Senate
28 November 1935

14th Parliament · 1st Session

  1. Senate
  2. 14th Parliament
  3. 1935

The President (Senator the Hon. P. J. lynch) took the chair at 3 p.m., and read prayers.

page 1986

PAPERS

The following papers were presented : -

High Commissioner for Australia in London - Report for 1934.

Wireless Telegraphy Act - Regulations amended - Statutory Rules 1935, No. 104 -No. 120.

page 1986

QUESTION

LABOUR PARTY SANCTIONS

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

-i ask the Leader of the Senate if he will be good enough to direct the attention of the Leader of the Opposition (Senator Collings) to a newspaper report this morning that one of the speakers at the Conference of the Australian Council of Trade Unions in Melbourne declared that the general strike was the only weapon which the workers could use, and that it should impose sanctions on the war mongers of Australia?

Senator Sir GEORGE PEARCE:

– From my knowledge of the assiduity with which the Leader of the Opposition reads newspapers, I have not the slightest doubt he has read the paragraph to which the honorable senator has alluded. ‘

Senator Collings:

– I have.

page 1986

QUESTION

ASSISTANCE TO WHEATGROWERS

Senator E B JOHNSTON:
WESTERN AUSTRALIA

asked the Minister representing the Prime Minister; upon notice -

  1. Is it a fact that at the recent Loan Council meeting in Melbourne the Premier of Western Australia was requested to pass wheat legislation to supplement the Commonwealth’s proposed legislation?
  2. Is it a fact that on the day Mr. Collier reached Perth (Tuesday, 19th November) from theLoan Council, Mr. Manning, AttorneyGeneral of New South Wales, stilted that “ during the last few days the Premier (Mr. Stevens) has been in touch with the Commonwealth Government on the question whether this legislation should apply to the present harvest and in view of the discussion this Government has decided to inform the House that this act shall not be made applicable to this harvest and it is thought in consequence that the flour tax will be continued meanwhile “ ?
  3. If so, has the Government of Western Australia been advised of the altered policy arrived at in the discussions between Mr. Stevensand the Commonwealth Government, and announced by Mr. Manning to the Legislative Council of New South Wales?
  4. If not, why not?

  5. Is the Government in a position to announce what assistance will now be given to-

    1. the wheat industry generally, and
    2. distressed wheat-growers in the partially drought-stricken districts of Australia, or otherwise for the coming harvest?
Senator Sir GEORGE PEARCE:

– The Prime Minister has supplied the following answers : -

  1. . . A message was sent to the Premier to that effect.
  2. Yes. 3 and 4. The policy of the Commonwealth Government has not been altered.
  3. The hill brought down by the Government to give effect to its policy is being proceeded with, and will, it is hoped, be passed during the present session. The question of special assistance to wheat-growers in droughtstricken areas cannot be considered till the States have proceeded with their legislation in accordance with the decisions reached at the meeting of the Australian Agricultural Council in October, 1935.
Senator E B JOHNSTON:

asked the Minister representing the Minister for Commerce, upon notice -

How does the Minister reconcile the reply given to Senator . E. B. Johnston on the l5th instant,that “ it is essential in order to provide some guarantee for the wheat-growers for the coming harvest, that the main wheat growing States shall at once introduce their legislation “ and the balance of that reply, with the statement reported to have been made by Mr. Manning, the Attorney-General of New South Wales, on the 19th instant, that “during the last few days the Premier (Mr. Stevens) has been in touch with the Commonwealth Government on the question whether this legislation should apply to the present harvest, and in view of the discussion this Government has decided to inform the House that this act shall not be made applicable to this harvest and it is thought in consequence that the flour tax will be continued meanwhile”?

Senator BRENNAN:
Minister without portfolio assisting the Minister for Commerce · VICTORIA · UAP

– The Minister for Commerce has supplied the following answer : -

Both of these statements are consistent with the published resolutions of the Australian Agricultural Council, reached at its meeting on the 7th October,1935, which are: - “ That this conference of State governments gives general approval to the Commonwealth plan for securing a home-consumption price for wheat and will favorably recommend its adoption to their governments. If insuperable obstacles delay implementing the plan for the coming harvest, this conference urges the temporary re-imposition of the flour tax to enable a home-consumption price to be paid. The conference recommends that the homeconsumption price for wheat shall be 4s. 9d. a bushel, f.a.q., f.o.r., at seaboard.”

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QUESTION

COMMONWEALTH AND STATE EXPENDITURE

Senator COLLETT:
WESTERN AUSTRALIA

asked the Minister representing the Treasurer, upon notice -

What are the last recorded figures of the annual expenditure of -

The Commonwealth ;

Each State-

State government;

Local governments;

Friendly or benefit societies;

Trades unions;

Charitable organizations; in respect to -

Old-age pensions;

Invalid pensions;

Unemployment relief;

Casual unemployment;

Casual sickness, including free medical treatment and medical aids;

Destitute persons, aged, indigent, or infirm?

Senator Sir GEORGE PEARCE:

– The Treasurer has supplied the following answer : -

The whole of the information desired by the honorable senator is not available, but inquiries are being made with a view to furnishing such information as can be obtained. ‘

page 1987

QUESTION

TENNANT’S CREEKGOLD-FIELD

Senator COLLINGS:

asked the Minister representing the Minister for the Interior, upon notice -

  1. Has he received a petition from the Tennant Gold Mining Industries Association, with 300 signatures attached, asking for the erection and maintenance by the Government, of a battery on the Tennant gold-field, capable of treating 50 tons a day with a complete cyanide plant?
  2. If so. will he inform the Senate as to the Government’s intention in the matter?
Senator Sir GEORGE PEARCE:

– The Minister for the Interior has supplied the following answers : -

  1. Yes.
  2. It is not the policy of the Government to provide batteries so long as they are adequately supplied by private enterprise. The present position is that there aretwo private batteries operating on thefield,and several companies and syndicates have intimated that they are prepared to erect batteries as soon as water can be made available. The Government is doing everything possible to find water, three boring plants being continuously in operation.

page 1987

QUESTION

GOVERNOR-GENERAL ELECT

Senator COLLINGS:

asked the Minister representing the Prime Minister, upon notice -

  1. Is the statement, appearing in many of the principal newspapers of the Commonwealth, to the effect that the Governor-General elect is to be initiated into his high office in Melbourne, official ?
  2. Is the reason given, viz., that Sir Alexander Hore-Ruthven desires to go to Tasmania, considered satisfactory, seeing that Melbourne is only a few hours’ journey from the National Capital - Canberra ?
  3. Will the Government arrange for the installation of the new Governor-General to take place in Canberra?
Senator Sir GEORGE PEARCE:

– The Prime Minister has supplied the following answers: -

  1. Yes. 2 and 3. Full regard was given to the various aspects of this matter before the decision was reached that the ceremony would take place in Melbourne. Preliminary arrangements for the ceremony are being made, and it is not proposed to vary the decision already announced.

page 1988

QUESTION

BROKEN HILL PROPRIETARY COMPANY LIMITED

Contract for Construction or Vessels

Senator COLLINGS:

asked the Minister representing the Prime Minister, upon notice - 1.Whether, in view of his answer on the 23rd September last, to questions by Senator Ceilings upon this matter, he can give the Senate any information regarding the two vessels to be built by the Broken Hill Proprietary Company Limited?

  1. Has the contract been let, and, if so, are the vessels to be constructed in Australia or overseas ?

Senator Sir GEORGE PEARCE.The Prime Minister has supplied the following answer : - 1 and 2. The following information was recently supplied by the managing director of the Broken Hill Proprietary Company Limited in relation to the matter: - “The Australian tender for construction of one or alternatively two ore-carrying steamers was found to be very considerably in excess of comparative British tenders. A conference was held with representatives of the Cockatoo Docks and Engineering Company, and an opportunity offered to review prices with the object of reducing the margin of difference. The costs of steelplates and sectional materials were found to be quite in line with British prices, but the combined effect of the costs of other materials and of various uncontrollable items left the margin so great that we were not able to reach common ground, on which the building of those vessels in Australia could be made an economically sound proposition.”

page 1988

QUESTION

WHEAT : HOME CONSUMPTION PRICE

Senator BADMAN:
through Senator Hardy

asked the Minister representing the Minister for Commerce, upon notice -

Has the South Australian Premier, Mr. Butler, promised the Commonwealth Government that he will introduce legislation in the South Australian Parliament which will be complementary to the bill concerning the home-consumption price for wheat which the Federal Government has introduced in the Federal Parliament?

Senator BRENNAN:
UAP

– The Minister for Commerce states that the information will be obtained and furnished to the honorable senator later.

page 1988

QUESTION

NEW BRITAIN IRON ORE DEPOSIT

Senator COLLINGS:

asked the Minister representing the Prime Minister, upon notice -

In view of the definite announcement in the Sydney Morning Herald, under date the 11th November, 1935, to the effect that the Eastern Prospecting Syndicate was negotiating with a Japanese firm for the sale of “ a fabulous quantity of iron ore in New Britain,” can he give the Senate any information on the matter ?

Senator Sir GEORGE PEARCE:

– The Prime Minister has supplied the following answer: -

I have read a statement in the press concerning an iron ore deposit in New Guinea. There is no information in the possession of the Government concerning the Eastern Prospecting Syndicate, nor of any negotiations for the purchase of any iron ore deposit in the territory. Inquiries have been made of the authorities in the territory, and a further statement will be made when a reply comes to hand.

page 1988

QUESTION

WIRELESS BROADCASTING

” B “ Class Station atfremantle.

Senator E B JOHNSTON:

asked the Postmaster-General, upon notice -

  1. Has the Postmaster-General’s Department received an application for a licence to establish a “ B “ class broadcasting station at Fremantle, Western Australia?
  2. Has the Fremantle City Council requested that a licence should be granted for a broadcasting station, in the second city in Western Australia ?
  3. If so, what decision has been arrived at in the matter?
Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

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

  1. Two applications have been received for a broadcasting station licence in Fremantle.
  2. Yes.
  3. Each applicant has been informed that it is not . practicable at present to authorize a wave-length for another station in the PerthFremantle area.

page 1988

REMOVAL OF PRISONERS (TERRITORIES) BILL 1935

Motion (by Senator Sir George Pearce) agreed to -

That leave be given to introduce a bill for an act to amend the Removal of Prisoners (Territories) Act 1923.

page 1988

NEW GUINEA BILL 1935

Bill read a third time.

page 1989

INCOME TAX BILL 1935

Second Reading

Senator Sir GEORGE PEARCE:
Minister for External Affairs · Western Australia · UAP

[3.13].- I move-

That the bill be now read a second time.

This bill is the annual taxing measure which is necessary in order that the income tax for the current financial year may be assessed and collected upon the income derived by taxpayers during the year 1934-35. The schedules to the bill set out the rates of ordinary income tax which are to be levied upon income from personal exertion, upon income from property, and upon combined incomes derived from both personal exertion and property. These basic rates are set out in the first three schedules to the bill. The rates ave the same as those which have been in force since the 1933-34 assessment. The schedules which follow also impose rates and amounts of tax similar to those which have been in force since 1933-34. The special property tax of 5 per cent, of the taxable income .derived from property is set out in clause 5.

It will be observed that the only alteration of the former rates of tax is in relation to the rate of the special property tax. It is proposed to reduce that rate from 6 per cent, to 5 per cent. As stated in. the Treasurer’s budget speech for the current year, the Government regards this special property tax as a severe form of emergency taxation from which relief should be given as soon as reasonable opportunity presents itself. It has, unfortunately, not been found possible at present to do more- than reduce the tax to the extent now proposed. The reduction of revenue from the special property tax resulting from the lowering of the rate is estimated at £200,000 for the total assessment for 1935-36 which must be based on the 1934-35 income. The income tax collections during 1935-36 have been estimated at £8,800,000. Of that amount, it is expected that over £5,000,000 will be collected by the 30th June, 1936, on account of the assessment for the financial year 1935-36. The remainder of the £8,800,000 represents estimated collections during the present financial year on account of taxes amounting to £4,380,000, outstanding at the 30th June, 1935, and also on account of assessments made during 1935-36 in respect of earlier assessment years.

Senator COLLINGS:
Queensland

– Having looked -through this measure I am impressed with the fact that once again the Government proposes to distribute largesse, not to that section of the community which pre-eminently deserves it, first, because it is the least wealthy and, secondly, because it is the most valuable, but to people who ought to be made to carry the full burden of taxation because they can well afford to do so. The remissions of taxes which have been made during the last two or three years by this Government to the wealthy sections of the community are equivalent to an annual distribution of approximately £5,000,000. This distribution is proposed at a time when the Government is haggling with the pensioners over the restoration of their meague pension to £1 a week. It is true that the Government contemplates doing something for the soldiers, and that the Opposition will have an opportunity to support that measure ; but public servants have not yet had their salaries restored in full, nor are members of this Parliament being paid at the contract rate agreed upon for their services - a rate which at best is low enough. The Opposition could move amendments to this bill; but no notice would be taken of them because this is a money measure. It could also protest against the proposed distribution of surplus revenue, but it knows that the Government’s proposals will be carried. Although the Opposition will not oppose the measure, it believes that the people of this country should know that there is a great difference between the policy of the Labour party, both in this Parliament and elsewhere, and the policy of the present Commonwealth Government in regard to taxation.

Senator HARDY:
NEW SOUTH WALES

– Does not the honorable senator believe that reduced taxation will result in cheaper rentals for the workers ?

Senator COLLINGS:

– The Government is anxious to get into recess, and within the next week or so will ask the Senate to vote millions of pounds without due consideration . being given to its disposal, and therefore I shall not be sidetracked by the honorable senator’s disorderly interjection. The Brisbane Courier-Mail which, not being a Labour publication, may be described in this chamber as a “ reputable “ journal, recently published a brief report of the discussion of this bill in the House of Representatives. It pointed out that these remissions were being made, and, strangely enough, immediately underneath that report appeared the following: -

page 1990

SUPER LAND TAX TO BE PERMANENT

The Assistant Treasurer (Mr. Cooper) gave notice in Parliament yesterday of a. bill to reimpose the super land tax for the financial year beginning on the 1st July, 1935, and for each financial year thereafter.

I draw the attention of the people of the Commonwealth to the fact that while a Labour Government in Queensland is deciding that the people who can pay taxes shall pay, the Commonwealth Government continues to follow the policy that the people who can and should pay tax will not be asked to pay; it has the cast-steel cheek to give them further remissions.

Senator GIBSON:
Victoria

.- On a previous occasion I drew attention to the fact that the special tax on property, in effect, fixes . the rate . of interest which persons have to pay on mortgage. The Prime Minister (Mr. Lyons) has spoken very strongly against the principle of this tax. Originally it was 10 per cent.; it was subsequently reduced to 6 per cent., and the Government now proposes to reduce it to 5 per cent. The total revenue derived from this special tax amounts to about £1,200,000 per annum. It would have been a commendable gesture on the part of the Government towards the industrialists, the manufacturers, and primary producers of this country, if it had wiped out this taxation altogether. I do not agree with the Leader of the Opposition (Senator Collings), because I hold the view that cheap money inevitably means greater returns to industry and enables private enterprise to give more employment. Reduction of taxation is the only means whereby cheap money can be made available. I venture to say that the Commonwealth loan now being floated at 3$ per cent, will absorb the whole of the money that would otherwise be available for loan on mortgage. A person with an income of £2,000 would have to receive 5£ per cent, from the mortgagor to get a, return equal to that yielded by the 3- per cent, interest on Commonwealth bonds, because only one tax is levied on income from bonds, whereas on income from mortgage five taxes are payable - federal tax, special property tax, State tax, State special tax, and unemployment, relief tax.

Senator Duncan-Hughes:

– And also rates.

Senator GIBSON:

– That is so. In fact, a man with an income of £2,000 to-day would have to get per cent, interest from mortgages to be in the same position as if he invested his money in Government bonds.

Senator Collings:

– Then he should put it all into Government bonds.

Senator GIBSON:

– It is better that the money be put into industry rather than into Government bonds. I hope that the Government will wipe out this tax as soon as possible. The vital need of industry to-day is cheap money. This taxation represents a means of providing cheap money for the Government, but making it dear to everybody else.

Senator PAYNE (Tasmania) [3.24 J. - But for the extraordinary statement made by the Leader of the Opposition (Senator Collings) I would not have spoken on this measure. He characterized the bill as another effort on the part of this Government to distribute largesse to its supporters. When he makes such a statement he does not know what he is talking about. He also contended that the Commonwealth Government should follow the example of Labour governments in making a wide differentiation between the taxation of income from property and the taxation of income from personal exertion. If the honorable senator examines the schedule to this- bill he will find that in the Commonwealth, also, a wide differentiation between these two classes of taxation applies. The rates which are set out on page 4 of the bill reveal a wide differentiation, not only between the respective rates, but also between the amounts on which those rates are applied. For instance income from personal exertion must exceed £6,900 before the highest rate of tax is applicable, whereas the corresponding level of income from property is £3,700. The highest rate of taxation applies only when the income from personal exertion is almost double that of income from property. That differentiation in itself is a very heavy burden to the latter class of taxpayers. The main point to be considered in connexion with this measure, however, is that in remitting some of this tax on property the Government is not distributing largesse to its supporters, as the Leader of the Opposition says, but is simply partially removing a burden that was unjustifiably placed on these taxpayers by the Scullin Government.

Senator Brown:

– Why was that tax unjustified ?

Senator PAYNE:
TASMANIA

– That tax, at the rate of 2s. in the £1 on income from property, was in addition to other taxation levied on the same income - ordinary income tax, super income tax, and special income tax. Because the Government now proposes to reduce the special tax on income from property the honorable senator has the audacity to refer to the Government’s action as a distribution of largesse.

