so to speak, of the path that lay before me. I found that every parliamentary refreshment room concerning which I obtained information, was conducted more economically than is ours, but that an alteration in our system was not so easy as might appear. Shortly after the seat of government was transferred to Canberra, and before Parliament was opened, for reasons which undoubtedly at that time might have appeared necessary, a change was made with respect to the status of thirteen refreshment-room employees, which embracespractically the whole staff. These employees, who were then casual hands, were made permanent employees. They became members of the Public Service with all those impregnable privileges which public servants enjoy to the full. It was a strange thing to do ; I do not cavil at it, but I presume the reasons then submitted to the presiding officers of the day appeared to be good and sufficient. But it has this peculiar effect : Employees such as waiters and kitchen assistants, who were employed when the House was in session, were, during a recess, walking about not rendering any service for the salaries they received. I could see no way of stopping that. As I have already stated they are well entrenched. I have no fault to find with the officers - indeed, I am inclined to congratulate them on the impregnability of their position. However, it renders the running of the refreshment rooms very difficult, as it entails expenditure that would not otherwise be incurred. A different system obtains in the parliamentary refreshment rooms that I inspected at Brisbane, Melbourne, Adelaide and Perth, which results in a considerable saving being effected during recess. There, the employees are sessional hands, engaged only while Parliament is sitting.

It is obvious that a waiter or a cook, who is not working in the refreshment room’s during a large part of the year, should, in the ordinary course, be paid off when his services are not needed.

Senator O’Halloran:

– In the other Capital cities members of Parliament frequent the House practically all the year round.

Senator KINGSMILL:

– Yes, to a greater extent than is the case here. During a recess of any length there are practically no members of Parliament in Canberra. That is why the committee hat adopted the expedient of closing down the parliamentary refreshment rooms during the recess; it saves some money. I desire to pay a tribute to the courtesy and kindness of the officers of each of the Parliaments that I visited. I was given more information than I really could have expected. When I returned, and before I discovered the impregnability of these officers, I formulated a scheme which I laid before the House Committee, of which I am chairman, which was accepted gladly and unanimously. That scheme contemplated substituting for the existing policy, which involves an expenditure of £5,475 per annum for wages and salaries, another which would entail an outlay of £2,882, which is a very substantial saving. Unhappily, it was not to be. I made a point at each step of consulting the Commonwealth Crown Law authorities, so that I obtained the best possible advice on’ the matter. Finally, I had to abandon the hope of making that saving, and had to face the position as it stood. Gradually, through one means and another, the House Committee has succeeded in materially reducing the expenditure on the parliamentary refreshment rooms without in any way impairing their efficiency. On the first of this month, the amount in the bank to the credit of the refreshment rooms was £859 12s. 2d., which is exceptional. The amount of cash in hand on the 1st August last was £52 2s.1d., while there was owing to the refreshment rooms £114 0s. 9d. That is about the usual amount outstanding, and should not cause honorable senators any alarm, as there is no difficulty in collecting it. Reimbursement of wages payable by the

Joint House Department amounts to £24 2s. 5d. making a total credit of £1,049 17s. 5d. Against that there is approximately £600 owing to tradesmen. Again, that is the usually monthly balance, and honorable senators will realize that no difficulty will be experienced in paying it. The resultant surplus in favour of the refreshment rooms amounts to £449 17s. 5d. That is without taking into consideration the salaries paid by the Joint House Department, which may be regarded as a debit, and the value of stock on hand, which may be looked upon as a possible credit.

A re-arrangement of the work in the refreshment rooms has made it possible to dispense with the services of four casual waiters, and the following statement shows the saving thereby effected -

This represents ‘ a saving of £81 per month, or almost £1,000 per annum.

The percentage of gross profits on the cost of goods sold over the bar during the year 1929-30 was 21 per cent. When the balance sheet for 1930-31 is completed, it is anticipated that the increase will be approximately 30 per cent., as compared with less than 10 per cent, for years prior to 1929-30.

Honorable senators have noticed that on previous Estimates an amount is provided for the refreshment rooms under the heading “ Grant in aid which is for the purpose of supplementing the Estimates to cover unexpected expenditure. During the financial year 1929-30, an amount of £700 as grant in aid was obtained from the Treasury and expended. For the financial year 1930-31 no grant in aid has been found necessary, and the sum of £900 provided on the Estimates remained untouched. For this year the sum of £200 is provided as grant in aid to meet possible emergencies, but it is hoped that no portion of the amount will be required.

Several administrative economies have been effected in connexion with the service in the dining room, which, without prejudicing the convenience of honorable senators and others using the rooms, will result in greater efficiency. A consider- able saving has been made through the members of the press and the typists being served in the officers’ dining room. That means that a smaller quantity of food than formerly has to be prepared. Economies have also been made possible in the service to the tables. Another item in connexion with which considerable savings have .been made is that of meals for the general staff. For, I presume, good and sufficient reasons, the refreshment rooms were originally instructed to serve to certain officers for 9d. what was to all intents and purposes a full meal. It is all very well to be liberal with a concern that is making money, but it is very wrong, when matters arc going to the bad, to make concessions which cannot in any way be upheld.

Senator Sir George Pearce:

– That was not the ordinary full meal?

Senator KINGSMILL:

– No. It was provided only for certain officers. The minimum charge to members of Parliament, the press, and senior officers was and still is 2s. Those officers who were previously charged 9d. are now- charged ls”. 6d. for the meal to which I have referred. A satisfactory arrangement has been made in connexion with the serving of meals for the general staff. The price has been increased, as I have intimated, but the cost is charged to the departments concerned, when the officers are on duty. A three-course meal is provided with better quality service. As a result of this new system the refreshment rooms have benefited to the extent of at least £15 a month.

The consumption of coal in the kitchen amounts to two tons a month. Certain criticism was made in another place wilh regard to the coal contract, and all sorts of horrible things were alleged as motives for entering into it. [Extension of time granted.] I feel very deeply indebted to the officers who put up a most generous and effective defence to that criticism, with the result that the honorable member who made it admitted to Mr. Speaker that the information on which it was based was erroneous. The reason for letting that contract was that there are two firms in the Federal Capital Territory which supply coal and coke and similar fuel. It would be false economy on the part of any customer who was buying these commodities to put either of those firms out of commission, as that would give an undue advantage to the remaining firm, naturally the larger one, and probably result in a monopoly being established. The element of competition is good both for the two firms concerned and their customers. That is why this contract has been let, and why I intend to pursue the same policy in future, unless Parliament directs otherwise.

Senator Lynch:

– Are the refreshment rooms paying their way?

Senator KINGSMILL:

– Taking wages and every other expenditure into consideration, they are not, but they are much nearer doing so than has been the case for many years. Perhaps the honorable senator has in mind an alternative proposal, but viewing the matter from every angle, I do not see that it could be given effect. Leaving out of account altogether the dignity of Parliament, and the fact that it has always been a maxim throughout the British Empire that Parliament should have its own refreshment rooms, and considering only the practical issue, I believe that members of Parliament would be greatly inconvenienced if the refreshment rooms were conducted privately. I hope that no step will be taken in that direction.

Senator Lynch:

– Could they not be disposed of satisfactorily by tender?

Senator KINGSMILL:

– I have investigated that possibility. There have been several instances both in connexion with this and other parliamentary refreshment rooms in Australia where tenders have been called and accepted, and in all cases the result has been disastrous, principally because of the gradual falling off of the quality of the viands supplied to members. There would be difficulties in connexion with the staff, and above all, the unlikelihood of a satisfactory tender being received in view of the irregular attendance at meals. In other directions, such as the curtailing of laundry work without impairing its efficiency, strict attention to the delivery of goods and the checking of accounts, and matters of that sort, the administration of the refreshment rooms has been materially improved. I think I may say, without exaggeration, that we shall effect a sav ing of well over the 20 per cent., which the Government has indicated it desires to have effected. Matters are moving particularly smoothly at the present time, despite, wars and rumours of wars, which inevitably rumble along the corridors of Parliament House from time to time as the result of the association of members with the staff.

Senator Herbert Hays:

– Those rumours found their way into the press, and were never contradicted.

Senator KINGSMILL:

– They were investigated, and were found not to have sufficient foundation for actionto be taken on them. That was the dictum of the Commonwealth Crown law authorities. In the circumstances, the wiser policy was to improve matters in the sphere to which one was confined, and not to trouble oneself regarding rumours which upon investigation proved to be absolutely groundless.

Senator Thompson:

– Does the 20 per cent. reduction apply to the prices of liquors ?

Senator KINGSMILL:

– Most decidedly not. The 20 per cent. to which I have alluded refers to the saving of expenditure to the Commonwealth.

I trust that honorable senators will pardon my having brought up this subject, which I thought might prove interesting to them. I was not afraid to introduce it because, with the aid of Mr. Speaker, the Joint House Committee, and the officials, who have been most helpful, I believe that we are on the high road to running these refreshment rooms as economically and as efficiently as possible under the circumstances.

Senator PAYNE:
Tasmania

.- The provision for stationery in the Senate has been reduced to a very small stun, but I suggest that further economy might reasonably be exercised. Scribbling pads could be used by honorable senators, instead of the expensive type of notepaper which apparently is all that is available.

Senator Herbert Hays:

– Scribbling pads are available to any honorable senator if he applies for them.

Senator PAYNE:

– That is not the correct procedure to adopt. I have never yet seen one on the table in the club room or in the Senate. They should be placed in the desk of every honorable senator.

That would obviate the waste that is caused by the use of expensive official notepaper, and in the aggregate many pounds would be saved in the course of a year. It is necessary to save every pound that we can.

The Estimates make provision for an extra day’s pay on account of leap year. That is absurd. In the aggregate, the expenditure on this account must amount to thousands of pounds. Has any honorable senator ever heard of large business firms making special provision for increasing the salaries of their employees in leap year ? This is beyond the limit of endurance. In these times of stress every item of unnecessary expenditure should be ruthlessly cut out. This is only a recent innovation, but it applies to every department.

Senator SAMPSON:
Tasmania

– The provision for expenses, including allowances to witnesses, and travelling expenses of clerks and shorthand writers, in connexion with select committees of the Senate, is £100. For the year 1930-31 the vote was £25, and the expenditure £75. Certain events that transpired last year are within the memory of all honorable senators. The story runs that, four or five years ago, the invariable practice was to place on the Estimates the sum of £500 to meet the purposes of select committees of the Senate. I understand that two years ago the Treasurer in the last administration, being anxious to reduce the Estimates, approached the President of the Senate and suggested that the amount might be reduced. I believe that in that year it figured at £250. In the year before last, the Treasurer desired to make a further reduction, and suggested that the nominal amount of £25 should be provided for this purpose, on the understanding that should the Senate desire to set up a select committee, the money for it would be made available. Last year the Senate did desire to set up a select committee, but found that it was not master in its own House. I contend that it should be master in its own House, irrespective of the wishes or the desires of any government, of whatever colour or description it might be. When that committee was set up, the Government, in a fit of pique, said : “ You have no money on your Estimates for this purpose, and you will not be given any “.

It apparently thought that the committee would not be able to function ; but it did. Had the provision of £100 not been made this year, it was my intention to move in that direction. I consider that the Senate acted reasonably and honestly last year, but it came in for a lot of abuse, and odium of a sort, from unthinking people, which at the time I resented very greatly. The Government took up a most unseemly and undignified attitude. I quote the following paragraph in regard to the matter which appeared in the Labor Daily of the 17th June, 1930 : -

FATE OF RESERVE BANK BILL.

Meeting of Committee.

Must Pay Own Expenses.

Canberra, Wednesday.

The Select Senate Committee created last week to slaughter the Central Reserve Bank Bill, which is comprised entirely of Nationalist and Country party Senators - Labour men having refused to sit on it - will meet at 10 a.m. on Saturday at the Commonwealth Bank, Sydney, and on Monday, and possibly Tuesday.

The committee will be glad if any person desirous of giving evidence will communicate with the secretary, Mr. Broinowski, at the federal members’ rooms, Sydney, indicating the nature of the evidence it is desired to give.

It is understood the committee applied for £200 as the first instalment of its expenses.

Cabinet, after considering the matter, refused to grant the money, and to-day the party confirmed this stand.

The interesting position now is that the Senate committee is morally bound to carry on the inquiry, but members will have to pay all their expenses.

That is what members of the committee did. I understand that the matterwas the subject of negotiation between the President of the Senate and the Prime Minister, who after consultation made the necessary arrangements for defraying the expenses of the secretary and the shorthand writer. I am glad, therefore, that this year the sum of £100 has been provided for this purpose, and hope that a similar position will not arise again.

Senator Lynch:

– The members of the committee did not draw any fees?

Senator SAMPSON:

– They did not.

Senator FOLL:
Queensland

.- The sum of £1,350 is set down for the Parliamentary Standing Committee on Public Works. I understand that that committee has been practically idle for quite a considerable period, because it has not had any public work referred to it for inquiry and report. The secretary of the committee, Mr. Whiteford, whose salary is £750 per annum, is probably one of the most able officers in the Commonwealth Service, yet his services are lost to the Commonwealth because there is no work for him to do. He, as well as the clerk and the messenger, should be transferred to another department, where their services could be utilized by the Government until provision is made on the Estimates for other public works .to be undertaken, and the committee is again functioning.

The question of select committees of the Senate, to which Senator Sampson has referred, was fully threshed out in the Senate- on a previous occasion, while Senator Newlands was President. It was then laid down that the Parliament is above the Government in the matter of appropriation, and that the Senate itself has the right of appropriation in relation to expenditure connected with its own House. I should like the President to explain the present position.

Senator DALY:
Assistant Minister · South Australia · ALP

– It is obvious that Senator Payne misunderstands the system of accountancy in the various departments of the Public Service when he complains that it is necessary to make a violent protest against the payment for an extra day in leap year. For the benefit of the honorable senator, I may explain that members of the Public Service are paid fortnightly, the annual salary being divided into 26 equal parts. In leap year the officers are paid for one extra day, but in the following years the position is rectified.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– I agree with Senator Foll that the secretary of the Public Works Committee is one of the ablest officers in the Commonwealth Public- Service, and we all regret that, because of the present difficult financial position, the Government’s programme of public works has been suspended so that the officer in question has, for the moment, no specific duties to perform. But if the plan for the restoration of financial stability is successful, the Government’s works programme will be resumed, and the secretary of the Public Works Committee will again be fully employed.

Senator Sir GEORGE PEARCE (West fess that earlier this morning, when I was criticizing government expenditure, I made a most unfortunate mistake, which, I think, should be put right at once. Referring to a table which was published in the Melbourne Argus on the’ 31st August, relating to government expenditure, I made a comparison between the estimated expenditure for this year and expenditure in 1924-25, 1927-28, and 1928-29. My attention has since been drawn to the fact that figures which I assumed related to the estimated* expenditure for the present financial year were really figures of expenditure for the last financial year. When one makes a mistake it is only right that one should correct it at the earliest opportunity. I can only offer as an excuse that we have been working almost continuously since the Senate resumed on Tuesday, and that in the haste which is necessary to deal with Government business, I misinterpreted the figures published in the Argus, so that my criticism as to the cost of government was based on entirely wrong premises. I should add that this remark does not apply to my criticism of the Customs Department or to the expenditure at Australia House.

Senator LYNCH:
Western Australia

– I should like some information from the Leader of the Senate (Senator Barnes) about the proposed reduction of expenditure for the Council for Scientific and Industrial Research. I make this inquiry because I notice that, in a number of other sub-departments, there is a slight increase in expenditure, and, in view of the good work which is being done by the council, I am at a loss to understand the reason for the proposed reduction.

Senator PAYNE:
Tasmania

– I have a number of inquiries to make with regard to the Treasury. I notice provision for the Trade Agency Section, payable from trust funds, New Guinea Agency Account. What duties are performed by officers in that subdepartment? I note also certain increases of expenditure in the taxation office, and in view of the protestations by this Government that it is reducing departmental expenditure to the lowest possible limit, I should like- to have some explanation.

For example, last year the expenditure on writing papers and envelopes, including cost of printing and embossing, was £910, as compared with an estimate of £600, and this year the sum of £1,000 is provided.

Senator Sir George Pearce:

– That would be due to additional work in connexion with the Government’s taxation proposals.

Senator PAYNE:

– Another item is £500 for account, record, and other books, including cost of material, printing, and binding. As the expenditure last year was slightly over £400, the proposed expenditure this year represents an increase of 25 per cent. I find also that increased provision is made for travelling expenses other than valuation. Last year the estimate was £2,700, and this year £3,000 is to be provided. Another item, to which I direct attention, is travelling expenses for valuation £13,655, an increase of 20 per cent. There is also this extraordinary item: Financing valuers to purchase motor cars for official use, £400. Last year the expenditure on this account was £973.

Senator McLachlan:

– I understand the department assists valuers to purchase cars on time payment.

Senator PAYNE:

– But we should have some explanation of these unusual items, otherwise the average person studying these Estimates would conclude that members of Parliament were not exercising reasonable oversight over governmental expenditure. I also call attention to the expenditure on account of the Government Printing Office. A few months ago I asked the Leader of the Senate if the Government had instructed heads of departments to exercise all reasonable economies, and I was assured that this had been done. I have just had evidence to the contrary, and although this may appear to be a very minor matter, it certainly denotes a lack of general oversight. Some time ago I received from the Government Printing Office a volume of statutes wrapped in no fewer than four thicknesses of the very best glazed brown paper. One would have been sufficient.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– The increased expenditure in the Taxation Department has been brought about by the necessity to employ more officers to deal with the sales tax. As this tax is estimated to bring in a revenue of £8,500,000, the honorable senator can see the necessity for employing more officers to collect it.

Senator FOLL:
Queensland

.- I desire to protest against the reduced provision for rifle clubs. Now that the permanent Defence Force is being considerably reduced, every encouragement should be given to the voluntary section of our defence, particularly to rifle clubs. The members of these clubs provide the bulk of the cost of training themselves to become expert rifle men. They devote nearly all their Saturday afternoons to that end, and I regret this mean, cheeseparing policy of cutting down their grant from the Commonwealth.

Senator Pearce has explained how necessary it is in the interests of our naval cadets and economy that a good deal of their training should be done overseas, where organizations exist which it would be too costly to set up in Australia, but I should like to know from the Government whether it is made plain to these lads before they enter upon this course of training that there is considerable doubt whether at the end of their training, they will be transferred to the Royal Australian Navy; otherwise they are only fooling away the best part of their lives.

Senator DALY:
South AustraliaAssistant Minister · ALP

– The honorable senator referred to this matter yesterday, and the Hansard proof of his remarks has been forwarded to the Defence Department. When the Senate resumes after the adjournment, I hope to be in a position to give him the fullest information on the point.

Senator COOPER:
Queensland

– While these Estimates provide for an expenditure of £1,473,937 on naval forces and £1,050,935 for military forces, or a total of £2,524,872, only £339,770is to be made available for the Royal Australian Air Force and £131,060 for the Civil Aviation Branch, out of which £105,000 is to be devoted to the development of aviation, subsidies to aviation companies and grants to aero clubs. It is a matter for regret that such a progressive branch of defence as the Air Force has been cut down to an expenditure which is less than one-fifth of the total amount to be devoted to the military and naval sections of defence. In my opinion, the Government should allot a greater proportion to the aviation branch of defence.

Senator Daly:

– I shall bring the honorable senator’s remarks under the notice of the Minister for Defence, but Senator Cooper will understand that these estimates have been carefully prepared after consultation with all arms of the forces.

Senator HERBERT HAYS:
Tasmania

– Many years ago the Naval Department entered into a tentative contract with the Tasmanian Government for the supply of 10,000 tons of shale oil each year, provided the State Government undertook to extract oil from the shale deposits in Tasmania. In nearly every State, efforts are being made to discover flow oil. There are also many companies which are endeavouring to extract oil from shale, but they have been unable to make arrangements with the Naval Department for the purchase of their product, even at the price which is being paid by the navy for overseas supplies. In order that every encouragement might be given to private enterprise to develop the great oil-bearing shale deposits of Australia, I think that the Government should be prepared to pay for local shale oil a price which is even in excess of that which is being paid for overseas supplies, so long as the local oil is up to departmental specifications. Some of the companies a short time ago found themselves in possession of supplies of oil which they could not dispose of, and they made advances to the Naval Department for copies of the departmental specifications, but could get no satisfaction. I ask the Government to go out of its way to encourage these people in carrying on what is really now, and certainly will be eventually, a work of great national importance.

Senator DALY:
Assistant Minister · South Australia · ALP

– Any encouragement that I can give to the shale oil industry of Australia will be readily given. It is news to me to learn that any department under the present Government has not given the maximum amount of encouragement to an Australian pro duct but I recognize the difficulty of not being guaranteed a continuity of supplies.

Senator Herbert Hays:

– The Government could supplement its imports by purchasing the quantity of oil locally; produced.

Senator DALY:

– I can assure the honorable senator, on behalf of the Government, that it will give every encouragement to the use of Australian oil if it should be found suitable for the requirements of defence.

Senator SAMPSON:
Tasmania

– This year the Government is providing £48,595 for camps of training, &c. It is £17,206 less than was spent last year. Of course, we must cut our coat according to our cloth, but this cut of £17,206 in the vote devoted to camps of training is the greatest piece of folly that I have come across since I have had anything to do with the Defence Department. It is a penny-wise-pound-foolish policy, and I regret very much that the Minister has approved of it. The camps of continuous training are a vital part of the system. I realize that the Government must save money where it can; but I urge it to save it anywhere else than by, cutting out these camps. I did not see eye to eye with the previous Government on many matters, but I give the Minister of the day credit for refusing to interfere with the vote for camps of continuous training. I regret that, in order to make a saving of only £17,206, these camps are to be cut down and bivouacs substituted.

Senator DALY:
South AustraliaAssistant Minister · ALP

– I assure Senator Sampson, whose remarks on defence are always interesting, that if any mistakes have been made by the Government in connexion with defence expenditure, it has endeavoured not to interfere more than necessary with the essential requirements of the department. Now that these Estimates, setting out fully the Government’s proposals with respect to the Defence Department, are before us, I suggest that those who feel disposed to criticize the Government’s defence policy should go through them; and that if they can see other directions in which expenditure can be reduced, they should inform the Minister for Defence (Mr. Chifley) accordingly with a view to increasing the amount to be made available for these camps of continuous training. I feel sure that if those who are more intimately acquainted with the defence organization will give the Minister the benefit of their knowledge, he will be pleased to give the fullest consideration to their representations.

Senator SAMPSON:
Tasmania

– I was not questioning the Government’s sincerity of purpose in this Clatter.

Senator Daly:

– I have not suggested that.

Senator SAMPSON:

– I thought the Minister did. I look at these training camps from the point of view of a citizen force officer, who knows what their cutting down will mean. I regard these camps as absolutely ‘ essential to the efficiency of our defence force. I should be glad to have a chat with the Minister on the subject.

Senator THOMPSON:
Queensland

.- Under the heading “Militia Training” provision is made for five divisional commanders, 20 cavalry and infantry brigade commanders, and five divisional artillery commanders. In the big re-organization which took place after the war, the allowance granted to officers of high rank was increased beyond that which was paid in pre-war days. If that higher allowance is still being paid, we might with propriety revert to the prewar rates. For some years I had the honour to be a brigade commander of light horse in Queensland. In my charge were five regiments of light horse, as widely separated as Innisfail, in the north and Lismore in the south. I received pay according to my rank for the yearly period of training, sixteen days, and in addition, a travelling allowance when I visited the regiments, which I did each year. I was satisfied to carry out my duties for the pay to which my rank entitled me, for sixteen days a year, together with travelling allowances. In view of our serious financial position, and also of the fewer troops in training, it appears to me that we might well go back to the pre-war system.

Senator DALY:
Assistant Minister · South Australia · ALP

– The maximum amount payable to officers is £250 per annum, which is paid to a divisional commander. A mixed brigade comman der receives £90 a year and the allowances of other officers are as low as £36 a year.

Senator Thompson:

– By reverting to the pre-war system, that amount would be reduced tremendously.

Senator DALY:

– I shall bring the honorable senator’s suggestion under the notice of the Minister for Defence. _

Senator Sir GEORGE PEARCE (Western Australia) [11.50]. - The statement which appears on page 185 indicates that in the Department of Trade and Customs there is to be a decrease of expenditure amounting to £151,273, as compared with the vote for 1930-31, and that, compared with the actual expenditure of last year, the saving will be £115,306. But if honorable senators turn to page 248, they will see a sum of £212,222 for the marine branch of the department of transport, and a footnote which states that in 1930-31 that branch was under the Department of Trade and Customs. If we add that £212,222 to the £498,000 estimated as the cost of the Trade and Customs Department for this year, we arrive at a total of £710,222.

Senator Barnes:

– The Department of Transport shows an estimated saving of £62,837 this year, as compared with the vote for last year.

Senator Sir GEORGE PEARCE.The marine branch shows an estimated saving of £24,881 on the expenditure for last year. Last year’s expenditure in the Trade and Customs Department was £613,306, so that it would appear that, instead of a decrease, there is to be an increase of nearly £97,000 in the expenditure of that department. In that case, my remarks this morning with regard to the number of officers in the department have greater force.