Senator Collings:

– The honorable senator makes me laugh; they are the parasites in this country.

Senator PAYNE:

– I cannot laugh with the Leader of the Opposition; rather I must express sympathy with the people whom he professes to represent when he, as their leader knows so little about income tax legislation as to have the audacity to refer to this particular remission of taxation as a distribution of largesse. I hope the day is not far distant when this taxation will be wiped off the statute-book altogether. It was never justified, and so long as it remains it will diminish the avenues of employment. The Leader of the Opposition must realize that the more that money is taken from the people in the form of taxes the less will be the amount available for employment. Everyone admits that. I cannot understand the honorable senator’s failure to welcome a reduction of taxes in any way whatever. Every reduction of £1,000 must mean that the money available to provide employment is increased by that amount.

Senator Collings:

– It does not necessarily mean anything of the kind.

Senator PAYNE:

– It always means that. Senator Gibson’s remarks on this subject were correct. Reduction of taxation must mean that primary producers and employers in trade and industry will be enabled to secure money at reasonable rates of interest from private lenders. The higher the taxation, the higher the rate of interest that must be earned by private lenders to meet taxation. I regret that the Government has not seen its way deal- to propose a reduction greater than one per cent, in respect of this tax on property. I remind members of the Opposition that the continuance of the present rate of this tax imposes a very heavy burden on many people who have a gross income from property as low as £200 per annum. The Leader of the Opposition objects to relief being given to these people; yet he and his colleagues always profess to be advocates of the relief of the under-dog! I hope that the day is not far distant when the Government will receive sufficient revenue from income tax proper to be in a position to abolish this special taxation on property.

Senator E B JOHNSTON:
Western Australia

– This measure is most disappointing to the comparatively small body of taxpayers who pay federal taxes. There are 221,886 resident federal income taxpayers in Australia. It is surprising that in a population of 6,500,000 the number is so small. In addition, there are 10,501 absentee income taxpayers, and 6,449 companies paying income taxes to the federal authorities. According to the latest figures available in the report of the Commissioner of Taxation, I find that for the year ended the 30th June, 1934, there were 1,155 casual taxpayers making a total, including absentees and companies, of 239,971. Those constituting this comparatively small proportion of our population were looking forward to some substantial relief from the staggering burden which has been placed upon them. We read in the newspapers a week or two ago,- that for the first four months of this financial year there was a surplus in the Commonwealth Treasury returns of £1,990,000. I know that the Minister will say that this small reduction is being given in the first portion of the financial year, but we know that in the latter part of the year revenue comes in freely. “With such an enormous surplus in four months, there is no justification whatever for the Government retaining a super tax of 5 per cent, on income from property. Although Australian taxpayers are again being told that prosperity is just around the corner, the Government is still placing an enormous burden upon the people. Some rates have been reduced slightly, but the Government is still collecting more money in all forms of taxation, with the exception of land tax, than in any previous year. The relief of income tax granted under this measure - a paltry 1 per cent, in respect of one tax only - amounts to only £200,000 a year. There is not the slightest justification for the continuance of a special federal income tax on property, or for the continuation of the high rates of taxes imposed in the extraordinary schedules embodied in the bill, and which I challenge any person to understand. At present taxation has reached such a high level that most taxpayers regard it as legalized robbery at the hands of the Federal Government. This special income tax on property should have been abolished at least three years ago, because during that period it has been levied merely as a contribution towards the trust fund to which the Auditor-General referred in his import. I commend that official for the comment which he has made on this phase of taxation. He said -

Altogether the amount of revenue moneys, well over £8,000,000, is held in trust fund, though really part of the Consolidated Revenue Fund. That sum is available for revenue expenditure or towards the automatic reduction of the accumulated deficit of £17,000,000.

It will be seen that the Government is retaining this super tax on property amounting to £1,000,000 a year in order to maintain a reserve of £8,000,000 which has accumulated during past financial years. The Auditor-General continued - lt does not appear to be generally realized that, by accumulating revenue moneys in trust fund for subsequent expenditure, a deceptive appearance has been given to the Consolidated Revenue Fund. The result is that taxation of many millions has been imposed, particularly during the difficult depression years, a considerable time ahead of requirements. This, of course, is a most serious matter.

It is a serious matter that this small body of 250,000 taxpayers should find that the rate is to be only slightly reduced instead of abolished. The fact that £8,000,000 has been placed in the trust fund means that practically a whole year of income taxation has been placed in reserve - the estimate for this year is, I think, £8,800,000 - while at the same time the Government is maintaining excessive and oppressive rates of tax in this and in other directions, the greater portion of which is extravagantly expended by the federal authorities.

Senator Hardy:

– Does the honorable senator believe in the complete elimination of income tax?

Senator E B JOHNSTON:

– The framers of the Constitution always intended that the right to collect income tax should be reserved entirely to State governments, which are able to make better use of the money so collected. When the Bruce-Page Government was in power, Mr. Bruce said that it was wrong for one government to collect revenue for another government to spend. He said in Perth that he hoped that the Federal Government would eventually be able to vacate the field, of income taxation altogether. In reply to the interjection of Senator Hardy, I believe the collection of income tax should be reserved entirely to the State governments, and that the Commonwealth Government should, as Mr. Bruce suggested, vacate that field altogether. At the original meetings of the Federal Convention it was suggested that the Federal Government should not have the right to impose an income tax, and that the imposition of such a tax should be left entirely to the States. It was, however, pointed out that in the event of war heavy expenditure would be incurred, and that the Federal Government should have the right to impose this tax in order to provide for such expenditure. That is the only justification for a federal income tax.

Senator Gibson:

– The grant to Western Australia is larger than the proceeds of the income tax.

Senator E B JOHNSTON:

– The Federal authority will not vacate any of the fields of taxation into which it has entered. This is illustrated particularly by the retention of the sales tax, and other imposts.While the inner reserve of £8,000,000, to which the Auditor-General referred exists no justification can he advanced for the continued imposition of the heavy rates of tax proposed in this measure. I challenge the Government to shown any necessity’ for the continuance of the income tax at these rates. Income taxes are killing enterprise amongst our citizens and preventing the re-employment of our people. I consider that Parliament has been induced to retain this tax on property, and the high rates of income tax, because of the policy of the Government of transferring revenue to trust fund. This practice has been most severely cri- ticized by the Auditor-General, whose outspoken remarks on this subject deserve the thanks of every Australian taxpayer and every member of the public. Mr. Cerutty describes the Government’s bookkeeping methods, in continuing this system, as being unnecessary and confusing; he states that they are “quite opposed to orthodox accounting, commercial practice and commonsense “ ; and I agree with him entirely on this point. I am pleased to notice that taxpayers’ associations, chambers of commerce and other representative bodies throughout Australia Approve of Mr. Cerutty’s comments so far as they affect the bookkeeping and the excessive and unnecessary taxation which this and other governments have levied and are continuing to levy. Mr. Cerutty’s remarks were also supported in the press by economists. Professor F. A. Bland, Professor of Public Administration in the Faculty of Economics, Sydney University, said -

The matter should not be allowed to rest where it was, but should be fully probed. Nothing disclosed more clearly that Parliament did not understand the present system nf bookkeeping used by the Treasury than the attack which members were making on Mr. Cerutty, who had been doing his duty on behalf of the public.

Mr. Cerutty performed his duty ably in informing the public that £8,000,000 - a sum nearly equivalent to the Federal income tax collections for a year - had been transferred to trust fund as a sort of inner reserve at the disposal of the Government to be expended, if it so chooses, without consulting Parliament. The taxpayers, indeed, the general public, are entirely in accord with Mr. Cerutty’s fearless and businesslike criticism of political bookkeeping, federal extravagance, and excessive taxation.

The first results which should follow the Auditor-General’s disclosures are the abolition of the special tax on income from property, and reduction of income taxes and the heavy tariff burdens, including the primage duty. That such concessions will be put into effect by this Government is naturally to be expected, because on such a policy the Government and particularly the Country party, appealed to the electors eighteen months ago.

Senator Foll:

– The first tax to be abolished should be the sales tax.

Senator E B JOHNSTON:

- Dr. Earle Page’s policy speech contained many important proposals and I propose to quote an extract from it. He said -

Much remains to be done, especially in regard to those taxes which increase interest rates and production cost. Such taxes arc the property income tax, the land tax, and the primage on British goods and excessive tariffs generally, all of which, the Country party is prepared to abolish.

I subscribe to that policy entirely and I trust that later, in committee, the Senate will instruct the Government to abolish the special property tax. It is difficult to understand the formulas fixing the rates of income tax as set out in the schedule, but they should be substantially reduced. If the Government will adopt this policy it will do more than anything else to relieve the present burden on Australian industry, and will take a notable step towards solving the unemployment problem.

Senator BROWN:
Queensland

– I listened with interest to the remarks of the speakers from the Ministerial parties. They were keenly interested in securing a reduction of the rate of the tax because their economic interests are affected. Possibly if my interests were similarly involved I would warmly support the proposal of Senator Johnston further to reduce the special property tax.

Senator E B Johnston:

– What does the honorable senator mean by “ economic interests “ ?

Senator BROWN:

– Senator Johnston is naturally upset because the Government’s proposals do not go far enough to satisfy him. The labour party believes that before taxes should be remitted greater effort should be made to give au income to those who have no income at all. As has been stated in this chamber time and time again, huge numbers of people in Australia are in receipt of practically no income whatever.

Senator Arkins:

– Does the honorable Senator favour an increase of the property tax?

Senator BROWN:

– If I were a member of the Government, I should do my best to ensure that taxes were distributed over those persons who are best able to bear them. The first duty of the Government should be to look after the tremendous number of Australians who receive no incomes.

Senator Hardy:

– Does the honorable senator believe in high rents ?

Senator BROWN:

– Senator Hardy, by his interjection, suggests that by reducing the property tax we shall reduce rents. In the past four years, I understand, remissions of property tax amounted to nearly £4,860,000. Before Senator Hardy’s contention can be accepted as being correct he will require to prove that rents have been reduced, following those remissions. My experiences of the conditions in Queensland during the past few months convince me that the reduction of rents which should accrue as the result of this remission of property taxation, has not taken place.

Senator Hardy:

– I could quote instances for the honorable senator’s information where no rent is being paid.

Senator BROWN:

– I realize that many good Australian citizens have been unemployed for so long that, they are unable to pay rent. If Senator Hardy’s contention be correct, many people should be paying no rent at all because of the huge remissions of the tax on income from property. But in many cases rents have been increased. Why is Sena tor J Johnston so disappointed with the remission of taxation ? He is not concerned with the people who pay rents. He and Senator Payne, who favour a reduction of this tax, are not actuated so much by a desire to see rents reduced as by a desire to see their bank balances increased. I am not blaming them for that but I point out that whilst there has been a great remission of direct taxation by this Government there has been a huge increase of indirect taxation which, as everyone knows, is borne mainly by the masses of the people whose standard of living is thereby seriously affected. In 1930-31, the indirect taxation was equivalent to £4 18s. Id. per capita, and direct taxation was £2 17s. 7d. In 1934, indirect taxation had increased to £7 0s. 10 3/4d. per capita, and direct taxation had been reduced, to £1 14s. 5d. These figures indicate that there has been an amelioration of taxes in respect of those who are in a position to pay, and an increase of the burden on the shoulders of those who are not so. well able to bear it.

Senator Hardy:

– Not necessarily. The honorable senator’s argument is on a wrong basis.

Senator BROWN:

– It cannot be denied that all conservative governments of Australia, and for that matter in other countries also have, in recent years, given taxation relief to the richer classes in the community - the interest takers - while at the same time adding to the burdens of the masses of the people.

Senator Arkins:

– In the last analysis who pays the property tax?

Senator BROWN:

– In the last analysis, all the real work of the community is done by the workers. Those who form what may be called the rentier class are not the wealth producers as alleged by Senator Payne. Only a few weeks ago Bishop Le Fanu. one of the most distinguished ecclesiastical leaders in this country, in a lecture before members of the Constitutional Club in Sydney, emphasized that the interesttakers were drawing too much money out of the community. But the day is coming when the income which they will enjoy will be measured by their contribution to the total wealth production of this country.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– All interest-takers do not bury their incomes.

Senator BROWN:

– I am well aware that many persons, whose income is derived from interest on one form or another, re-invest it in projects for further wealth production. I have not the slightest misconception about the effect of the existing monetary system on. the economic life of this country. What I wish to emphasize is that the real wealth producers are not the interesttakers, but those who are actually engaged in various forms of production. Ifall rentiers were forced out of the country the wealth of Australia would still be produced by the workers, as it is to-day.

Government supporters have argued that if the tax on property were remitted the development of this country would be accelerated and the volume of unemployment would be lessened. That is not a true statement of the position. We know very well that irrespective of whether the property tax is high or low, if any industry can show a profit on its operations it will have no difficulty in obtaining financial support from the banks. The attitude of the banks to any form of private enterprise depends entirely upon the financial return from the undertaking. Those who urge that the development of industry depends upon further remissions of taxes cannot substantiate their argument. We have been told that but for excessive taxation, the volume of capital available for industry would be vastly increased.

Senator Gibson:

– Hear, hear!

Senator BROWN:

– Does Senator Gibson really believe that the amount of money available for investment in industry really depends upon a reduction of taxes?

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– It would be an important factor.

Senator BROWN:

– Does any Government supporter imagine for a moment that if, unfortunately, the war between Italy and Abyssinia suddenly involved Europe and Australia in another world conflict, the banks would trouble whether taxation was high or low before they collaborated with the Government in the issue of credit for the prosecution of the war? They know very well that the necessary money would be available.

If, regardless of the incidence of taxation,money can be found for the prosecution of a war, is it not anomalous that there should be any difficulty, in times of peace, to make money available for the development of industry?

Senator McLeay:

– Private enterprise did not provide the money for the prosecution of the Great War.

Senator BROWN:

– Under our present banking system hundreds of millions of pounds were raised in Australia for the prosecution of the Great War.

Senator Dein:

– Where did that money come from?

Senator BROWN:

– It was made available by bank credits. Sir Hal Colebatch, the present Agent-General for Western Australia in London, whilst a member of this Senate, proved conclusively that, under our present system, the Australian banks could, by the issue of credits, make available all the money required for our legitimate needs. Senator Payne and Senator Johnston are not correct when they say that the amount of capital available for industry is dependent upon low taxes on property income. I repeat that, whether taxation be high or low, if industry can produce and market commodities at a profit there will be no lack of money for expansion.

Senator Dein:

– Is it not true to say that the less money which a government takes from the community in the form of taxation, the more will be available for industry?

Senator BROWN:

– Is it not also clear to the honorable senator that if, owing to a dislocation of world markets, industry is depressed, money will not be expended in further developmental projects? The problem is to find wider and more remunerative markets for our production. If it can be established that production is profitable, make no mistake about it, the banks will find the money for the expansion of industry. During the war there was a definite demand in all countries for commodities, and money was readily available for the expansion of war industries. Taxation burdens were not then considered. However, I do not wish to detain the Senate further, except to say that we on this side believe that, instead of remitting the taxes of those who are able to pay, the Government should expend money in such a way as to provide work and a good living wage for those who have no income at all to be taxed.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– I should not have spoken in this debate had not my colleague from Western Australia (Senator -Johnston) made some’ astounding statements in support of his amendment. The honorable gentleman has consistently advocated that the Commonwealth Government should retire from the field of income taxation, leaving this source of revenue to State governments. I should very much regret that step, because the Commonwealth would surrender revenue amounting to about £13,000,000, and as a consequence its attitude to proposals for financial assistance to the smaller States might undergo a change. It stands to reason that the loss of such a huge amount of Commonwealth revenue would have serious repercussions upon the States. I take this opportunity to dissociate -myself from Senator Johnston’s advocacy of the retirement of the Commonwealth Government from this field of taxation. Recently, the Leader of the Senate (Senator Pearce) ‘replied effectively to Senator Johnston in this connexion, when he showed clearly that Western Australia would lose by the vacation of this field of taxation by the Commonwealth. A few weeks ago, ‘the Melbourne Age voiced a strong protest against continued applications by the less wealthy States to the Federal Government for financial relief, and pointed out that ‘tax-payers in Victoria, and presumably in New South Wale® ‘also, were being called upon to contribute too much towards the relief of the poorer States. I do not agree with the opinions expressed in the Ago, which, unfortunately, viewed the subject from only one angle. It forgot that, ever since the discovery of gold in Western Australia in 1S92, that State has ‘been a good customer of the manufacturing States. Gold to the value of about £180,000,000 has ‘been. produced by Western Australia and much of it has been exchanged for manufactured goods imported from the other States, principally from Victoria. In other words, a big proportion of the value of the gold production of Western Aus tralia has come to the Eastern States to pay for goods imported from them. No mention of that fact was made by the Age, which claimed thai the “mendicant States “ were .asking for too much of the federal pie. Some weeks ago, when discussing the budget, I pointed out that the Treasurer (Mr. Casey) had taken a rather gloomy view of the financial position and had disregarded the greater prosperity evident throughout the Commonwealth. I stated then that conditions showed an upward trend, and I hinted at a federal surplus again this year. I now join with Senators Gibson .and Payne in urging that, if the super tax be not entirely wiped out, it should at least be reduced substantially, and not merely by a paltry 1 per cent.

Senator McLeay:

– Does the honorable senator regard a reduction of 1 per cent, as paltry!

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– It is a paltry reduction considering the incidence of this tax. The marginal note to clause 5 - “ .Further tax on income from property “ - is objectionable. The abolition of the super tax would mean that carpenters, bricklayers and other artisan, who are largely dependent for their work upon the type of taxpayer affected, would ,have more opportunities to obtain employment than they have now. I welcome the reduction of the tax as a step in the right direction, but I hope that, if not this year, the Government will see its way, next year, to abolish it altogether. I am encouraged in that hope by the figures recently published showing the results of the financial operations of the Commonwealth for the last four months.

Senator LECKIE:
Victoria

.- I am somewhat amused at the statement of Senator Allan MacDonald that most of the gold produced in Western Australia has been exchanged for goods manufactured in Victoria. Let me put the position from the opposite point of view, and say that Victoria has sent manufactured goods to the value of £180,000,000 to Western Australia and received im return so many ounces of gold. I claim that, as there was a fair exchange of commodities, there is no ground for complaint. It may even be argued that Victoria sent valuable goode to “Western Australia an exchange for a certain weight of metal.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– The honorable senator will , admit that gold is a nice metal.

Senator LECKIE:

– I am also amused at the attitude of the Opposition in advocating greater pensions to persons whom I may describe as State pensioners, while proposing increased taxation of private pensioners, by which term I mean persons who receive dividends from industry. It is strange that a political party should so differentiate between a dividend drawn from industry and a pension provided by the State. I agree with those honorable senators who have pointed out that, if money is taken from industry, or if the amount of money available for investment’ in industry, is ‘reduced, opportunity to provide employment is lessened. Usually, a business which makes a profit expends some of its surplus in expanding its business, either by installing further plant or by some other development which provides further employment; but if the money is taken by the Government and is paid out as pensions, it is lost to industry.

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– Money cannot be lost.

Senator LECKIE:

– On the contrary, money is the easiest thing in the world to lose. If goods “represent money, then the honorable senator must agree that much money was blown away and lost during the Great War

I regret that the Government has not seen its way to reduce the super tax to a greater extent than is proposed in this bill. It could have done so had it not under-estimated the revenue from Customs. In. view of the increased revenue from that source, lt should be possible still further to reduce taxation, and I hope that as soon ,as possible the iniquitous super tax will be removed, in the interest, not of the rich man who pays it, but of those workers who would find employment were it abolished.

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– Senator Leckie does not usually .speak at length, but his remarks are always interesting. He has the happy knack of saying many pungent things in a short time. To a great extent, I disagree with the honorable senator, but that may be because we have been trained in different political, schools. Senator Payne contended that further remissions of taxation would assist industry to provide more employment, and Senator Leckie said that money would be lost if paid away as- pensions. Let us suppose that more money were expended in the payment of pensions. “Where would that money go? According to Mr. Cerutty, who recently retired from the position of Auditor-General, a lot of it would be spent in the purchase of alcoholic liquor. Even so, it would assist the industry which provides alcoholic refreshment. Many persons who will not invest money in industry because of the risks associated with business, are willing to purchase stock in Government loans. That money is lost to industry. Senator Leckie must admit that the money spent in pensions and in providing work for the unemployed eventually finds its way into the pockets of the traders and manufacturers, including the manufacturers of alcoholic liquors; but, in any case, it circulates throughout the community, creating a more optimistic outlook and a belief that some day the corner will be turned and a brighter economic future opened up for this country. The present Commonwealth loan will release the wealth which the well-to-do classes of this country now have stored away in the banks, and are afraid to spend or invest in industry, because of the effects of the depression.

Senator Leckie:

– It is not the wealthy classes who invest in government loans.

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– I feel sure it is in the great majority of cases.

Senator Leckie:

– What of insurance companies ?

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– Those companies, I remind the honorable senator, make very big profits. One has only to look at the magnificent buildings which these companies have erected in the various capital cities to realize that fact. Senator Johnston- referred to an amount of £8,000,000 held in trust fund which, he said, the AuditorGeneral had revealed as having been prematurely and unnecessarily taken from the people in taxes. My objection to that particular fund is that it is derived from indirect taxes levied in a very cunning fashion. The mass of the people at all tunes object to indirect taxation. It was in order to meet the difficulties arising out of the depression that sales tax was first imposed; it has now become a modern horror. . It is an insidious tax, because it is included in the purchase price of goods. When a man buys a suit of clothes or any other articie he pays money into the coffers of the Government. That amount of £8,000,000 represents customs duties and sales tax. lt was not taken from the wealthy classes of the community. Yet the Government proposes further to reduce by £200,000 a tax that is paid by wealthy propertyowners. We claim that before any reduction of taxes is made in favour of wealthy people the sales tax should be removed, and something should be done to reduce the contributions made to the Government’s coffers by the masses of the people by way of customs tax. We are against any reduction of direct taxes imposed on people who are best able to bear them, and the levying of further taxes on people least able to bear them. The whine - I cannot express it otherwise - continually heard from honorable senators opposite that money remitted by way of reduced taxes, to the wealthy classes finds its way into industry, is utter rot. A lot of this money is not spent in industry, but is stored in the banks.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– The honorable senator does not suggest that this money is buried?

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– No. It is not buried, but it is placed in the banks, and no honorable senator can deny that during the years of depression it was kept there, because the wealthy depositors were afraid to take the risks of investing it in private enterprise, as they were not sure that it would then return them 10 per cent, or more. They preferred to get the bank rate and keep it safe. When banks and insurance companies invest money in Commonwealth loans they really do not give anything; they follow this course only when those in control think it is better to invest in such a way. They are not inclined to risk capital in industry at the present time. The people of the Commonwealth owe nothing to these people for making investments in government loans ; they do so because such a loan offers the best terms for investment that can be had at the present time. I hope that less charity will be shown to the wealthy classes bv this Government, and that more notice will be taken of the fact that money given to pensioners is immediately circulated in the community to the benefit of the community generally. Perhaps a little of this money is spent in the way suggested by the Auditor-General; it would be an extraordinary assumption that all pensioners are immune from the temptation to take an occasional drink. To those honorable senators who claim that more money should be made available to industry I point out that loan money is being devoted to public works undertakings at the present time. Fortunately for the wealthy investors in government loans, but unfortunately for the Government and the people, these investments give a. handsome return to the investors, particularly a3 they are afraid to take the risks of investing in industry. The more taxation is remitted to these people the more will money find its way into private banks; very little of it -will be invested in industry. Apparently the only way in which this money can be utilized for the general good of the community is when it is invested in Commonwealth loans raised for public works. This experience was borne out in Queensland during’ the last election in that State when the Labour party swept the polls. A large number of people who had been opposed to the Labour party for over 20 years, and still are, accepted the view that the policy carried out by the Forgan Smith Labour Government in this respect over the last three years was” the best means of circulating money in the community. Whether it is spent in the payment of pensions or on public works money is rapidly circulated in the community and benefits the workers and traders generally and makes for better conditions for all classes. The adoption of such a policy explains the Queensland Labour Government’s tremendous majority at the last Queensland elections when it almost annihilated the Nationalist party. Consequently, when T hear the old Tory aphorisms beingrepeated on this subject I am forced tothe conclusion that it is very difficult for some people to learn by experience.

Senator Sir GEORGE PEARCE:
Minister for External Affairs · Western Australia · UAP

[4.30].- in reply - Senator Johnston quoted comments by Professor Bland in Sydney on certain remarks concerning trust funds made by the Auditor-General in his annual report. The honorable senator credited the learned professoor with having said that members of Parliament evidently do not understand finance. After listening to Senator Johnston I could almost believe that there is some ground for the professor’s statement, because the honorable senator seems to think that it would be in the interests of Western Australia if the Commonwealth Government vacated the field of direct taxation. I thought that the honorable senator had read the second report, made in 1935, of the Commonwealth Grants Commission.

Senator E B Johnston:

– I have not the same faith as the honorable senator has in that commission.

Senator Sir GEORGE PEARCE.No matter what the honorable senator may think of the commission’s conclusions he cannot challenge its figures because these have been taken from the audited balance-sheets of the Commonwealth. On page 29 of the commission’s report are given figures showing payments made by the Commonwealth to or for Western Australia in 1933-34. These were -

I point out that the amount of the Federal AidRoads grant to Western Australia in that year exceeded the amount of petrol tax collected in that State.

Senator E B Johnston:

– What about customs and excise payments made -by Western Australia?

Senator Sir GEORGE PEARCE.Those are thus fully set out on page 93 of the commission’s report -

The special grant to Western Australia this year is £800,000.

Senator Gibson:

– That amount is greater than the total amount of direct federal taxes collected in Western Aus-

Senator Sir GEORGE PEARCE Yes. The amount of direct federal taxes collected in Western Australia was £584,000; so the amount to be paid by the Commonwealth by way of special grant to that State this year will be more than £200,000 in excess of the amount that the Commonwealth collects by direct taxation in Western Australia.

Senator Collings:

– Yet Western Australians talk secession !

Senator Sir GEORGE PEARCE:

– Other payments made by the Commonwealth in or on behalf of Western Australia, as set out in the Commonwealth Grants Commission’s report, are -

The total amount expended by the Commonwealth in Western Australia was £5,276,000. These transactions show that for that financial year the debit balance against Western Australia was £1,666,000, or £3 15s. 8d. a head of population; but if the additional grant of £200,000 be added the debit becomes £1,866,000. Whatever other reasons Senator Johnston may be able to advance in favour of the Commonwealth’s retirement from the field of income tax altogether, he certainly cannot urge that that course would benefit Western Australia.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– What are the par capita figures1 in some of the other States?

Senator Sir GEORGE PEARCE .For South Australia tlie debit balance is £3 2s. 2d. and for Tasmania £3 lis. 7d.both less than Western Australia. Queensland has a credit of 5s. 6d. a head, and Victoria and New South Wales have credits of 14s. 2d. and ls. a head respectively.

Senator E B Johnston:

– The Minister knows that there is an effective reply to that statement. Consider the excise duties collected on commodities used in Western Australia !

Senator Sir GEORGE PEARCE:

– If the figures mean anything at all they show that if the Commonwealth Government retired from the field of direct taxation it could not continue the grant now paid to Western Australia, and that Western Australia would have to impose not merely the rate of tax which the Commonwealth imposes, but in order to obtain the additional £800)000, a rate about 20 per cent, higher: That would be in addition to tlie State income tax now levied. Again I refer to the comments of Professor Bland, who joined in the resolutions applauding (he Auditor-General’s remarks on the (subject of the trust fund. One thing is certain - were it not for the practice of paying money into a trust fund the rate of tax would fluctuate more than it does at present. That is one of the points which Mr. Cerutty and those who applaud his statement overlook. Some two years ago when the Commonwealth adopted a somewhat vigorous defence policy, involving the expenditure of capital over three years, there was a surplus in the Commonwealth accounts. Heavy guns and their armaments cannot be obtained in the year in which the Government decides upon their purchase. Material may be ordered in that year, but it may not be delivered until the following year, and the mounting of the guns may not be completed until a year law. “Were the Government to adopt tlie suggestion made by the AuditorGeneral and commended by Senator Johnston, what would happen would be this: In the year in which the Government decided upon a certain defence policy the rate of income tax could remain normal, but during the year in which war material, previously ordered, was delivered, the rate would nave to be increased substantially in order that money might be found to meet the cost of that material.

Senator Sampson:

– ‘When the chickens came home to roost.

Senator Sir GEORGE PEARCE:

– Yes, there- would have to be a marked increase in income and all other taxes to meet the expenditure in that year. To avoid such violent fluctuations a proportion’ of the. surplus of two years ago was paid into the trust fund, and when amounts for defence purposes fall due payments are made from that fund. In some cases the amount available in that fund will not be sufficient, and this year it is being supplemented by payments from Consolidated Revenue. Were it not for the trust fund there would be no possibility of making remissions of taxes, but, on the other hand, it would be necessary to provide for enormous increases.

Senator Sampson:

-. - What sort of “ spin “ would the Council for Scientific and Industrial Research have had but for the trust fund?

Senator Sir GEORGE PEARCE:

– I am glad that the honorable senator has reminded me of that. The greatest work done in the interest of science by’ any Commonwealth organization is that performed by the Council for Scientific and Industrial Research. Had that council to depend on the amount which the Treasury could spare in certain years it would have been unable to adopt a continuous research policy, but, because the Government took advantage of a fortuitous surplus and paid a portion of it into a trust fund, the council knew that a sufficient sum was available to meet expenditure over a number of years. In that way it was able to commence valuable scientific research work which could not have been undertaken without tlie guarantee that money would be avail- , able in subsequent years. To undertake research the council had to bring scientists from all parts of the world, and in doing so guarantee them employment over a period of years, so that they could complete their work. The establishment of a. trust fund enabled that to be done. The work could not have been continued had it been dependent an the Commonwealth having surplus revenues in subsequent years.

Senator E B Johnston:

– Robbing the taxpayers years before the money was clue.

Senator Sir GEORGE PEARCE:

– W hen one compares the honorable senator’s suggestion with the facts which I have just recited, it will be seen that that is a very cheap statement. The honorable senator’s criticism bounces off without making any impression’ whatever.

Senator Gibson:

– It is preferable that the money should be in a trust fund than that it should have been spent.

Senator Sir GEORGE PEARCE:

– Exactly. Let me give honorable senators another illustration, because there is a great deal of popular misconception concerning the trust fund, even amongst learned professors. I mention almost with bated breath that we have an invalid and old-age pensions liability and a war pensions liability amounting to approximately £21,000,000 a year. If on the 30 th June all surplus moneys in the Treasury were handed over-

Senator E B Johnston:

– At one period surpluses were -supposed to be returned to the States.

Senator Sir GEORGE PEARCE:

-If that generous policy were still adopted, what would be the position of the Commonwealth when the first payment of the invalid and old-age pensions and war pensions became due after the 30th June? The Government would not have the money. Any one who studies the public accounts knows that revenue does not come in regularly at so much a week. During one period of the year it comes in like an avalanche, but in other periods it is a mere trickle. If all surpluses were to be cut off at the 30th June, that money would not be available in the Treasury to meet pensions and other liabilities in July. If it were not in the Treasury or in a trust fund the Government would have to arrange a bank overdraft to meet its liabilities. Contracts also have to be considered. If a bank overdraft had to be arranged the Government would be faced with this peculiar spectacle: During one financial year it might have a surplus of several million pounds; but, if it complied with the Auditor-General’s suggestion, and did not pay a portion into a trust fund, during July it would have to pay interest on borrowed money to meet its liabilities.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Including the parliamentary allowance of the honorable senator who is finding fault with the present system..

Senator Sir GEORGE PEARCE.Yes. If money were not in the Treasury these liabilities would have to be met by obtaining a bank overdraft. Honorable senators will recall that a bill embodying authority to pay a specified amount into a trust fund to meet invalid and old-age pensions, war pensions and other liabilities is presented to Parliament periodically.

The present system is businesslike, and preferable to paying interest on borrowed money. That is the position of the trust fund, and not much credit is due to Mr. Cerutty and the learned professor who have condemned the system.

Senator E B Johnston:

– The whole of the public has also condemned it.

Senator Sir GEORGE PEARCE:

– Is the honorable senator the mouthpiece of the public? I doubt very much whether the people generally condemn the present system. This policy, which was adopted many years ago,has been operated by all govern ments, and is the ‘wisest one in all the circumstances.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 4 agreed to.

Clause 5 - (1.) In addition to any income tax payable under the preceding provisions of this act, there shall, be payable upon the taxable income derived by any person - a further income tax of 5 per centum of the amount of that taxable income.

SenatorE. B. JOHNSTON (Western Australia) [4.49]. - I move -

That the House of Representatives be requested to leave out the word “ five “, subclause (1), with a view to insert in lien thereof the word “ one “.

If this request is approved, the remission of the special property tax will be increased from £200,000 to £1,000,000. As the Auditor-General has pointed out in his report, the amount of moneys in the trust fund is £8,000,000, and that is really part of the Consolidated Revenue Fund. He says -

That sum is available for revenue expenditude or towards the automatic reduction of the accumulated deficit of £17,000,000. It does not appear to be generally realized that by accumulating revenue moneys in trust fund for subsequent expenditure a deceptive appearance has been given to the Consolidated Revenue Fund. The result is that taxation of many millions has been imposed, particularly during the difficult depression years, a considerable time ahead of requirements. This, of course, is a most serious matter.

A sum of £8,000,000 was tucked away at the 30th June last for future expenditure; some of the money was collected years ahead of requirements, even during the difficult period of depression. In addition, after four months of this financial year has expired, there is a surplus in the current accounts of £1,990,000, making a total of nearly £10,000,000 at the disposal of the Commonwealth Government. In asking the Government to remit the special tax on income from property I am merely requesting that it should cease to collect an amount equivalent to 10 per cent, of this surplus, presuming, of course, that the £8,000,000 lias not been substantially reduced since the 30th June. The Leader of the Senate (Senator Pearce), in his speech, confirmed the fact that successive federal governments are extorting from industry and from the pockets of the people, who would spend money wisely on developmental works and in creating employment, sums of money years before it is required. These collections are stored away in Government vaults, regardless of the fact that the taxpayers are being robbed. This excessive sum, unwarrantably extorted from the taxpayers, is responsible for much of the federal extravagance. “With such large reserves at its disposal, the Federal Government seeks fresh avenues of encroachment on State rights. The real reason for the establishment of these trust funds was that the Commonwealth might deliberately rob the State governments of their rights under the federal Consti- tution at the time. The Constitution originally decreed that at the end of every financial year the surplus revenue of the Commonwealth should be distributed amongst the States, but the Federal Government resorted to a mean device to over-ride that provision, degrade the States, and take the money that they required for developing land, building railways, and generally rendering essential services. At the inception of federation it was considered that the Commonwealth Government would attend to matters of defence ; and I do not begrudge any expenditure for that purpose. But I am strongly opposed to any subterfuge by which the State Governments are robbed of their legitimate revenue. The practice is entirely wrong. Since the inauguration of the financial agreement, £8,000,000 has been piled up in a trust fund. Last year an excess of revenue over the Estimates was recorded. In the first four months of the current financial year Commonwealth revenue continues to be buoyant, there being a surplus of £1,990,000, but the sole remission of income tax which the Government proposes to make totals only £200,000. In 1934-35 the Government was obliged to make available £4,000,000 for the relief of wheat producers, but on this year’s Estimates not a penny has been set aside for such a purpose. Relieved of this obligation,- what excuse has the Government for retaining this inordinate tax? In the final analysis it amounts, to legalized robbery of the taxpayers, whose pockets are being emptied years before the money is required. In consequence, the primary industries are being starved-

Senator Hardy:

– What percentage of the income tax is collected in Western Australia ?