Senator McLachlan:

– I think that the figures balance themselves; they are taken from one department and added to another.

Senator Daly:

– The Estimates show an estimated saving of £115,306 in the Trade and Customs Department, and- £24,881 in the marine branch, now under the Department of Transport, a total saving, of £140,187.

Senator Sir GEORGE PEARCE:

– I cannot 1 understand that that is so. Generally, when an item is transferred from one department to another, the figures for last year are carried forward for the purpose of comparison. That has not been done this year in the case of the Department of Trade and Customs. As I have said, it appears that, instead of a saving, the expenditure of the department is to be increased.

Senator DALY:
Assistant Minister · South Australia · ALP

– If the right honorable gentleman will look at the items which go to make up last year’s vote of £649,273, he will see that there is no mention of the marine branch at all. In order to get a true comparison the amount provided for that branch there would have to be added to the £649,273. The real saving is that shown for the Department of Trade and Customs, plus the £24,881 shown opposite the marine branch, now under the Department of Transport.

Senator Sir George Pearce:

– The position is not clear.

Senator DALY:

– It is clear that the marine branch is not included at all in the items set out on page 185. It is also clear that, in respect of every item on that page, there is a reduction as compared with the actual expenditure last year. The same is true of the Department of Transport.

SenatorMcLACHLAN (South Australia) [11.58]. - It would appear that, although the personnel of the Trade and Customs Department will be 30 less than last year, if we add the personnel of the marine branch, the aggregate number of officers is greater than in 1927-28. There may be a good reason for the increase, but it seems an extraordinary position, in view of the enormous decrease of customs revenue. I do not know whether there has been an increase in the personnel of the marine branch, but it would appear that the aggregate number of officers is greater than it was last year.

Senator DALY:
Assistant Minister · South Australia · ALP

– The classification remains ; but 83 fewer officers will be employed in that department. It is indicated at the end of each subdivision that certain positions will not be filled during the present financial year. The Government is asking for an appropriation to enable it to employ 83 fewer officers in this department than were employed last year.

Senator SAMPSON:
Tasmania

– Under the Department of Works £350 is provided to meet the cost of telephones at Government House, Canberra, as against £250 last year. Will the Minister explain why this costhas increased? Provision is also made for the expenditure of £50 on flags, although only £5 of the £90 voted last financial year was expended.

Senator Sir GEORGE PEARCE (Western Australia) [12.31]. - Under the Department of Works provision is made for the appropriation of £5,277 to be paid to the Government of Victoria for the lease of the building in Melbourne previously occupied by the GovernorGeneral. As no appropriation was made last year, and as the building which has been handed back to the State Government of Victoria is now being used as a high school, I should like to know why this amount is being appropriated.

Senator DOOLEY:
Assistant Minister · New South Wales · ALP

– The additional cost of telephones under the Department of Works - GovernorGeneral’s Establishment - is due to the fact that the Governor-General is now permanently resident in Canberra, and, consequently, the telephones are used more extensively than previously. His Excellency is now permanently residing in Canberra, and this has resulted in a considerable saving in other respects. The establishments previously conducted at Sydney and Melbourne have not now to be maintained by the Commonwealth. The proposed vote of £9,377 for the present financial year is to cover the cost of the Governor-General’s establishment at Canberra. An amount of £5,277 is payable to the State Government of Victoria as compensation for the surrender of the unexpired portion of the lease of the Melbourne Government House property. This payment will be continued for seven years in accordance with the agreement entered into with the State Government of Victoria.

Senator FOLL:
Queensland

.- Reference has been made to the expenditure incurred in the marine branch; but I trust that no unnecessary reduction will be made in the cost of maintaining our existing lighthouse services, particularly on the north-west coast of Western

Australia and the north coast of Queensland. An efficient lighthouse service must be maintained- in the interests of navigation.

Senator Sir GEORGE PEARCE (Western Australia) [12.7]. - In miscellaneous services under the control of the Prime Minister’s Department provision is made for the expenditure of £42,000 towards the maintenance of Cockatoo Island Dockyard on a nucleus basis, and £10,000 for repairs to plant and buildings at the dockyard. When the late Government went out of office it had received an advantageous offer from a private firm to take over the dockyard, and that offer would have been accepted had the Government remained in office. Had it been accepted the Government would have received an annual rental of £10,000 and a share in all profits exceeding 6 per cent. Although I know that the present is not an opportune time to consider leasing tho dockyard to a private company, the Government should carefully consider the benefits to be derived from the adoption of such a proposal. Provision is also made in the same division for an appropriation of £2,000 in connexion with a world conference on a reduction and limitation of armaments. As our defence system has been so ruthlessly reduced, and we are practically without armaments, it would appear unnecessary to send a representative to that conference. As we are practically defenceless, we should invite other nations, particularly Russia, to adopt ‘a similar policy. The other nations know as well as we do, and perhaps attach more significance to it, that we are practically defenceless. This is an instance in which expenditure could be saved.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– The appropriation in connexion with tho Cockatoo Island Dockyard is to maintain in a proper condition valuable plant and material owned by the Government, and to keep the dockyard in a state of efficiency. Provision has been made for the expenditure of £2,000 in connexion with the world conference on the reduction and limitation of armaments in case it may be found necessary to send an Australian representative to that conference.

Senator SAMPSON:
Tasmania

– Under miscellaneous services provision is made for the expenditure of £1,000 on an international map of the world, and for an appropriation of £500 to cover the cost of passes over the transcontinental railway. Will the Assistant Minister supply information with respeot to those two items?

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– At a meeting of the International Map Committee held in London in November, 1909, at which Australia was represented by Mr. Cecil Darley, M.I.C.E., it was decided to publish an international map of the world. The details of the method of construction were discussed and certain principles were agreed upon, and the whole proceeding embodied in a report published in 1910. In 1914, the Commonwealth was informed that’ a permanent bureau in connexion with this map had been established at the Ordnance Survey Office, Southampton, England, and was asked if it desired to take part in the arrangement. Owing to the outbreak of war in 1914, the matter remained in abeyance until the 1st May, 1924, when Cabinet approved of the participation by Australia. The work is of world-wide importance, the map showing all railways, roads, towns, harbours, forests, watercourses, mountains, &c. Practically all the countries of the world are contributing towards the production of the map. Steady progress is being made with the preparation of the Australian section, and the sum of £1,000 is desired to enable the work to bo continued.

The sum of £500 is being appropriated for passes over the transcontinental railway, which, in certain cases, are granted to distinguished visitors. This amount ia appropriated to recoup the railways commissioners.

Senator FOLL:
Queensland

.- I am given to understand that a large number of war service homes are unoccupied, principally because those who have been purchasing them have been unable to keep up their payments, but also because the supply has exceeded the demand. What action is the department taking in connexion with their disposal? Is an endeavour being made to sell them, whether to returned men or others, so that the Government may be recouped the cost? Many returned soldiers are sleeping in camps in the capital cities, and others with their families are living in hessian huts and tents. It would be only fair if they were allowed to occupy the empty houses rent free. The department would reap an advantage, because they would be looked after pending a sale.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– There is a total of over 30,000 war service homes, and a certain proportion are always becoming vacant. Immediately a home reverts to the commission, action is taken to sell the property, and failing a satisfactory sale being effected, the home is leased. It would be most undesirable to allow them to be occupied rent free, principally because of the difficulty that would be experienced in inducing the nonpaying occupant to vacate the premises in the event of a sale. There is also the further consideration that tenants who receive something for nothing do not, as a rule, exercise due care.

Senator SAMPSON:
Tasmania

– I should like some information from the Minister regarding the provision of £13,738 set opposite the item “ Graves of soldiers - Contribution to Graves Commission for Commonwealth’s share of cost of care and maintenance “. Last year the vote was £94,950, and was fully expended. What is the reason for the reduced amount this year?

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– According to the original statistics, the Commonwealth’s contribution with respect to this item was £94,950 annually for six and a half years, from the 1st April, 1925, to the 30th September, 1931. On those figures the balance remaining to be paid during 1931-32 was £23,738. The High Commissioners’ Office, however, recently advised that the question of basing the percentages of the various contributing’ governments on later information than that upon which the original estimates were made in January, 1919, had been the subject of correspondence with the Imperial War Graves Commission. That body has not yet been able to supply the new statistics, but has advised that the relief to Australia will be approximately £10,000.

Thus the net provision rendered necessary to adjust Australia’s liabilities financially in 1931-32 will be £13,738, and that amount has been provided onthese Estimates.

Senator McLACHLAN:
SOUTH AUSTRALIA · NAT

.- The sum of £51,800 is provided for loan management expenses in connexion with loans for war purposes, including payments to the Commonwealth Bank. Will the Minister supply information in regard to the nature of the loan operations that are likely to cause that expenditure?

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– All expenses in connexion with the management of war loans are charged to this item. The payment to the Commonwealth Bank represents the actual cost of performing work in relation to those loans, including registration, plus 2 per cent.

Senator THOMPSON:
Queensland

– I again urge upon the Government the desirability of extending the period of repayment of the purchase price of war service homes in Queensland from 25 to 40 years. It has been argued that, inasmuch as these buildings in Queensland are constructed of wood, it is proper that the period of repayment shouldbe spread over a shorter term than in New South Wales and other States, where the buildings are constructed of brick. Every week that passes improves the value of the security, by reason of the payments that are made. A building that is well constructed of wood, as these are, has a life of over 60 years; therefore, there is a wide margin of safety for the department. At the present time, wages having been reduced and rationing being in vogue, it is very difficult for men to meet the payments that they met with ease a little while ago. A case was brought under my notice inRockhampton of a very estimable returned soldier who, prior to these bad times, when he was in receipt of quite a good salary, had no difficulty whatever in meeting his payments; but when the days of rationing arrived, and his wages were reduced very materially, he found that it was impracticable to do so. It has been suggested that if, in his and like oases, the payments were spread over 40 years instead of 25 years, a great deal of relief would be afforded. This request has been made by returned soldier organizations in Brisbane and other places, but so far without success. In the present particularly strenuous times, it is a request that the Government could very well grant. I invite it to give sympathetic consideration to the matter.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

.- This matter is receiving the earnest consideration of the Government. A measure of relief will also be afforded by the reduction of the rate of interest charged. It is somewhat difficult to imagine that the life of a weatherboard house is as great as 60 years, particularly in Queensland, where the white ants are so bad.

Senator Thompson:

– My own house is 70 years old.

Senator LYNCH:
Western Australia

.- The item “Exchange on remittances to London, £1,412,000”, is rather large. Is the Defence Department being debited with this huge sum? If it is the practice to debit different departments with a proportion of the amount represented by exchange there is very little justification for the claim of the Government that its exchange commitments aggregate £10,000,000.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– The Treasury is responsible f or all payments that are made tinder the heading of “exchange”. This expenditure will be incurred on account of payments made for war services or debts arising out of the war.

Senator McLACHLAN:
South, Australia

– An amount of thissize can scarcely be attributed to our war indebtedness.

SenatorO’Halloran. - If there were no war debt there would be no payment on account of exchange.

Senator McLACHLAN:

– What war debt has to be paid in London?

Senator Sir George Pearce:

– £90,000,000.

Senator McLACHLAN:

– That payment is held up. The exchange that would be added to the interest payment for one year on a debt of £90,000,000 would not represent£1,412,000.

Senator BARNES:
VicePresidentof the Executive Council · Victoria · ALP

.- The Government is required it pay annually off the war debt about £5,000,000. This is the amount of exchangethat will be incurred in connexion with that payment.

Senator Sir GEORGE PEARCE (Western Australia) [12.29].- There is provision for an expenditure of £36,000 in connexion, with the agreement with Amalgamated Wireless Limited, representing the Commonwealth’s contribution towards the upkeep of coastal and island radio stations. Last year, this expenditure amounted to £34,920. There is also provision for an expenditure of £42,600 on the maintenance of broadcasting stations and studios in connexion with the national broadcasting service, the expenditure upon which last year was only £36,520. What is the reason for those increases ?

Senator FOLL:
Queensland

.- I direct attention to thesum of £130,000, which is paid annually as a subsidy to the Orient Line of Steamers. The footnote to this vote says that the company has voluntarily undertaken to waive £20,000 of this subsidy for the present year; yet the vote hasnot been reduced by that amount. It is merely shown as a footnote. I trust that this £20,000 will not be spent in some other direction. I do not know what is the term of the contract with the Orient Company, but Iquestion very much if it is necessary for Australia to subsidize vessels for the carriageof our overseas mails. There are at least five or six lines of steamers travelling regularly to and from Australia, and it seems to me that a better proposal would be to arrange for the carriage of our mails on the poundage basis. We could then select vessels that were travelling by the most direct route, and were likely to give thebest service.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– I am informed that advice with respect to the rebateof £20,000 inthe subsidy paid to theOrient Line was received too late to be included in the Estimates, but I can assure the honorable senator that it is not the intention of the Government toexpend it in anyother direction. As tothe wisdomor otherwise of continuing thesubsidy, that isreceiving the attention of the Government.

Senator Pearce made an inquiry with regard to Amalgamated Wireless (Australasia) Limited. I am informed that theagreement with Amalgamated Wireless (Australasia)Limited provides that a certain proportion of therevenue re- ceivedfrom the companyshall becredited to this vote for themaintenance of coastal and island radiostations, but , as this is a decreasingamount,the subsidyis correspondinglygreater. The increased expenditure for broadcasting isdueto thefact thatthere is a larger number ofstationsnow inoperation than there were atthisstagelastyear.

SenatorSAMPSON (Tasmania) [12.35]. - I notice in the proposedvote forthe Postmaster-General the item “£530,000 exchange on remittances to London”. Is thattheexchange paid on money transmitted by money orders, or exchangeon theexpenditure incurred by thedepartment forequipment and other appliances?

Senator Dooley:

– Itrepresentstheexchange rateon loans raised on behalfof the departmentfor postal works.

Senator HERBERT HAYS:
TASMANIA · NAT; UAP from 1931; LP from 1944

– I shouldlike a statement from the Minister with reference to the Go- vernment’s intention concerning theproposed telephonic service to Tasmania. The people of thatState are entitled to enjoy thesame facilities as are given to citizens in the mainland States.I am aware that the financial stringency will be the excuse for the non-fulfillment of its promise, but I shall be glad if the Minister can intimate when this work will be put in hand.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– The matter mentionedby the honorablesenatorwas the subject of an inquiry by the Public Works Committeesometimeago.Alter consideringthe relative merits of wireless telephonyanda submarinecableservice, the committee recommended the latter, and the proposal is now receivingthe earnest Attention oftheGovernment. It will be proceeded with as soon as possible.

Senator LYNCH:
WESTERN AUSTRALIA · ALP; NAT from 1917

– I noticethat expenditureto the amountofover £80,000 iscontem- plated this year in connexionwith the Agreement with Amalgamated Wireless (Australasia) Limited andthe national broadcasting service. In view of recent development in wirelesstelephony, Isuggest thatthe department keep in touch withscientific investigations that are being made in othercountries, notably SouthAfrica,with aviewto avoiding unnecessaryexpenditure upon the extension of the existing telephonic services which it maybeadvisable to scrap inthe courseof a few years.

SenatorPAYNE . (Tasmania)[12.40]. -Under the beading “Miscellaneous”, Northern Territory,there appears the item, “ Encouragement of primaryproduction,£3,000”. Last year the vote was £2,000, and the actual expenditure£497. Can the Minister explain thereasonfor this increased provision? Expenditureamountingto £4,750 is also, contemplated on the coastal shipping services, and £15,000for “Destitutes - maintenance, passages, and burials”.I should like.some information from theMinister concerning these items.

SenatorDOOLEY (NewSouthWales -Assistant Minister.)[12.42] . -The assistance to the primaryproducers in North Australia wasformerly met from the vote of the North Australia Commission, the expenditurein1930-31 being £4,132. Expenditure in Central Australia forthat year wasapproximately £500. The provision of £3,000for this yearrepresentsaconsiderablereduction on thatfor 1930-31. Coastalshipping services were formerly underthecontrol oftheNorthAustraliaCommission. Of thetwoservices nowoperating, oneisconducted by John BurkeLimited, towhom a subsidy of £2,350ispaidfor a fourweeklyservicefrom ApriltoDecember from the Albert Bar, Queensland, tothe RoperRiver,Leichardt Bar, Borroloola, and the McArthur River. Thisservice connects with eachtripof the Kallanlina from Brisbane.The other service is conducted by Hayles Magnetic Island Limited. This contract expires onthe 31st Decembernext. It provides for six trips from Darwin to the Victoria River, via the Daly River,during the period April to December., and the subsidy paid is £2,400 per annum. Negotiations are proceeding with boththesecompaniesfor a reductionof 10 percent. in thesubsidy paid underthecontracts. Theother matter mentioned by the honorable senator related to the proposed expenditure of £15,000 for the maintenance, passage and burials of destitutes. Owing to the present depression, severe distress is reported in the Northern Territory, and a large number of people are now drawing government rations. The Ministry has also been obliged to put in hand a considerable amount of relief work. In 1930-31 the expenditure under this head was £1,484, the basis of relief in Darwin being - Single men, one day’s work per week, £1 ; married men, one and a half days’ work per week, £1 10s. In May last 86 men were employed on relief work in Darwin. This number is increasing owing to the arrival, in Darwin, of stowaways on vessels from southern ports. It is estimated that this year the expenditure in North Australia will be £13,000, and in Central Australia, £2,000.

Senator PAYNE:
Tasmania

– I notice provision of £1,000 for the maintenance of the new swimming pool in Canberra. As the pool is open for only three or four months of the year, an expenditure of £20 a week for the whole of the year for maintenance seems to be unduly large.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– The approximate cost of the baths, which were officially opened towards the end of January, was £11,300. Up to the 30th June, the revenue received amounted to £588 while the expenditure totalled £791. A considerable amount of the expenditure, however, was non-recurring and at the close of the year assets in the shape of towels, costumes and chemicals were held to the value of £106. It is expected that in a full season the revenue will meet all charges.

Senator SAMPSON:
Tasmania

– I notice that a sum of £3,180 is provided for the extermination of rabbits and dingoes in the Federal Capital Territory. I was under the impression that all the rabbits in the Territory had been exterminated. If that is so, why is this large sum of money required?

Senator Dooley:

– Rabbits and dingoes have been pretty well exterminated in the vicinity of the city, but men have still to be employed in the outlying parts of the Territory for the destruction of these pests.

Senator PAYNE:
Tasmania

– Last year £5,000 was voted for the New Guinea Administration to provide medical attention for natives and the full amount was expended, but this year I notice that no such provision is being made. I have had the opportunity to see how the money devoted to this object has been spent, and I can assure honorable senators that it has been wisely spent. It therefore seems to me wrong to withhold any further assistance to the New Guinea Administration towards providing medical attention for the natives.

Senator E B JOHNSTON:
Western Australia

– I support the honorable senator’s protest. I suppose that this reduction of expenditure is due to the fact that New Guinea is a long way from the seat of government. Even in these bad times additional money can be provided for expenditure close to Canberra or the big cities of Australia, yet the Government finds it necessary to curtail an expenditure on medical attention for the natives of New Guinea, for which most excellent value has been obtained.

Senator Dooley:

– The Administrator of New Guinea has agreed to the curtailment of the Estimates by the deletion of this item. Apparently he already has sufficient money in hand for the purpose.

Schedule agreed to.

Postponed clauses 2 and 3 agreed to.

Postponed first schedule agreed to.

Preamble and title agreed to.

Bill reported without requests: report adopted.

Bill read a third time.

Sitting suspended from 12.55 to 2.15. p.m.

page 5032

SALES TAX ASSESSMENT BILLS

(Nos. 1 to 9) 1931.

Standing and Sessional Orders suspended.

page 5032

SALES TAX ASSESSMENT BILL (No. 1) 1931

Second Reading

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

.- I move-

That the bill be now read a second time.

This is one of the nine bills which are being introduced for the purpose of (1) giving effect to the exemptions, and other proposed amendments of the law, which were announced by the Treasurer in his budget speech, and also certain additional exemptions which have since been announced; (2) removing the exemption of semolina; (3) validating certain exemptions tentatively allowed; and (4) effecting certain amendments, mostly of a machinery nature, which the experience of the administration has shown to be necessary or desirable. I propose to deal with these matters briefly in the order in which I have stated them :

Exemptions already announced. The following are the chief exemptions, additional to those mentioned in the budget speech, which have since been agreed to by the Government - Scones, bread sandwiches, and buns, foods consisting of 95 per cent. milk or milk powder, hydraulic power, milk arrowroot biscuits, baby rice biscuits, baby rusks, Bibles and scriptural parts, Australian wine, blast furnace slag sold to a local governing body or other public authority responsible for the making or maintenance of roads, or produced by such body or authority and applied to its own use. The latter is merely an addition to the exemption of metal, gravel, and sand sold, &c., for similar purposes. The fact that slag has recently come extensively into competition with bluestone for road-making purposes makes the additional exemption desirable. (2)Removal of exemption of semolina. The reason for this is that semolina is commonly sold under different trade names for use as a breakfast food, and that producers of other commodities such as rolled oats, crushed wheat, &c., are at a disadvantage in competition with the producers of semolina. (3) Validation of certain exemptions tentatively allowed. The items affected are principally imports, the necessity for the exemption of which, as a matter of policy or principle, has already been recognized for customs purposes. It is desirable that the practice under the Sales Tax Assessment Act No. 5 - the tax under which is in reality a duty of customs - should, in such matters, be brought as far as possible into conformity with the practice under the Customs Act. (4) Other amendments for the more effective administration of the law - (a) A provision abolishing the minimum security of £25. This is for the benefit of taxpayers in a small way of business. (b) A provision for the continuity of certificates of registration until the death or bankruptcy of the taxpayers concerned or until the certificates are cancelled by the Commissioner; (c) A provision for the continuity of securities until the second surety notifies his desire to be released, or until both parties are otherwise released by the commissioner; (d) A provision for simpler forms of security, to be prescribed by regulations, and to be exempt from State stamp duty; (e) A provision enabling the commissioner to acquire fresh or additional security; (f) A provision to exempt manufacturers and wholesalers, engaged wholly in nontaxable transactions and operations, from the necessity to furnish securities; (g) A provision that where a registered person sells goods by retail, sales tax shall be payable upon the amount which would be the fair market value of the goods if sold by wholesale, and giving the commissioner power to review and alter such wholesale values shown by taxpayers in their returns; (h) a provision enabling the Commissioner to review and alter the wholesale values returned by manufacturers in respect of goods treated by them as stock for retail sale; (i) a provision that sales tax shall not be payable by manufacturers the volume of whose taxable sales is so small that the average amount of tax calculated thereon would not exceed £3 per annum; (j) a provision requiring returns to be made and tax to be paid, in prescribed cases, by auctioneers who sell taxable goods on behalf of registered persons; (k) a provision enabling adjustments as between vendors and purchasers under agreements for the sale of goods, where there has been an alteration of the rate of tax after the date of the agreements; (l) a provision for the alteration of prices fixed under certain contracts relating to building and other work, where owing to an alteration of the rate of tax since the dates of the contracts, the cost of supplying materials has been varied; (m) a provision that sales tax shall be specified in invoices; (n) a provision extending the power to make regulations to prevent double taxation to meet the case of double taxation under one and the same act, and to meet the case of unregistered persons who sell to registered persons goods which the unregistered persons had bought at a tax-inclusive price; (o) a provision that where a registered person has quoted his certificate when purchasing goods prior to the 11th July, 1931, he shall be entitled to a rebate, when those goods are sold by him by retail, to the extent of the additional tax due to the increase in the rate of tax from 2^ to 6 per cent.; (p) minor provisions to remedy certain oversights, and to rectify certain grammatical and phraseological errors in the principal acts. The bill is of a non-party and noncontentious nature. It is concerned chiefly with the smooth and efficient running of the machinery associated with the sales tax. I commend it to the generous consideration of honorable senators.

Senator Sir GEORGE PEARCE (Western Australia) [2.25]. - I have a few brief remarks to make concerning this bill, mostly with respect to representations which have been made to me, some of which have already been placed before the Government, First, I wish to read an extract from a letter which I have received from the Taxpayers Association of New South Wales. The letter, which is dated the 29th July, reads -

I have been instructed by my council to forward you copies of the correspondence which this association has had with the Prime Minister relative to the above important subject from which you will see that our contention is that amounts paid to the Federal Government as sales tax is an allowable deduction for income tax purposes, which, however, is not in accordance with the views of the Taxation Commissioner.

A letter dated the 4th June, which was sent by the association to the Prime Minister, contained the. following statement : -

The question as to whether amounts paid in ales tax will be allowed as a deduction in arriving _at the taxable income for purposes of federal income tax will shortly become a very vital matter to taxpayers affected, in view of the fact that their “ income “ for the year ended 30th June, 1931, will form the basis of the tax for the coming financial year.