Senator E B JOHNSTON:

– I regret that the honorable senator’s vision is confined to one State, but Western Australia contributes its fair share to federal revenues, and pays far more in indirect taxes in proportion to its population than any other State. Senator Pearce quoted figures from the report of the States Grants Commission regarding Commonwealth payments to and on behalf of Western Australia, but he omitted to say that considerable amounts of excise and customs duties are collected in the. eastern States on goods utilized in Western Australia. In the past the expenditure on defence in Western Australia has never been so great as it was entitled to

On a population basis.

The CHAIRMAN:

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

Senator E B JOHNSTON:

– Those are my reasons for making the request. Presently the Government will not know what to do with its surplus revenues. No justification can be. advanced for this high rate of tax, and I hope that the committee will decide to reduce it to 1 per cent.

Senator Sir GEORGE PEARCE (Western Australia - Minister for External Affairs) [4.59]. - I am sure that the committee will not support this request. The Commonwealth Government could not possibly accept a request of that character. Senator Johnston is quite incorrect in saying that the proposed remission of the property tax is the only concession to be made to taxpayers this year.

Senator E B Johnston:

– The only concession in respect of income tax.

Senator Sir GEORGE PEARCE.The budget shows that the proposed remissions for the year are: Special tax on property income, £200,000; sales tax exemptions, annual value £200,000 (for the remainder of this year, £150,000) ; primage, £45,000; excise on Australiangrown tobacco, £90,000; excise on cigarettes, £25,000; total, £510,000. Some of those remissions will operate for only a part of the year, so that the annual value of the concessions will greatly exceed £500,000. Senator Johnston, in referring to the surplus of £1,900,000, should remember that Commonwealth revenue does not flow in regularly, and a temporary surplus for four months of the year does not necessarily indicate a surplus at the end of twelve months; there may be a deficit. The honorable senator spoke as if the £S,000,000 of trust funds were available for immediate use; that is quite incorrect, because,, as I indicated previously, some of that money is earmarked for various purposes. For instance, some of it represents the provision made for defence. I therefore ask the committee not to support the request.

Senator GIBSON:
Victoria

– I do not propose to support the request, although I feel strongly in regard to the property tax. I suggest that the Government - especially in view of the statements of the Prime Minister (Mr. Lyons), that this imposition would be abolished at the earliest opportunity - should increase the rate of income tax byl-J per cent., which would compensate for the remission of the property tax. This would place mortgagors in a better position than at present, for many of them will have great difficulty in borrowing money. I resent Senator Johnston’s attitude, which is also adopted by some other honorable senators, of laying the blame on the Federal Government for the extravagant expenditure that occurs in Australia. Such an attitude may be popular in the various States, but it is altogether wrong for a member of the Federal Parliament to adopt it. Who is spending the money to-day? The States have added £130,000,000 to the national debt in the last seven years, compared with £4,000,,000 added by the Commonwealth. The States are responsible for the extravagance.

Senator Brown:

– Is it extravagance?

Senator GIBSON:

– A great deal of the extravagance arises from the generosity of the Commonwealth in making liberal grants of money to the States. If the odium of collecting taxes devolved on them, they would not be so ready to spend money as they are to-day. Is the forthcoming loan on behalf of the Commonwealth or the States? Of course, the money is being raised for the States, which are going merrily along adding £20,000,000 a year to the deficits of this country ! The States will shortly have to reconsider this reckless policy. I do ask the Government to consider my suggestion to increase the income tax. because mortgagors are enduring hardships by paying higher rates of interest temporarily. A greater measure of prosperity has come to Australia in the past two years than anybody expected, and I hope the day is not far distant when high taxes will be reduced. In the meantime, relief should be given to mortgagors.

Senator DUNCAN-HUGHES:
South Australia

– >As the amendment raises the whole question of Commonwealth taxation, I think it desirable that I should state my general views with regard to it before a vote is taken. I wish, at the outset, to dissociate myself from the method adopted by Senator Johnston. Since it does not help in the discussion of the amendment to talk about legalized robbery, I shall not deal with it from that angle. Nor do I intend to vote for it, because to do so would be to take the business out of the hands of the Government. In the budget the Government announced the taxes which it intended to impose, and the remissions which it proposed to give ; but there are some things which justify, I think, some criticism. One of these is the fact that the Government has budgeted for a surplus of approximately £l,000,000.Thus it would appear that Senator Johnston has at least some justification for his amendment. Times are difficult. A substantial surplus may be considered desirable in a year like this, but I believe there would be less chance of adverse criticism if the Government kept its expenditure and income fairly equal. To budget for a surplus of over £1,000,000 is to invite criticism, especially from those business interests which consider they could very well do with that one million pounds. This sum, it should be noted, would be sufficient for the purposes of Senator Johnston’s amendment. There can be no questioning - I say this without hesitation - that there is widespread disappointment at the small remissions of direct taxation this year. Senator Johnston was on safe ground when he emphasized that point. There is a general feeling that the remissions should have been greater. It is admitted that the Government is com:mitted to heavy expenditure for defence, but it is also known that its commitments in respect of pensions have been increasing at the rate of about. £1,000,000 a year, and that various public works, which may or may not be developmental, such as, for example, the Red Hill to Port Augusta railway, are being proceeded with. There is undoubtedly a feeling that the Government is spending money which it would be wise to leave in the pockets of the people by a further reduction of taxes.

Senator PAYNE:
Tasmania

– I should be glad to support Senator Johnston or any other honorable senator in efforts to reduce the special tax on property with a view to its eventual elimination, if I could see my way clear to do so without imperilling possibly many proposals which the Government has in view, and which will make a substantial drain on the Treasury. Every one knows that, from the time of its imposition, I have been opposed to this tax on the ground that it is an unjust levy on industry; but being in the minority in this chamber my efforts have been unsuccessful. Once a tax is imposed it is very difficult to get rid of it. This Government has been earnest in its desire to ease the load on those sections of the people who already were heavily burdened, and it is gratifying to know that this super tax has been halved in recent years.

I feel sure that if it had been possible to reduce the levy to 3 per cent, instead of 5 per cent, the Government would gladly have done so. But we all know the difficulties which it has to surmount. Almost daily applications are being received from all sections of the community for further assistance to the industries in which they are engaged.

Senator Arkins:

– How does the Government get that money?

Senator PAYNE:

– By taxing the people.

Senator Arkins:

– Western Australia has been doing very well; the State Government has not curtailed any of its social services.

Senator PAYNE:

– I am glad to know that in addition to complying with the imperative demands from various sections of the community for financial assistance, the Government has been able to make provision for some reduction of taxation. I cannot support the amendment but I hope that in the near future the Commonwealth finances will be so improved as to enable the Government to make still further reductions.

Senator ALLAN MacDONALD (West obliged if the leader of the Senate (Senator Pearce) would give me some explanation of the meaning of paragraph c of cause 5. That clause states -

In addition to any income tax payable under the preceding provisions of this act, there shall be payable upon the taxable income derived by any person -

  1. in the course of carrying on a business, where the income is of such a class that if derived otherwise than in the course of carrying on a business it would be income from property.

That is to say, the income referred to would be taxed at the higher rate. If a company were carrying on a manufacturing business which showed a surplus and decided to re-invest it in some other industry - perhaps gold-mining - the income from that source, I contend, should not be taxed at the property rate because the money would be invested in a purely industrial concern. I doubt the equity of a provision which taxes that income at a higher rate.

Senator Sir GEORGE PEARCE (Western Australia - Minister for External Affairs) [5.15]. - If the course which the honorable senator has suggested were adopted by the Taxation Department it would get into a hopelessly inconsistent position. If a private individual invests his savings in a business venture the income from the investment is taxed at the property rate. Why should not a company also be taxed if it invests portion of its profits in the same way? When any portion of the income derived from a business is set aside for investment, it really becomes a property investment, and the resultant return should be taxed at the property rate.

Request for amendment negatived.

Clause agreed to.

Clause 6 agreed to.

Schedules 1 to 7 agreed to.

Title agreed to.

Bill reported without requests; report adopted.

page 2003

REMOVAL OF PRISONERS (TERRITORIES) BILL 1935

Bill brought up by Senator Sir George Pearce and read a first time.

page 2003

ORANGE BOUNTY BILL. 1935

Second Reading

Senator BRENNAN:
Assis tant Minister · Victoria · UAP

– I move -

That the bill be now read a second time.

This bill provides for the payment of a bounty on the export of oranges from the Commonwealth to the United Kingdom. During recent years, the Australian citrus industry, like other primary industries, has been confronted with many difficulties. Some years ago an inquiry into the industry was undertaken by a committee appointed by the development branch, and a report was issued in 1930. Since then the Government has given much consideration to the problems affecting the industry. The industry itself has not been completely silent in the matter. During 1933 and 1934 the exporters of oranges were guaranteed 13s. a bushel case, and in respect of those whose shipments were covered by comprehensive all-risks insurance policies, tho guarantee was increased to 13s. 5d. a bushel case in order to cover the added cost of the insurance. After that scheme had been in operation for some time, the Government realized that it had certain disadvantages, inasmuch as the exporters of high-quality fruit, whose return was equal to 13s. or 13s. 5d. a case, received no assistance whatever from the Government, whereas the exporters of inferior fruit, which brought a very low price, were paid by the guarantee a sum which brought their return to 13s. or 13s. 5d. a case. In other words, the Commonwealth made available to the exporters of inferior fruit a considerable amount of money by way of guarantee, whereas the exporters of a high class quality got nothing. That was a premium on inefficiency. The Government has decided to vary this basis and to substitute for it a bounty on citrus fruits exported from the Commonwealth. The bill embodies its decisions.

Bounty will be paid at the rate of 2s. a case on oranges exported to the United Kingdom, which absorbs the great bulk of the exports of citrus fruits from this country. The grower of fruit of inferior quality will receive no encouragement to export it to the United Kingdom, because the bounty will only be sufficient to compensate a man whose fruit brings a reasonable price on the overseas market. That is the real principle embodied in this bill.

Among the difficulties facing the growers of citrus fruits is the loss of a great part of the New Zealand market. A severe blow was dealt to the industry when the. Government of the dominion of New Zealand imposed an embargo against the importation of citrus fruit from Australia, with the exception of oranges from South Australia. While the embargo remains Australian growers of citrus fruits must seek other markets overseas in order to dispose of their surplus production. The total export of citrus fruits to the United Kingdom and countries other than New Zealand increased from 97,000 cases in 1933 to 213,000 cases in 1934. The bulk of the fruit was exported to the United Kingdom, the 1934 shipments to that market being 190,000 cases as against 77,000 cases in 1933. Honorable senators will therefore appreciate why the Government has given so much attention to the export of citrus fruits to the United Kingdom.

The amount expended under the guarantee in respect of the 1933 season was £3,000, whilst it is anticipated that over £10,000 will be required to meet the guarantee for the 1934 season. An amount of £20,000 has been placed on the Estimates this year for the bounty provided for in the bill now before the Senate. This year valencia oranges are bringing about lis. a case, and navels about 12s. a case. Last year’s general market prices were considerably higher.

The conditions respecting the oranges which are the subject of the bounty, are contained in the schedule to the bill. A committee of investigation set up by the industry has made suggestions to overcome some of the difficulties associated with the export of Australian citrus fruit to the United Kingdom, such as cold storage, marketing, shipping and packing. The recommendations of the committee have been of assistance in framing the conditions . which are considered necessary in regard to oranges intended for export. The conditions set out in the schedule relate to the picking, handling, grading, packing and shipping of oranges. Their purpose is to ensure that only fruit of first-class quality shall be consigned to the British market. It must be remembered that Australian citrus fruit has to be marketed in the United Kingdom in competition with first-class fruit from Brazil and other countries nearer to the British market which experience no difficulties in connexion with cold storage. With these facts in mind, the Government has endeavoured, in COllaboration with the industry, to formulate a plan for the more efficient marketing of Australian citrus fruits overseas and to secure the best advice possible, as a result of scientific research, with a view to overcoming the many difficulties associated with the export industry. By tightening up the regulations the Government hopes to be able to eliminate the export of a considerable quantity of inferior citrus fruit from Australia. It is realized, of course, that it is impossible for citrus-growers to produce all firstquality fruit; nevertheless the Government has to bear in mind that in the British market Australian citrus fruit has to meet the competition of some of the best fruit produced in the world. For that reason it decided to help Australian citrus-growers to meet that competition. The Government confidently believes that the bill will give to the Australian growers of citrus fruit financial assistance on the soundest possible business basis, and will be of considerable assistance to many growers who are facing serious financial difficulties at the present time.

Senator Payne:

– Can the Minister say in what period Australian oranges arrive in London?

Senator BRENNAN:

– I cannot give the information offhand; but if the experts of the department have it I shall supply it later. The bill will stand the scrutiny of those who are interested in the citrus industry, either directly or indirectly, and I commend it to the Senate.

Senator COLLINGS:
Queensland

– This bill will not be opposed by the Labour party which, for a number of reasons, is gratified at its introduction. The Opposition, particularly those of its members who come from Queensland, will always favour the granting of assistance to any Australian primary or secondary industry which needs it. The introduction of this measure provides further evidence that private enterprise, cannot produce, distribute and market its own produce without government assistance and control. The more we on this side see industries, particulary primary industries, tending towards government assistance and control the more satisfied we are, because we know that a government ought to be able to do this job better than private enterprise can hope to do it.

Senator Abbott:

– Does the honorable senator include the wool industry in his remarks ?

Senator COLLINGS:

– I am getting rather tired of hearing Senator Abbott speak of the wool industry as though it were far superior to other industries.

Senator Brennan:

– This bill does not interfere with private enterprise, but seeks to assist it.

Senator Abbott:

– The wool industry has never asked for assistance.

Senator COLLINGS:

– At the present time the wool industry is negotiating with the Government for assistance in certain directions.

Senator Abbott:

– It has never asked for government help.

Senator COLLINGS:

– As time goes on, it is more than likely that this Parliament will be asked to do something to assist the wool industry, and when that time comes Senator Abbott can rest assured that the Labour party will support any reasonable proposal to promote greater prosperity in the industry. I wish to emphasize that the Labour party has a definite policy in regard to the production and distribution of wealth. It believes that the present conditions in this respect are absolutely anarchic. Except in respect of those industries which are now, to some extent, under government control, no attempt is made towards a planned economy. No effort is made to find out what the requirements of the several nations are, what the exportable surplus is likely to be, what prices are likely to be realized overseas, and what is necessary in regard to packing and grading. Everything proceeds by rule of thumb methods; it is a case of “Every man for himself and the devil take the hindmost “. As a result, an ever-increasing num ber of people, in order to avoid being taken by the devil, are seeking government protection. The Opposition sees in this measure another- primary industry being given a measure of control in order to secure first, the best quality of product, and secondly, the most effective method of assuring to the growers the best possible return. It therefore will support the bill.

Senator HARDY:
New South Wales

– Unlike the Leader of the Opposition (Senator Collings), I do not seize this opportunity to demonstrate, as he did to his own satisfaction, that the citrus industry has failed, and that the only way to revive it is to institute complete governmental control.

Senator Collings:

– I did not say that.

Senator HARDY:

– There is a world of difference between producer-control secured by co-operative action between grower and Government and direct governmental control. Past experience in connexion with the Dried Fruits Export Control Board has shown that once a framework is built - and, I trust, it will be built according to the advice of those engaged in this industry - producercontrol will place the citrus industry on a sound basis. This bill represents what can be called “ interior “ help to the industry. It is not of such great interest to honorable senators representing other States as it is to those representing New South Wales. This is not because citrus fruits are not grown in the other States, but because, of the collapse of the export market, the industry in ‘ that State suffered most, and I do not hesitate to say that as a “result of that collapse the growers in New South Wales are now in a critical position. I make an appeal on behalf of the citrus industry, primarily because it represents the essence of closer settlement ideals. Although there are many advocates of the stabilization of the wheat and wool industries, those industries, while of tremendous value to the nation, are not so effective as citrusgrowing in promoting closer settlement. That fact will be demonstrated to any one who flies over the irrigation areas of New South Wales. The farms are so numerous that they resemble a chessboard. Therefore, I submit that any industry which promotes closer settlement, and directly provides much employment, should be supported by adherents of all political parties. The volume of capital invested in the citrus industry is not generally known. It is certainly not a fly-by-night industry; neither is it confined to backyards. It has been estimated that the money invested in the industry amounts to between £8,000,000 and £10,000,000, and it employs thousands of people. As this legislation is designed to help the industry over a stile - and it has had many stiles to surmount during the last few years - it should be supported by every honorable senator, particularly as the difficulties of the industry have increased through the loss of the profitable export market.

Now I propose to examine the main difficulties confronting the industry. The Leader of the Opposition, no doubt, will immediately say that the industry is in trouble because orderly marketing with Government control has not been imposed.

I shall be quite frank. To a large extent, the citrus industry has lacked orderly marketing in the past, both within Australia and without, but that is no indication that the growers are averse to greater organization and control, providing it is producer-control. If only because of the crucible of adversity into which they have been plunged, we may assume that they are eager to establish orderly marketing, if they are satisfied that the move will bring financial stability. Broadly, I separate the difficulties confronting the industry into three divisions. First, as I have already admitted, orderly control of marketing within and without Australia is lacking. Citrus fruits in large areas of the States reach maturity simultaneously, and, although cool storage is available in many centres of production, gluts are at times unavoidable under the present marketing system. Even assuming that co-operative organization existed among trie growers, it would still be most difficult to control the individual grower. The position in this respect is not similar to that prevailing in the dairying industry. In the citrus industry a man may have an acre or two under cultivation, and be content to do his own packing and sell his products at the best prices offering in his local centre. This attitude will make very difficult the institution of co-operative control with its consequent price stability. The second difficulty confronting the citrus industry is the lower prices prevailing not only in Australia but also in the export markets. The Assistant Minister (Senator Brennan) has already pointed that out and the citrusgrower must face the fact, that this year when he exports his oranges to the United Kingdom, he will not get the same price as he secured a year or two ago. The United Kingdom is not so profitable an export market as is New Zealand. The third, and greatest, difficulty confronting the industry, particularly in New South Wales, is what is commonly known as the New Zealand embargo-. It is .not within the province of honorable senators during the discussion of this bill to say why that embargo was imposed. Still we must recognize that in spite of all the efforts we may make to establish a remunerative citrus trade elsewhere, one of our greatest and most profitable export markets should be New Zealand. I am sure that the Government will, as it has done in the past, endeavour to get that embargo lifted. It seriously affects the growers in all States, but it operates particularly harshly on the growers of New South Wales. In 1931-32 the total quantity of oranges exported from Australia was 166,254 centals, of which New South Wales growers produced 116,557 centals, or 70 per. cent, of the total export. Thus one can easily realize that the export trade is vital to the New South Wales growers. Of Australia’s total export of 166,254 centals of oranges, New Zealand took 130,S58 cental’s, or 79 per cent, of the total export, therefore, remembering that the New South “Wales grower produced 70 per cent, of the total exported in 1931, it is easy to imagine the present plight of the citrus-grower in that State, following the collapse of the New Zealand trade. Without wishing to be parochial in this matter I point out that the loss of the New South Wales export trade has been South Australia’s gain because the New Zealand embargo has been partially lifted in respect of the latter State which, to-day, is exporting a large quantity of oranges to the dominion, while the position in New South Wales has remained unchanged. Thus New South Wales growers are faced with the problem of finding new markets for their products.

Now let us examine the result of the loss of the New Zealand trade. In 1931-32 Australia shipped to the dominion oranges valued at £119,870, for 70 per cent, of which New South Wales growers were responsible. Following the imposition of the embargo by the New Zealand Government in December, 1932, the value of exports in 1932-33 fell to £79,667, a great percentage of which was contributed by other States. Is it any wonder that growers in the Murrumbidgee irrigation area, who previously relied so largely upon the export trade, have their backs to the wall to-day and at every opportunity exclaim, “ For goodness sake get the Government to lift the New Zealand embargo ! It is our only opportunity to operate:’ I know that this Government has done everything it possibly can in that direction, but its efforts have proved abortive. I hope that following the change of government in New Zealand, our representations will be more successful than in the past. Senator Allan MacDonald asked about the South Australian trade, desiring to know how the New ‘ South Wales loss was South Australia’s gain. In 1934 the New Zealand Government permitted South Australian oranges to enter the dominion .market, but only in specified quantities and in specified boats. The reason given was the alleged absence of fruit fly. The total entry allowed in 1934 was 112,000 cases. I repeat that South Australia’s gain was New South Wales’s loss.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– Why did Now Zealand impose that embargo?

Senator HARDY:

– Honorable senators may argue on that point, but I am interested at the moment in getting it lifted. In 1935 South Australia exported to New Zealand 136,000 cases. Perhaps Senator Allan MacDonald may hope that the embargo will be continued because it has proved of benefit to South Australia, but the problem of the New South Wales grower is acute. Where is tlie New South Wales grower to dispose of the quantity of citrus products previously exported to New Zealand? That problem was referred to the Commonwealth Government, which suggested the United Kingdom as a possible substitute market, and gave official assistance to the industry in 1933 and 1934. It is very easy to say “ We have lost the New Zealand market ; let us concentrate on the United Kingdom market,” but many difficulties arise. In respect of the United Kingdom market, we have to take into consideration, first, the disabilities resulting from Australia’s geographical position. Shipments from Australia reach New Zealand in four day3, whereas the journey from Australia to the United Kingdom takes six weeks and in some cases longer. On the British market our products have to compete at a great disadvantage with those from other countries, including South Africa, Spain and Brazil. Growers in New South x Wales, in order to overcome tlie disadvantages of distance, have experimented in shipping fruit in fairly green condition to the United Kingdom, but the fruit, by the time it reached its destination, had not developed a sugar content sufficient to please the English palate. They then tried shipping fruit in a fairly ripe condition, but on its arrival in the United Kingdom its quality was not sufficiently good to compete with the products of Spain and Brazil. If the United Kingdom provides the only export market which the citrus fruitgrowers can reasonably approach, the Government should concentrate upon improving the transport facilities between Australia and Great Britain. That is a problem calling for expert research. For some years, Australian meat producers were at a disadvantage in shipping frozen meat to Great Britain, but, owing to the work of scientists associated with the Council for Scientific and Industrial Research, in conjunction with scientific autho’rities in Great Britain, the quality of Australian beef which is now chilled instead of frozen is . equal to that produced in Argentina. As a result of the improved conditions which now prevail, Australian meat producers may expect to secure an even larger proportion of Great Britain’s chilled .beef trade. In these circumstances, with such an outstanding example of the value of research, I suggest that careful research be undertaken in connexion with the transport of Australian oranges, which have to be sold in the British markets in competition with the product of countries more favorably situated geographically than is Australia. In 1933, the export of Australian citrus fruits to the United Kingdom totalled 97,000 cases, but in 1934, owing to a guarantee of a price of 13s. a case, the quantity increased to 213,000 cases which was a satisfactory quantity but it did not give a satisfactory financial return. Notwithstanding the action of the Commonwealth Government in guaranteeing 13s. a case, the costs incurred in handling, shipping and insurance in 1933 and 1934 were so heavy that. the growers did not get anything.

Senator Collings:

– Private enterprise again obtained all the benefit.

Senator HARDY:

– Not altogether. The fault was due largely to the fact that the Commonwealth Government did not adopt the right policy. When 13s. a case was guaranteed, practically every grower endeavoured to’ obtain the advantage of the guaranteed price with the result that quality was in many cases sacrificed. Instead of the growers deriving substantial benefit, many did not receive any return at all. It is practically impossible to draft a measure covering all phases of the industry, but the experience which the growers have gained will be of benefit to them in the future. A guaranteed price of 13s. a case induced many growers to dump inferior fruit on the market, but a bounty of 2s. a case, on the conditions outlined in this bill, will be an inducement to ship only the best fruit which should command the highest price offering. An amount of £20,000 has been placed on the Estimates in the belief that the exports of citrus fruits to the United Kingdom this year will total 200,000 cases, but I have been authoritatively informed that the quantity likely to be exported will be only 100,000 cases. Now I submit to the Minister in charge of the bill that if exports should be reduced by one-half, the amount of bounty payable will be £10,000, and not £20,000. Is the ‘bounty to be paid at a fixed Irate on the citrus f fruits exported or is it to vary ‘according to the quantity actually exported? The delegates at the Conference of Citrus Fruit-growers, held in Sydney in April, 1935, realizing the serious difficulties confronting the industry, asked (the Government to provide a bounty of 3s. 6d. a case, but the Government considered that such a rate would involve too large a sum and eventually compromised at 2s. a case. As the £20,000 provided on the Estimates is not likely to be absorbed, I should like to know if the Government is prepared to increase the bounty from 2s. a case to the amount originally asked for by the growers? Owing to the reduced number of cases to be exported, the total payment would not exceed £20,000.

Senator Arkins:

– The amount proposed is fairly liberal.

Senator HARDY:

– It is not, because in 1933 and 1934 practically 90 per cent, of the growers did not receive any return at all. If the growers received an additional bounty in respect of exports to the United Kingdom for the years under discussion, they would be well rewarded. The marked reduction in the quantity to be exported this year as compared with the previous year is due to the low prices prevailing on the London market having resulted in unprofitable transactions. I strongly recommend the increase to the Government as it would be just and equitable. Many of the growers and also the Government are anxious that the industry should be placed on a firm basis in order to build up a permanent and profitable market in Australia and in the United Kingdom. Unfortunately there is a lack of unanimity amongst the growers. In some parts of the Commonwealth growers object to any governmental interference, and wish to continue the present haphazard system ; others favour a compulsory pool, and yet others a voluntary pool. . I stress the fact that it is vital for the growers to weld themselves into one organized whole. The Assistant Minister has doubtless realized that one of his greatest difficulties has been to formulate a scheme acceptable to the majority of those engaged in the industry. The delegates who attended the conference held in Sydney in April, representing Queensland, New South

Wales, Victoria and, I believe, South Australia, suggested that the Commonwealth Government should appoint a citrus export control board, similar to the Dried Fruits Export Control Board, which should have power to issue licences to packing houses, and to control the quantity of fruit exported. In my opinion that would be a step in the right direction. I believe that such a proposal has substantial support, but until there is unanimity amongst the growers little success can be expected. The only way to save the industry is to provide for improved marketing conditions, and the appointment of an export control board, not on the lines suggested by the Leader of the Opposition, but controlled by the producers. That is the difference between boards appointed by the Commonwealth and those appointed by the Queensland Government. It is essential that there should be co-operation by the growers.

Senator Collings:

– Many of the boards in Queensland are controlled by producers.

Senator HARDY:

– I am glad to hear that the Queensland Government has at last been converted to the policy of the Country party. The Minister for Commerce (Dr. Earle Page) stated that this is the only assistance which the Government can offer until a permanent scheme has been adopted. I shall support the appointment of a board controlled by the producers on the lines I have already indicated.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– Clause 2 of the bill provides that “ this act shall be deemed to have commenced on the first day of January, 1935.” That date is also mentioned in paragraph b of clause 5, which reads -

Tlie bounty shall be payable in respect of . . navel oranges exported from the Commonwealth to tlie United Kingdom during the period commencing on the first day of January One thousand nine hundred and thirty-five and ending on the twenty-second day of July One thousand nine hundred and thirty-five.

Does that mean that only the citrus fruitgrowers who have exported fruit to the

United Kingdom between the dates specified will receive the bounty? I ask these and other questions because the newspapers are constantly publishing interviews in which disinguished travellers, upon their return from England, make caustic remarks about the marketing of many Australian products there. Some of the critics are more trenchant than others, but there seems to be a consensus of opinion among such gentlemen, who undoubtedly keep their, eyes open when abroad, that room for improvement in marketing methods exists, especially in the grading of such produce as oranges. I hope that the Minister will make inquiries as to the application of this present schedule to the exports already mentioned. For instance, the orchardist is expected to use blunt-nosed secateurs when cutting oranges from the tree, and in the process of picking and packing, he .must use gloves. Misshapen or corrugated fruit is not permitted to be exported, and pickers must be careful of how they lay the fruit in the case, which, incidentally, must conform to the standard dimensions. I raise these matters in an endeavour to avoid a repetition of this continual criticism of the export of misshapen or badlygrown fruit. What is the procedure in regard to the inspection of that fruit by the Commonwealth officer before it leaves these shores? I hope that the Minister will answer that question when he replies. Various opinions on the wisdom or otherwise of paying ‘ bounties were expressed in this chamber long before ever I entered it, but according to the logic of the Leader of the Country party (Senator Hardy), the exporter, if the quantity sent abroad shall fall below the estimate, should be compensated at a higher rate than 2s. a case. Obviously, he desires that the grant of £20,000 should be allocated to the orchardists irrespective of the total number of cases exported. That is to say, if growers in the Murrumbidgee area, which, I understand, includes the Griffith irrigation area, were able by an “ eat more fruit “ campaign, to increase the local demand and so’ reduce the number of cases for export, perhaps only 20,000 cases would be sent abroad, but the growers would still receive the full amount of £20,000.

I cannot understand the reasoning of the honorable senator in putting forward that suggestion. I hope that adequate steps will be taken to ensure that the best type of fruit reaches the United Kingdom. Although I asked Senator Hardy the question several times, he did not explain why the Government of New Zealand placed an embargo on New South Wales oranges. One answer suggests itself, although it might not be the correct one, but I think that the matter goes deeper than the actual importation of oranges into New Zealand. If one tried to obtain a complete history of that embargo, not only on oranges, but on other primary products, one would find that the New Zealand people are objecting to the trade balance between the two countries being overwhelmingly in favour of Australia. If Senator Hardy and other representatives of New South Wales, who are very high protectionists so far as Australian products are concerned, were to look for the real reason of the embargo I think they would find it is as I have stated. I support the second reading of the bill and in committee I shall refer to some important details that will require consideration.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– 1 support this measure, which has excellent qualities and is a step in the right direction. In South Australia the majority of the citrus-growers are returned soldiers whose holdings are situated along the banks of the river Murray, and they have experienced severe difficulties during the past two years. They have attempted to export oranges to . the United Kingdom. As was pointed out by Senator Hardy, at first they were guaranteed 13s. a case for the oranges, but this price actually left them in debt. The financial assistance was absorbed in freight and other charges. A bounty of 2s. a case is little enough, and despite the remarks of Senator Allan MacDonald, I think, considering that only 300,000 cases have been exported this year to the Old Country, that the least the Government should do is to grant the reasonable request made by the citrusgrowers at the conference in Sydney in April last.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– The exporters of apples receive only 5d. a case.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– But no specific sum of money was set aside for the apple-grower.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– How can the honorable senator reconcile the two bounties?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– - They can be reconciled to a certain extent. The export of apples to the United Kingdom has been proceeding foi a number of years and Australia has established a market there. On the other hand, the legislation now before the Senate is largely experimental. Australia is endeavouring to establish a market for oranges in the Old Country, and we must give some encouragement to our citrus-growers, who are prepared to take the risk entailed in selling their oranges on the British market, Senator Hardy has mentioned the charges involved in freights alone in shipping oranges to New Zealand or to the Old Country. The bounty is inadequate. When reference is made to the bounty of 2s. a case, many people believe that the cases containing fruit for home consumption and the export cases have the same capacity, and that the fruit is of a similar standard. But an export case has practically one and a half times the capacity of the case used in Australia. Apart from that consideration the conditions set out in the schedule as regards picking and packing must be observed. These details certainly warrant the payment of a larger bounty. Senator Hardy also alluded to transport facilities. At one time we believed that it was impossible to send chilled beef from Australia to the United Kingdom, but now the difficulties have been practically overcome. That success demonstrates what can be achieved by experimentation. I believe that similar success could be achieved in regard to oranges if we conducted experiments along the right lines. The Government itself could render valuable assistance to enable growers successfully to compete with the fruit marketed by countries much nearer to England.

page 2013

REGULATIONS AND ORDINANCES COMMITTEE

Third Report

Senator DUNCAN-HUGHES:
South Australia

– I move -

That the third report from tlie Regulations and Ordinances Committee, presented to the Senate on the 31st October, 1935, be adopted.

As this report was laid on the table of the Senate on the 31st of last month honorable senators have had ample time to read and consider it. In moving its adoption, I am simply following the procedure observed when the first and second reports of the committee were presented. It is neither necessary nor desirable that I should speak at length in support of the motion. The report speaks for itself, and as I assume that honorable senators have read it, no useful purpose would be served by my elaborating what is, perhaps, better said in the report itself. I may, however, be permitted to allude briefly to three or four matters mentioned in it.

Clause 3 makes mention of a series of regulations which, in the opinion of the committee, are in precisely the same position as the regulation, the disallowance of which I moved in the Senate a month ago. It is not the province of the committee to touch on matters of Government policy. Its function is to report to the Senate whether or not regulations laid on the table of the Senate are in accordance with the law and with certain general principles, but I may perhaps be allowed to go so far as to say that it does not appear to the committee that the noncompliance with the law which, in its opinion has taken place in connexion with a number of regulations mentioned in this clause, is of a very serious nature. The transgressions vary in degree. Nevertheless, the committee deemed it its duty to indicate the regulations which, in its opinion, were not in conformity with the law. I mention in particular Regulation No. 58, which deals with an amendment of war service homes regulations. In this case there is 710 evidence of moral turpitude - if I may use the phrase without conveying a false impression - in connexion with what was done, but the committee felt that it was improper to do it in this particular way. It appears that a person, after having contracted to pur-. chase a war service home, had left Australia. Proceedings for repossession were commenced, but it was impossible to prove to the satisfaction of the magistrate that the man had ever, in fact, entered into possession of the home. The department wished to resume possession but as, under the rules of evidence existing, it was impossible to do this, the department got over the difficulty by prescribing that a new set of rules of evidence should be applicable to this case. This, in the opinion of the committee, was not a proper thing to do. Although perhaps the objective was, in itself, quite good, the method, in the opinion of the committee, was bad.