The communication then sets out the reasons why, in the opinion of the association, an amendment of either the income tax or the sales tax legislation is neces- sary. I shall not quote the remainder of the letter, seeing that it is already in the possession of the Government; but I desire to ro er to a ruling given by the Commissioner of Taxation which bears on the subject. The Commissioner writes -

I desire to inform you that, although under the Income Tax Assessment Act, sales tax it not a permissible deduction in an income tax assessment, the majority of persons who are liable to pay sales tax will, however, not be required to pay income tax on the amount of sales tax paid by them, in vIeW of the position as set out hereunder.

I suggest that that matter might be reviewed, so that all persons liable to pay sales tax shall be placed- in the same position. I admit that the adjustment is one which should be dealt with in income tax legislation, rather than in this bill, but this measure bears on the subject. I come now to a matter which more directly concerns this bill. It has been represented to me that -

At present section 41 only deals with objections to the “Sale value of goods “, and that no provision is made whereby objection can be lodged in respect to the taxability of (1) Certain goods, and (2) Certain transactions. It is suggested that provision be made to give taxpayers the right to object, by lodging a written objection within 21 days after the end of the month in which the transaction occurs, when the taxpayer is of the opinion that certain goods or transactions are not taxable. The objection having been lodged the ordinary procedure as to board of review and appeals generally should prevail. The machinery in the Income Tax Assessment Act by which a taxpayer oan object to his assessment of income tax, should also apply to the sales tax.

The provisions dealing with the quotation of certificates refers to the certificates of those persons who are registered under the Sales Tax Acts. Certain manufacturers are registered and given a corticate. The liability of certain persons to pay taxation is involved in this matter. It is suggested that, instead of the present ruling of the department as to the quotation of certificates by manufacturers, the ruling should be -

  1. Registered manufacturers to be listed ;
  2. All sales made - whether materials or overhead charges- to registered manufacturers to be free of tax to the vendor ;
  3. Purchaser - being a registered manufacturer- to pay sales tax on all goods of an overhead nature;
  4. Vendor to pay sales tax on all sales made to unregistered persons.

The ruling would throw on the proper person the responsibility of quoting, or not quoting, his certificate.

At present the provision as to quotation of certificates is not by any means being carried out.

When a trader is making his sales tax return, he is legally liable to pay sales tax on all sales for which he cannot produce a quoted certificate, either individually or periodically, whether a sales tax certificate should have been quoted or not. The result is that when a trader is making out his return he generally dissects his sales, not between those for which he has certificates and those for which he has not certificates, but between those for which he should have certificates and those for which he should not have them.

I understand that that point is creating some friction among the trading community, and I commend it to the Government for consideration.

Senator THOMPSON:
Queensland

– Like the Leader of the Opposition (Senator Pearce), I have several requests from public bodies - in Central Queensland - which I wish to bring under the notice of the Government. I have discussed them with Mr. Gibson, and I shall be satisfied ifI can obtain some authoritative reply from the Minister. The first is a request from the Employers’ Association of Central Queensland which asks for the abolition of the provision exempting from the act manufacturers whose total sales do not exceed £1,000 per annum.I venture to saythatthere would be a great increase in revenue if there were a drag net provision to bring all small traders under the act. I am, of course, unable to say what the cost of collection of the tax, which may ‘be the great objection, would be. At any rate, the Minister may be able to inform me onthatpoint. The next request is fromthe same association, which asks that the time for monthly payments by whole salers and manufacturers be extended to the end of each month. I understand that, originally, the time provided was seven days after the end of the previous month which was increased to fourteen days, and later, after pressure had been brought upon the department by trading organizations, to 21 days. In practice, it has been found that it would be far better if the time were extended to the end of the month.From long experience, I know that business people make all their principal payments at the end of the month, and, incidentally, receipts come in at the same time.

Senator GREENE:
NEW SOUTH WALES · NAT

– Sometimes.

Senator THOMPSON:

– Yes ; but not as regularly as some may desire. It would be a great convenience if an extension to the end of the month were granted. The other two requests are from the Rockhampton Chamber of Commerce, members of which complain that, under the sales tax, block cake only is taxed in New South Wales, while in Queensland block cake and small cakes are also taxed. It seems unfair that the traders in Rockhampton are not placed on the same basis as those in New South Wales.

Senator Foll:

– That must be due to different, interpretations by departmental officers.

Senator THOMPSON:

– Doubtless it is a matter of interpretation; there should not be any discrimination as between the States.

Senator Daly:

– I understand that proceedings are to be taken in connexion with certain evasions.

Senator THOMPSON:

– In practice, block cake only is subject to the sales tax in New South Wales, whereas in Rockhampton block cake and small cakes are taxed. A further request of the Rockhampton Chamber of Commerce is that miningandagricultural machinery should be exempt. That request I cordially endorse. I realize, however, that it is a matter whichaffects the whole continent. At present, there is a revival of the mining industry in Central Queensland in connexion with which additional plant is required. The cotton-growing industry in which agricultural machinery isemployed is also being developed, and an exemption of these two classes of machinery would benefit those two industries. Although difficulties may arise in connexion withthe exemptions on mining and agricultural machinery, I support the request of the Rockhampton Chamber of Commerce. I shall be obliged if the Minister (Senator Barnes) will give a definite reply to the points I have raised.

Senator FOLL:
Queensland

.- Under the existing act, it is unnecessary for traders to show the sales tax on their invoices as a separate item. The traders have the option of showing the sales tax or of refraining from disclosing the amount. Under this amending measure it is mandatory upon traders to show the sales tax as a separate item. It has been represented to me that if this proposal is adopted it will necessitate a good deal of alteration in the accountancy systems of numerous companies, and I should like an assurance from the Minister that due notice will be given before this provision becomes operative. Are we to understand that this provision will come into operation on the date on which the act is proclaimed, or will it be on a date which may be decided upon when the measure is in committee? I think it only fair that the trading community should be notified as to the date, otherwise it will cause a great deal of inconvenience if it is made retrospective.

Senator GREENE:
NEW SOUTH WALES · NAT

– That is impracticable.

Senator FOLL:

– Yes.

Senator GREENE:
NEW SOUTH WALES · NAT

– I understand that it is to apply to all invoices issued after the 31st August.

Senator Daly:

– In practice, it will work out that way.

SenatorE. B. JOHNSTON (Western Australia) [2.40]. - An increase in the sales tax has been adopted in consequence of a recommendation by the Commonwealth and State Under-Treasurers, and the financial experts and a number of economists consulted by the Government. In a minority report, two of the UnderTreasurers strongly objected to an increase in the sales tax on the ground that it would unduly increase the cost of living, and the cost of production in Australia.

Senator Daly:

– But they accepted the plan as a whole.

Senator E B JOHNSTON:

– The plan provided for certain exemptions. These gentlemen unanimously recommended that if the sales tax was increased, certain additional exemptions should be included. They said -

The administrative difficulties of a sales tax are great, but we are committed to them for the present sales tax and they will not be greater for a higher tax. There is also a primage duty operating, and there is no technical difficulty in increasing it. The sales tax might be raised to6 per cent. and the primage duty to 10 per cent., with care that in both cases basic foods are exempt, and possibly also the more important goods which are direct instruments of production, such as machinery, fertilizers, cornsacks,&c.

They unanimously recommended the exemption of mining and agricultural machinery. In a country such as Australia, depending upon primary production, the revival of the mining industry is essential, but development generally must be retarded when agricultural and mining machinery have to bear an additional impost.

Senator Daly:

– Why not wait until the measure is in committee ?

Senator E B JOHNSTON:

– If the Minister will agree to the exemption of agricultural and mining machinery, I shall have nothing more to say, and a good deal of time will be saved in moving amendments. It is most important to those engaged in wheatgrowing and in mining operations that machinery of this character should be exempt. The financial advisers of the Commonwealth and State Governments and leading economists recommended that the machinery used in production should be exempt. Unless the Government is prepared to give effect to that recommendation, I propose to vote against the bill. I trust that the Government will approve of this recommendation, because the cost of living and the cost of production cannot possibly be reduced if an unnecessarily heavy burden is placed upon those engaged in production.

Senator J B HAYES:
Tasmania

– I have previously asked the Government to include agricultural lime in the list of exemptions, and I understand that the matter has been considered. At present fertilizers and materials used in the manufacture of fertilizers are exempt, and as agricultural lime is a fertilizer, it should also be exempt. In certain classes of soil where there is a high rainfall, and a good deal of the soil consists of decayed vegetation, which naturally becomes sour, agricultural lime is used to the extent of from half a ton to two tons an acre. Agricultural experts have advocated an increase of agricultural lime. Even if it is not included in the exemptions when the measure is in committee, I understand that it could be included under regulations. I trust that the Minister will give the committee an assurance that agricultural lime will be placed on the exempt list.

Senator HERBERT HAYS:
Tasmania

– Materials used in the manufacture of sprays arc exempt from primage duty, and I should like to know if the Minister will also exempt such materials from the provisions of the sales tax. Bluestone, which is manufactured in Australia, is very extensively used in the preparation of spraying material, and also for wheat pickling. I intend to move for the exemption of every class of material soused. That is one way in which the farmer and the orchardist may be assisted.

Senator McLACHLAN:
South Australia

– The point raised by the right honorable the Leader of the Opposition (Senator Pearce) in relation to the limited nature of the bill, is deserving of the closest attention of the Government. I have had an opportunity to study the act, and it appears to me that the point that has been raised by the Taxpayers Association of New South Wales is well taken. Doubtless the Government will consider the matter at its leisure.

There are one or two points upon which I should like to be supplied with information by the Minister. The first is, as to whether consideration has been given to the very powerful representations of a number of learned societies in this country in relation to the exemption of all literature, including books, from the operation of the sales tax. Those representations are backed by a considerable body of people, who are doing excellent work in improving the mentality of the nation. I cannot find any provision for the exemption of books.

I understand that action has been taken in connexion with the incidence of the tax, and its unjust operation, against the tailoring community throughout Australia. I observe, also, that relief is being afforded in connexion with road material sold to municipalities.

An important question is that which relates to the tax that is levied on plant and machinery which is the subject of sale in reality, but not in the true sense of the term, nor in the sense contemplated by this legislation. If two companies are forced by the depression to amalgamate their interests, they are obliged to pay sales tax upon the plant which is used in their business. The case has been placed before me in the following way -

Shortly put, the argument in favour of such a clause is, that the Sales Tax Acts are only meant to tax transactions made in the ordinary course of trade of goods which ultimately come into consumption. Plant and machinery does not come into consumption and, prima facie, should not be taxed.

I should like to know whether the Government proposes to give that matter further consideration, or is prepared to accept an amendment to deal with the point.

There is another class to which I understand the Government contemplated giving relief. I do not adopt the view that has been stated by Senator E. B. Johnston, that this legislation is not a part of the plan. I consider that it is a part of the Government’s policy in relation to the plan, and that, therefore, we have to swallow the medicine whether we like it or not. But there is one question that vitally affects primary industries, particularly dairy farming, which is making considerable headway with its export trade. I understand that the Government contemplated the removal of the sales tax from cream separators and utensils of that character. They have already been exempted from primage duty, and I fail to see why they should not be exempted also from this tax.

I intend to move an amendment that will make quite clear what has been clarified to a certain extent by amendments that were made in another place, in connexion with the giving of relief to wholesale retail houses.

In the dying hours of a session one does not feel in the mind to move amendments that may alter the settled convictions of the Government; but I believe that consideration ought to be given to the exemption of books, agricultural lime, cream separators and similar utensils.

Senator LAWSON:
Victoria

– Presumably, the Senate must accept the Sales Tax Bills as part and parcel of the rehabilitation plan, in spite of the fact that two of the experts who dealt with the matter recommended that there be no increase in the tax. The Government has accepted this tax as a part of the plan, and, although we do not like it, I suppose we have no alternative but to accept it. But I do not know how we shall be able to reconcile the action that we have taken in connexion with the reduction of salaries and other cuts, unless we can do something that will decrease the cost of living. These proposals unquestionably must increase the cost of living, because the tax will ultimately fall upon the consumer. We say to the small bondholders and the moderate salary-earner, “You will not be any worse off; the real value of your wages will not bo reduced “. But if we accompany our reduction propositions with taxation that inevitably must increase the coat of living to the consumer, we shall do a very grave injustice. If we can reduce the cost of living, and thus not affect the real value of the wages or the income of the person who has to purchase goods, no great harm will be done, and we shall have an application of the principle of equality of sacrifice. I frankly ‘ confess that I do not care for this legislation, because it seems to me to run counter to the proposition that the costs of living and of production shall be reduced.

Senator Daly:

– Does not that apply to every form of taxation?

Senator LAWSON:

– I am afraid that it does. But this tax will be added to the cost of commodities that are needed daily, and thus inevitably there must be an increase in the outgoings of the average household. There is a certain section of our community who have small investments, and who live on a moderate income from property. They no longer possess the capacity to obtain an income from personal exertion, and they will be exceedingly hard hit by these proposals. There will be no equality of sacrifice so far as they are concerned. I hope that it will be possible to lighten these impositions at the earliest moment. I sympathize with the Government in that it finds itself compelled to resort to measures of this description. Although very reluctantly, I give my consent to the passage of the bill. The Government has anticipated most of the requests for further exemptions that I intended te prefer, and I thank it for the concessions that have been made; but it might very well accept some of the suggestions that have been put forward by other honorable senators. Practically all primary products are exempt, in pursuance of a definite policy, and according to a fixed principle, the endeavour being to reduce the costs of production. The exemption, of bluestone, agricultural lime, and machinery would not introduce a new principle. Action along those lines would merely represent an extension of the principle of aiding the primary producer instead of adding to his. costs. He has to compete in the world’s markets, and is having a rough spin. We are well aware of the desperate plight in which many find themselves to-day, and we ought not to add to their burdens or their costs.

The principle is recognized that works of art should be exempted. Admittedly they are to be for continuous exhibition and not profit-making; but they are designed to educate and to elevate the taste of the community. It is said that, as a matter of public policy, every encouragement should be afforded to art. Adopting that line of reasoning, we can, with equal justification, SaY to the Government, “What you are doing for art, do also for literature. Do not place this tax on learning, but rather encourage the dissemination of information and of knowledge by the reading of good books. Do nothing that will place those books outside the purchasing capacity of the people “. Already there has been a considerable increase in the price of books, and that affects a large section of the people who are endeavouring to keep themselves up to date by this means.

Senator Barnes:

– Their exemption would mean a difference of £60,000 to the revenue.

Senator LAWSON:

– It is very difficult for honorable senators, who have not access to the estimates of the experts and the statistical information that the department can supply, to speak with authority upon these matters. But if the Government can make these concessions it will do a real service to the community. If it involves too big a loss of revenue, and defeats the object of establishing budgetary equilibrium, we cannot, in loyalty to the plan, press the request unduly. But I urge the Minister tocarry to its logical conclusion the principle which has already been expressed, by making the further exemptions sought by certain honorable senators; and, if possible, by removing the present burden from literature and culture.

Senator PAYNE:
Tasmania

.- I endorse fully all that has been said by Senator Lawson. As the honorable senator remarked, the declared policy of the Commonwealth is to encourage primary production, but if one can judge from the Government’s taxation proposals our primary producers will find it still more difficult to make any headway. An exemption of primary products from the operation of the sales tax is absolutely essential. I also have every sympathy with the departmental officials who have to administer this tax. I can well understand the worrying and harassing time that is ahead of them, but as departmental officials it is their duty to administer all taxation legislation which expresses the will of Parliament. These sales tax proposals bristle with extraordinary difficulties, and as we have not yet received the statutes for 1930, it is impossible to understand the effect of all the proposed amendments to the original acts. But while I have sympathy for those departmental officials who administer these acts, I have still greater sympathy for the mercantile community. Many business men within my circle of acquaintances have informed me that since these sales tax measures were passed they have found it extremely difficult to carry on commercial undertakings with the same degree of satisfaction as formerly. Several have been obliged to engage additional employees to deal with all the difficulties that arise from the operation of higher customs duties, primage duties and sales tax. I understand that it is costing one firm an additional £500 a year to handle all these matters. I am aware of the Government’s need for additional revenue, but I am convinced that a much simpler and more effective means of taxation could have been devised. For example, a turnover tax would have been entirely free of all the worry attendant upon the imposition of these sales tax measures.

Senator GREENE:
NEW SOUTH WALES · NAT

– What does the honorable senator mean by a turnover tax?

Senator PAYNE:

– I mean a tax upon total sales made. I realize, of course, that any form of tax will be passed on to the general public, and for this reason I would prefer a turnover tax, because of its simplicity, and its greater effectiveness as an instrument for the raising of revenue.

Senator Hoare:

– Let us pass the second reading and get on with the business.

Senator PAYNE:

– I am as anxiousas any other honorable senator to expedite Government business, but I strongly resent the introduction of these sales tax proposals in the Senate on the last day of the sitting, and honorable senators being expected to pass them all in one day.

Senator Thompson:

– The general principle has been admitted long ago, so what is the use of raising objections now?

Senator PAYNE:

– I know that the honorable senator is anxious to get to his home. So am I.

Senator Thompson:

– The honorable senator now is merely wasting the time of the Senate.

Senator PAYNE:

– I object to that remark, because my sole purpose is to deal, as intelligently as possible, with the problems that confront us. I resent the attitude of a number of honorable senators during the last day or two whenever I have risen to address the Senate, on important legislation that has been before this chamber. But their comments will not deter me from doing my duty, because I sympathize very deeply with the business people who have to carry on under this obnoxious form of taxation.

Senator Sampson:

– It is a nightmare to them.

Senator PAYNE:

– That is so, and it is the more to be deplored because it is possible to raise the required revenue by other and less complicated forms of taxation. Under this system it is absolutely impossible to pass on to the purchaser of low-priced articles only the amount of the tax imposed, because our lowest current coin is½d., and if the tax is equivalent to an addition of one-eighth of 1d. to the price of a particular article, the retailer, to protect himself, adds½d. to the cost of the article in question.

Senator GREENE:
NEW SOUTH WALES · NAT

– In some cases the additional charge may be1d.

Senator PAYNE:

– That may be so. In this way the consumers are being called upon to pay thousands of pounds more than is represented by the additional taxation imposed.

Senator GREENE:
NEW SOUTH WALES · NAT

– It is the worst possible form of taxation.

Senator PAYNE:

– I believe it is, and I rose for the purpose of expressing my strongest objection to these measures. When the bills are in committee I intend to submit a number of amendments which I hope will be adopted. One is to exempt the products of the blind workers in institutions for the blind from the operation of the tax.

Senator GREENE:
NEW SOUTH WALES · NAT

– I entirely agree with the views expressed by Senator Lawson. I do not approve of the proposed turnover tax mentioned by Senator Payne. In view of the fact that we are being asked to approve of proposals to increase the rate of tax, I think the Government should have provided for the collection of the tax over the counter. In that form it would not have pressed so heavily upon the people.

Senator Daly:

– It would not be constitutional to impose the tax in that form. We had the opinion of the most eminent counsel in Australia on that point.

Senator GREENE:
NEW SOUTH WALES · NAT

– I should be inclined to accept that opinion for what it is worth. It is just as feasible to put the tax upon the retailer as it is to impose it upon the wholesaler. But the point to be considered, at the moment, is that we are increasing the rate of tax and, therefore, adding to the already heavy burdens upon consumers. We must, I suppose, regard these proposals as part of the plan for the restoration of financial stability, and we must pass them; but I feel sure that the Government could have obtained more revenue, and at a less cost to the people, if this tax were imposed in the manner which I have suggested. It is being done in other parts of the world, and it could bo done here. The idea underlying the principle of a sales tax is that every penny obtained under it should go into the public revenue; but experience has shown that a much heavier burden is placed on the consumers than is represented by the actual amount of the tax. I venture to say that, although the new rate of tax will be 6 per cent., the actual additional payments made by consumers will, in some instances, be fully 12 per cent. A tax over the counter could be collected by means of stamps. It would be the simplest form of taxation that could be devised, and it would be the most effective from the point of view of revenue. 1 trust that the Government will consider this phase of the subject, and sec whether it is not possible to alter the form of tax.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– I have a number of explanatory notes which, I believe, deal with nearly all the points that have been raised by honorable senators, and when the bill is in committee I think I shall be able to convince them that this additional taxation is unavoidable if we are to give effect to the plan agreed upon at the recent conference in Melbourne. I fully understand the point of view taken by honorable senators who are pressing the Government to add to the list of exemptions, but I am afraid that, if we accede to their requests, the plan itself will be wrecked. For instance, if books and magazines were placed on the exempt list, the loss to the revenue would be £60,000. I, therefore, hope that honorable senators will not press for further exemptions.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Clause 2-

Section 11 of the principal act is amended.

  1. by adding at the end thereof the fol lowing sub-sections : - “ (12.) This section shall not apply to any person other than a person who is engaged in -
  2. the manufacture or sale of goods upon the sale value of which sales tax is payable by him under this act; or
  3. other transactions, acts or operations in connexion with which sales tax is payable by him.”.
Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– This clause will provide by paragraph a much needed relief to small taxpayers where the tax is less than £25 per annum. Experience has disclosed a number of cases in which the tax payable during the year amounts to a few pounds only. It is considered that the revenue will be adequately protected by a smaller security than is permitted by the present form of the law. With regard to paragraph b the existing form of the law causes certificates of registration to remain in force only until the end of the financial year in which they are issued, or until the date of the issue of a fresh registration certificate. This causes unnecessary work and expense to taxpayers and the department, but owing to lack of experience in the working of the sales tax this result was not adequately foreseen. The amendment in paragraph b will remedy the position, and prevent further inconvenience and expense to the taxpayer and the department. I move -

That the words “ This section “, proposed new sub-section (12),be left out with a view to insert in lieu thereof the words “ The provisions of this section relating to securities.”

As the bill stands, manufacturers and wholesale merchants who deal only in exempt goods, or who otherwise manufacture or sell goods in such circumstances that they are not liable to pay sales tax, are exempted from the obligation to become registered, or to furnish securities. This provision was intended to relieve such persons from unnecessary burdens,but examination of the position since the bill was drafted, indicates that if a manufacturer of exempt goods, or a wholesale merchant selling raw materials tomanufacturers, or goods to other wholesalers, does not become registered, he will have to pay tax on his purchases. This was not intended, and it is, therefore, necessary to ensure that such persons shall become registered. The amendment will achieve that result.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 3-

Section eighteen of the principal act is amended -

by inserting at the end of subsection (1.) the following proviso: - “ Provided that where the goods are sold by retail the sale value of the goods shall be the amount which would be the fair market value of those goods if sold by the registered person by wholesale, but if the commissioner is of opinion that the amount set forth in any return by the registered person as the sale value of any such goods is less than the amount which would be their fair market value if sold by wholesale, the sale value shall be altered by the commissioner to the value which, in his opinion, would be their fair market value if so sold, and the altered value shall be the sale value of the goods for the purposes of this act.”;

by inserting at the end of sub-section (2.) the following proviso: - “ Provided that where the amount set forth in any return by the manufacturer as the sale value of any such goods is less than the amount which, in the opinion of the commissioner, would be the. fair market value of the goods if sold by wholesale, the sale value shall be altered by the commissioner to the value which, in his opinion, would be their fair market value if so sold, and the altered value shall be the sale value of the goods for the purposes of this act “ ; and . . .

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

.- I move-

That paragraphs (a) and (b) be left out with a view to insert in lieu thereof the following: -

  1. by inserting, before the proviso to sub section (1.), the following proviso: - “ Provided that, where the goods are sold by retail, the sale value of the goods for the purposes of this act shall be the amount which would be their fair market value if sold by wholesale, but if the Commissioner is of opinion that the amount set forth as the sale value of any such goods in any return furnished under this act is less than the amount which would be their fair market value if sold by wholesale, the Commissioner may alter the amount set forth in the return to the amount which, in his opinion, would be the fair market value of the goods if sold by wholesale, and the amount as so altered shall be the sale value of the goods for the purposes of this act”;
  2. by inserting in sub-section (1.), after the word “ Provided “, the word “ further “; (ba) by inserting at the end of sub-section (2.), the following proviso: - “ Provided that, where the amount set forth as the sale value of any such goods in any return furnished under this act by the manufacturer is less than the amount which, in the opinion of the Commissioner, would be their fair market value if sold by wholesale, the Commissioner may alter the amount set forth in the return to the amount which, in his opinion, would be the fair market value of the goods if sold by wholesale, and the amount asso altered shall be the sale value of the goods for the purposes of this act.” ; and.

This is merely a drafting re-arrangement of provisions already in the bill. The proviso in paragraph a of the amendment was drafted while the bill was in committee in another place; but, in the hurry of drafting, the fact that there was already a proviso to section 18 (1) was overlooked. This amendment will place the several provisions in their proper order.

Senator GREENE:
NEW SOUTH WALES · NAT

– I should like to know why the word “ shall “ has been replaced by “ may “.

Senator BARNES:

– That has been done with the idea of extending the discretion of the Commissioner.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 4 agreed to.