Another reference in the report relates to regulations of the Postal Department with regard to telephones. It seems to me, and also to other members of the committee on whose behalf I am speaking, that a regulation which has been amended to deal with individuals who tap “ any telephone system improperly throws upon the proprietor of the house in which the telephone is installed or the land over which the line is taken, the obligation to prove that he was not in any way responsible for the unauthorized tapping of the service. There may be some legal answer to’ the committee’s objection - it may be claimed that it is permissible under the act - but apart from legal technicalities, the committee considers that it is not in accordance with the general principles of the law that an individual who owns a house in which there is a telephone, or the land over which the telephone line runs, should be held responsible if the service is tapped by some unauthorized individual. In some instances, as we know, telephone lines traverse miles of open country to a distant house connexion, so it is possible for some unauthorized person to tap the line without the knowledge of the subscriber or the owner of the land. Indeed, the owner may be 12,000 miles away, on a visit to the Mother Country, and can have no knowledge of what has been done. This shifting of the burden of proof in connexion with the misdeeds of a third individual, is, in the opinion of the committee, an undue interference with the liberty of the subject. The fourth case to which I shall refer, and that briefly, relates to the censorship of cinematograph films. Three years ago in this chamber, Sir Hal Colebatch dealt with this matter and, so far as I know, nothing has been achieved, although attempts may have been made, to ensure that control of cinematograph films should be vested in the Commonwealth. I have as high a regard as any other honorable senator for the rights of the States but there are certain matters which, I consider, should obviously be under Commonwealth control. Wireless broadcasting is one, and aviation another.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Commonwealth rights as regards aviation art very much in the air at present. That subject has been twice argued before the High Court.

Senator DUNCAN-HUGHES:

– It is, I think, highly desirable that the Constitution should be amended in such a way as to make it clear that the Commonwealth has complete control of films, aviation and wireless broadcasting. These important matters should not be left in abeyance. Speaking on this subject in the Senate on the 28th September, 1932, Senator Sir Hal Colebatch, in presenting the first report, of the committee, quoted this passage -

Your committee would direct attention to the unanimous recommendation of the Royal Commission on the Constitution that the words “ cinematograph films “ should be inserted as a new paragraph in section 51 of the Constitution in order to give to the Commonwealth Parliament power to pass laws in regard to films made in Australia as well as those imported.

I cordially endorse that opinion. The report goes on to state -

Pending the taking of action to amend the Constitution or the reference of the subject to the Commonwealth Parliament by the State Parliaments, your committee would submit the following resolution for the consideration of the Senate: - “” That in the opinion of the Senate the time has arrived when public policy in regard to the censorship of imported cinematograph films should be set out in substantive legislation.”

Senator Sir Hal Colebatch also made this quotation from the report of the committee -

Apart from the important principle involved in this recommendation, your committee is of the opinion that the passing of satisfactory legislation governing the censorship of imported cinematograph films would afford the strongest possible inducement to the State parliaments to refer > the subject of film censorship generally to the Commonwealth Parliament, thereby making it possible to achieve a highly desirable end without the delay that would be occasioned by an amendment of the Constitution.

In other words, he suggested that the Commonwealth Parliament should pass an act which would so satisfy the States that they might be prepared to give general power in these matters to the Commonwealth. Unfortunately, this has not been done and no legislation has been framed for the control of aviation or broadcasting. These important questions have not been submitted to the people for an expression of their opinion.

Senator Brennan:

– The States have been approached but they show no disposition to vest authority to control in the Commonwealth.

Senator Sir George Pearce:

– State Ministers have agreed in conference to this course, but have not passed the necessary legislation.

Senator DUNCAN-HUGHES:

– I am aware that the subjects mentioned have been discussed at conferences of Commonwealth and State Ministers for some years past, but nothing has been done. The reports of these conferences usually contain some such statement as the following : “ This matter was referred back for consideration at a later meeting.”

Senator Sir George Pearce:

– In this case the States were in agreement at the conference, but they did not take any action to give effect to that agreement.

Senator DUNCAN-HUGHES:

– Has the Commonwealth taken any action?

Senator Sir George Pearce:

– The Commonwealth could not take action to compel the States.

Senator DUNCAN-HUGHES:

– Was there any agreement that these matters should be controlled by the Commonwealth ?

Senator Sir George Pearce:

– Yes.

Senator DUNCAN-HUGHES:

– Surely, in that event, the Commonwealth could either have brought in a bill in accordance with the agreement - if there had to be agreement by both the Commonwealth and the State Parliaments - or referred the matter to the people at a referendum.

Senator Sir George Pearce:

– The States agreed to legislate to transfer to the Commonwealth any power that they might have in this connexion.

Senator DUNCAN-HUGHES:

– Perhaps I may be allowed to depart a little from my duty as Chairman of the Committee and express my personal opinion, that the States should not be allowed to use these important matters as subjects for bargaining. These things should be determined on their merits. Obviously, the questions which I have mentioned cannot be dealt with by any one State. If the Commonwealth cannot agree with the States regarding the control of these things, the sooner it makes up its mind to hold a referendum of the people, to determine whether these matters should be controlled by the Commonwealth in the future, the better it will be for the Constitution, and for every one concerned, for there will then be for the first time a responsible body to deal with these matters.

I have nothing further to say on the report, except to express the hope that honorable senators will give it fair consideration. The committee was faced with a difficult problem by reason of the fact - which I shall not over emphasize - that there appeared to be instances in which the strict law had not been complied with. It did not seem to the committee that it was the duty of any of its members, or of any private member of the Senate, to rise in his place and move that a number of regulations which did not appear to be watertight should be disallowed. The members of the committee think that in dealing with regulations they are discharging a duty on behalf of the Parliament, and are entitled to the support of the Government. If their action is either illegal or incorrect, that fact will, no doubt, be pointed out to them, but they are of opinion that so long as their recommendations come within the province of the committee, and are sound, the responsibility for the proper maintenance of the law is not with the committee. They hold the view that any errors which might have been made inadvertently should be rectified by the Government, and not by the isolated action of any individual, whether a member of the committee or not. I commend the report to the consideration of honorable senators. It was not produced without careful thought and much work. The committee is strictly non-partisan, and has acted solely with the object of carrying out the important duties entrusted to it by the Senate.

Senator Sir GEORGE PEARCE:
Minister for External Affairs · Western Australia · UAP

[8.21].- The Standing Committee on Regulations and Ordinances has done, and is doing, most useful work. In the remarks I have to make on this motion I hope that it will not be thought that there is any lack of appreciation on my part, or on the part of the Government, of the way in which the committee is carrying out a thankless but important task. Knowing the number of regulations which are issued from time to time, I realize that the duties of the committee are onerous, and that its members cannot expect much limelight on the useful work that they are doing.

The present report, however, introduces a subject which I feel should not pass without discussion. I trust that any remarks which I shall make will not be regarded as being in any sense a reflection on the work of the committee, but because this committee is of comparatively recent appointment, I think that it is wise to deal with certain aspects of its report, so that in its future work it may proceed along proper lines.

I suggest that the committee’s report falls into two categories. In order to illustrate what I mean by that statement. I direct the attention of the Senate to paragraphs 1, 2 and 3 of the report -

  1. The motion for disallowance of Statutory Rules 1935, No. 29 (Amendments of the Dried Fruits Export Control Regulations), moved by Senator J. G. Duncan-Hughes in his personal capacity in the Senate on 22nd October, 1935, and carried, was moved by him with the unanimous prior endorsement and approval of the members of the committee
  2. The principle in the disallowed regulations is an important one, as in the committee’s opinion they were in direct contravention of the law as laid down in the Acts Interpretation Act 1904-1934, and as decided by the High Court in the case of the Broadcasting Company of Australia Limited v. the Commonwealth. (52 C.L.R. 52), to the effect that regulations containing a provision that they should be deemed to have commenced on a certain date, which was prior to the date of notification in the Gazette, were void. The Senate, by its vote endorsed the committees view.
  3. Among the 1935 regulations considered by the committee recently are the following, each of which appears to infringe the provisions of the Acts Interpretation Act by a retrospective clause of a similar type: -

Here follow a number of statutory rules. In paragraphs 5 and 6 the committee goes on to say -

  1. The committee considers that these regulations are void or voidable, in whole or in part, and would be held so to be if contested in the courts, in view of the decision of the High Court mentioned above. In some of the statutory rules enumerated above the retrospective regulations appear to be separable from other regulations to which they have no reference.
  2. In such circumstances, and especially considering the large number of the regulations affected, the question of procedure becomes important. The committee is of opinion that it should not be the duty of its members or of other private members of the Senate to move for the disallowance of these regulations one by one, thereby throwing the responsibility on them and also involving much unnecessary waste of the Senate’s time. The duty of seeing that the law is complied with obviously falls on the Government, one of whoso members admitted in the Senate that in his opinion the retrospective provision in Statutory Rules No. 29 was invalid.

I separate those paragraphs from the other portions of the report for the reason that in paragraphs 8, 9 and 10 the committee is exercising its duties in what appears to be a proper manner, whereas in the paragraphs which I have read, it obviously is taking upon itself the functions of a court in that it makes a declaration as to the legality or otherwise of certain regulations. I submit that the committee was not appointed for that purpose. I go further, and say that it is not competent to act in that capacity. It is important to consider the constitution of the committee. In mentioning this subject I make no reflection on its members. The committee consists of Senators Abbott, Brown, Collett, Cooper, Duncan-Hughes, J. V. MacDonald, and McLeay. Senator DuncanHughes, who is the chairman of the committee, is a lawyer, as is also Senator Abbott.

Senator Abbott:

– I am a solicitor.

Senator Sir GEORGE PEARCE.The other members of the committee are laymen, and I suggest that it is somewhat hazardous for a committee of laymen to proceed to expound the law. Further, I suggest that it is somewhat rash for the Senate to proceed to endorse the opinion of a -committee of laymen in regard to the law.’ While it may be that in the case of the particular regulations which are referred to, no serious consequences would ensue from their being declared invalid, it surely is not the function of a committee of laymen to determine that point. The proper authority to determine the validity or otherwise of a regulation is a competent court. Any person who feels aggrieved by the regulations may contest their validity in the appropriate court. Any citizen may take action to have a regulation declared invalid. The Senate would be stultifying itself if, on the advice of a committee of laymen, it made a pronouncement that certain regulations are invalid.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– Does the Leader of the Senate suggest that honorable senators have not the right to press for the disallowance of a regulation?

Senator Sir GEORGE PEARCE.No. Any senator may move for the disallowance of a regulation, on any ground that he thinks fit. That is the course contemplated by the Acts Interpretation Act, which gives power to each House of the Parliament to disallow a regulation. The Standing Orders of the Senate recognize that power, and in order that no member of the Senate shall be prevented from exercising it, they actually give a motion for disallowance precedence over all other business. Parliament has laid down the procedure which should be followed to disallow a regulation; but Parliament never contemplated that a regulation should be declared to be invalid by a committee of its own appointment. If Parliament intended that to be done, it would constitute a committee of gentlemen with legal training.

Senator McLeay:

– Lawyers are not always right.

Senator Sir GEORGE PEARCE.That may be so; but they at least have had some legal training.

Senator Abbott:

– Paragraph 2 of the report distinctly refers to the opinion of the committee; there is no attempt to dictate.

Senator Sir GEORGE PEARCE.My point is that the committee expresses a legal opinion when it says that certain regulations are void or voidable. In my opinion, the committee is not competent to say that.

Senator Abbott:

– Is not the responsibility of accepting this report exactly the same as the responsibility of rejecting it?

Senator Sir GEORGE PEARCE:

– I remind the honorable senator that, like the committee, the Senate is composed of laymen. Before dealing with the specific matters included in the report, it seems to me that honorable senators should be quite clear as to what would be involved in the carrying of the motion for the adoption of the report. Under Standing Order 36a which deals with the appointment of the Standing Committee, it is provided that any action necessary, arising from a report of the committee, is to be taken in the Senate on motion after notice. The Senate is now being asked simply to adopt in detail the report of the committee - a report which, for the most part, contains expressions of opinion merely, and not concrete recommendations which could form the subject of specific motions in the Senate. The question arises whether the Senate should go the length of adopting in their entirety the views of the committee - views which, in some instances, raise contentious legal points.

In paragraphs 3, 4 and 5, the committee has given expression to legal opinions as to the validity or otherwise of certain statutory rules. In paragraph 3, in particular, there are specified twelve statutory rules which appear to the committee to infringe the Acts Interpretation Act by reason of the inclusion therein of a retrospective provision. The committee, in venturing an opinion as to the retrospectivity of the statutory rules mentioned in paragraph 3, has, it is feared, assumed an interpretative function which should not be undertaken lightly. In a matter such as this, which depends largely upon the interpretation of statutes in the light of decisions of the courts, it seems that the committee would be embarking on a task ill-suited for a body consisting principally of laymen if it continued to offer opinions as to the legality or otherwise of regulations or ordinances laid before it. The report of the Standing Committee, as is proper, receives due publicity, but it cannot be in the public interest to express opinions on the validity of regulations when the effect may be to envelop in a cloud of doubt regulations which, on consideration by a court of law, may be found to be perfectly in order. If objection can be taken to the action of -the committee, which, I freely admit, has specially directed its mind to the terms of the individual statutory rules upon which it has reported, how much greater is the objection to be taken to this Senate adopting the report in its entirety unless, indeed, it also scrutinizes each separate regulation impugned. But, even if it did undertake such scrutiny, the Senate would, if it adopted the report, arrogate to itself functions of the ‘Courts - functions which, I venture to suggest, it is neither fitted for nor expected to perform. You, yourself, Mr. President, would hesitate to undertake the duty of deciding on the constitutionality of a measure before the Senate. Sir Richard Baker laid down a rule which, I think, should apply equally to this Senate, as to the functions of a President of the Senate in dealing with questions as to the constitutionality of measures before the Senate. He is reported in Hansard, volume xxxv., page 5967, as having said -

It does not seem to me that I should, from the chair, undertake the responsibility of interpreting all the provisions of the Constitution. The Constitution itself has provided for a tribunal, the High Court, which, after argument and consideration, such as would be impossible and undesirable in this Senate, is empowered to finally determine its meaning in most of the cases which will arise.

These words are equally applicable to legislation purporting to be passed -in pursuance of the Constitution. If you, Mr. President, were asked by the Senate to pass judgment as to the legality or otherwise of a bill before the Senate you would, I feel sure, take up an attitude similar to that adopted by Sir Richard Baker in the instance to which I have just referred. It would be a grave mistake for the Senate to engage on the task of examining the legality of statutory rules laid before it. Further, the adoption of this report would be nothing less than an expression of the opinion of the Senate that the statutory rules referred to in it are void or voidable in law. If we reflect for a moment on our qualifications for the task, I feel sure that we must acknowledge that, most of us being laymen, we would be engaging in a very undesirable task - a task more properly to be performed by a court. I urge on honorable senators the desirableness of leaving this function to the tribunal which the Constitution has pointed out as best qualified to perform it, namely, the High Court. This can be done by rejecting the motion. The committee submits that the Government should withdraw and cancel such of the regulations set out in . paragraph 3 of the report as are invalid; alternatively, that it should move in the Senate for their disallowance within the prescribed time. The first course would not at this stage have the effect which the committee has in mind. If the provisions are invalid, then the repeal thereof would not effect anything from the legal point of view, because the repeal could not be ante-dated in view of section 10 of the Acts Interpretation Act. With regard to the suggestion that the Government should move for the disallowance of the regulations in question, I do not think that it can be seriously contended that a government responsible for the making of regulations should itself make use of the power of disallowance. This is a right which can He more properly exercised by an individual senator.

I have said that, in my opinion, this report is divisable into two parts. The comments which I have just made deal with those sections of the report which I read. When I received a copy of this report I sent it to the Attorney-General for his consideration, as it raises important questions which the AttorneyGeneral has had under consideration and upon which he is proposing that certain action be taken by the Cabinet. This matter is now before the Cabinet; a decision has not yet been reached. Before concluding my remarks on this motion, I wish to be able to tell honorable senators what action the Government proposes to take on the committee’s report.

Senator Duncan-Hughes:

– Will the right honorable senator comment on what he has described as the second part of the report?

Senator Sir GEORGE PEARCE.No possible exception could be taken to the second portion of the report.

Senator Duncan-Hughes:

– Yet clause 8 expresses a legal view on the question of shifting the burden of the onus of proof.

Senator Sir GEORGE PEARCE.I do not think so. I think it is competent for a body of laymen to deal with such a matter.

Senator Duncan-Hughes:

– I should say that that matter is more difficult than the question raised by clause 3.

Senator Sir GEORGE PEARCE:

– The matters dealt with in clauses 8, 9 and 10 seem to come within the function of the committee, and it is upon those and other parts of the report that the Attorney-General has submitted his report. In order to be able to inform honorable senators of the action to be taken by Cabinet, I ask leave to continue my remarks at a later date.

Leave granted ; debate adjourned.

page 2018

QUESTION

INTERNATIONAL LANGUAGE

Debate resumed from the 14th November (vide page 1621), on motion by Senator Abbott -

That to encourage the breaking down of barriers and in the interests of mutual understanding and peace among the nations of the world and to enable the founding of an international public opinion and literature -

1 ) It is imperative that a means of international thought exchange be established by a common language to be compulsorily taught in their respective primary and secondary schools;

For this purpose the Government be asked to list this question on the Agenda of the next General Assembly of the League of Nations;

That the Government be asked to instruct the delegates representing Aus tralia at the next Assembly of the League to take action to ensure the approval of the Assembly to the above ;

That the terms of this resolution be communicated to the House of Representatives with a request for concurrence therein ;

That the right honorable the Prime Minister be requested to communicate the above to the governments of the United Kingdom, the dominions, and India, seeking their co-operation.