Clause 5 (Time of payment of tax).

Senator PAYNE:
Tasmania

.- This clause provides -

Section twenty-four of the principal act is amended by omitting from sub-section (1.) the word “sold” (second occurring).

I should like to know why it is proposed to leave out the word “ sold “.

Senator DOOLEY:
New SouthWalesAssistant Minister · ALP

– The amendment made by this clause will correct a mistake in section 24 of the principal act which was made as the result of an oversight when the measures were being passed. The bills, as originally introduced, provided a time limit for the pay ment of the sales tax on goods sold, but not for a tax on manufactured goods treated for stock for sale by retail by manufacturers. The amendment now proposed is designed to cause the time limit for the payment of the tax to apply, not only to goods that are sold, but also to goods which the manufacturer treats as stock for sale by him by retail.

Senator PAYNE:
Tasmania

.- I am pleased to hear that explanation. It appears to me that the object is to impose the tax on goods which may not have been sold, but were manufactured before the introduction of the original act.

Senator Dooley:

– The tax is already imposed.

Senator PAYNE:

– A manufacturer who is also a distributor has told me that he has been called upon to pay tax on goods which were manufactured and distributed among retail establishments before the operation of this tax. I take it that the amendment proposed to-day is to make it definite that all those goods shall be dragged into the net. This was not contemplated by the original act, and, if I had not had the Assistant Minister’s explanation, I should not have connected this apparently inoffensive amendment with such an important alteration in practice.

Clause agreed to.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– I move -

That the following new clause be inserted: - “ 5a. Section twenty-six of the, principal act is amended by omitting from sub-section (2.) the portion commencing with the word Where ‘ and ending with the words ‘ to be a bad debt ‘, and inserting in its stead the words -

Where a registered person has sold goods upon the sale value of which he has paid tax, and has subsequently written off as a bad debt the whole or any part of the amount for which the goods were sold, the Commissioner may -

on proof to his satisfaction that the whole amount is a bad debt - refund to the registered person the amount of tax paid on the sale value of the goods;

on proof to his satisfaction that a part of the amount is a bad debt - refund to the registered person so much of the tax as bears to the total amount of tax the same proportion as the amount so proved to be a bad debt bears to the total amount for which the goods were sold’”.

Under the existing law, a refund of tax is ni ada where there is a sale of goods which is subsequently written off as a bad debt, and the refund can be made only where tax has been paid on the amount for which the goods were sold.

The bill now contains several provisions which have the effect of imposing the tax on amounts other than the sale of goods, as, for instance, on the wholesale selling value of goods which a manufacturer sells by retail. It would be inequitable to refuse a refund of tax where a manufacturer incurs a bad debt in respect of goods which he has sold by retail, and upon which he has paid tax on- some other value than the actual sale price. This amendment will enable refunds to be made in any case where goods upon which sales tax has been paid have been sold, and the whole, or any part, of the sale price has subsequently been written off as a bad debt. A similar amendment is included in Assessment Bills Nos. 2, 3, 6, and 7.

Proposed new clause agreed to.

Clause 6 agreed to.

Clause 7 (Agents and trustees.)

Senator PAYNE:
Tasmania

.- This clause proposes to amend section 69 of the principal act. If agreed to, it will make an auctioneer responsible for the payment of sales tax on goods which he sells by auction if such goods are liable to the sales tax. The clause will make it very difficult for auctioneers to keep a tally of goods that are subject to sales tax.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– This clause will remove some existing doubt as to the statutory authority for the departmental practice which has been followed in fixing a time limit within which auctioneers who sell taxable goods on behalf of a taxpayer shall render returns and pay sales tax. I point out that all auctioneers are not required to render returns. They are to be furnished only by those auctioneers who sell taxable goods on behalf of a manufacturer or wholesale merchant, and the manufacturer or wholesale merchant has not arranged with the Commissioner for the payment of sales tax on the goods so sold. Where a manufacturer or wholesale merchant has arranged with the Commissioner for the inclusion in his relevant monthly return of sales effected by him through auctioneers, the auctioneer is not troubled about those sales.

Clause agreed to.

Clause 8 agreed to.

Clause 9 -

After section 70 of the principal act the following sections are inserted: - 70a. Where an agreement for the sale of goods has been made, whether before or after the commencement of this section, and, after the date of the agreement, an alteration has- taken place in the rate of sales tax, as the result of which the amount of tax payable upon the sale value of any goods sold in pursuance of the agreement ib affected, then, unless the agreement contains express written provision to the contrary, or it is clear from the terms of the agreement that the alteration of the rate of tax has bees taken into account in the agreed price of the goods, the agreement shall be altered as follows: - 70c. - (1.) In the case of a sale of goods by a taxpayer by reason whereof he becomes liable to pay sales tax, the taxpayer shall state upon the invoice delivered by him to the purchaser in respect of the transaction the amount of sales tax payable in respect thereof.

Penalty: One hundred pounds. (2.) The taxpayer shall have the same right to recover from the purchaser the amount of the sales tax payable by him and stated upon the invoice as he has to recover the price or other payment for or in respect of the goods.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– I move–

That the words “ to the contrary “ proposed new section 70a be left out, with a view to insert in lieu thereof the words “ that the price at which goods shall be sold shall not be altered on account of sales tax or any alteration in the rate of sales tax”.

In some cases which have been brought under notice, sales which will be subject to the increased tax of 6 per cent, are being made under contracts which were made years prior to the inception of sales tax, and which contained provisions to the effect that the agreed prices should not be altered unless an alteration in the market price of the goods took place. Such contracts might be construed as containing express provision to prevent the vendor from adding the increased sales to the agreed price. It is considered that vendors should not be called upon to bear the full burden of the tax in cases where they fixed their prices without any knowledge that the Government intended to introduce the Bales tax. Some such vendors have carried the burden of the 2½ per cent. tax for the last twelve months, but the increase of the rate of tax to 6 per cent. is so serious that vendors, in some cases, will be unable to continue in business unless something is done to enable them to pass on the tax to their purchasers. It is considered, however, that where the parties to a contract specifically agree that the prices shall not be altered on account of sales tax, or of any alteration in the rate of sales tax, they should be bound by their agreement. The effect of the amendment will be, therefore, that unless the parties to a contract have incorporated some such specific stipulation in their contracts, a vendor selling goods on or after the 11th July under a contract entered into prior to that date will be in a position to pass on the increased rate of 3½ per cent. to his purchasers.

Amendment agreed to.

Senator McLACHLAN:
South Australia

– I move -

Thatafter the word “ goods sub-section 1 of proposed new section 70c, the words “ by wholesale “ be inserted.

The amendment will clarify the position. Sub-section 1 of proposed section 70c does not require unregistered retailers to show the sales tax on their invoices. Consequently, registered wholesalers who also sell by retail will be at a disadvantage in respect of retail sales. Difficulties also arise in calculating the tax on cash retail sales, consequent upon amendments included in the bill. I understand that the Government is willing to accept the amendment.

Senator Barnes:

– That is so.

Amendment agreed to.

Senator E B JOHNSTON:
Western Australia

– I should like to know the reason why proposed new section 70c is to be inserted. I have had communications from both wholesalers and retailers in regard to it. Some of the traders’ associations in Western Australia say that the new section will have the effect of increasing the price of certain goods. I understand that at present some wholesale firms do not charge the tax at all. The proposed new section is designed to make them show the tax separately on their invoices. That would place a heavier burden on the consuming community. If wholesalers are prepared to pay the whole of the tax, why should we compel them to show it on their invoices? In introducing this bill in another place, the Treasurer said that he was not certain of the merits of this clause, and that it would be reconsidered by the Government. In view of that statement, the Senate is entitled to an explanation regarding this provision.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– This new section will require a sales-tax payer to show as a separate item on hisinvoice for goods sold by him, the amount of sales tax payable by him on those goods. A severe penalty for failure in this respect is provided. A second part of the new section authorizes vendors to recover from a purchaser the full amount of the sales tax shown as a separate item on the invoice. There has been a strong difference of opinion between sections of the commercial world regarding the mandatory nature of this provision. Conferences held between the disputants, with a view to arriving at a compromise, have proved futile. A majority of traders support the compulsory form of the provision. The Government is also of the opinion that it should be mandatory for the sales tax to be shown as a separate item on invoices. There is now a concensus of legal opinion that there is no constitutional bar to the inclusion of this provision in sales tax assessments acts. It is proposed to move an amendment to the wording of this new section toensure that its provisions will, after the commencement of the amending act, apply to sales made under any agreement to which new section 70a relates. I move -

That the words “ The taxpayer sub-section 2 of proposed new section 70c, be left out with a view to insert in lieu thereof the words “Notwithstanding anything contained in section 70a of this act, the taxpayer “.

This amendment will ensure that after the commencement of the amending act every vendor who sells goods by wholesale will be entitled to recover from the purchaser the full amount of the sales tax payable by him in respect of the sale. That was the intention of new section 70c, which is inserted in clause 9, but it has been pointed out that, as the bill is drafted, new section 70c might be con- strued as applying only to sales to which new section 70a does not apply. To ensure that that construction shall not be given, it is considered advisable to provide expressly that new section 70c shall apply notwithstanding anything contained in new section 70a. The effect of the amendment on new section 70a will be that that section will only be applicable for the following purposes : - (1.) To enable vendors to add to their sale prices the additional tax of 3½ per cent. for which they will be liable in respect of sales taking place on or after the 10th July, 1931, and prior to the commencement of the amending act, as the result of agreements entered into prior to the 11th July,1931. (2.) To enable purchasers to get the benefit at any future reduction in the rate of sales tax.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 10 -

Section seventy-three of the principal act is amended by omitting paragraph (a) and inserting in its stead the following paragraph: -

for prescribing cases in which refunds may be made for the purpose of obviating double taxation of the sale value of any goods under one or more acts relating to the payment of sales tax, and cases in which payments in respect of tax included in the purchase price of goods may be made to the purchaser of those goods; and”.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– I move -

That the words “ in respect of tax included in the purchase price of goods may be made to the purchaser of those goods “, paragraph a, be left out with a view to insert in lieu thereof the words “ for that purpose may be made to the purchaser of goods where sales tax has been included in the purchase price of the goods, or has been passed on to the purchaser in any other manner “.

This amendment’ is for the purpose of expressing the intention of the clause in clear terms. The object of the part of the clause with which the amendment deals is to enable rebates to prevent double taxation to be made to a person who has had sales tax passed on to him, notwithstanding the fact that he is not technically a taxpayer.

Amendment agreed to.

Senator THOMPSON:
Queensland

– I should like the Minister to state if this is the clause in which I could move an amendment to provide for an extension of the time of payment of the sales tax to the end of the month instead of the 21st day of the month as at present?

Senator DALY:
Assistant Minister · South Australia · ALP

– I understand that Senator Thompson is anxious to extend the time for the furnishing of returns and the payment of the tax from the 21st to the last day of the month.

Senator Thompson:

– I am not suggesting an extension of the time in which returns are to be furnished, but only with respect to the payment of the tax.

Senator DALY:

– Originally the date of payment was fixed for the 7th of the month, but as a result of certain representations made to the Government the date was extended to the 21st. When in consultation with the sales tax authorities, the Government was requested to resist any extension at all costs, as it is necessary to budget for the collection during each month of the whole of sales tax payable in respect of sales during the preceding month. The taxation authorities advise that if such a request were granted an estimated revenue from this source of approximately £700,000 for June, 1932, would not be collected until after the close of the present financial year.

Senator Thompson:

– All payments could be made by the end of June.

Senator DALY:

– The Government met the taxpayers to the extent of extending the date from the 7th to the 21st of the month, and should not be asked to do more. The Government has been advised that any extension would harass the department and create complications which should not exist. The remedy suggested by the honorable senator is out of all proportion to any hardship, which might be inflicted upon a certain section of the community.

Senator Thompson:

– The whole commercial activities of the country are conducted on these lines; but, apparently, the Government cannot adopt a system acceptable to business men.

Senator DALY:

– Inquiries have been made, and the only complaint appears to be that of the honorable senator. Those who have to pay the tax were grateful to the Government for extending the time of payment from the 7th to the 21st of the mouth which must be regarded as the absolute limit consistent with the financial requirements of the Government and the efficient working of the department. I trust that the honorable senator will not move an amendment in the direction he suggests.

Clause, as amended, agreed to.

Clause 11 -

Thefirst schedule to the principal act is amended -

SenatorE. B. JOHNSTON (Western Australia) [3.55]. - I move -

That the following item “ Agricultural and mining machinery, implements, including spare and duplicate parts “ be inserted.

During my second-reading speech, I quoted the recommendations of the finan- cial experts and economists in support of these exemptions.

Senator Daly:

– Does the amendment apply to imported machinery as well as to machinery manufactured in Australia?

Senator E B JOHNSTON:

– Yes. The experts included primage duty, and, such a duty could not be collected if machinery were not imported. The financial experts and economists unanimously recommended that if the increased sales tax were imposed, care should be exercised in seeing that basic foods and machinery and some goods which are direct instruments of production, be exempted. These authorities instanced mining and agricultural machinery, fertilizers, and cornsacks. The Government has accepted their recommendations with respect to fertilizers and cornsacks, and I urge the committee to exempt mining and agricultural machinery. When this schedule was first before the committee, a test vote was taken on the first of three or four items which included agricultural and mining machinery, and it was de- cided that they should be exempt. Then a vote was taken on cyanide, and the then Vice-President of the Executive Council (Senator Daly) reported progress, and the committee was subsequently informed that the Government would not accept the amendment.

Senator Daly:

– If these articles are exempt how is the Government to make up a leeway of £140,000?

Senator E B JOHNSTON:

– That is the matter for the Government. I am not in a position to suggest the way in which the amount could be made up by that department, but I know that the economists who drew up the plan very strongly recommended the exemption of mining and agricultural machinery.

Senator Herbert Hays:

– That amount could be saved by reducing the cost of government.

Senator E B JOHNSTON:

– That is one direction in which considerable economies could be effected. I trust that the Minister will accept the amendment.

Senator LYNCH:
Western Australia

– In supporting the amendment, I direct attention to certain commodities that have been exempted from the operation of the tax. It would appear that, in the opinion of the Government, the wine drinker is deserving of more sympathy than the unfortunate farmer, who is reduced to wearing a threadbare coat and living on wheat, because Australian wines are exempt. The gentleman who drinks beer also has been given an exemption.

Senator Daly:

– An excise duty is paid on beer and wines.

Senator LYNCH:

– The farmer also has to bear the burden of a duty on agricultural machinery, up to as much as 45 per cent., and frequently is compelled to borrow in order to pay it. On that parity of reasoning, the honorable senator’s case falls to the ground. Neither beer drinkers nor those who sell beer are to be called upon to contribute 1d. to this tax with respect to that commodity; yet the unfortunate farmer, who stands at the base of all wealth, is to be further burdened! The makers of margarine, which enters into competition with our butter, also are relieved of the tax. Why? No answer is forthcoming. There are other luxuries which are exempt. Apparently, the list of exemptions consists almost exclusively of luxuries. I almost hold my breath when I pronounce the word “ cigars “. Fancy cigars being exempt! The same applies to cigarettes, which are stunting the growth of the otherwise lusty youth of this country - the youngsters who sneak round corners to dodge their parents in order to indulge their craving for tobacco.

The wealthy “Yanks”, who do business in this country, are not to be taxed on the films that are imported; but the Australian “ cocky “, with his threadbare coat and bis hair showing through his hat, is to catch it every time.

With bated breath, I direct attention to the exemption of newsprint. When this country was in trouble, was the appeal made to the newspapers, and others who use newsprint, to rescue it? Of course not! It was made to the men to whom appeals are always made in such circumstances, the men of whom the Prime Minister asked, “ Save me, or I perish, financially”. They are at the base of the industrial cone; they are the under dogs, even though they are the producers of all wealth, whose voices are rarely heard, or, if heard, not heeded in the parliaments of this country. Senator Johnston now proposes that they shall be given a little breathing space.

I impress upon the Government the desirability of recasting this measure during the recess, so that when it next comes before us it will bear some semblance of equity and fair play as between all sections of the community. I urge it not to tax those who can ill afford to pay, and exempt others who are well able to bear the burden; and, above all, not to allow luxuries to escape.

Question - That the item proposed to be inserted, be so inserted (Senator E. B. Johnston’s amendment) - put. The committee divided.

AYES: 17

NOES: 5

Majority 12

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Senator PAYNE:
Tasmania

.- I move -

That the following item be inserted : - “ All goods manufactured by blind or partially- blind workers in the industrial departments of the institutions for the blind in the Commonwealth.”

I have every confidence that this amendment will be acceptable to the committee, and I hope that it will prove acceptable to the Government. The Sales Tax Act already provides that goods which do not exceed in value £1,000 per annum, which are manufactured by workers who have their eyesight and can use machinery, shall be exempt. The investigations that I have made since the passage of the act last year, have shown me that the average output of blind industrial workers in the different institutions in Australia does not reach £250 for a man or woman. That is less than one-fourth of the amount that may be turned out by a man who possesses his eyesight, before his product becomes taxable.

Senator Cooper:

– This matter was threshed out last year.

Senator PAYNE:

– I know that it was; but, unfortunately, I did not receive the support that I anticipated from at least two honorable senators, and my amendment was lost by one vote. I have additional particulars to place before those honorable senators to-day, and I feel confident that I shallhave their support. I have interested myself personally in the employment of our blind people since we met last year, and have paid visits to different institutions for the blind. One has only to go to those institutions to see what a wonderful blessing has been conferred upon these unfortunate people by their being given employment. Whatever they undertake must be made without the use of machinery, consequently the cost of their production per item is infinitely greater than the cost of similar goods when turned out with the aid of machinery by those who have their eyesight. As a result they experience some difficulty in disposing of their products. During the last few months I have visited a number of institutions for the blind, and have come in close contact with many of the workers employed in those establishments. Several informed me that the mere fact that they had been trained in some useful occupation had made all the difference in the world to them, because now their minds were occupied with the tasks upon which they were engaged. The Government has exempted all businesses with a turnover of less than £1,000 a year, and as the average output of a blind worker is not £250 a year. I hope that the committee will accept my amendment. It has been objected that if the product of these workers is exempted it will compete unfairly with the output of other manufacturers; but business people who handle brushware, wickerware, coir mats, &c, have informed me that they have heard of no complaints of the possibility of unfair competition.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– The proposal made by the honorable senator has already been considered by tho Government. Some time ago requests were received from all over Australia, urging the Government to give sympathetic consideration to proposals to exempt the products of such institutions.

Senator Sampson:

– What institutions has the Minister in mind ?

Senator BARNES:

– Institutions of the kind referred to by Senator Payne, all of which also would make representations for exemption, if we adopted this amendment.

Senator Payne:

– There are no others in the same position.

Senator Daly:

– Yes there are - the limbless soldiers and deaf and dumb institutions.

Senator BARNES:

– I am advised that, if we exempted blind workers inmates of other institutions, such as those for the limbless soldiers, deaf and dumb, the infirm and orphan asylums, where industrial occupations are carried on, would also ask to be exempted.

Senator DALY:
South AustraliaAssistant Minister · ALP

– The proposal to exempt inmates of blind institutions was discussed in’ the Senate in August of last year. Senator Payne, who submitted an amendment on similar lines, used exactly the same arguments as those employed by him this afternoon. I was then in the position occupied by Senator Barnes, and in replying to Senator Payne, I said -

The Government would he 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 ob goods manufactured by limbless soldiers or by inmates of orphanages, or other charitable institutions.

Senator Pearce, who followed me, stated that the arguments used by me were unanswerable; that if a concession were made in the case of blind institutions other institutions would have to be included; and Senator McLachlan, who spoke later, held the same view. In the division on the amendment the Government had the support of the Leader of the Opposition and Senators McLachlan, Cooper, Glasgow, and Greene.

Senator Payne:

– What was the result of the division?

Senator DALY:

– The amendment was defeated by eleven votes to ten in a thin Senate.

Senator Sampson:

– That was because legislation was being rushed through at high speed.

Senator DALY:

– But the issue was decided on exactly the same arguments as those which have been ised this afternoon. If we exempt the products of blind institutions there is no logical reason why we should not exempt also those of the other institutions to which I have referred. Tho Government has gone to the limit in the matter of exemptions. Furthermore, it feels that if blind workers are exempted their products will come into unfair competition with the products of other industrial establishments controlled by private enterprise.

Senator PAYNE:
Tasmania

.- The case against the amendment stated by Senator Daly is identical with that put by the Minister when I submitted a similar amendment last year. The Minister has ignored the fact that blind workers are in a class by themselves; because they have been deprived of their eyesight they are unable to use machinery, with the result that their product is more costly than that of the average workers in a modern industrial establishment. All I am now asking is that no further burden shall be placed upon these unfortunate people. These institutions for the blind have done magnificent work during the last twenty years, and they should b* encouraged in every possible way. I am afraid that, unless something is done to relieve them of this additional taxation, the unemployment problem among blind workers will become still more acute.

Senator SAMPSON:
Tasmania

– I have pleasure in supporting the amendment. Last year also we considered the Government’s sales tax bills at the end of the session, and measures were rushed through without due consideration. As Senator Payne has pointed out, the position of blind workers in our various institutions is totally different from that of the average worker in factories controlled by private enterprise. All the work done in blind institutes is carried out by hand, and, therefore, is more costly. For this reason alone, these workers should not be subject to the sales tax.

Question - That the item proposed to be inserted be so inserted (Senator Payne’s amendment) - put. The committee divided.

AYES: 7

NOES: 13

Majority 6

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

SenatorFOLL (Queensland) [4.34].- I move -

That the following item be inserted, Canned fish, canned in Australia.”

This request has been submitted by the Fisherman’s Co-operative Company Ltd., which operates along the Queensland and New South Wales coast, in the following communication : -

During the season, May to July, the fishermen (members of our co-operative company, who number approximately 1,000 men), catch heavy supplies of mullet, which are marketed in Brisbane. The fishis sold retail at a low price, viz., 3d. per lb.for cleaned fish, but, as a rule, when the normal heavy supplies are reaching the market, the demand, notwithstanding the low price, is insufficient to absorb the supply. It happens at times, therefore, that the fish have to be carried over in cold store, and occasionally it has to be destroyed; but more often the practice is to restrict the catching operations. this being necessary to prevent the market becoming completely glutted. This condition has obtained for many years. We ore endeavouring to overcome this difficulty by arranging for the canning of the surplus fish. It is expected that 30 to 40 tons of fish will be canned this season. The work of canning is being done by Messrs. Foggitt Jones Pty. Ltd., at actual cost, which is a much sounder proposition than if we were to put down our own plant, because the work is intermittent. We are not anxious to make any more than a bare profit on this work, and to obtain the ready sale for the product it must be sold retail at 9½d. to10d. per tin. At this price, less cost of marketing, and after paying cost of canning, the net return for mullet applied to that purpose will be 3.13d. to 3.64d. per lb., onlyslightly more than the retail price for fresh fish, but it will give increased employment to the fishermen.

The Minister (Senator Daly), when speaking on another measure, urged that the fishing industry in Australia should be encouraged. This is an entirely new industry which has a possibility of providing a good deal of employment. The amendment will also cover the King Island industry of canning crayfish. I ask honorable senators to grant this small concession.

Senator COOPER:
Queensland

– I support the amendment. It deals with an entirely new industry which is on a good footing right from the start. In addition to its own small factory, it has the assistance of an expert packing firm such as Foggitt, Jones’. The amendment will not only enable this business to be carried on successfully, but also create greater interest in thefishing industry.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– Representations have been made to the Government that fish canned in Australiashould be exempted from sales tax on the grounds that the industry hasbut recently started, and is meeting with considerable opposition from imported canned fish. It cannot be admitted that imported canned fish enters into serious competition with the Australian product at the present time.. The rate of duty on certain imported canned fish has recently been increased to 4d. per lb., primage, to 10 per cent., and sales tax to 6 per cent. These increases in duty and sales tax, together with the adverse rate of exchange operating against imported goods, should place Australian canned fish on a very favorable basis compared with the imported article. Full consideration has been given by the Government to the representations which have been made for the exemption of fish canned in Australia. If exemption were granted in this instance, it would lead to numerous requests for the exemption of other canned foods, which would be entitled to receive equal consideration. I trust that after that explanation, honorable senators will not press the amendment.

Question - That the item proposed to be inserted be so inserted (Senator Foll’s amendment) - put. The committee divided.

AYES: 8

NOES: 13

Majority 5

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Senator HERBERT HAYS:
Tasmania

– I indicated on the second reading that I intended to move for the exemption of material used in the manufacture of spraying and wheat-pickling preparations. I now move -

That the following item beinserted: - “ Materials for use in the manufactureof spraying and wheat-pickling preparations.”

By a large majority the committee has already agreed to exempt agricultural and mining machinery which, as the Minister has explained, involves a loss of revenue amounting to approximately £140,000. The amount involved in the case of my amendment would be only £300. There is no need for me to say more than that the exemption asked for is of considerable importance to agriculturists and orchardists. These materials are now exempt from primage duties, and I ask that they be also exempt from the sales tax.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– I trust that the Senate will not accept the amendment. Representations have been made to the Government that materials for use in the manufacture of spraying and wheat-pickling preparations should be exempted from sales tax. Sales tax is not imposed on the raw materials purchased by a registered person to be used in the manufacture of sprays, but only on the finished product. Consideration was given by the Government, amongst other commodities, to the exemption ofbluestone from sales tax; but it was not considered that special treatment shouldbe given to this item. If all spraying preparations were exempted from sales tax, the loss of revenue would be considerable, and it would, no doubt, lead to many further requests for the exemption of goods of a similar nature.

Question - put. The committee divided.

AYES: 14

NOES: 6

Majority . . . . 8

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Amendment (by Senator J. B. Hayes) proposed -

That the following item be inserted: - “All lime used for agricultural purposes.”

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– Prior to the introduction ofthe amending sales tax bills, requests were received by the Government for the exemption of agricultural lime from sales tax. Inquiries made by the Taxation Department showed that it was not possible to distinguish between lime used for agricultural purposes in Australia, and lime used for building and other purposes, as lime in all forms is being used in various parts of the Commonwealth in connexion with the cultivation of land. In some quarters it is contended that lime is a fertilizer. In other quarters, equally well-informed, it is admitted that lime is not a plant food, but that it is a substance which affects soil so as to render more accessible the plant food which is in it. Any attempt to allow lime used for agricultural purposes to be exempted would involve the Taxation Department in considerable expenditure in order to prevent any evasion of the tax on other lime. A cumbersome system of certificates and of checking would be essential. This would give rise to dissatisfaction in business circles. The sales tax on lime used for agricultural purposes is probably not a great amount, but the possible evasions of tax are great. The extra cost to the department of the exemption would be out of all proportion to the small benefit to users of lime. It is estimated that the sales tax payable on lime used for all purposes is approximately £15,000 per annum. The loss of revenue involved if lime for all purposes were included in the schedule of exempt goods is too serious to contemplate at the present moment.

Question put. The committee divided.

AYES: 10

NOES: 11

Majority 1

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Senator SAMPSON:
Tasmania

– I move -

That the following item be inserted: - “Mutton birds”.

The mutton bird industry is confined to the Furneaux group of islands in Bass Strait, and is principally carried on by the few surviving descendants of the last of the Tasmanian aborigines, who are dependent on the mutton bird industry and a little fishing for a livelihood. Should mutton birds be taxed under this measure, it will be hard for mutton birds to compete with meat. The loss of revenue, if my amendment is agreed to, would be infinitesimal. I trust that” the amendment will be agreed to.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– Inquiry has shown that in no instance are the mutton bird trappers on Flinders Island registered persons under the Sales Tax Assessment Acts, and, therefore, liable to pay sales tax on their goods. The trappers are principally employees of shed-owners, who sell to registered persons, who, in turn, account to the Taxation Department for the sales tax. In some cases small numbers of mutton birds are purchased from half-caste trappers by trading vessels, and sold retail at the Launceston wharf. The registered persons’ who are responsible for the payment of sales tax upon the sale of the mutton birds can obtain reimbursement by passing the amount of the tax on to the consumer. The matter has been considered by the Government; but, in view of the circumstances, and the fact that the trappers are not themselves responsible for the sales tax, exemption must be refused.

Senator SAMPSON:
Tasmania

– It must be admitted that the tax by whoever it is paid must eventually come back to” the mutton bird trappers, who have great difficulty in earning a living. Notwithstanding the information supplied by the Assistant Minister, I trust that a majority of the committee will support the amendment.

Question - put. The committee divided.

AYES: 9

NOES: 12

Majority . . 3

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Senator FOLL:
Queensland

.- I move -

That the” following item be inserted: “ Oatmeals.”

It is obvious that this item has been omitted owing to an oversight on the part of the Government. Earlier in the day the Minister read a list of infants and invalids foods which are exempt from the sales tax, and as apparently oatmeal was overlooked, the Government will no doubt accept the amendment.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– The exemption of this commodity could not be granted without similar requests being received for the exemption of numerous other breakfast foods. Under the original act semolina was exempt from the sales tax. That commodity is commonly sold under different trade names for use as a breakfast food. Producers of other breakfast foods claimed that they were at a disadvantage in the competition with producers of semolina, and it was, therefore, decided that the exemption of that commodity should be withdrawn as from the 11th July, 1931. This is provided for in the amending bill now under consideration. It would, therefore, be most inconsistent and unjustifiable if exemption were now granted in respect of oatmeal.

Amendment negatived.

Senator FOLL:
Queensland

.- It was my intention to move further amendments of this character; but as it is quite apparent that the Government will not relieve the food of the people from this class of taxation it is useless to submit them. I shall contend myself by protesting against the action of this alleged democratic Government.

Clause, as amended, agreed to.

Clause 12, consequentially amended, and, as amended, agreed to.

Title agreed to.

Bill reported with amendments; report adopted.

Bill read a third time.

page 5052

SALES TAX ASSESSMENT BILLS

(Nos. 2 to 6) 1931.

Bills read a second time and reported from committee with consequential amendments.

Reports adopted, and bills read a third time.

page 5052

SALES TAX ASSESSMENT BILL (No. 7) 1931

Second Reading

Motion (by Senator Barnes) proposed -

That the bill be now read a second time.

Senator SAMPSON:
Tasmania

– When these measures were introduced last year I asked a question to which I have not yet received a satisfactory reply from the Government. I asked why it was necessary to have nine separate assessment bills, and nine separate tax bills. I have also asked legal lights in this chamber, but have not been given a reply which I felt that I could pass on to the people in my own State. I should very much like a simple explanation on the point if it is possible to get one.

Senator DALY:
Assistant Minister · South Australia · ALP

– There is a division of opinion as to the constitutional powers of the Commonwealth in relation to legislation of this kind. After consulting the most eminent constitutional counsel at its disposal, and in order to minimize the possibility of litigation in the High Court, the Government finally adopted this particular form of imposing a sales tax.

Senator Sampson:

– Could not everything be included in one bill?

Senator DALY:

– When this class of legislation was first under consideration, it was found that there were so many complications in respect of wholesale and retail merchants, and so many legal complications incidentally arising out of the relationships of various classes of taxpayers, that it was necessary to submit nine separate assessment bills, and nine separate tax bills, in order to guarantee as far as possible the constitutionality of this class of legislation. Section 65 of the Constitution Act provides -

Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect.

Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and law imposing duties of excise shall deal with duties of excise only.

In order that its sales tax legislation should conformwith the letter and spirit of the Constitution, the Government sought the best advice available, and after consultation with counsel, came to the conclusion that it was best to have a number of bills. I regret that the Labour party’s policy of clarifying the Constitution has not yet been accepted by the people. If it had been we should have had one sales tax bill instead of nine bills. But we have to take the Constitution as we find it.

Senator Sir George Pearce:

– Let us get on with the business.

Senator DALY:

– I am willing to do so, but Senator Sampson asked a question, and courtesy demands a reply.

Senator Sampson:

– For which I thank the honorable senator.

Question resolved in the affirmative.

Bill read a second time, and reported from committee with consequential amendments.

Report adopted, and bill read a third time.

page 5053

SALES TAX ASSESSMENT BILL (No. 8) 1931

Second Reading

Motion(by Senator Barnes) pro posed -

That the bill be now read a second time.

Senator PAYNE:
Tasmania

.- I should like to have an explanation of the paragraph which exempts agricultural and horticultural seeds not covered by any item in the Customs Tariff 1921-30. I understand that application was made for the exemption of these seeds, and I should like to know if the request has been fully granted?

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– I understand that the purpose of the amendment provided in this bill relating to agricultural and horticultural seeds is to bring the sales tax legislation into conformity with the primage duty. If the seeds referred to are subject to customs duty, they are to be subject to the sales tax. On the other hand if they are not subject to customs duty, they are exempt from the sales tax. If any further information on the matter is available I shall endeavour to let the honorable senator have it at a later stage.

Question resolved in the affirmative.

Bill read a second time, and reported from committee with consequential amendments.

Report adopted, and bill read a third time.

page 5053

SALES TAX ASSESSMENT BILL (No. 9) 1931

Bill read a second time, and passed through its remaining stages, without amendment or debate.

SALES TAX BILLS (Nos. 1 to 9)1931.

Standing and sessional orders suspended.

Bills read a second time, and reported from committee with requests for verbal amendments.

Reports adopted.

page 5053

ASSENT TO BILLS

Assent to the following bills reported : -

Gold Bounty Bill (No. 2).

Appropriation(Works and Buildings) Bill 1931-32.

Appropriation Bill 1931-32.

page 5053

INCOME TAX ASSESSMENT BILL

(No. 4).

Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate in this bill.

page 5053

FEDERAL AID ROADS BILL 1931

Bill received from the House of Representatives.

Standing and Sessional Orders sus pended.

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

Second Reading

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– I move -

That the bill be now read a second time.

At several conferences between the Commonwealth and States, held within the last two years, there has been considerable discussion as to the necessity of amending the present agreement, which operates for ten years from 1st July, 1926. Under the agreement the Commonwealth is obliged to provide £2,000,000 a year, and the States £1,500,000 a year. The States are required to spend the money on construction and reconstruction of approved federal aid roads. These conditions have proved a burden to the States, particularly the contribution which they are required to provide, and which, in some cases, has been largely obtained from loan moneys. The restrictions as to the classes of roads and nature of construction upon which the moneys are to be expended have also proved unworkable in most, if not all, of the States. The States, accordingly, requested relief from their contribution, and also requested greater freedom in the spending of the money.

In order to meet its obligation under the agreement, the Commonwealth imposed a special duty of 2d. per gallon on petrol, estimated to realize £1,500,000, and additional duties on chassis estimated to realize £500,000. As petrol imports have declined between 40 per cent, and 50 per cent, in the last twelve months, and imports of chassis are now almost negligible, the Commonwealth has found its obligation under the agreement a much more serious burden than was contemplated in 1926. For 1930-31 the receipts from the special duty of 2d. a gallon realized £1,025,000, and chassis, £30,000, or a total of £1,055,000.

At a conference between the Commonwealth and the States, held in February last, the following resolution was passed : -

The conference agrees that the Federal Aid Roads Agreement be amended to provide that as from 1st July next, the Commonwealth shall pay to the States a Bum equal to 2 id. per gallon on all petrol cleared through the customs for home consumption; such sum to be apportioned among the States on the sams basis as the £2,000,000 set out in the agreement; all other conditions contained in the roads agreement to be cancelled.

The Premiers undertook to submit the matter to their respective governments. At the May conference the States submitted further representations and the Commonwealth undertook to embody in the amended agreement provision for further payment to the States out of excise collections on petrol refined in Australia.

A formal agreement has been drawn up on the lines indicated and has been forwarded to the States for completion. Under the new agreement the Commonwealth will pay to the States a sum equal to 2£d. per gallon on imports of petrol, and a further sum. equal to l£d. per gallon on petrol refined in Australia. The total amount available will be distributed to the States in the same proportion as the £2,000,000 which was to have been provided under the original agreement.

The States will be relieved of their contributions, and they will be free to spend the money on any class of work, including maintenance. The agreement has been extended for a further period of six months, to the 31st December, 1936, instead of the 30th June, 1936. This extension is in accordance with an undertaking given by the Commonwealth Government at a’ conference in December, 1929, when £1,000,000 of moneys which had accumulated in the trust account were” mads available for relief of unemployment.

The agreement takes effect from the 1st July, 1931. The States will be released of any obligations under the original agreement unfulfilled at the 30th June, 1931, but the Commonwealth will fulfil its obligation in respect of the £2,000,000 obligation up to that date.

Provision has been made in the budget, 1931-32, for a payment of £1,400,000 to the States. This is based on the present consumption of petrol, namely: -

The object of the bill is to authorize the execution of an agreement between the Commonwealth and States to give effect to the proposals I have outlined.

Senator PAYNE:
Tasmania

.- I expected that the Leader of the Opposition (Senator Pearce) would have something to say on this measure. If he is not prepared to do so, I shall comment upon the unnecessary haste with which it is sought to push it through.

SenatorO’Halloran. - It is the result of an agreement between the parties.

Senator PAYNE:

– That may be so. But we havehad no opportunity of reading the very closely printed schedule. I may be in absolute agreement with its provisions, but it is not reasonable that we should be asked to pass it without due consideration. I suggest that its consideration be deferred until we have had an opportunity to obtain some refreshment. We may then have an opportunity to read the schedule. I, therefore, move -

That the debate be adjourned.

The PRESIDENT (Senator the Hon W Kingsmill:
WESTERN AUSTRALIA

– The honorable senator having spoken to the motion, may not move the adjournment of the debate.

Senator SAMPSON:
Tasmania

– Then, I move -

That the debate be now adjourned.

Question - put. The Senate divided. (President - Hon. W. Kingsmill.)

AYES: 4

NOES: 18

Majority . . 14

AYES

NOES

Question so resolved in the negative.

Senator SAMPSON:
Tasmania

– Once again I rise, at the risk of being vulgarly termed a “ nark “, to make an appeal to the Senate. We are asked to pass this bill holus bolus, without having had an opportunity of considering it. It is not in keeping with the dignity of the Senate that legislation should be rushed through in this manner, and I, for one, shall not be a party to it. I can well understand the Minister sayingthat the Government found the original agreement somewhat onerous and beyond its capacity to observe in these hard times. It is well known that that agreement was entered into at a time when a shortsighted Treasurer thought he had overflowing money bags, and could not rack his brains hard enough to find means for disposing of his wonderful wealth. The construction and maintenance of roads was no concern of the Commonwealth at the outset, but was a matter purely for the States. They were offered easy money, and that is the reason for the mess in which we find ourselves to-day in regard to this matter. I am extremely disappointed at this attempt having been made at the eleventh hour to pass legislation hurriedly. This Government is not singular in that respect. All other governments, during the few years that I have been in the Senate, have acted similarly. Important measures of all descriptions have been brought down at thelast moment, and the discussion of them has been stifled in the interest of indecent haste. I shall not return to my people and say, “ We did not have time to read the measure; it was slummed through”. The sales tax measures, of which we have just disposed, were treated in a similar manner. The Senate should act more in keeping with the dignity of its position.

Senator BRENNAN:
Attorney-General · Victoria · ALP

. - I also protest against the attempt that is being made to push through a bill that is very important, not only in itself, but also in regard to the principles that are embodied in it. I suppose there is no better test that one could apply to any action in one’s life than that which would show how it affected oneself. I am a lawyer; yet if I return to Melbourne after having agreed to the second reading of this bill, and am asked for an explanation of its provisions, in the present state of my knowledge of the subject all that I shall be able to say is, that I know nothing of its details. The Minister read a statement which it was impossible to follow. I make no reflection upon the honorable gentleman when I say that. When a representative of the

Government reads quickly a statement that is intended to explain a complicated measure, it is absolutely impossible for honorable senators to get the drift of what he is saying. I have had occasion previously to point to the roads’ agreement as an illustration of the Commonwealth having exceeded the limits imposed upon it by the Constitution. I am now asked to accept a bill which substitutes an entirely new agreement for that which was passed in 1926, without having had any opportunity of considering its terms. In this matter, are we not merely trying to fool ourselves ? Does not everybody know that an effort is being made to enable honorable senators to join a train that leaves Canberra at 8.20 this evening? Is not that the reason why we are asked to expedite the passage of this bill without having had an opportunity of considering it? That design may bc, morally, neither good nor bad, and if I thought that it could be carried out I might be tempted to facilitate it; but I am utterly unable to see how it is possible to dispose of the measures that still await our consideration in time to effect that excellent purpose.

It is impossible for me to make a speech upon the bill. If I did so, I should contradict the view that I am now expressing, namely, that I am unable to speak upon it because I have had no opportunity of studying it. That may appear desirable to those who wish to expedite our departure.

I do not feel that I can say anything further. Therefore, I content myself by entering a protest against this action being forced upon us without, as it appears to me, any person deriving a corresponding advantage. I -do not know whether to vote either for or against the measure. All that I am asking for is time to consider it. If the Government does not concede that, I must try to decide what I ought to do by finding out what other persons whose judgment I respect have done in similar circumstances.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Clause 2 (Execution of agreements authorized.)

Senator PAYNE:
Tasmania

.- I have been endeavouring to understand the schedule, but, in the few minutes at my disposal, I find it is impossible to do so. I therefore suggest that progress be reported so that honorable senators may examine it. I have no desire to delay the passage of the bill. It is probable that’ if honorable senators are given the opportunity to study the schedule they will be satisfied that it ii in the best interests of the States.

Sitting suspended from 6.48 to 8 p.m.

Clause agreed to.

Glauses 3 and 4 agreed to.

Schedule.

Senator J B HAYES:
Tasmania

– When the Minister was moving the second reading of the bill, I wai anxious to ascertain whether all the States had approved this new agreement, which terminates the old roads agreement. If they have, 1 have nothing further to say about the measure, but it ha; such far-reaching consequences that, if the agreement has not been accepted unanimously by the States, it should be postponed for further consideration.

Senator PAYNE:
Tasmania

.- In view of the fact that I was partly in- “strumental in getting the adjournment of the discussion over the dinner hour, 1 think it is only fair for me to say that I appreciate the opportunity I was afforded to make a fairly careful perusal of the agreement contained in this schedule, and that I am pleased with its contents. If the new agreement has been accepted by all the States, it is more advantageous to them than the old agreement. The State which I represent is particularly interested in road construction. It will be relieved of the contribution of 15s. for every 20s. found by the Commonwealth, and of hampering restrictions that have always prevented it from being able to take the fullest advantage of the Common wealth grant. The States will now be empowered to use this money for reconditioning existing roads, the construction of new roads, and the repair and maintenance of existing roads. This represents a very substantial additional contribution from the Commonwealth Government towards State expenditure.

Senator j B Hayes:

– That was all done years ago.

Senator PAYNE:

– If that were so, there would be no need for the following provision in the agreement : -

If the State prior to such variations taking effect shall have expended any of the moneys paid to the State under the principal agreement or any of the moneys provided by the State under that agreement on the maintenance of roads instead of on the construction or reconstruction of federal aid roads the expenditure on the maintenance of roads shall be deemed to have been authorized by the principal agreement and the State shall not be under any liability to the Commonwealth for so doing.

That provision clearly shows that the principal agreement did not permit of expenditure on maintenance. The first agreement provided only for the construction of roads. It was subsequently modified to permit of expenditure on the reconditioning or widening of roads to enable them to carry the exceptionally heavy traffic which now passes over them, compared with the traffic they were expected to carry some years ago. Hitherto, it has not. provided for expenditure on ordinary maintenance or repairs. I appreciate the fact that the restrictions which previously existed have now been removed. I am also pleased to find that provision is made for the creation of a very substantial sinking fund, under which the capital expenditure will eventually be wiped out.

Senator McLACHLAN:
South Australia

– The point raised by Senator Hayes appears to me to be covered by the recital in the agreement -

Whereas the Commonwealth and the States have agreed to vary the principal agreement in the manner hereinafter appearing, now it is hereby agreed as follows : -

This agreement shall have no force or effect and shall not be binding on either party unless and until it is approved, adopted, authorized or ratified by the Parliaments of the Commonwealth and of the States.

It would appear that this is an arrangement between the Commonwealth and the States because the recital refers to an agreement of that character already entered into as a sequence to an agreement arrived at during the Premiers Conference. I take it that it is not the intention of the Government, unless all the States agree, to act detrimentally to any one State. Tasmania appears to be suffi ciently safeguarded by the provisions of the agreement itself.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– This agreement is based on a resolution adopted at the conference between the Commonwealth and State Ministers held in February last, and Tasmania and Western Australia have already signed it. There was no opposition on the part of any of the States to it.

Senator J B Hayes:

– I. am satisfied on the point.

Senator DOOLEY:

– I regret that during my second-reading speech I curtailed my remarks at the request of honorable senators opposite. The resolution agreed to at the Premiers Conference in February was as follows: -

The conference agrees that the Federal Aid Roads Agreement be amended to provide that as from 1st July next the Commonwealth shall pay to the States a sum equal to 2½d. per gallon on all petrol cleared through the customs for home consumption ; such sum to be apportioned among the States on the same basis as the £2,000,000 set out in the agreement; all other conditions contained in the roads agreement to be cancelled.

What the conference had in view was to give the States a freer hand in regard to the construction, maintenance and reconditioning of roads. Under the old agreement they were subjected to direction by the Commonwealth as to how the money made available should be spent by them, I think that honorable senators will agree that road matters can best be left to the discretion of State authorities. Another aspect of the question has relation to the rehabilitation plan. In order to balance the budget, it is necessary for the Commonwealth to curtail expenditure. As I pointed out in my second-reading remarks, if the Commonwealth dictates conditions to the States some of them may insist on its standing up to its obligations under the existing agreement, thus rendering itself liable for an annual grant of £2,000,000, instead of £1,400,000 as provided in this bill. That saving to the Commonwealth of £600,000 a year is an important part of the budgetary adjustments.

Schedule agreed to.

Preamble and title agreed to.

Bill reported withoutamendment report adopted.

Bill read a third time.

page 5058

COMMONWEALTH DEBT CONVERSION BILL

Assent reported.

page 5058

SALES TAX ASSESSMENT BILL (No. 1) 1931

Bill returned from the House of Representatives with a message intimating that it had agreed to certain amendments, and had disagreed to two amendments to clause 11 (amendment of the first schedule).

In committee (Consideration of House of Representatives message) :

Clause 11 -

Senate’s amendment. - Insert “Agricultural and mining machinery and implements, including spare and duplicate parts.

House of Representatives’ message. - Amendment disagreed to for the following reason : That it would involve a serious loss of revenue amounting approximately to £200,000.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– I move -

That the amendment be not insisted upon.

When the question of the sales tax on agricultural’ and mining machinery was before the committee at an earlier hour, I was unable to show the loss of revenue which it would involve. I point out now that if this exemption is insisted on by the Senate, it will mean a loss of revenue amounting to approximately £200,000 for the current financial year.

The additional exemptions already granted by the Government since the estimates of revenue from sales tax for the current financial year were taken out, will result in a reduction of the estimated revenue by from £500,000 to £7.50,000. If the £200,000 involving the exemption of agricultural and mining machinery is added to the loss resulting from the exemptions already granted, it will be necessary for the Government, at an early date, to increase the rate of sales tax all round, with the consequence that the general public, including those who are now claiming the benefit of this exemption,, will have to make up the loss involved by the granting of the exemption.

The claim for exemption of agricultural and mining machinery was largely supported on the ground that if such luxuries as tobacco, cigars and wines are exempt from sales tax, there is much more Mason for the exemption of roods which are of such vital importance to primary producers -as agricultural and mining machinery.

In reply to that contention it was pointed out that tobacco, cigars, wines, &c, had been made subject to specially heavy duties of excise and customs, but that reply was met with the statement that agricultural and mining machinery were also subject to heavy duties of customs ranging up to 45 per cent. Seeing that practically the whole of Australia’s requirements of agricultural machinery - approximately 92 per cent. - are locally produced, it will be realized that the statement as to the heavy tariff on such machinery has practically no bearing on the claim for exemption of such machinery from the sales tax. In view of the preponderance of local production of that machinery, it is clear that the sales tax is, in the main, only being imposed on machinery which is not subject to any duties of customs or excise.

On the other hand, the special duties of excise and customs imposed on tobacco, cigars, wines, &c, are so heavy as practically to exclude those goods from the field of sales tax, which tax, in its main incidence, amounts, in substance, to the imposition of duties of customs and excise. Any smoker knows that a couple of ounces of tobacco which now costs ls. lOd. could have been bought a few years ago for 9d. As a smoker, I am prepared to pay the additional tax without squealing.

Senator E B JOHNSTON:
Western Australia

– The Minister has made out an excellent case for the adherence by the Senate to the decision which it has already arrived at. He has shown us plainly that if we insist on our amendment those persons in the community who produce 98 per cent, of our export wealth, will he relieved of a burden of taxation, amounting to £200,000 per annum, which presses heavily on them. Surely the people who establish batteries in mining centres and encourage the development of rural townships are not enemies of their country? The same may be said of those who use agricultural implements. We have induced large numbers of settlers to take up agricultural holdings on the strength of the promise that we would continue with a bold policy of migration and development. They expected that with the money which was to have been made available under the migration agreement, facilities, such as railways and water supplies, would be provided. They have . cleared the land and now they require ploughs, harvesters and other implements. Many of these settlers are carrying on against heavy odds, because the action of the Government in not proceeding with the migration agreement has meant that railways and other facilities will not be provided for them. I cannot imagine that the Senate will retreat from the attitude it has taken up. Is the wheat-grower such an enemy to his country that we must fine him £12 or £18 in respect of every machine that he buys? I have received a letter from one settler in which he states that he will carry on with his old implements, even if it means the loss of some of his wheat, rather than pay the burdensome taxation proposed to be imposed on him. The plan recommended by the committee of economists and experts exempted agricultural and mining machinery from these heavy imposts. The proposal to tax these implements has been brought forward by the Government in defiance of the recommendations of its expert advisers. The Under-Treasurers of the States were unanimously in favour of this class of machinery being exempted from the sales tax. Professors Copland, Melville and Giblin were of the same opinion. Supporters of the Government seem never to tire of quoting the views of Professor Giblin. I remind them that he signed the recommendation that agricultural implements and mining machinery should be exempted from the operation of the sales tax. Professor Shann, who was for many years a Professor of the University of “Western Australia, in making that recommendation, spoke with firsthand knowledge of the conditions of primary industries in. the Commonwealth.