Senator Sir GEORGE PEARCE:
Minister for External Affairs · Western Australia · UAP

[8.40]. - It is axiomatic that any motion directed towards the promotion of peace among the nations of the world must commend itself to the sympathetic consideration of honorable senators. Senator Macartney Abbott has broken new ground in submitting this motion, and he is to be congratulated on the interest he has displayed in the subject and on his action in bringing it before the Senate. Before we commit ourselves to this motion, however, we have to ascertain its value to achieve the purpose to which it is directed. A common language would probably lead to a better understanding between the peoples of the world but one would be extremely optimistic to take the view that a common language of itself would necessarily bring about international peace. If we look back on history, certain events immediately spring to mind. For instance, we readily recall the terrible American civil war. At that time, the population of the United States of America was much more Anglo-Saxon than it is to-day, and I think it is correct to say that the language almost generally in use was English. But, notwithstanding the fact that the American people had a common language and practically a common religion and common ideals, a great fratricidal conflict occurred. Also, we recall the civil war in England* in the time of Charles I. There is no doubt that, at that time, the English people had a common language. These two examples from the history of our own race should prevent us from being unduly optimistic and assuming that the adoption of a common language among people of different races and holding different ideals will necessarily make for international peace. Of course, this is not a fatal objection to the promulgation of the idea embodied in the motion. However, I have to speak, not in my own behalf, but on behalf of the Government. This motion, if agreed to, will commit the Government to a certain course of action. I recall remarks made to me by the late Senator E. D. Millen on his return from Geneva where he bad attended the Assembly of the League of Nations. He had an extremely critical mind, and when I asked him for his impressions of the League, he told me that he thought those directly connected with the League were too idealistic, that they refused to come down to earth, and that they did not pay sufficient regard to practical things. The Government feels that any proposition it places before the League of Nations should have the support of educated public opinion, and that it should not do anything which might make the League appear to be merely a debating society. Public opinion has first to be formed amongst the nations themselves, and the Government’s view is that before attempting to obtain international action it should have the support of the Australian people. Even Senator Abbott will agree that up to the present there is no definite public opinion in Australia upon this subject.

Senator Abbott:

– There is a considerable volume of public opinion.

Senator Sir GEORGE PEARCE.No one can say that so far public opinion in Australia has been educated as to the need or desirableness of the course of action he suggests. While the Government is particularly sympathetic towards the ideal expressed in the motion, it feels that it would be premature to place the subject upon the agenda of the League of Nations at this juncture. The Government feels that there should be more education on the subject in Australia, and I think that through the press and by other means the honorable senator himself is doing good work in that direction.

Senator COLLINGS:
Queensland

– I happen to be one of those who believe that it is time, that as a Parliament, we did something definite in the direction of creating an atmosphere of peace amongst the people of this country. We are apt - and some honorable senators are very glib whenever the opportunity occurs - to create an opposite atmosphere. Some of us sometimes have diffidence in approaching the subject of peace because when we do so we are charged with being unpatriotic, particularly when we are opposed to voting huge sums of money to purchase guns to blow human beings into eternity. An opportunity is now presented to do something in the opposite direction. When speaking in this chamber on another subject I said that it was time the Commonwealth established a peace council instead of a defence council, and that the time had arrived to appoint a Minister for peace instead of a Minister for defence. I know that these sentiments are more or less unpopular. Are we the leaders of the people or are we to be like a celebrated leader who said: “ There go my people ; I must follow them because I am their leader “. Here is a splendid opportunity to give the people a lead.

Senator Arkins:

– Did not the British Government appoint a Minister for peace when it appointed one of its number a Minister for League of Nations Affairs?

Senator COLLINGS:

– The honorable senator is not likely to lead me off the track in that smooth and easy way, because I do not intend to follow him. The Leader of the Senate (Senator Pearce) is incorrect in suggesting that there is little public opinion on this subject, because for the last 20 years I have been connected with an Esperanto society in Queensland. I understand that there are branches of the esperanto organization not only in every otherState of the Commonwealth, but also in almost every civilized country. Scholars are communicating in esperanto with the scholars in many other countries, some of whose ideals are far removed from those of the British race. Already there is a more or less appreciable volume of public opinion on this subject. Some one should give the public a lead, and if that lead is given I believe the people will be eager to follow. The Leader of the Senate alluded to the difficulties which arose in the time of Charles I., over 300 years ago, and then he brought us nearer to present day affairs by referring to the American Civil War which occurred 70 years ago. Does not the right honorable gentleman realize that in the last 70 years there has been a change in public opinion? Does he not realize that from 1914 to 1918 there was the most disastrous war in history, and that at that time practically every leader of the church in this and in other coun tries involved, including Australia, was in favour of war?

SenatorFoll. - What power had they to do anything else?

Senator COLLINGS:

– The point I wish to make is that in the last seventeen years the whole attitude of the churches - representing not a negligible portion of the community - has changed completely. Their leaders are now opposed to war, and take every possible action to prevent it.

Senator Foll:

– It is not fair to say that the leaders of the churches were in favour of war.

Senator COLLINGS:

– The churches were recruiting agents in this country. Practically every dignitary of every church favoured it.

Senator Brennan:

– That is not correct.

Senator COLLINGS:

– It is near enough; there may have been some honorable exceptions. I am sure that if another international conflict occurs there will not be so many white feathers in circulation as there were between 1914 and 1918, because a decided change has come over the people. The Great War brought home to the people of the countries involved what war really means. The objection of the ‘Government to the action proposed is not because of the sentiment embodied in the proposal, but because it believes that there should be a greater volume of public opinion in Australia behind this proposal before this Parliament recommends that action should be taken by the League of Nations. It would be a wonderful achievement if this motion, containing real evidence of a practical step being taken in the interests of universal peace, were transmitted from Australia to Geneva with the imprimatur of the Commonwealth Parliament upon it. In the absence of any great volume of public opinion behind it the proposal may be laughed out of court, but I am sure thata great many delegates will support it. If it is not considered seriously by the League of Nations Assembly and nothing is done for a time it can be postponed for consideration later. That would not bring Australia into disrepute, but would raise it in the estimation of sensible people. They would see that we were anxious to prevent the possibility of another cataclysm, such as that through, which the world passed a Hew years ago. The Leader of the Senate said that Senator Abbott deserves the thanks of the Senate for the trouble he has taken in submitting this motion. The honorable’ senator asks not for thanks but for action. He has already performed some fine propaganda work in connexion with this ideal, but believing that something practical is essential, he has now brought the matter before the Senate, of which he is a distinguished member, and asks for our support. I trust that the ‘Senate will accord the motion the support which the mover is entitled to expect. I remind honorable senators that every achievement of value to the community is some one’s dream come true. I do not see any reason why we should be the least hesitant about encouraging Senator Abbott and those who think with him to go right ahead with their proposal. Tt has been said that every great business is but the lengthened shadow of one man, and every great thought it but the lengthened shadow of the thinker, and the thought presages subsequent action. The thought is not only present in the motion made by Senator Abbott; it is present everywhere in the community, and is actually waiting an opportunity to become articulate in those circles where at present it is not articulate, and even where the opposite sentiment, perhaps, is reigning. I hope that the Senate will endorse this motion, and transmit it on a wave of enthusiasm and unanimity to the Prime Minister.

Senator HARDY:
New South Wales

– When I read the terms of the motion, and realized the ideal that lay behind the words, I felt confident that, when the matter came up for debate in the Senate, it would meet with unanimous approval, and that immediate action would be taken to commence a movement that will reach fulfilment through the proper instrument, the League of Nations. I listened most carefully to the Leader of the Senate (Senator Pearce), and I dissent from his statement that it is not the Government’s intention or duty to take the matter before the League of Nations until a public opinion in Australia has been formed. It should not be necessary for a government or for a leader to wait for public opinion. If a person honestly believes that an ideal is worth while, he will march toward it, irrespective of public opinion, hoping that the public will follow.

Senator Duncan-Hughes:

– If the leader does not take the initiative, he follows last of all.

Senator HARDY:

– Having regard to the ideal expressed in the motion, I believe that no harm, but only good, can accrue from action by the Government, and it is my sincere hope that, instead of bringing this motion to an issue to-night, the debate will be adjourned, so that the Government may have time to reconsider the motion, and all its implications, and reverse the decision which Senator Pearce conveyed to the Senate to-night. I trust that the motion will not be withdrawn, and that we shall not have to divide on it. The issue is so far-reaching that we should not deal with it on party lines. Senator Sampson referred, by interjection, to the Tower of Babel. A passage in the Book of Genesis is particularly interesting in relation to the ideal expressed in Senator Abbott’s motion -

And the whole earth was of one language, and of one speech.

And it came to pass, as they journeyed from the east, that they found a plain in the land of Shinar, and they dwelt there.

And they said one to another, Go to, let us make brick and burn them thoroughly. And they had brick for stone, and slime had they for morter

And they said, Go to, let us build us a city and a tower, whose top may reach unto heaven; and let us make us a name, lest we be scattered abroad upon the face of the whole earth.

And the Lord came down to see the city and the tower which the children of men builded.

And the Lord said, Behold, the people is one, and they have all one language; and this they begin to do: and now nothing will be restrained from them, which they have imagined to do.

Go to, let us go down, and there confound their language, that they may not understand one another’s speech.

What is the lesson conveyed by that passage? It is that co-ordination of action was not possible once there was a confusion of tongues. Modern counterparts of the Tower of Babel are to be found throughout the world. Where a country or an alleged nation is divided by dialects, as in China, there is always found a lack of unity and understanding, whereas, in a country with a common language, the tendency is towards a common understanding, unity, and cooperation. The manner in which the nations are separated by linguistic barriers is strikingly demonstrated when one tunes in on a short-wave wireless set to various parts of the world. One may make contact with Moscow, Berlin, or Paris, but, not being able to understand their language, cannot benefit by their culture and thought. When a proposal is brought forward to smash the barrier of language, it is the solemn duty of every honorable senator to support it to the last degree. I could mention many practical instances of the barrier formed by the multiplicity of languages. I could cite the advertisements of commercial firms in Japan and China; I can unwrap a product of some foreign country and find translations in various languages of the descriptions accompanying. But the most striking modern example of the Tower of Babel is the League of Nations. A frank delegate to the Assembly will inform an inquirer that one of the difficulties at Geneva is, not to interpret words, but to understand the motive behind them. The speeches are translated into various languages; but the delegates lose the sentiment and emotions of the speaker, and the speeches are therefore colorless. Thus the oratory is without force, except for a limited number of speakers; the expressions of the face are the only guide to the majority of listeners.

I frankly admit that this is a longrange project; the objective is far from realization. It may not become a reality in my time. But if the motion provides an opportuunity to lay a foundation upon which may be built universal goodwill and understanding, we should not wait for the public of Australia to endorse it; we should go ahead on our own initiative.

Senator ARKINS:
New South Wales

– I support Senator Abbott in what may be considered a somewhat visionary and idealistic proposal in a world of practical realism. Often, the idealist is discouraged. It is said that his dreams will never crystalize into real and material benefits to mankind. I do not suppose that there was ever a visionary in history who was not scoffed at and derided. He is a prophet who looks to a far off land, which is never to be reached. But the time is fast arriving when there shall be a common language known to all the peoples of the earth and giving them a common relationship. Notwithstanding differences of colour and creed, when we come close to one another and understand each other better, we realize we all belong to the common family of humanity. I read recently ‘The Vision of the Things to Come, a book written by H. G. Wells, a great thinker and one of the greatest visionaries as well as one of the greatest fundamentalists that the English-speaking people has produced. Surveying modern economic tendencies, he foresees the breaking down of all national barriers, and the building up of one common humanity. I see nothing wrong in the suggestion that we should despatch this motion to the League of Nations. It is a most admirably constituted body to deal with such a matter. The League of Nations was founded to bring about peace between the peoples of the earth, and international communication and understanding of each other’s ideals are among the basic essentials of peace. For that ideal to be brought into practical being, a common vehicle of communication between the various peoples must be introduced. There should be a common literature. We should be able to read the great literature of the world not only in English, French, Russian and German, but also in a common language in which men of all nations can express themselves. I believe that, although Senator Abbott’s motion might not run the gauntlet of this Senate, the day is coming when the League of Nations will- discuss this problem. If Australia does not take the initiative, some other country will urge before the League that a common vehicle in which understanding can be transmitted from one country to another, so that each might understand the other’s sentiments, should be introduced. It is true, as Senator Pearce stated, that in the United States of America, where English is the predominant language, a civil war was waged 70 years ago, but then, civil wars ‘have broken out elsewhere - in Soviet Russia and, more recently, in Greece, for example. The occurrence of civil wars is not an argument against this proposal to bring the people of all nations into closer communication by what Senator Abbott has termed an international thought exchange.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I remind the honorable senator that this matter was discussed by the Committee on Intellectual Co-operation at Geneva about two years ago, and nothing was done.

Senator Abbott:

– Did not that committee adopt the attitude that it might be arrogating something to itself unless it was asked to consider the question.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– No.

Senator ARKINS:

– This topic will be discussed again by the League of Nations. Senator Abbott has just handed to me this note -

You are, of course, aware that thu question of an auxiliary international language has already been considered by the Auxiliary International Committee of the League and negatived, partly owing to the .fear of laying itself open to a charge of ‘.’ arrogating authority “ vide page 320 “ Ten Years of World Co-operation “ issued by the Secretariat of the League of Nations.

I propose now to say a few words on behalf of a vehicle of language which might easily be adopted by the various peoples of the world. I refer to “Basic English “. Very little is known about it in Australia, although it has considerable vogue in Great Britain, and has spread widely on the continent and throughout the Orient. I quote the following from an article which appeared in a recent issue of an American newspaper: -

Unlike Esperanto and many other unnatural systems which the invention of men has put forward, basic English is a readymade and living language. It is, in fact, English; and while not quite the English of the library, being much simpler, it is still true English and clear enough for any purpose. Basic English is the name which its friends give it. They have gone through the word book with a small-tooth comb, taking out great masses of words as unimportant and unnecessary. They have kept 850 words only. You may place them all on a sheet of notepaper. This selection gives us a language which takes only a short time in the learning and in the narrow limits of ‘what it is possible to put across any every-day thought that may come to mind.

The trick may seem a little hard to do at the start, but a person quickly gets the idea. By way of example, this discussion down to here, is in basic English.

The paragraphs which I have read clearly prove that, although concise, basic English is adequate for the expression of human thought. The writer of the article adds -

The chief sponsor of this newest international language, is C. K. Ogden, of Magdalene College, Cambridge, England, Director of the Orthological Institute at Cambridge. Co-operating with him are leading scholars the world over. Basic English has been in process of development and trial for ten year3, and is now studied and used by groups’ in lands as far apart as Japan, Mexico, Iceland, and Czechoslovakia. “ We find fully 1,500 languages acting as barriers to world understanding,” says Mr. Ogden. “ Though Russian is given as the language of 150,000,000 people, there are twenty distinct language groups in the Soviet Republic. China contains hundreds of dialects that differ as widely as Spanish and Dutch. In India there are 200 native tongues. It must be clear that one of the greatest needs of humanity to-day is an auxiliary language understandable in all lands. Such a language would be the best internationalizer. “ While a hundred artificial languages have been proposed in the past, there is now only one, Esperanto, and it has relatively few adherents. All of these innovations have been synthetic. Not one has the advantage of taking off from the solid ground of a living language. English, on the other hand, is already the language, natural and governmental, of 500.000,000 people. Ten years ago some of us saw that if it was only made simple enough, it might become the international speech for trade, for science, and for all other purposes.”

Here, then, we have to our hand an appropriate vehicle which makes possible a common understanding between all nations. At least 500,000,000 people have a rudimentary, and approximately 180,000,000 people a fairly intimate understanding of the language.

It has been suggested that the Japanese people will not take kindly to it.

Senator Abbott:

– Russia has adopted it.

Senator ARKINS:

– The Japanese, I understand, have difficulty with words that do not end with a vowel, but it is encouraging to know that many societies in J apan are urging the adoption ‘ of “Basic English” as an auxiliary language for the Japanese people. English, to a large extent, is being taught throughout the Japanese school system. In a remarkable little work entitled Debabelization, which is apropos Senator Hardy’s reference to the Tower of Babel. Mr. Ogden, the author of Basic English, makes a comprehensive survey of contemporary opinion on the problem of an international language, and states that by “ debabelization “ the world will eventually be brought back to a common understanding of major problems. The principal languages of the world are set out in the following table which appears in Whittaker’s Almanac for 1929 -

It should be noted that at least 500,000,000 people have a rudimentary knowledge or come under the influence of the English language, so the adoption of “ Basic English “, which is founded on 850 of the easiest words in the language, would be the quintessence of simplicity. What is more beautiful than the simple language of the Old and New Testament, the Book of Common Prayer, Bunyan’s Pilgrim’s Progress and Defoe’s Robinson Crusoe. These it has been said, are written in “ Tinker’s English “. As a matter of fact, they are written in simple English and convey graphic word-pictures. Modern English, it has been said, is more or less a jargon, and lacks much of the beauty which could be conveyed in thoughts expressed in basic English.

Senator Abbott, I know, was approached by several people who are interested in this subject, and urged to include in his motion a recommendation that “ Basic English “ should be the language for the exchange of international thought, but he declined because he did not wish to confuse the issue. There is, of course, the objection that every nation jealously guards the purity of its language in which are preserved the songs of folk-lore and cherished traditions of race. But the adoption of an international language would not interfere in any way with their desire to preserve their literature and ideals. All that the motion seeks to do is to enlist the sympathy of the League of Nations in a proposal for the adoption of an international language. We are all aware of the existing difficulties due to the absence of a common vehicle for human thought. I doubt that any Australian delegate to the League of Nations - not excepting even University graduates - has had a thorough understanding of French, which is the diplomatic language. Honorable senators are well aware how difficult it is for the average speaker to express his thoughts clearly in his mother tongue. This being so, how much more difficult is it for our delegates to the League of Nations to convey their views in words that can be understood by their fellow delegates. In the use of the spoken word there is not only the difficulty to impart, but also the difficulty to receive. The adoption of an international language is, I believe, essential if the League of Nations is to fulfil its true purpose, namely, to be a League of universal peace, working for the improvement of the world and human life in all its aspects.

The work done by the International Labour Office during the last few years has demonstrated the potential force of the League for the good of mankind.

Quite recently we have had striking evidence of the influence of the interchange of thought. An Australian delegate who is very well known, has returned to preach a somewhat revolutionary industrial gospel - a reduction of working hours in industry - and, what is more significant, has declared his intention to test his theory in his own industrial undertaking. It is important that there should be a complete understanding between the nations represented in the League, so that advocacy of improved social conditions in one country may not re-act unfavorably upon another. The League of Nations is evolving not only as a League of Peace, but also as a parliament of mankind. Tennyson, I believe, was inspired by prophetic vision when he wrote -

Till the war-drum throbb’d no longer, and the battle-flags were furl’d,

In the Parliament of man, the Federation of the world.

It is fitting that the English language in which is enshrined the glorious traditions of the British peoples, and which is the language of the land that was the mother of parliamentary institutions, should become the vehicle for the exchange of international thought. And let Australia, as the youngest of the

British, dominions, take the initiative in the establishment of an international language. Lot it also be decided that “ basic “ English, as scientifically devised by Professor Ogden, not merely because it is English, but because of its universality, shall be the common language of all the peoples of the earth. If we do that we shall have gone a great distance along the road towards true liberty, and mankind will be nearer to the realization of its great destiny.

Debate (on motion by Senator Foll) adjourned.

page 2025

ORANGE BOUNTY BILL 1935

Second Reading

Consideration resumed from page 2012.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– On his return from England recently, Mr. Butler, the Premier of South Australia, said that the Australian oranges on sale in the United’ Kingdom were of good quality and were highly regarded by British consumers. If a trade in fruit with the United Kingdom is to be established, we must send only the best of our produce. As the Commonwealth Government will pay the bounty, it should see that all the oranges which are exported are properly graded and packed, so that they shall arrive in England in good condition. It should also arrange for the High Commissioner and the several. Agents-General of the States to assist in their disposal.

South Australia was fortunate in that it received a small share of the New Zealand market for citrus fruits last season. The question has been asked why South Australia enjoyed that privilege and New South Wales did not. The growers of citrus fruit in South Australia believe that New South Wales, by reason of its action in regard to New Zealand potatoes, practically debarred itself . from participation in the citrus fruit trade with that dominion. There is tho further point that the South Australian fruit was probably of better quality.

Senator Foll:

– Was there not a fear of introducing the Mediterranean fruit fly?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I think so. The Government has set aside £20,000 for the payment of this bounty, and as only about 100,000 cases of oranges are likely to be exported, it could afford to be generous and pay a bounty in excess of 2s. a case. The men who are taking the risk in the British market should be assisted to the fullest extent possible. I support the bill.

Senator ARKINS:
New South Wales

– I agree with the proposal to pay a bounty on citrus fruits exported, because I know that the citrus industry in New South Wales is in a very unsatisfactory condition. Many of the men engaged in it have experienced difficult times during recent years. Nearly all of our primary industries are receiving some form of assistance, either external or internal, and the time is ripe for the citrus fruit industry to enjoy its modicum of protection. The Minister explained that £3,000 was expended to aid this industry in 1933, and that in 1934 the sum of £10,000 was devoted to that purpose. This bill provides for an export bounty of 2s. a case, which will mean about £20,000 this year. I do not agree with the proposal of Senator Hardy that the proposed bounty should be increased to 3s. 6d. a case.

Senator Hardy:

– Only if the £20,000 be not exceeded.

Senator ARKINS:

– It would be better to pay a bounty of 2s. a case this year, and if any surplus remains, to pay a higher bounty next year.

It is high time that the citrus industry in Australia was established on a cooperative basis, as it is in California. The growth of the citrus industry there i3 one of the greatest examples of the benefits of co-operation that could be found. Probably no other society in the world excels the remarkable co-operative organization which deals with citrus fruits in California.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Does the honorable senator know the price of oranges in California last season?

Senator ARKINS:

– No; but I do know that the growth of the citrus industry in the United States of America, particularly in the western States, has been remarkable. The Year-Booh of Agriculture for the United States of America shows that, whereas’ in 1899 about 6,000,000 boxes of oranges, 30,000 boxes of grape fruit, aud 900,000 boxes of lemons were shipped from California and Florida, in 1930 the quantities sent to market were respectively 48,000,000 boxes, 14,000,000 boxes and 7,000,000 boxes. Those figures show the abnormal growth of the industry, and demonstrate the value of a campaign of publicity, and a fully developed system of producer cooperative control. The growers of citrus fruits in California embarked on one of the greatest publicity campaigns in history. That their efforts were successful the figures which I have given demonstrate clearly. Australian growers of citrus fruits should follow their example, not only in relation to the marketing of their product and the production of high grade fruit3, but also in the utilization of by-products. The proper utilization of the by-products of citrus fruits grown in California has had the effect of stabilizing the market, as the following extract shows : -

A co-operative by-product industry can go a long way towards stabilizing markets at any time, but in year*; of over-production, it becomes the only salvation of the grower. A striking illustration of this took place in 1927 in the lemon industry. With the consumption in the United States of America, and Canada of loss than 15,000 car-loads, all but 2,000 of which came from California., the lemongrowers of that State wore faced with the problem of disposing of 0,000 additional carloads. Not only was this amount of fruit, 78.000 tons, handled by their by-product company with a satisfactory return to the growers, but nearly 1.3,000 car-loads were marketed, with a gross return exceeded but once in the history of their co-operative enterprise. Had 1,000 car-loads of the fruit which was turned into by-products been placed on the market, the crop would probably have yielded one of the poorest returns on record.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– What are the by-products?

Senator ARKINS:

– They are many. The following extract from the same publication shows what can be done with an over-production of citrus fruits: -

This fruit was converted into citrate of lime (from which citric acid is produced), essential oil of lemon and oil of orange. Citric acid is used in beverages, soda water syrups, effervescent salts and citrate of magnesia. The consumption is about 6,000,000 to 8,000,000 lb. per annum of which about 20 to 25 per cent, is supplied by citrus bi-‘products operators. Most of it is imported from Italy.

It is remarkable that within the last five years Australia has imported from the

United Kingdom, India, Italy, the Netherlands, the United States of America and other countries essential oils extracted from the lemon valued at £10,982, and oils extracted from the orange valued at £3,079. I have not been able to ascertain the value of imports of citric acids into Australia, but I believe it stands somewhere in the region of £15,000 per annum. Not only are citric acids being produced from the lemon and the orange, but thanks to modern synthetic chemistry cream of tartar is also extracted from fruits, it being, I understand, a by-product of the grape. This extract is used in every household throughout the Commonwealth and, I suppose, our importations of it would amount to hundreds of tons valued at many thousands of pounds. I believe that if we study these matters seriously we shall solve not only the problem of marketing in the citrus industry, but also the problem of surplus production. Fruit which, because of poor quality, must now be sold at any price, if at all, can be used in the manufacture of essential oils and acids which are so largely used in the preparation of non-alcoholic beverages, and also in foodstuffs such as cakes, &c. Pectin, which is produced from the white skin of the orange when peeled, is the jellying material which is used principally in the manufacture of jams to replace a deficiency in berry fruits, and, I understand, it is imported in fairly large quantities. But to-day large quantities of fruit of inferior quality are simply thrown on the dirt heap. This secondary production could be undertaken by cooperative enterprise. The Government should help not only to put the citrus industry itself on a sound basis, but also to establish an industry to handle valuable citrus by-products. In all of our large cities and even in most of our smaller towns it will be found that fruit juice is being sold to-day in place of the old cordials which were made largely from synthetic flavourings. Although I have not taken out details I am certain that the value of the synthetic flavourings imported into Australia still amounts to thousands of pounds per annum. In passing, I point out that some flavourings are made from ordinary coal; vanilla for instance is not made from the plant but from coal. To-day nearly all flavourings are made synthetically but they’ are not so palatable or so beneficial to health as are natural fruit juices. I hope the Government will give-this matter the fullest consideration. The consumption of natural fruit juices has increased enormously in Australia during the last few years, and I hope to see it increase still further. In fact I would like to see a form of taxation instituted with the object of forcing synthetic flavourings off the market in favour of the natural juices. If this were done the consumption of natural juices would help to overcome the difficulties of fruitgrowers in times of surplus production. The juice could even be stored as is done in America where it is kept in a frozen state and not put up for sale until a favourable market is available. The time has come when Australia must adopt scientific marketing, but let us do this job properly. We have to tackle this problem in respect not only of the citrus industry but also all primary products including wheat and wool. Senator Abbott said that the wool industry is all right and that it looks after itself. That is so, but I remind the honorable senator that the actual freight charges on wool to-day are very low indeed, in comparison with other items in the cost of production. I do not object to these concessions. The Government has instituted better marketing methods in respect of wheat, meat, and dried fruits. To-day, almost every section of primary industry, such as the butter, sugar, wheat, meat and fruit industries, has to be carefully looked after by the Government in one way or another. Perhaps this development is a natural result of the evolution of industry; perhaps it is due to the intensive development of what is known as economic nationalism, under which each nation now endeavours to grow his own food-stuffs and make itself, in that respect, independent of other countries. Australia also will have to re-orientate its internal economic system. I hope to deal with this matter more fully on a future occasion. Whilst I agree wholeheartedly with this measure, I hope the time will soon arrive when this Government will assist in the establishment of an industry for the treatment of citrus by-products, and so help to solve the great problems confronting the industry. If we do this we shall at least be moving in the right direction, and shall give those engaged in the industry a chance to make a decent living. Some growers to-day are in a parlous position. The problems of the industry can be overcome only by instituting orderly marketing and by encouraging cooperative efforts within the industry in order that the last penny may be got out of citrus products.

Senator BRENNAN:
Assistant Minister · Victoria · UAP

– in reply - I waa glad to hear the statements made by many honorable senators in this debate, particularly those of the Leader of the Opposition (Senator Collings). I recognize that he is in a peculiar position. He cannot oppose this measure because he has to pay due regard to the electorate, and he cannot support it, because by so doing he would admit that this Government has done something good; he would be very loth to make that concession. But, placed in such a dilemma, he elects to sit on the latter horn and cover it with a cushion by saying that he can rejoice in the measure because this Government is in favour of certain planks of his party’s platform, and because the measure reveals that private enterprise in this industry has broken down. I point out that so far as this bill is concerned any interference with private enterprise is limited to the provisions, which the Commonwealth may exercise under its powers over exports, to deal with the condition in which fruit shall be exported.

Senator Collings:

– Private enterprise cannot be trusted to export the goods in proper condition.

Senator BRENNAN:

– There is no other agency to control exports except the Commonwealth. Therefore it is the only power which can prescribe the nature of the goods to be exported. Senator Allan MacDonald referred to the inspection of exports. This is carried out by State officers on behalf of the Commonwealth and, so far as the Commonwealth is concerned, is based on exactly the same principles as the inspection of all other articles the export of which is controlled by the Commonwealth. The States have, in some respects, wider powers of ins;ection than the Commonwealth, because their officers can inspect fruit all the way from the tree to the wharf. The Commonwealth takes what precautions it can to ensure that fruit and any other primary commodity shipped is despatched in a condition which meets the requirements of the law; but as it is impossible for an inspection to be made of every orange, every pound of butter, or every egg, the Commonwealth is limited to this extent in the methods of inspection which it has instituted. .Senator Payne asked what was the export season for the citrus industry. This last3 from April to November, the fruit arriving in London from May up to December. Very little arrives in London in May or June ; the greater part arrives there from late in June up to December. For the information of honorable senators I have had details of the prices compiled. The market in the United Kingdom was not so good this year as it was last year, but this year Australian fruit realized better prices relatively to the general market levels, than last year. Although the general market prices this year were less than they were last year; the prices realized by Australian fruit were as high as those we secured last year. . That point should be considered in conjunction with some remarks I made in moving the second reading of the bill, when possibly I may have conveyed a wrong impression.

Senator DUNCAN-HUGHES:

– How does tlie Australian price compare with the Brazilian price?

Senator BRENNAN:

– Australian prices compare reasonably well. The information I have is that Australian prices were about up to the average of the top market prices; I am not quite certain, but that seems to be the deduction to be drawn from the information in my possession. The price realized this year for valencias was 12s. a case, and for navels lis. a case; South Australian navels probably realized up to an average of 12s. a case. Last year valencias averaged 16s. a case, and navels 13s. to 14s. a case, while New South Wales valencias averaged only about lis., and navels brought from 10s. to 12s. a case.

The Leader of the Country party in the Senate (Senator Hardy) suggested that, because the quantity to be exported this year is expected to be only about one-half the quantity anticipated, the whole of the amount provided should be absorbed in paying a bounty on the quantity actually’ exported:

Senator Sampson:

– That would mean 4s. a case.

Senator BRENNAN:

– Yes, unless paid on an acreage basis, as has been done in one instance with which the honorable senator is familiar. Senator Hardy should realize that the quantity anticipated is not being exported this year, not because the production has fallen off, but because of the stricter conditions imposed on exports. In effect, the honorable senator is asking for the payment of a bounty on inefficiency.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

asked why the period provided in the bill was selected. There has been a variation in the ease of navel oranges, because it has been found that those shipped later than July are not, as a rule, in a satisfactory condition. In order to maintain a good quality the limit set out .in the bill has been provided.

It is true, as Senator Hardy said, that the desire of the Government is not so much to place the industry on a permanent basis as to assist the citrusgrowers to do so. The assistance being provided will, it is hoped, do something towards achieving that desirable end. As Senator Arkins has said, all industries, with one notable exception, have claimed governmental assistance, and it was only to be expected that the citrus fruitgrowers would join with others in asking for the Government’s help. The Government looks forward to the day when primary industries will be able to support themselves; but it realizes that the world has passed through a crisis such as has never been experienced previously, and that primary producers have suffered serious inconvenience and loss. The Government, consisting of intelligent persons with flexible minds, were able to adjust themselves to presentday circumstanc.es; it realizes that it is necessary to assist primary industries in this and in other ways. In normal times such assistance would not have been sought, or granted. Those engaged in the citrus fruit industry have been informed that they should arrange for the proper organization of their marketing arrangements; but, so far, they have not responded to the Government’s suggestion. The Government looks forward to the day when, as a result of the benefit they are now receiving, the growers will do more than they have done to assist themselves.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 4 agreed to.

Clause 5 - ( 1 . ) The bounty shall be payable in respect nf- (b)….. navel oranges exported from the Commonwealth tothe United Kingdom . . . which were picked, handled, graded and packed in accordance with the conditions set forth in the schedule to this act.

Senator PAYNE:
Tasmania

– This clause provides that the bounty shall be payable in respect of two classes of oranges exported during the period commencing the 1st January, 1935, and ending on the 22nd July, 1935. That period has now expired. The clause also provides that the fruit must be of a good merchantable quality at the time of export, and picked, handled, graded or packed in accordance with the conditions set forth in the schedule to this act. The schedule stipulates the conditions under which the fruit shall he shipped, handled and packed; but, if the schedule was not operative during the period mentioned., how can the bounty bo paid on the fruit shipped during that period?

Senator BRENNAN:
Assistant Minister · Victoria · UAP

– It was realized that this measure would not be passed before this season’s fruit could be shipped. The conditions provided in the schedule were made available, and the citrus fruitgrowers were informed that’ the bounty would be paid only on oranges packed in accordance with the conditions set out in the schedule. I move -

That the words “ and packed “, paragraph (b),be left out with a view to insert in lieu thereof the words “ packed and shipped.”

Senator Payne:

– Was there proper supervision of the packing and grading of the fruit for export?

Senator BRENNAN:

– The State authorities arranged for proper supervision.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– Will the Assistant Minister (Senator Brennan) explain if the bounty is payable on navel oranges shipped after the 22nd day of July? Oranges grown in some States do not ripen until the end of July, and consequently would not be available for shipment before the date specified in this clause.

Senator BRENNAN:
Assistant Minister · Victoria · UAP

– It is stipulated that the bounty shall be paid only on navel oranges exported before the 22nd July, because it has been found that those shipped after that date have not been up to the standard required. So fat as I know, there is no distinction between oranges grown in Western Australia and those produced in the eastern States. The bounty will not bo paid on consignments shipped after the date mentioned.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 6 to 12 agreed to. .

Schedule agreed to.

Title agreed to.

Bill reported with an amendment.

Standing and Sessional Orders suspended ; report adopted.

Bill read a third time.

page 2029

ADJOURNMENT

National Insurance

Motion ‘ (by Senator Pearce) proposed -

That the Senate do now adjourn.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– Would it be possible for the Government to obtain more up-to-date information and statistics upon the subject of national insurance? I have been studying the excellent reports on this matter, the last of which is dated 1928. If the Government could furnish honorable senators with more recent data, it would be of great assistance in enabling them to give this important subject the consideration it deserves.

Senator Sir GEORGE PEARCE:
ern Australia - Minister for External Affairs · West · UAP

[10.21]. - The Government, realizing that these figures should be brought up to date, has, with the consent of the Government of Western Austral;?:. obtained the services of the State Statistician, Mr. S. Bennett, who has been transferred to Canberra for the purpose of collecting such data. Before long, the information should be available to honorable senators.

Question resolved in the affirmative.

Senate adjourned at 10.22 p.m.

Cite as: Australia, Senate, Debates, 28 November 1935, viewed 22 October 2017, <http://historichansard.net/senate/1935/19351128_senate_14_148/>.

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