Senator Barnes:

– The experts hero disagreed with him.

Senator E B JOHNSTON:

– Messrs. Pitt and Strutt, two of the UnderTreasurers, were opposed to any increase of the sales tax or primage duty, because they believed that its effect would be to add to the cost of living and of produc tion, and would, therefore, delay national recovery. I ask the Senate not to take any steps which will delay that recovery. The experts whom I have mentioned say that deficits can be reduced by other means. I am not opposing the sales tax altogether, as those gentlemen did; I merely ask . the Senate to accept their recommendation that machinery used for agricultural and mining purposes, as well as fertilizers and cornsacks, should be exempt from the sales tax. The Senate has treated the Government liberally in regard to these sales tax proposals.

Senator Daly:

– The honorable senator has never yet voted with the Government ; yet he claims that the Government has been treated liberally by the Senate.

Senator E B JOHNSTON:

– I vote with the Government whenever it is right. That ‘ is not often. On the last occasion on which the committee carried certain amendments in the interest of those engaged in primary production - amendments which were opposed by another place - this branch of the legislature eventually gave way. We have not made any real fight with any of our amendments to the sales tax legislation, but in this instance, when supported by the financial advisers of the Commonwealth and leading economists, I trust that we shall adhere to the amendments which were so properly made a few hours ago.

Senator DALY:
Assistant Minister · South Australia · ALP

– I appeal to the committee to decide this issue on longestablished principles. When the first sales tax legislation was under consideration in this chamber, certain amendments which were forwarded to another place were eventually returned to this chamber. The more experienced members of the committee did not insist on the amendments, as they contended that the imposition and incidence of taxation is primarily the responsibility of the Government. They said that the committee having voiced its protest against the particular form of taxation was prepared to throw on the Government the responsibility for that taxation. In these circumstances, I contend that ho good purpose can be . served by holding up this legislation. Senator E. B. ‘

Johnston referred to a report by the Under-Treasurers and certain economists, in which the imposition of a sales tax upon mining and agricultural machinery was taken into consideration ; but in the final analysis it was left to the representatives of the Government who signed the plan adopted at the conference of Commonwealth and State Ministers to devise the means by which expenditure could be reduced and additional revenue raised. The Government found it necessary to obtain additional revenue, and having arrived at a decision explored possible sources from which it could be obtained. This chamber cannot close its eyes to the fact that it has already passed an Income Tax Assessment Bill and an Income Tax Bates Bill which give the Government the right to raise certain revenue. The Senate knows that the Government, in adhering to the plan, has to find a certain sum of money, and the difference between the amount to be raised by direct taxation, and agreed to by tho Senate, and the total amount required, must be obtained by indirect taxation. This branch of the legislature has adopted the financial plan, and has saddled the Government with the responsibility of giving effect to it. This chamber has made its protest with respect to certain forms of indirect taxation, and, in effect, is now asking the Government to reconsider certain important aspects of its sales tax legislation with a view to a more equitable distribution. Certain of the amendments made by this chamber have been agreed to by another place, and a request has now been made by the Leader of the Government in the Senate (Senator Barnes) that the only two which have not been accepted by another place shall not be insisted upon. Senator Johnston must not overlook the fact that the Senate is now in a vastly different position from that which it occupied prior to the amendments going to another place. We know that taxation measures cannot be amended in this chamber. We can present requests to another place which, if unacceptable, can be returned for further consideration. The committee has made its requests, and has pointed out to another place that in its opinion the distribution of indirect taxation is inequitable. On a previous occasion, the Leader of the Opposition (Senator Pearce) and other experienced honorable senators opposite said that having made their protests they could do no more, and the Government would have to take the responsibility.

Senator Foll:

– Does the Assistant Minister suggest that the Senate can only protest?

Senator DALY:

– No; but I contend that if the Opposition joins as partners with the Government in a plan for the rehabilitation of Commonwealth finance, and the Government provides for the imposition of indirect taxation to make up the difference between the amount to be collected from direct taxation and the total amount required, indirect taxation must be imposed in the way the Government considers necessary. The committee has suggested to the Government that it should reconsider the method of collecting indirect taxation with a view to bringing in a more equitable scheme, and the amendments of the committee have been returned from another place with a request that they be not insisted upon. The onus is now upon this committee to show the Government the way in which, in this instance, an additional £200,000 can be raised.

Senator E B Johnston:

– Is the Assistant Minister overlooking the economists’ recommendation ?

Senator DALY:

– That was a recommendation by the Under-Treasurers of the States, and certain economists. When that report came before the conference of Commonwealth and State Ministers, the difficulty of laying down a uniform plan was apparent. One of the conditions of the acceptance of the plan was that the Commonwealth and State Governments should bc permitted to work out their own schemes. The UnderTreasurers suggested certain methods ‘by which the States could balance their budgets, but surely Senator Johnston does not seriously suggest that the proposal submitted by some of the Under-Treasurers and economists was accepted by the full conference. The document from which the honorable senator quoted was a report of the proceedings.

Senator E B Johnston:

– I quoted from the recommendations.

Senator DALY:

– If the honorable senator will refer to the document, which contains three separate reports, he will see that it is entitled “ Report of the Proceedings “. It does not contain the decisions of the conference of Commonwealth and State Ministers. After the fullest consideration had been given to the economists’ recommendations, a compromise was arrived at, and a plan was agreed upon. Under the plan it was left to the Commonwealth Government and the State Governments to make representations to their respective Parliaments as to the way in which revenues should be raised and expenditure reduced.

Senator McLachlan:

– And the Government has adopted the plan.

Senator DALY:

– Yes, and it has been supported by the Senate. It is the responsibility of the Government to decide the way in which revenue shall be raised in order to honour its obligations to the conference. To-day we passed an Appropriation Bill proclaiming to the taxpayers of Australia that this branch of the legislature is satisfied with the Government’s policy to reduce expenditure. The passing of that measure is an indication that governmental expenditure cannot be further reduced.

Senator GREENE:
NEW SOUTH WALES · NAT

– I do not think that the Assistant Minister is entitled to say that.

Senator DALY:

– What did the passing of that measure mean? The Opposition assisted the Government in reducing expenditure to a certain amount, and in raising additional revenue in order to keep its deficit within certain limits. The Appropriation Bill provides the extent to which Parliament is prepared to allow the Government to incur expenditure, and we must, therefore, proceed on the assumption that Parliament was not prepared to allow it to spend more than an amount agreed upon under the plan.

Senator McLachlan:

– The next point is, where is it to be obtained?

Senator DALY:

– Exactly. I am pleased that, as we proceed, we are coming closer together. We had to raise a certain amount of revenue to meet the expenses that Parliament authorized us under the plan to incur. Probably we placed the cart before the horse by introducing the Income Tax Bill before the Appropriation Bill. The Senate, after a fair debate, limited our direct taxation within the bounds laid down in that particular measure. Assuming that, under the plan, our expenses were £20,000,000, that the only taxation we were permitted to impose by direct methods was £.1.0,000,000, and that the deficit was to be no more than £5,000,000, it would be necessary to obtain an additional £5,000,000 somewhere.

The CHAIRMAN (Senator Plain).The honorable senator has exhausted his time.

Senator McLACHLAN:
South Aus tralia

– I have always been, and still am, opposed to the sales tax, and to the principles that underlie it. J believe that its effect will be to increase the cost of living. But we have to recognize that this is the financial policy of the Government, and we have to bear with it,’ having regard to the fact that we are parties to the plan. While I very strongly resent the imposition of a burden of any sort on the primary producer, apart altogether from the underlying principles of this legislation to which I object, I feel that we shall have to deal with this matter as we dealt with a similar contingency last year. ] realize the force of Senator Johnston’s argument, but cannot see that we are able to carry this matter any further. The Government says that it will be £200,000 short if it agrees to this request. Although it is a burden that I would not impose upon the primary producers, and that I do not care to see imposed, I think that the Government must be allowed to accept the responsibility for it. We voiced, our protest after a division was taken on the proposal to make the request. I voted with Senator Johnston in that division. But we arc now faced with the position that if we persist, we shall have to replace the loss by other means, and there is nothing that can be done. With great reluctance, I am obliged to support the suggestion of the Minister that the request be not insisted upon.

Senator GREENE:
NEW SOUTH WALES · NAT

– I feel with Senator McLachlan that this is a case in which the responsibility is clearly on the Government; but

I consider that the Government is doing the wrong thing in placing this burden of taxation on the primary producers at this particular time. When this legislation was being framed, that fact should have been recognized by Ministers, particularly in view of the very definite recommendation of the economists and others who were called into consultation before a start was made with the implementing of the plan. The particular methods to be adopted were clearly within the discretion of the Government. It should have been possible so to frame taxation measures that the Government could have afforded to exempt these particular lines, and yet collect the same amount of revenue. That, however, is its responsibility. The committee now is faced with the position that another place has returned the bill, with a message that the Government will not agree to the amendment that has been made. Naturally, the Leader of the Government in this chamber has moved that the committee do not insist upon its amendment. If we do insist upon relieving the Government of its responsibility, eventually the stage will be reached when we shall either have to give way or throw out the bill. It is perfectly clear that we cannot adopt the latter course. Therefore, I cannot see that we can do other than regretfully agree to what another place has asked of us.

Senator Daly:

– The honorable senator will not regret it.

Senator GREENE:
NEW SOUTH WALES · NAT

– I assure the Minister that I not only regret it now, but shall regret it in the future, because it is absolutely unnecessary. The Government could have chosen another method of raising the amount in question. However, the responsibility is on the shoulders’ of the Government, and there it must rest.

Senator PAYNE:
Tasmania

.- I listened attentively to the statement of the Minister, which was prepared in opposition to the expected suggestion that the Senate should insist upon this amendment. The honorable gentleman attempted to show that the arguments advanced by Senator Johnston were not based on good premises inasmuch as 92 per cent. of the agricultural machinery used in Australia is produced locally and, therefore, does not carry the burden of the customs duty of 45 per cent. It is well known that the price of local production is fixed at a figure just below the price of the imported article. An item that, apart from duty, costs £100 to land in Australia, would, with the addition of the duty of 45 per cent., cost £145. What is the price charged to the farmer or the mine-owner for a similar piece of machinery that is produced locally? Probably it is £140. Therefore, the most that would be gained is 5 per cent. Consequently the Minister hasnot advanced a sound reason for the non-acceptance at its face value of the contention put forward by Senator Johnston.

I shall now deal with the objection that has been offered by Senator Daly, that we cannot insist upon the request because we are bound to carry out the plan that has been agreed upon and that the exemption of this item would result in the loss of £200,000. Probably the revenue would lose to that extent.

Senator Barnes:

– Where does the honorable senator suggest that we should obtain that amount?

Senator PAYNE:

– I have taken the trouble to look through the Estimates that were passed to-day. They record the amounts that were voted last year, and the expenditure that was incurred. I find that, in regard to ten departments, the total expenditure was £269,000 less than the amount voted. Therefore, the Government was able to save that amount. Is it toomuch to expect that, in the present time of stress, when every penny should count, the Government should make a special effort to curtail all unnecessary expenditure? Can we not reasonably anticipate that in those ten departments, at least, a saving of £200,000 can be effected, thus making good the loss caused by the exemption sought by Senator Johnston? If ever there was a time when an endeavour should be made to help the man on the land, it is the present. Every additional burden placed on those men makes it more difficult for them to carry on.

Senator HERBERT HAYS:
Tasmania

– The Government has been seeking means to assist the primary producers, and Isuppose that in a few moments we shall be considering a bill that has for its object the relief of the very people whom we are endeavouring to relieve by means of this request. The Government was acquainted with the position of these people when it brought down this amendment of the sales tax, and could very well and properly have allowed the old tax of 2-J per cent, to continue so far as agricultural machinery was concerned, instead of bringing forward this additional impost. What is the use of taking away in one direction, and then proposing relief in some other form? The gain in revenue -which the Government anticipates from this additional taxation is more apparent than real. I am convinced that, owing to the difficult financial position in which the primary producers of this country are placed, it will not obtain anything .approaching the estimate. In 1918-19, 42,000 ‘farmers contributed £12,000,000 in taxation; in 1927-2S, 14,000 farmers paid £6,000,000. What better evidence could we have of the urgent need for relief from taxation than is to - be found in those figures? It is simply cant and humbug for the Government to pretend to assist our farmers by legislation when it imposes this crushing burden upon them. Soon an attempt will be made to raise a loan of about £6,000,000 for the assistance of necessitous farmers, from whom, according to Senator Daly, the Government expects to obtain £200,000 by way of taxation under this measure. I am aware of the assumption that the sales tax will be obtained in equal proportions from the mining and farming industries, but I am convinced that 75 per cent, of it will be contributed by the agriculturists of Australia. I fully appreciate the position of the Government in this matter, and I agree with Senator v McLachlan that, having made our protest, there is nothing left for the Senate to do but to throw the responsibility upon the Government.

Senator LYNCH:
Western Australia

– I suppose that we must accept the situation as philosophically as possible and allow the primary producers of this country to be led like lambs to the slaughter. Nevertheless, I hope that what has been said to-night will sink into the minds of Ministers during the recess, and that, perhaps, in the not distant future, they. will remove this burden of taxation from the shoulders of our primary producers. Senator Hays has just presented some figures which throw into bold relief the desperate plight in which our farmers are placed. He has shown that within the last nine years the number of income taxpayers in the ranks of our primary producers has been shrunk by one-third and the amount of taxation paid by them has decreased by 50 per cent. And yet this is the body of men upon whom this Government is now laying its * heavy hands, laying this special impost, while allowing others in more fortunate circumstances to escape. Why should the wine and beer drinkers, the man who smokes cigars, the pale-faced, pigeon-chested youngsters who smoke cigarettes - which habit, by the way, is interfering with the stamina of our race - escape this taxation? They escape because, by reason oftheir numbers, they exert a potent influence at the ballot box. They must not be taxed, but there is no escape for the unfortunate farmer, with his toes sticking through his boots. One is almost tempted to think that this cross-country legislation was conceived over-night. Adam ‘Smith, who may be regarded as the leader of British economic thought concerning principles of taxation, has laid it dow.n as the first canon of taxation that the subjects of every State ought to contribute to the support of their government as nearly as possible in proportion to their respective abilities, or in other words, in proportion to the revenue which they respectively enjoy under the protection of the State. Senator Hays has, this evening, quoted figures which cannot be dismissed by a wave of the hand. They are irrefutable. They stand like ghosts, and will haunt this Government like a spectre. They prove beyond the possibility of all doubt that unless the farmers of this country obtain some: relief from tariff and taxation burdens, they will, as I said on a former occasion, automatically exempt themselves from all taxation by reason of their dire poverty. The figures cannot be contradicted. This “ Hollywood “ or “ Mary Pickford “ government allows the wine drinker, the cigarette smoker, and the Yankee film magnate, as well as the big newspaper proprietor, to escape taxation, but not the poor “ cocky “. It takes good care to send its tax-gatherer after this man, who gets up in the dark, and works as long as daylight lasts. He has no chance of escape. In the matter of taxation this Government is the most hardened sinner that I have ever come across in my life. Senator Daly has told us that the incidence of this sales tax will not fall upon the primary producer, because the great bulk of his requirements in tho way of agricultural machinery and implements is made in this country. Of course it is. But Senator Daly did not tell the whole story. He did not say how much our farmers have to pay for their machinery. Perhaps this is not to be wondered at in view of the fact that no member of this Government knows the first thing about farming, and, I fear, it has no kindly thought for our farmers; otherwise it would do something to ease their burden of taxation. Is the Minister aware that, if I wished to purchase an Australian harvester to-morrow, the price which I would have to pay would be increased by £18 as the direct result of this new measure of taxation? Yet Yankee films must not be touched by the tax-gatherer! Is this justice? It certainly is not justice according to the first canon of taxation laid down by Adam Smith, though it may be justice according to “ Adam Barnes “ or “ Adam Daly “. I warn the Government that the day of reckoning is at hand. This form of taxation is but another step towards economic perdition. If this Government persists in crushing the ambition which impels every worthy citizen to go to the back-blocks, and there carve out a home for himself, the inevitable result will be that all these people will again turn their faces towards our cities. Apparently, in the eyes of this Government, it is a crime for a man to even think of going out into the country to clear a virgin piece of la-nd, work day and night, and all the hours which God gives to us, in order to make his home there. It is, in fact, almost a criminal act, if one may judge by the class of legislation which it has placed upon our statute-book.

Senator Daly:

– Why did not the honorable senator help the Government to obtain 4s. a bushel, for our farmers?

Senator LYNCH:

– I have heard that story before, and I remind the Minister that Senator Dooley, one of his colleagues, observed not so long ago, that perhaps it was a good job for the Government that the Senate did reject that bill. I realize, of course, at this stage, the Senate can take no effective action. We have entered our protest, and, I suppose, we must accept tho position. We are sterilizing production in this country to such an extent that in the long run we must succeed in drying up the fountain from, which all income tax comes. If the Government chooses to do it, on their own head let the punishment fall. When the farmer wants to buy a plough, a harrow, a harvester or a hay rake, and finds that he has to pay an extra 6 per cent., he will ‘ ask, “ Who has done this “ ? And the answer that he will get is : “ None other than this Labour Government “. The Government will always have my vote while it piles up taxation on those who indulge in the frivolities or . luxuries of life, but not while the industrious, upright and creditable section of the people are unduly taxed. Mv, advice to Ministers is to overhaul this legislation properly, and see that it is drafted on the right lines, consistent with encouraging, and not discouraging, the worthiest element in this community. As it is framed at present, it is a discouragement to those engaged in industry.

Senator BRENNAN:
Victoria · ALP

– Like Senator Lynch, I feel that we must “ swallow “ this, but it is inconsistent with swallowing a thing to chew it over every long. My sympathy with the farmers is as great as that of any other person, but I feel that the relief they must get should be by means of a settled policy, and not by nibbling at this or that. The Government must take the responsibility for its actions. At what is practically the tail end of the session, we cannot delay matters unduly, and as we know that, in the long run, we must either yield to another place or reject the bill, I feel that I must reverse the vote I gave this’ afternoon, and vote for the motion.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– The Government has been driven back to the last ditch in its effort to find money with which to carry on the affairs of the country, and it has not been merciful to itself. The estimates of expenditure upon all salaries including the allowance to members of Parliament, have been cut down drastically, because it was absolutely necessary to do so.I remind Senator Lynch and Senator Johnston, who are so sympathetic with the farmers, that when they had an opportunity to grant the farmers 4s. a bushel they voted against it.

The CHAIRMAN (Senator Plain).The Minister must not discuss theWheat Marketing Bill.

Senator BARNES:

– I am merely replying to some of the remarks other honorable senators have made during this discussion.

Senator E B JOHNSTON:
Western Australia

– Senator Barnes knows perfectly well that the State Governments were to pay half the 4s. to which he refers.

The CHAIRMAN:

– The honorable senator must not discuss the Wheat Marketing Bill.

Senator E B JOHNSTON:

– I object to the dictatorial attitude of the Government in saying that the Senate must not cross a”t” or dot an “i “ in its legislation; that it must pass a bill as brought in, and not amend it unless at its own behest, and then only to make its terms harsher. If we are to pass every measure sent to us without altering it, we might just as well not be here. On the second reading, I said that if I could not have agricultural and mining machinery exempted from the sales tax, as recommended by the experts at the Premiers Conference, I hoped the bill would be defeated; and, even now, I am perfectly certain that if the Senate showed some backbone in the matter, the Government would provide for the exemption for which the Senate has asked. The economists declared that mining and argicultural machinery should be exempted in order to assist the national recovery. The Minister talked about something which happened eighteen months ago. Let him get down to the present. If the Senate will stick to its guns, the Government will be very pleased to accept the very generous and, indeed, oppressive measure of taxation it will get, even if this exemption is granted to the most deservingsection in the whole Australian community.

Question - That the amendment be not insisted upon - put. The committee divided.

AYES: 11

NOES: 5

Majority . . 6

AYES

NOES

Question so resolved in the affirmative.

Motion agreed to.

Senate’s amendment. -Insert “Materials for use in the manufacture of spraying and wheat-pickling preparations “.

House of Representatives’ message. - Amendment disagreed to for the following reasons : - (1.) That is would involve a loss of revenue amounting approximately to£5,000. (2.) That it would amount to discrimination against the manufacturer of prepared sprays.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

.- I move-

That the amendmentbe not insisted upon.

If this amendment were agreed to, it would mean a loss of approximately £5,000 in revenue. Its object is to enable the orchardist to obtain free of sales tax the materials which he purchases for use in the manufacture of his own sprays. The exemption would discriminate against the manufacturer of prepared sprays, who would be required to pay sales tax on his manufactured goods. It is extremely difficult to justify the exemption of these spraying materials in view of the refusal to exempt other classes of goods equally worthy of consideration, such as sheep dips and other insecticides and prepared sprays.

Senator HERBERT HAYS:
Tasmania

– It is my opinion that sheep dips and other formulas for dealing with pests should be exempted. Anything that will enable flockmasters and orchardists to keep down pests and produce more wealth should be made as cheap as possible to them. I realize, however, that the matter is on all-fours with that which has just been decided by the committee. This is a further penalty on the very people whom we ought to assist. It is evident that the Government is not desirous of helping the primary producers, notwithstanding its professions of sympathy with them.

Motion agreed to.

Resolutions reported; report adopted.

page 5066

INCOME TAX BILL 1931

Bill received from the House of Representatives with a message transmitting amendments recommended by the Governor-General to which it had agreed.

In committee (Consideration of House of Representatives’ and GovernorGeneral’s message) :

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

.- I move-

That the amendments be agreed to.

These amendments have been found desirable on account of the lack of clarity in expressing the rates of income tax on incomes from personal exertion and from property.

Senator Thompson:

-Will the amendments make the position more favorable to the taxpayers?

Senator BARNES:

– They will make the position clearer.

Senator PAYNE:
Tasmania

.- I rise, not to object to the motion, but to express my satisfaction that, notwithstanding that both Houses of Parliament passed the bill in its original form, we have a Governor-General capable of detecting a serious error.

Motion agreed to.

Resolution reported; report adopted.

SALES TAX BILLS (Nos. 1 to 9) 1931.

Bills returned from the House of Representatives with messages intimating that it had made the amendments requested by the Senate.

Bills read a third time.

page 5066

WHEAT MARKETING BILL (No. 2)

Restoration of Order of the Day.

Debate resumed from the 31st July (vide page 4812), on motion by Senator Barnes -

That the Order of the Day for the second reading of the Wheat Marketing Bill ( 1931 ) be restored to the notice-paper, and be made an Order of the Day for a later hour of the day.

Senator BRENNAN:
Victoria · ALP

– I realize some of the difficulties which face any one who has to present arguments to the Senate in the dying hours of a session. I do not know whether I had any advantages in that I opened what I had to say a few days ago when greater attention was rivetted upon this measure than will be given to it to-night ; but to recapitulate briefly what I said before, in order to preserve the consecutiveness of my argument, I may say that, to put it shortly,I declined to consider in terms of pounds, shillings and pence, a question involving human liberty; I said that it seemed to me that this bill was a tremendous advance towards sovietism and socialism; that that was proved by some observations made by the Minister in charge of the Senate in moving the second reading, and proved also by the fact that some of the extreme supporters of the Government in another place welcomed the bill as an instalment of socialism. I regarded it, I said, as an attack uponproperty, and I put it that property lies at the root of our modern civilization. The proper place, I put it, to defend a political position was, as in the case of military strategy, at the outposts. I urged that what we had to fear was not a direct attack by communism or socialism, but that subtle attack which comes of soothing phrases, such as “ orderly marketing “ ; the “ stabilizing of prices “ and “ allowing the farmer to market his wheat in his own way”. I was passing on to some of the objections that have been raised by honorable senators on this side of the chamber when the adjournment hour arrived. The view which had been put in support of the bill was put in combination by parties who do not often combine. My colleague, Senator R. D. Elliott, had’ joined with Senator O’Halloran of the Labour party in asking “ Is this not a measure to give the farmers an opportunity to settle the matter for themselves “ ? Senator O’Halloran said it was to give the farmers an opportunity to market their own wheat. I cannot assent to either of those views. I ask myself, if the farmers have to decide this matter by a mere vote amongst themselves, why should not every other section have the same opportunity. That is sovietism pure and simple. Sovietism, as I understand it, is designed to give the workers in every industry control of their own industry. If the farmers, or any other section, for the matter of that - but we are dealing only with the wheat-growers in this case - wish to control their industry, it must be in order that ‘they may raise prices. That being the position, those responsible for the bill are really claiming for them, as the right honorable the Leader of the Opposition (Senator Pearce) put it in his speech, the power of taxation. The power of taxation is the first and most elementary power of government. According to our Constitution it resides in the Parliament, consisting of the King, the Senate and the House of Representatives. Under this measure the Government proposes to give to a section of the community a power greater than is given to Parliament itself, because although this power of taxation is conferred upon the Parliament, there is this restriction upon it : that it must not differentiate between State and State. Senator Johnston, in his very exhaustive speech showed that this form of taxation will differentiate between’ State and State. It will resolve itself into this: that the States with large populations, such as Victoria and New South Wales, will have to pay tribute under this measure to Western Australia and South Australia, which, although larger in area, have a smaller population. If the price of wheat goes up, surely it must be admitted that the price of” flour must increase. If the price of flour is increased, it must be admitted that the price of bread must go up. Arguments have been put forward with the object of showing that what appear to me to be necessary results do not follow. If there is no necessary rise in the price of bread in consequence of an increase in the price of wheat, why do we not arbitrarily raise the price of wheat? No one would be hurt if the argument presented on” that head is correct. I can conceive of no less opportune time for saying to residents of the .-industrial suburbs of Melbourne and Sydney that one section of the community has asked, and this Parliament has conceded to it, the right to increase the price of bread.

When I see the Government and its supporters putting forward the view that this step, which will result in the raising of the price of bread, should be taken, I ask what is the reason for it. Senator O’Halloran put it that the first aim of the measure was to assist the farmer. Senator McLachlan contended that its first . aim was to assist some Ministers - that some of the Ministers represented wheat-growing constituencies, and that a political gesture which would show that they were the friends of the wheat-farmer might have very satisfactory results in very difficult times. I frankly admit-

Senator O’Halloran:

– The honorable senator admits that it would benefit the wheat-farmers.

Senator BRENNAN:

– I do not in the least; but I do think it may benefit a candidate to be able to . say to the farmers, “ We offered to do something for you ; but those hard-hearted old tories in the Senate prevented us from doing it”. The view was” put by Senator O’Halloran that the majority should rule.

Senator O’Halloran:

– Hear, hear !

Senator BRENNAN:

– That is another soothing phrase which, if taken . without qualification, leads to extraordinarily serious results. Should the majority rule in everything? Does it rule, for instance, in matters of religion ? Can a majority overrule the ten commandments, or any of them? Can a majority make white black or wrong’ right?

Senator O’Halloran:

– The distance between this proposal and the ten commandments is considerable.

Senator BRENNAN:

– The distance is not so great as the honorable senator thinks, and this, indeed, is the very evil of proposals of this sort. Upright and honorable citizens like Senator O’Halloran do not realize how close they do come to the ten commandments, or to some of them, when they support measures of this sort. Can a majority expropriate the property of the rich and give it to the poor merely because they think it would be better? That is what is called a pagan, a Caesarian, an omnipotent state - a state which is supposed to leave no right to the individual except what it chooses to leave. It is a pagan state built on utterly wrong principles.

Senator O’Halloran:

– We do not propose to take away the right of individuals under this bill.

Senator BRENNAN:

– It is proposed to take from certain individuals their right- in property which they raised by the sweat of their brows. If by a mere majority in any House of Parliament you can take from a man. the property which he has raised by the sweat of his brow, which, in other words, he has raised by his labour, you can take his labour from him. If you take his labour from him you deprive him of his liberty, and make him a slave. And that, whether honorable senators realize it or not, is what is involved in a measure of this kind. There is no stopping-place. If you expropriate a man’s property - destroy the rights of private property - you strike at the whole roots of modern civilization. But the difficulty, as I have said, is that our friends on the Government side of the Senate do not recognize that there is no stopping-place. They think that everything is to be resolved by mere matters of expediency. That is the view at. which they arrive in their own crude and uninformed way. I do not. use that expression in a sectionally offensive way; I mean in the crude and uninformed way of any of us when we come to deal with the immensely complicated social world in which we live. The only difference between us is that some of us realize what a complicated world we live in, while others do not, and plunge in gaily upon the principle of those who rush in “where angels .fear to tread”. It is said that the farmers should have control of the marketing of their own produce. That seems to me an extraordinary argument to advance. The farmers to-day have control of the marketing of their own produce; that is their essential right. What this bill proposes is to take that right from them. What it proclaims is, not the right of the farmers to market their own produce, but the right of one farmer to market the produce of another.

Tho next point in support of the bill was that made by Senator Johnston. In his sympathy for the farmer, Senator Johnston is, I hope, blood-brother to me. His view is that the farmer has to bear all the burdens that can be piled upon him. Only” this evening we heard from the honorable senator a speech upon that very subject, and we have heard others at different times. Now it is his right to join the vicious circle, and to break it down by reducing it to an absurdity. I agree that burdens have been piled upon the farmer.’ But the answer to Senator Johnston is to be found in the well-known saying that two wrongs do not make a right. Where a wrong is found to be’ existing, it certainly is not cured by the addition to it of other wrongs.

But there is another reason why I cannot accept the argument that has been put forward by Senator Johnston. You, Mr. President, I am sure, in your young days visited circuses.

Senator McLachlan:

– It might be suggested that he is presiding over one now.

Senator BRENNAN:

– I shall deal with only one show that is generally to be seen at a circus - the family troupe. The male parent stands in the centre of the circus tent and supports the members of his family, one on this shoulder, another on that, one on his head, and so on, until there is . a pyramid of human’ beings reaching high into the air. The one notable feature of that performance is that there is a man on the ground. The farmer is in the position of that man to-day; he is on the ground.

Senator E B Johnston:

– And his nose is being rubbed into it.

Senator BRENNAN:

– All these men to whom Senator Johnston refers are piled on him. The honorable senator wants to lift the man off the ground, and suspend all of them in the air - something in the nature of the Indian rope trick - whereas the simple and natural process - though it is not perhaps so simple as it appears to be - would be to remove those persons from his shoulders so that all might stand on the ground, and be as well off as though they were in the air, in addition to being in a much more secure position ; because, except by means of the Indian rope trick, to which I have already referred, I know of no one who can remain in the air without some kind of support.

Another point was that made by Senator Guthrie, namely, the success that has attended the pooling system ; or rather, his denial of the suggestion that pools have universally failed. He cited Bawra as an example of the wonderful success of pooling. I would remind him were he here that one must judge any system, not by its happy accidents, but by its general tendencies. The very argument that Senator Guthrie put forward showed that he was judging by a happy accident; in other words, he pointed out that all the men who should know best - in theory, at any rate - as to what might happen, were strongly of the opinion at that time that the wool pool would be a failure. Skilled as those gentlemen doubtless were in the business of marketing wool, they possibly were not wellread in history. Had they been, they would have known that the invariable course of events after great wars, is, first a spurious activity, and then depression. It so happened that Bawra disposed of its wool holdings in most advantageous circumstances when the spurious prosperity was operating.

I am sorry if I appear to criticize my colleagues. But we represent a common electorate, and I desire that it shall be publicly known why argument that makes some appeal to them does not appeal to me. I make no comment whatever upon the honesty or the bona fides of their belief or, indeed, upon the intelligence with which they have expressed that belief. I merely say what I do in connexion with them and their arguments, by way of selfprotection more than anything else.

There is another aspect of this matter to which I desire to call attention, and that is the constitutional aspect. Much could be said upon that subject, but I do not feel that it would be right to detain the Senate unduly at this late hour. It is most desirable, however, that there should be a realization of what the constitutional position is, if that be possible. It will be remembered, I think, that in introducing the bill in another place, the Minister said that it would prevent the non-pool States from dumping wheat in the pool States. That depends upon whether section 92 of the Constitution means what it appears to say, or something entirely different. It says that, on and after the happening of a certain event - which has long since happened - trade, commerce, and intercourse among the States shall be absolutely free. One would think that those words “ absolutely free “ would not require much defining or refining; but they have cropped up in many cases. The first case was that which was decided in 1915, in. which the Government of New South Wales expropriated the wheat grown in that State. The question raised was, whether that action interfered with freedom of trade. Griffith, C.J., said -

Section 92 is equally binding upon the Commonwealth and the States.

Barton,J., said -

Section 92 was framed to secure the owner of any commodity in exercising his dominion over it in the way of transporting it from State to State without obstruction on the part of Commonwealth or State or any other authority or person.

Isaacs, J., said -

That section, asI have stated, (in other vases) is an absolute limitation on the powers which either Commonwealth or State alike would otherwise have to do anything to prevent the absolute freedom of trade, commerce, and intercourse.

Then there was the case of Foggitt,Jones and Company against the New South Wales Government, in 1916. That Government took possession, or stopped just short of taking possession, of some pigs in which Foggitt, Jones were interested. I cite merely one passage from the judgment, in which Isaacs, J., said -

That section makes Australia one indivisible country for the purpose of commerce and intercourse between Australians. . . . It is beyond the power of any State Parliament or even of the Commonwealth Parliament . . . to impair that fundamental provision.

The next case is that of Duncan v. The State of Queensland, in which cattle instead of sheep were involved. In that case, the High Court decided that the case of Foggitt, Jones and Company was wrongly decided. Isaacs, again took the view that the words “ absolutely free” meant exactly what they said, namely, free from interference by any one, whether it be the legislature, the Executive, or an individual. All the judges took the view that section 92 bound the Commonwealth. But in the case of McArthur v. The State of Queensland which was heard a little later - the court by this time having undergone considerable modification in relation to its personnel - the view held was that those words were addressed only to the States, and not to the Commonwealth, the sole exception being the present learned Chief Justice of the High Court, who said -

I can imagine no language more appropriate for the purpose of limiting the legislative powers of both classes of legislature, or less appropriate for the purpose of limiting one class only.

What I desire to point out is that, emphatic though that expression of opinion is, that those words bind only the States and not the Commonwealth, it is not a decision of the court but merely what is called a dictum; consequently, it cannot yet be taken as settled that the Commonwealth has power to interfere with freedom of trade between the States. If it has not that power, this Wheat Marketing Bill must fail. What is more important, this is one of the cases that can go for decision to the Privy Council, without any certificate from the High Court. There is a grave danger - I do not so describe it, but some may - that if there is any attempt to block the passage of wheat from one State to another under the provisions of this measure, the probable result will be an appeal to the Privy Council.

Senator E B Johnston:

– The entry of wheat into Queensland has been blocked by that State for the last twelve months.

Senator BRENNAN:

– It has not been blocked. It has been allowed to enter Queensland; but under the decision given in the wheat case, when it does so the Queensland Government may expropriate it.

I desire to say, in conclusion, that I have no faith whatever in governmentcontrolled pools, or in pools that are fathered by government’s. I agree with what Senator Hayes said a few days ago, that what the farmer most needs is to be left alone. I do not mean that in a crisis like the present he can be left alone; but as a general policy all that’ can be done for him is to refrain from placing burdens upon him. If that be done, he can work out his own salvation. Something, I think, must be done for him in a time of crisis like the present. I suggested the other day, and I repeat now, that some appeal might be made to France for the loan of a portion of the large quantity of gold which is lying in that country under conditions of nothing more than idleness. We might recall the days when our sons and hers stood side by side, and point to the graves of many Australians who are buried over there.

If honorable senators feel inclined to regard these remarks of mine as somewhat over their heads, and as an expression of what is not practical politics, I hope that they will take to heart the lesson that they are of the very essence of practical politics. If we do not build upon a solid foundation, the house of cards that we erect may come tumbling down, as has actually been the case. Though we build it with all the ingenuity with which we thought we had built up our existing social system, still, if the foundations are not solid, the superstructure will once again collapse. There can be no more solid foundation to build upon than the right, which is being violated in this measure, of every man to possess the property which he has produced, and to dispose of it according to what he considers is right, and not according to what some other persons may think is right.

Debate (on motion by Senator Sampson) adjourned.

page 5070

SALES TAX ASSESSMENT BILLS

(Nos. 2 to 8) 1931.

Bills returned from the House of Representatives with messages intimating that it had agreed to certain consequential amendments, and disagreed to other amendments made by the Senate, for reasons set out in the messages.

In committee (Consideration of House of Representatives’ messages) :

On motions by Senator Barnes, the Senate’s consequential amendments disagreed to by the House of Representatives were not insisted upon.

Resolutions reported; reports adopted.

page 5071

WHEAT MARKETING BILL (No 2)

Restoration of Order of the Day.

Debate resumed.

Senator SAMPSON:
Tasmania

– The Leader of the Government in this chamber (Senator Barnes), in his frank and breezy way, expressed great pleasure at the prospect of this bill being restored to the notice-paper to give honorable senators an opportunity to study its merits. He is asking them to do the impossible, because it is impossible to study something which does not exist in the bill. It has no merits. It is the fifth attempt on the part of the Government to legislate for the wheat-growers, and, like all the others, it will fail for the simple reason that the Government has refused to apply to the wheat problem the lessons of experience. In advocating a system of compulsory pooling, it is advocating a method of handling wheat that has been completely discredited throughout the world. Compulsory pooling has been one of the most disastrous experiments of the greatest wheat-growing countries of the world. It is a method of dealing with wheat which is hopelessly out of date. Orderly marketing and compulsory pooling were recommended to the farmers of this country as things that would place them on the high road to prosperity. They have been tried and have proved to be the road to ruin. The farmer who accepts a compulsory pool will forfeit all the advantages of competitive buying by merchants, and put his neck in a noose operated by a bureaucratic board. First of all, he will have to carry all the risks of error and inefficiency which our experience of pools and boards handling wheat have shown are by no means inconsiderable. In any event, is the risk of error and inefficiency worth a problematical saving estimated to be½d. a bushel? Unless it can be proved that compulsory pooling increases the price realized upon the world’s market, it is absolutely useless to the farmer. Orderly marketing, a phrase which has become almost as blessed as Mesopotamia, was to solve all our troubles, but I should like those who advocate it to indicate to me where the marketing of wheat or any other commodity has been done in a disorderly manner. The people who are handling commodities are naturally out to avoid all possible waste and to handle them in the most efficient manner in order to get the best results. It was the fetish of orderly marketingwhich inspired the gigantic Canadian experiment, and gave birth to the farm boards of the United States of America. In the light of experience it has proved to be an illusion. Three yearsago I was in Winnipeg, where I came in contact with the men who were operating that gigantic pool. They were concerned about the carryover from the crop of the previous year. Since then there has been an increasing carry-over each year, accompanied by rapidly falling prices. The Farm Board of the United States of America, having had an equally disastrous career, is now withdrawing from some of its activities. That board has a carry-over of 350,000,000 bushels, and as a result it now advocates the curtailing of production. The Canadian pool and the Farm Board of the United States of America have been largely responsible for the present chaos. They attempted to defy the law of supply and demand by bolstering up prices artificially. The lesson that they have not yet learned is that, although such gigantic concerns may hold up the price of wheat, they cannot hold the customers. That has been amply demonstrated in Europe. When the big concerns in America attempted to put a pistol to the head of the European nations, Italy, France, and Germany took steps for their own protection. If those huge concerns could not get their own way, what chance has Australia of succeeding where they have failed ?

The influence of the Canadian monopolistic pool has been disastrous. At last the chickens are coming home to roost. The farmers in the prairie provinces of Canada are in a worse plight than are their fellow farmers in Australia. The failure of the pooling system is evident in the crumbling of the pooling organizations, and their impotence to raise the price of wheat by even half a cent perbushel. The right way to assist the wheat-growers to prosperity has still to be discovered ; but, as I have said, it has been amply demonstrated that compulsory pooling is not the right way. Experience has proved that any arbitrary interference with the law of supply and demand cannot succeed. Whether we like it or not, we are forced to admit that in the long run that law always prevails.

I do not question the good faith of the Government in endeavouring to assist the wheat-growers, nor do I think that one honorable senator desires to do other than the best possible for them. On the 3rd March last, the then Leader of the Nationalist Opposition in the House of Representatives (Mr. Latham) addressed a letter to the chambers of commerce, banks, and other organizations throughout Australia. Considerable publicity was given to his letter, which reads -

The desperate position of many of the farmers of Australia is well known to your members, who are themselves profoundly interested in the preservation of the farming industry.

The Prime Minister states that “ at present it is not possible to go upon the loan market either in Australia or abroad “.I agree that, as long as proposals for politically managed inflation of the currency are approved by the Government, a public loan cannot be obtained. If these proposals were definitely and finally abandoned, the position would be radically changed. The farmers, however, cannot await political changes of this character. They must be put in a position to put in the next crop.

The proposal for inflation of the currency now made by the Government would lead to ultimate disaster to the community as a whole. Apart from this consideration, however, I am in a position to assure you that the inflation proposal cannot be passed into law, because the Senate will not adopt the necessary legislation.

In order to provide the necessary immediate relief, it is therefore essential to discover some other methods of finding the money required.I, therefore, ask that your chamber should consider the formulation of a scheme to deal with the question. This should be done in co-operation particularly with the machinery, oil, and manure merchants, the banks and other financial institutions. The scheme, I suggest, should provide for the raising of non-government finance for a system of farm relief, to he controlled by a suitably representative body, under which advances would be made on a selective basis to farmers to put in and take off their crops, and to provide maintenance as required. A great deal of useful assistance could be provided by such a method without raising so large asum as £6,000,000.

Such a scheme would avoid many difficulties incidental to schemes which are politically devised or subject to political control, and it would, I suggest, be to the advantage ofall concerned in maintaining the vitally important farming industry of Australia.

I add that I have been authorized to write this letterby a meeting of the Nationalist Parliamentary Party held to-day at Canberra

Steps were taken to give effect to the suggestion which that letter contained. In one State a company was actually formed to give effect to Mr. Latham’s proposal ; but at that time the Government was still hopeful of establishing a fiduciary notes issue, ostensibly with the object of assisting the farmers and of relieving unemployment and because of the statement of the Government that another proposal was to be put before the Loan Council, that scheme came to naught. The proposal before us is the Government’s fifth attempt to help the farmers. I am opposed to the Government seeking, like Pontius Pilate of old, to wash its hands of an awkward problem by putting forward such a measure. The Government’s scheme opens the way to grave abuses, and to the establishment of a bloated bureaucracy to dominate the affairs of the farmers. It is an incentive to fraud and incapacity.

I know what the political consequences of the defeat of this bill will be. It will mean another stick with which to beat the Senate. The farmers will be told that, but for the Senate, they would long ago have received 4s. per bushel f.o.b. for their wheat. That cry might be a good one to mislead unthinking people; but it will “cut no ice” with the farmers. I trust that the Senate will not agree to the second reading.

Senator DALY:
South AustraliaAssistant Minister · ALP

– I should not have spoken had it not been for the remarks of Senator Sampson. Listening to the honorable senator, one would be tempted to think that the control and marketing of our produce embodied some principle which the Labour party had abrogated to itself, and that it was the only political party which had ever attempted to interfere with the so-called liberty of the subject. There are probably not many subjects upon which Senator Payne and I agree. As I suppose the honorable senator’ will speak to this bill, I desire to inform the Senate of the views he expressed some years ago when the Dried Fruits Export Control Bill was ‘before this chamber.

Senator Brennan:

– That is how it starts.

Senator DALY:

– What is wrong with the control of the dried fruits industry? Last night in the King’s Hall we listened to a lecture on the dried fruits industry, and saw a cinematograph film depicting different processes associated with the marketing of our dried fruits. The lecturer told us of the wonderful work that had been performed overseas as the result of the establishment of the Dried Fruits Control Board.

Senator Plain:

– It does very fine work.

Senator DALY:

– Australian dried fruits are better known in England than in Australia. Indeed, of our total production of 72,000 tons, 60,000 tons are consumed there.

Senator Herbert Hays:

– Why is nol the industry more profitable?

Senator DALY:

– There is need for a campaign in Australia in favour of a greater use of Australian dried fruits. Ex-Senator Wilson, who was Minister for Markets in the Bruce-Page Government

Senator Sampson:

– A great advocate of orderly marketing.

Senator DALY:

– While I have condemned the Bruce-Page Government for a good deal, I have never condemned it for the steps it took to bring about an orderly marketing of our products. When the Dried Fruits Export Control Board Bill was before the Senate in 1924 Senator Gardiner, who was then the Leader of the Labour movement in this chamber, attacked the bill because of his wellknown freetrade tendencies-.

Senator Sampson:

– How long ago was that?

Senator DALY:

– The debate to which I refer took place on the 1st October, 1924; it is, therefore, not statute barred.

Senator Herbert Hays:

– The honorable senator is going a long way back for an argument.

Senator DALY:

– One cannot go too far back to get a good argument. During the . course of the debate on that bill-, Senator Payne, as reported in Hansard, volume 109, page 4943, said -

I am surprised that the honorable senator, in his earnest desire to give the Government a good trouncing, should shut his eyes to tha fact that the conditions relating to the marketing of Australian products are to-day totally different from the conditions that existed prior to the war. The honorable senator knows as well as I do that our greatest difficulty lies in breaking down the commercial combines in England, which, during the last few years, have been working to the detriment of the Australian producers. This measure has only one object, and that is to endeavour to get past the combines in order that our growers shall reap an advantage.

Senator Plain:

– Was that said by Senator Payne of Tasmania?

Senator DALY:

– Ye3. The honorable senator commenced to speak at 9.21 p.m. I have quoted what Senator Payne said in 1924 because the bill then before the Senate embodied the same principle as that contained in the bill now under discussion.

Senator Payne:

– Nothing of the kind.

Senator DALY:

– I shall leave it to the honorable senator to explain the difference in principle between the marketing of wheat and the marketing of dried fruits. The honorable senator went on to say -

An advisory board in London composed of men actively engaged in commerce, may be able to devise some means whereby the fruit can bc taken to the consumers as speedily as possible without passing through the hands of so many middle men.

I am afraid there is little opportunity of getting a majority of honorable senators to support this motion, unless, by quoting the speeches they have made on previous occasions, I can show their inconsistency.

Senator Payne:

– I have not spoken to the motion.

Senator DALY:

– Perhaps not; but I felt certain that as the honorable senator suggested that ex-Senator Gardiner had trounced the Government, Senator Payne intended to- act similarly towards this Government. I invite Senator Sampson to read the speech of Senator Payne, to apply the principles that fie applied to that bill, and to ask whether hu can consistently oppose this motion.

The measure which we are endeavouring to restore to the noticepaper constitutes an honest attempt on the part of the Government to provide the same orderly system of marketing for the wheat-growing industry that ex-Senator Wilson, Senator Payne and others, who supported the Bruce-Page Government, advocated for the dried fruits industry when they assisted in placing the Dried Fruits Export Control Act on the statute-book. As Senator Sampson said, the Government has made several attempts to relieve the unfortunate primary producers of some of their burdens. The present Minister for Markets (Mr. Parker Moloney) has been at his wits’ end to frame a measure which a majority of this Senate would support, and which would be a means of relieving the wheatgrowers.

Senator GREENE:
NEW SOUTH WALES · NAT

– The Senate passed a bill providing for the payment of a guaranteed price of 3s. per bushel.

Senator DALY:

– The Government was prepared to shoulder the responsibility under that measure; but the Commonwealth Bank considered that it had not the power to provide the money. We also introduced a measure, which was rejected by the Senate, providing for the payment of 4s. a bushel.

Senator E B Johnston:

– And the Government popped on to the States the responsibility of finding one-half the money, which they could not do.

Senator DALY:

– I argued until I was almost blue in the face that if Western Australia did not desire to come under the scheme embodied in that measure, it would not be compelled to do so. The Senate having decided that it would not give the Government power to guarantee 4s. a bushel, we have now introduced this measure which represents the extent to which the Government can go.

Senator GREENE:
NEW SOUTH WALES · NAT

– Why not pay the 3s. a bushel?

Senator Barnes:

– Why not take a vote?

Senator DALY:

– As this is of vital interest to the primary producers, and a charge has been made against the Government of neglecting their interests, it is my responsibility as a Minister to fight for the Government of which I am a member. The Bruce-Page Government, in its dried fruits legislation, recognized the benefit of a proper system of marketing. The principle underlying this measure is exactly the same as that in the Dried Fruits Export Control Act. Honorable senators who are now in opposition should adhere to the principles which they supported when in office. It may be argued that the machinery provisions of this measure differ from those contained in the Dried Fruits Export Control Act; but if the motion is carried, the second reading can be agreed to and the machinery provisions amended in committee. I particularly invite the attention of honorable senators who intend to oppose the bill to Parliamentary Debates, Vol. 118, beginning, on the 17th March, at page 4960, and terminating on the 31st May, 1928. I sincerely trust that in view of the support given by honorable senators opposite to the policy of the Bruce-Page Government, they will support the motion. When the bill reaches the committee stage it may be amended to meet with their approval.

SenatorE. B. JOHNSTON (Western Australia) [11.13]. - At this late hour I do not propose to repeat the arguments which I have previously used in supporting the second-reading of the bill. I intend to deal with some of the points raised by those opposed to the bill. I shall vote for the restoration of the measure to the notice-paper, as there seems to have been some misunderstanding as to the effect of the amendment moved by Senator Greene. I cannot understand why there should be so much opposition to the bill in the form in which it was presented to the Senate. The last measure which the Government introduced was more objectionable in that it placed an unjust and unequal burden upon the States.

Senator McLachlan:

– It was more helpful to the farmers.

Senator E B JOHNSTON:

– Some States refused to have anything to do with it. Western Australia, for instance, said that it would be the means of placing an unjust burden upon that State. On the contrary, this measure merely seeks to give the farmer the same control over the marketing of his products as is already enjoyed by many other sections of our primary producers.

Senator Foll:

– It proposes to take a lot of money from some States and give it to others.

Senator E B JOHNSTON:

– It gives the farmers of all States the very distinct advantage of an equal price. Unless it is passed, none of the wheat-growers in any State will derive the advantage of an increased price with respect to local consumption. That is the great merit of this bill, and on that account it deserves the support of honorable senators. We have had measure after measure and proposal after proposal for the relief of the wheat-growers.

Senator Sampson:

– They were all “ duds “ ; and so is this.

Senator E B JOHNSTON:

– The honorable senator read an excellent letter that was written by the then Leader of the Opposition in the House of Representatives (Mr. Latham) in regard to the formation of a voluntary company for the assistance of wheat-growers. Unfortunately, nothing came of that proposal. This bill is a definite, concrete, proper proposal. It offers the wheatgrowers an extra 6d. a bushel on the whole of their production in the coming harvest. If that is not accepted, they will be again left, and will get nothing. The Leader of the Opposition referred to a telegram which Mr. Gregory had received from the Primary Producers Association of Western Australia in regard . to the equalization scheme. I point out that that telegram was despatched before the passage of this measure through another place, where the schedule, which deals with the equalization proposal, was radically altered on. the motion of the Minister for Markets. That alteration was made subsequent to the giving of the legal opinion quoted by Senator Pearce, and in my opinion the objections referred to in that telegram no longer apply.

The bill will enable an Australian price of some 2s. a bushel above world parity to be levied on all the wheat consumed within the Commonwealth, and the sum thus obtained will be distributed among the wheat-farmers of Australia. I believe that the figures given by Mr. Hill, Chairman of the Victorian Wheat Pool, which I quoted on the motion for the second-reading of the bill, show what the position is at present in regard to the distribution of the extra price among the States under the equalization scheme.

Senator GREENE:
NEW SOUTH WALES · NAT

– Those figures actually kill the bill.

Senator E B JOHNSTON:

– Other figures that have been quoted by some honorable senators in an opposite direction, may, with equal justification be regarded as killing the bill, because they are entirely lacking in those principles of equity, justice, and national spirit, which underlie the present equalization scheme. All wheat-growers are greatly advantaged by the distribution of the extra price received on Australian consumption. Why should we refuse the wheatgrowers of Australia this opportunity of obtaining immediately an extra 6d. a bushel? Why should the Senate decline to allow them to take a ballot on a question which is so much to their advantage? Let us pass this bill. It does not commit any State or wheatgrower to anything. It is really a machinery measure, which gives to the wheatgrowers the right to a ballot. The advantage to the wheat-farmers of Western Australia in terms of money amount to ?500,000 a year ; therefore, I hope that they will be given an opportunity to vote upon the proposal.

I wish to quote the opinion of this measure that is held by an independent, non-political body in Western Australia, called the Wheat-growers Union. In the West Australian of the 30th July, the secretary of that union is reported in the following manner : -

Mr. Seyfort said that wheat growers were gratified at the passage of the bill through the House of Representatives, and he had sent a telegram to all the West Australian senators, asking them to support the bill, on a proper equalization basis. Senator Lynch’s statement that he intended to move an amendment to the motion for the second reading was very difficult to understand, unless it were interpreted as obstructiveness. The amendment seemed to aim at the establishment of an Australian wheat pool, and, at the same time, for legislation to provide for the payment of 6d. a bushel on wheat produced. It seemed that the wheat-grower would derive very little benefit from the amendment. Instead of leaving the fixation of a price for home consumption in the hands of growers, as would be the case under the bill, Senator Lynch proposed to fix the price by law. This would be legislation that was scarcely likely to be favorably received. “The Minister for Markets (Mr. Parker Moloney), in his speech on the second reading of the bill “, Mr. Seyfort went on, “ mentioned that the measure was designed to permit the fixation of a price for home consumption by the growers, through their boards. He also said that fixation of the price at 4s. a bushel would have no effect on the price of bread, and would return to the grower, on the statistics of this year’s production, 6d. a bushel in excess of export parity “. “ It is obvious “, Mr. Seyfort declared, “ that the bill, as originally introduced, aims at putting the whole matter in the hands of growers, although those who oppose the bill have pretended that it will mean government control. In view of statements of the Minister for Markets, it would seem infinitely preferable to allow the price to be fixed by the growers, and little objection should he taken by representatives of the Labour party, who have strenuously opposed the imposition of sales tax on flour “.

That organization is non-party, and lias a large membership of wheat-growers.

I remind the Senate that the Government has repeatedly refused to impose a sales tax . on flour. This measure offers something definite and concrete, and it is within the reach of the wheat-growers if the Senate will approve of it. If it is defeated, no help will be given, and the wheat-growers will be deserted at a time when their financial position is absolutely desperate. T have received from the Cherry Tree Pool branch of the Primary Producers Association of Western Australia a letter dated the 26th of last month, referring to the desperate position of the wheatgrowers, and stressing their need for assistance. It reads -

At the last meeting of our branch I was instructed to write you saying that we look to the Senate as our last hope in regard to a reduction of the tariff.

You arc doubtless aware of the distressing circumstances of many, or most, farmers in our eastern wheat belt, many of whom are living on wheat alone, and dressing in bags. In fact, T have it on first-hand information, that one man with a large area of crop in had no socks or hat: another with 400 acres was applying for the dole, the tariff imposts eating lip all his profit. 1 remain,

Yours truly.

Dents O’halloran,

Honorary Secretary.

I confess that that letter portrays a more desperate position than I was cognizant of, and reveals the necessity for rendering practical support. This measure offers immediate and practical relief, and I appeal to the Senate to accept it, especially as it cannot come into operation in any wheat-growing State except as a result of an affirmative vote by a majority of the wheat-growers of that State.

Senator HERBERT HAYS:
Tasmania

– The honorable senator who has just resumed his seat said that this is one way in which relief may be given to the wheat-grower. I do not share that view. I say that it is one of the ways in which the farmer will be led to believe that he is being given some relief, and that he will find himself, tinder its operation, in the same position as he is in to-day. There is in it nothing of a practical nature that will provide either immediate or future relief. Senator Greene said quite rightly the other day that it is obvious that, under a scheme such as this, the wheat-grower cannot obtain a better price for his product. His only alternative is to eliminate some of the costs of marketing. The experience with wheat pools in Australia, both compulsory and voluntary, has been that they have rather added to than decreased the cost of handling. The private organizations that are- handling wheat under the present system could purchase from a compulsory or a voluntary pool and make a substantial profit out of the transaction. We are all anxious to help the wheat-growers, and that can best be done by rejecting the bill, because it will build them up with false hopes while giving them no practical assistance. The best means of assisting them is to relieve them of some of the burdens that are crushing them to-day. If this Government wishes to help our producers, it should do something to bring down railway freights, shipping freights, and bring in measures making it possible for farmers to get cheap superphosphate. Instead of doing this it introduces sales tax bills and other restrictive measures, all of which add to his living costs and costs of production. I am afraid that we cannot expect a substantial advance in the price of wheat for some years to come. In all probability it will remain in the region of 3s. a bushel, so if our farmers are to live and make a reasonable profit, costs of production must come down. How is it possible for any organization to ensure for our wheatgrowers a better price overseas? Whatever is done they must be prepared to sell their surplus in the world’s markets at world’s parity, so if we are to give them real help, we should confine our attention to measures that will lead to a reduction of production costs. I voted for the amendment submitted by Senator Greene last week, not because I believe in a sales tax on flour, but in order to defeat the bill. Whatever may have been the intention of other honorable senators who supported the amendment, I, at all events, voted for it in order to kill the bill. I do not believe in a sales tax on flour. The best help which this, or any other government can give to our primary producers is to remove some of the burdens which have been placed upon them. Our farmers wish to be left alone. In the course of time they may come together to a greater extent than at the present time in a voluntary co-operative marketing scheme, under which they will handle their own business in their own way. I understand that a compulsory pool is in operation in Queensland and that in two of the other States voluntary pools are working side by side with highly-efficient private sales organizations. Are these business firms to be regarded as the enemies of our primary producers?I feel sure that this is not the considered opinion of the majority of the people in this country. These private sales organizations have rendered a distinct service to our primary producers by developing profitable overseas markets for our surplus primary products, and I have no hesitation in saying that our producers have benefited to a greater extent than would have been possible under any pooling scheme. I intend to vote against this motion.

Senator J B HAYES:
Tasmania

– I intend also to vote against the bill, and like’ honorable senator who has just resumed his seat (Senator Herbert Hays) I wish to explain that, in voting for the amendment moved by Senator Greene last week, my intention was to defeat the bill. I do not wish my vote on. that occasion to be taken as meaning that . I favour a sales tax on flour, because I do not, and if such a measure were introduced; now I should vote against it. This bill provides for the establishment of a compulsory pool if a majority of the farmers in three of the States decide, by ballot, in favour of such a scheme. 1 believe that already three or four ballots have been taken in different States, and I understand that about one-half of the wheat-growers in Australia have expressed themselves in favour of, and the other half in opposition to, a compulsory pool. Why should 50 per cent., or a little over 50 per cent., of our farmers coerce the balance of our wheat-growers in such an important matter? The farmer is inherently independent. He clears, ploughs, and cultivates his own land, and with the necessary assistance, harvests his crop. Having done that without government interference, he prefers to be left alone, and to market his produce in his own way.

Senator Daly:

– Did not the hopgrowers of Tasmania ask for the establishment of a pool ?

Senator J B HAYES:

– Yes; but they did not get it. I am glad that the pool was not formed, because I believe that that scheme was not in the best interests of our hop-growers, and I voted against that bill. I hope, also, that the wheat-farmers of Australia will not be compelled to market their wheat through a compulsory pool, because I am convinced that such an arrangement will not get them out of their present difficulties. No fault can be found with existing selling agencies. They are highlyspecialized businesses, and well able to market Australian wheat under the best possible conditions. If governments had confined their attention to governing, and had allowed the business men to carry on the business of the country, we should not have been in our present unsatisfactory position. This bill, we are told, is designed to help our wheatfarmers. I should very much like to help them, because no one has greater sympathy with them than I have. ButI would remind the Senate that our wheatgrowers are not the only farmers who arc in trouble. I come from a State that grows very little wheat, yet its farmers are in the same dire trouble as are the wheat-growers on the mainland. We produce heavily of potatoes, oats, chaff, dairy products, and stock, and all our primary producers are in financial difficulties. Their interest obligations are too heavy. I am glad to know that, under measures now being taken, they are likely to get some relief in this direction. This bill will not help them because, as I have stated, it is intended solely to help the wheat-farmers of Australia, and, in my opinion, it will not be effective. The best help which we could give to all primary producers would be to reduce the present high tariff, and repeal certain legislation that has been responsible for high wages costs in industry. If we could do that, and do away with many of the taxation measures that have been imposed upon all sections of the community lately, we should be doing something of a practical nature in the interests of our primary producers. Let us try to reduce the cost of superphosphate, because in that way it will be possible to help, not only our wheat-farmers, but our graziers, potato-growers, fruit-growers, and, in fact, all primary producers throughout the Commonwealth. Let us endeavour also to reduce railway charges, which have been increased by 100 per cent. in the last few years. Let us reduce sea freights by repealing the coastal provisions of our Navigation Act. This would be a real help. If we did all these things, then, even if our primary producers were obliged to accept relatively low prices for their products, it would be possible for them to carry on. The farmerneeds real encouragement ; but all that the Government is offering them in this bill is a ballot for a compulsory wheat’ pool. I know that the price of wheat is low - lower probably than at any time during the last century, but prices for all other primary products are also down. At this time last year Tasmanian farmers were obtaining £10 a ton for potatoes in the Sydney market; to-day they have to be satisfied with £6 10s. per ton.

Senator Daly:

– This Government gave £5,000 to the berry-growers in that State.

Senator J B HAYES:

– That assistance was given to only one section of our primary producers. I do not say this Government has not done anything for our farmers. All that I am contending is that it has adopted wrong methods, and; in my opinion, this bill will not help them. As I have stated, our potatogrowers are in trouble owing to the low prices ruling. In Victoria, recently, a man who went to no end of trouble to grow a crop of potatoes was so discouraged at the price that, so I am informed, he stuck a digging fork in the paddock with this notice attached to it: “ Take as many potatoes as you like, but don’t take the fork “. The crop from which he expected a reasonable profit was not worth the digging. Other producers are in much the same position. Prices for all products are down anything from 25 per centto 50 per cent. If our dairy-farmers were paid arbitration court wages for all the work which they do, butter, instead of being1s. 6d. per lb., would be at least 3s. 6d. The Government and the people it represents have no objection to cheap butter, and they do not mind if the dairy-farmer has to work all sorts of hours to produce it. I hope that the bill will be defeated.

Senator PAYNE:
Tasmania

– Mr. President-

The PRESIDENT (Senator the Hon W Kingsmill:

– The honorable senator has already spoken to this motion.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– I have listened with a great dealof interest to honorable senators, whose hearts, they say, are bleeding for the farmers, but who, nevertheless, think that the farmers are not possessed . of sufficient intelligence to cast a vote as to the manner in which their products shall be sold ! The Government, at the urge of the intelligent section of the farming community, that they should be given an opportunity to organize the marketing of their products, has brought this bill forward for the sole purpose of giving them that opportunity, yet the troglodytes of the Senate refuse them that opportunity. Why cannot the farmers be trusted with the control of the disposal of the product of their labour? On sixteen occasions the Victorian Parliament was asked to give women a vote, and refused to do so. To-day politicians are seeking their suffrages, and here we have honorable senators who will not give the farmers a vote in respect to the management of their own affairs. I resent the opposition that has been displayed towards the Government’s proposal to give a great and intelligent section of the people an opportunity to say, by their own votes, what shall be done with their own product. The following telegram, forwarded to the Minister for Markets, has been handed to me: -

Farmers and Settlers conference carried resolution favouring Commonwealth compulsory pool and urges Government to do its utmost to pass the Wheat Marketing Bill through Senate. (Signed) Cambbidge.

Question - That the motion be agreed to - put. The Senate divided.

AYES: 5

NOES: 11

Majority . . . . 6

AYES

NOES

Question so resolvedin the negative.

page 5079

PAPERS

The following papers were pre sented : -

Public Service Act - Regulations amended - Statutory Rules 1931, No. 85.

Federal Capital Territory - Economic Survey of the Agricultural and Pastoral Leases - Report byE. N. Robinson of the Development Branch of the Prime Minister’s Department.

page 5079

LEAVE OF ABSENCE

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

That leave of absence be granted to every member of the Senate from the determination of the sitting this day to the day on which the Senate next meets.

page 5079

SPECIAL ADJOURNMENT

Motion(by Senator Barnes) pro posed -

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 senator by telegram or letter.

Senator THOMPSON:
Queensland

– Can the Minister give us any idea of the date on which we are likely to be called together? Those of us who have to travel to distant States would like to know when we are likely to be required again in Canberra.

Senator HERBERT HAYS:
Tasmania

– In fairness to senators who have to travel long distances to and from Canberra, the motion should state that the adjournment will not exceed a certain specified period, say, six weeks.

Senator LYNCH:
Western Australia

– I understand that another place is likely to re-assemble after about a month. The question arises whether the Senate should meet at the same time. I assume that you, sir, in consultation with the Ministry, will decide when the Senate ought to be called together. We should not be required to meet here again until there is something definite for us to do.

Senator McLACHLAN:
South Australia

– I understand that another place is not likely to re-assemble for probably a month or five weeks. Unless there is some urgent reason for our presence here, it would be futile for the Senate to re-assemble for some considerable time after another place has done so. In the circumstances, I consider that the arrangement proposed by the Minister is best. The Minister might, however, indicate how long he thinks it will be after another place has reassembled before there will be sufficient business to be transacted in the Senate to warrant its meeting again. It appears to me that at least three weeks will have to elapse after another place hasmet before there will be much business for the Senate to transact.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– So far as I know the House of Representatives will adjourn for four or five weeks. I expect that the Senate will meet about a fortnight later, but I cannot make a definite statement to that effect.

Question resolved in the affirmative.

page 5080

IMPERIAL PENSIONERS- SALES TAX: SECURITY

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– by leave - This morning Senator Johnston asked for some information in relation to Imperial pensioners. I am now able to inform him that arrangements for payment of the exchange premium to Imperial and other overseas pensioners are now almost complete. The Treasury is, however, awaiting the acquiescence of the British authorities in the details of the arrangements made between it and the representative of the British Ministry of Pensions in connexion with these payments, and until such acquiescence has been received payments cannot be authorized. It is confidently expected that payments will be made in the near future.

The honorable senator also desired to know whether the attention of the Government had been drawn to an article appearing in a recent issue of the Perth Sunday Times complaining of the increased burden placed on industry by an alteration in the Taxation Department’s requirements respecting bonds as security for the payment of sales tax, and if so, whether any relief could be afforded to taxpayers in this matter. I have not seen the article referred to, but I can inform the honorable senator that the amendments of the law which are now being made are designed for the relief of taxpayers.

page 5080

REPATRIATION ACT - SALES TAX ON SEEDS

Senator DOOLEY:
Assistant Minister · New South Wales · ALP

– by leave - Thismorning I promised the Leader of the Opposition (Senator Pearce) some information relating to regulations under the Australian Soldiers’ Repatriation Act in respect of pensions and allowances. I am now able to say that reductions of pensions and allowances have been made under the Financial Emergency Act and the Australian Soldiers Repatriation Act. The reductions made under the Financial Emergency Act are those recommended by the committee representing the returned soldier organizations. Regulations affecting other reductions have been presented to both Houses.

I also promised Senator Payne some information regarding a request that certain seeds should be exempt from the sales tax. I am now able to inform him that, as the seeds referred to are not dutiable under the Customs Act they will not be liable for sales tax.

page 5080

ADJOURNMENT

Tariff Alterations : Duty on Motor Bodies and Petrol - Disease in Cattle.

Motion (by Senator Barnes) proposed -

That the Senate do now adjourn.

Senator McLACHLAN:
South Australia

– I understand that there is a movement to effect an alteration in the tariff on motor bodies. In the past, alterations of tariff schedules have sometimes been made without the Tariff Board having first been consulted. I should like to have the Minister’s assurance that action will not be taken to interfere with the tariff without the Minister for Trade and Customs first hearing the persons most concerned and receiving a report from the Tariff Board. If the Minister representing the Minister for Trade and Customs is not in a position to give that assurance, the matter will have to be taken up with the Minister in charge of the department almost immediately.

Senator PAYNE:
Tasmania

– There has, unfortunately, been a serious outbreak of disease among cattle in the north-eastern portion of King Island. When a request was made to the Government for assistance, it promptly arranged for an officer to visit the island to make a soil survey, and to conduct an investigation into the probable causes of the outbreak. Has the Minister any information as to the stage which the inquiry has reached? The people of Tasmania appreciate the help given to the settlers on King Island by the Government. Naturally, they desire to know when they can hope for some solution of the mystery. I ask the Minister to bring this matter before the notice of the Minister directly interested, and to letthe Agricultural Bureau at King Island know as soon as possible how the investigation is proceeding.

Senator GREENE:
NEW SOUTH WALES · NAT

– The Minister for Tradeand

Customs is reported to have visited a factory in Melbourne at which he was again urged to impose a duty on petrol imported in drums. According to the press report, the Minister stated that he would give the matter his immediate consideration. That is a very mischievous statement for the Minister to make under existing circumstances.It makes it impossible for the independent importers of petrol to place their orders overseas, as they do not know what action the Government is going to take, and practically causes a complete cessation of their business.

I do not question the tremendous industry or integrity of the Minister for Trade and Customs, but his handling of the affairs of the oil industry has been disastrous, so far as the independent importers are concerned. Had the Minister ‘been the paid servant of the major oil companies he could not have done their work : better. That is a very serious statement to make, but from my intimate knowledge of the business, I say that it. would have been impossible to hinder the activities of the independent importers more than has been done by these constant alterations in the rates of duty. Only the other day the Minister brought down a fresh lot of duties on petrol, and now he proposes to allow into Australia free, crude oil with a petrol content not exceeding 70 per cent. If Parliament agrees to that, it will succeed in granting to the major oil companies, which have been bleeding the country white for years, an absolutely cast-iron monopoly. So little do the people handling customs affairs know what they are doing, that they have played right into the hands of the major companies in every move that they have made, and, incidentally, they have ruined80 per cent. of the independent importers. The Minister should take the earliest opportunity to make it definite whether the Government proposes to reimpose this duty, so that the persons to whom I have referred may have an opportunity to determine their future action.

Senator DALY:
Assistant Minister · South Australia · ALP

– I give Senator McLachlan an assurance that since he spoke to me concerning the matter that he has just raised, I have interviewed the Minister for Trade and

Customs, who has promised to hear South Australian representatives before making any change.

Senator Payne brought the matter to which he has referred under my notice when I was previously controlling the activities of the Council for Scientific and Industrial Research, and as a result of his representations, I arranged that one of our soil experts should visit King Island and make investigations. Since my return to office I have not had an opportunity again to go into the subject, but during the recess I shall do so.I suggest that he in turn should get in touch with the Tasmanian Agricultural Bureau or some local authorities, and then he can communicate with me on the matter. I shall do what I can to minimize the effect of the disease referred to.

There are two sides to the matter raised by Senator Greene. At this late hour I should not have attempted to put one side if Senator Greene had not stated that had the Minister for Trade and Customs been a paid agent of the major oil companies he could not have done the job better for them. The Tariff Board brought down a recommendation relating to petrol containers, favouring what was practically an embargo. I point out that if I desire to import whisky into Australia I could not take it out of bond unless I decanted it into Australian containers known as bottles, or as an alternative, paid a special duty of 5s. a gallon on the whisky that I took out in bulk. The duty to which Senator Greene has referred was imposed for the protection of Australian containers.

Senator GREENE:
NEW SOUTH WALES · NAT

– That is not correct.

Senator DALY:

– It is correct.

Senator GREENE:
NEW SOUTH WALES · NAT

– It is not.

The PRESIDENT (Senator the Hon. W. Kingsmill) . - Honorable senators must accept each other’s assurances.

Senator GREENE:
NEW SOUTH WALES · NAT

– I accept it, sir, though I know that it is incorrect.

Senator DALY:

– I know that Senator Greene has an axe to grind in this matter, but I am not concerned about that.

Senator GREENE:
NEW SOUTH WALES · NAT

– I have not one cent in the oil business.

Senator DALY:

– The Minister for Trade and Customs has no axe to grind, and he has not acted as though he were a paid agent of the major oil companies.

Whether rightly or wrongly, duty hasbeen imposed to protect the manufacturers of Australian petrol containers. The only thing that appeared to me to be illogical in connexion with the matter was that, having imposed the duty for the protection of the Australian tin or case, the drum which is competing against those containers was given a preference. I have no financial interest in either the independent oil companies or the major concerns, but I object to Senator Greene’s allegations against the Minister, who was actuated by a desire to assist the manufacturers of Australian containers. If the Australian container such as tins or cases are to be protected, there is no logical reason why the Government should allow foreign-made drums to compete with Australian-made cases or tins. The Minister for Trade and Customs (Mr. Forde) acted as he did, not in the interests of major or minor oil importing companies, but in the interests of the manufacturers of Australian-made containers. I ask Senator Greene to accept that assurance.

Senator GREENE:
NEW SOUTH WALES · NAT

– I desire to make a personal explanation. The Assistant Minister (Senator Daly) said that my reason for raising this question was that I had an axe to grind.

Senator Daly:

– I should not have said that.

Senator GREENE:
NEW SOUTH WALES · NAT

– In view of the statement of the Assistant Minister (Senator Daly), I desire to Bay that although I have an intimate knowledge of this particular business, I have not one single penny piece invested in it. I intentionally prefaced my reference to the Minister for Trade and Customs (Mr. Forde) by referring to his industry, and by saying that I had not the slightest suspicion conjoining his personal integrity in this matter. I only said that the whole of his actions had been in a certain direction.

Senator Daly:

– I also desire to make a personal explanation. I should have raid that it would appear that Senator Greene had an axe to grind. I accept bis assurance that he has not, but I could not understand his protest on any other hypothesis.

Question resolved in the affirmative.

Senate adjourned at 12.22 a.m. (Friday).

Cite as: Australia, Senate, Debates, 6 August 1931, viewed 22 October 2017, <http://historichansard.net/senate/1931/19310806_senate_12_131/>.

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