15th Parliament · 1st Session
The President (Senator the Hon J. B. Hayes) took the chair at 3 p.m., and read prayers.
page 1399
– Is the Assistant
Minister for Commerce in a position to give information to the Senate relating to the boardwhichhas been appointed,or is . proposed to be appointed, to deal with hides?
– Owing to the fact that the Commonwealth’ Prices Commissioner fixed the price of leather in Australia, it became necessary to formulate some plan by which tanners could get their normal supplies of hides. Unless that were done the tanners would he restricted as to the price that they could pay for hides. Owing to the increase of export parity, which has, in fact, meant that Australian tanners have been unable to obtain supplies of hides at prices at which they are allowed to sell their leather under the Commissioner’s ruling, it was necessary to form a Hide and Leather Industries Board to take control of the selling of hides. A formula has been prepared under which hides will be appraised at prices which will be in line with the prices at which tanners can dispose of their leather. Australian tanners will then have the opportunity to purchase their requirements of hides at the appraised prices.
– Do sheep skins come under the control of the board?
– Not at the moment; but it is expected that they will -do so later. Hides that are not required by tanners for local use will then be submitted to public auction, and ordinary dealers and exporters will be able to participate in what will be known as the second auction. By the grant of permits to oxport hides and skins bought at the second auction our normal export of hides, over and above domestic requirements, will be continued with as little interruption as possible. The board has already been set up, and held its first meeting on Monday. I understand that appraisements under the control of the board will be in progress during the present week. It is not expected that there will be any further hold-up of the normal disposal of hides for either local requirements or export.
– Will the appraisement and auction prices he pooled ?
– No. The distribution of any excess over the appraised prices which may be received at the second auction - and, owing to the higher overseas parity rate, it is reasonable to assume that at the second auction hides will bring- more than the appraised prices - was considered at a meeting at which all of the interested parties were represented. Delegates representing the cattle interests agreed- that it would be difficult to return to the actual producers of the hides any excess above appraisement prices that may be received at the second auction. So far, no definite decision as to the disposal of any such excess has been arrived at, but the matter is receiving the consideration of the department and the board. At the first conference to which I have referred a representative of the graziers suggested that the money should be earmarked for scientific research into diseases and other problems affecting the cattle industry. He expressed the opinion that the disposal of any excess in that way would meet with the general approval of the industry. However, the matter has not yet been decided ; when it is, I shall be pleased to give the information to honorable senators.
page 1400
The PRESIDENT (Senator the Hon. J. B. Hayes). - On the 22nd September last, during the debate on the -second reading of the Defence Bill (No. 2) 1939, Senator Dein, desiring to show the policy of the Labour party .with regard to the compulsory provisions of the Defence Act, was proceeding to quote from Hansard of the 14th June, 1939, the report of a speech made by the Leader of the Opposition (Senator Collings) during the debate on the National Registration Bill. I informed Senator Dein that he might not do so, but upon a point of order being raised, I stated that I would look into the matter and give a considered opinion on the next day of sitting. During the adjournment I have taken the opportunity to consider this point. Standing Order 414 reads -
No senator shall Tend extracts from newspapers or other documents, except Hansard. referring to debates in the Senate during the same session.
Originally the words “ except Hansard “ did not appear in this standing order, but in 1903 they were inserted on the motion of the then President, Sir Richard Baker, who stated that if a senator wished to quote from a speech delivered by another senator he ought to be able to quote from Hansard. However, Standing Order 414 is governed by Standing Order No. 413 which reads -
No senator shall allude to any debate of the same session upon a question or bill not’ being then under discussion, nor to any speech made in committee, except by the indulgence of the Senate for personal explanation.
In accordance with this standing order quotations from Hansard must be strictly relevant to the subject under discussion, and I desire this to be regarded as my ruling in the matter.
The quotation read by Senator Dein, after I had informed him that he might do so, was from a debate on the National Registration Bill. The subject under discussion was the second reading of the Defence Bill (No. 2). It might be held that the quotation was not relevant, but, on perusing it in Hansard, I consider that Senator Dein was in order.
page 1401
– Is the Minister for the Interior able to say whetherthe oil storage tanks which are now being constructed in Queensland, and at Darwin and Port Moresby, will be exposed in the open, and “ become targets for bombs in the event of an air attack against Australia, as are most of the existing oil storage tanks in this country, or whether they will be placed underground, or in some position out of sight?
– The oil tanks at Darwin have been placed in the most sheltered position possible.
page 1401
– Can the Minister representing the Minister for Air state whether Mr. Fairbairn is to proceed from Canada to London, and, if so, what is the reason ?
– I do not propose to answer that question at the present juncture.
page 1401
– As the Commonwealth Government has entered into a contract with the British Government for the sale of Australian wool, dried fruit, and sugar for the duration of the war and for twelve months thereafter, and as the meat contract will expire in September, 1940, the dairyproduce contract in June, 1940, and the egg contract in 1939, I ask the Minister for Commerce whether it would not have been desirable, wool being our main bargaining factor, to have made the contracts for -meat, dairy produce, and eggs of a more permanent character?
– On the advice of statutory boards, I made the best possible bargains in the circumstances.
page 1401
asked the Minister representing the Treasurer, upon notice -
– The Acting Treasurer has supplied the following answers : -
page 1401
Dining-cap Employees.
asked the Minister for the Interior, upon notice -
– The answers to the honorable senator’s questions are as follows : -
page 1402
” Talks “ by University Graduates - Empire War News - ‘Comments by “The Watchman.”
asked the Minister representing the Postmaster-General, upon notice -
– The PostmasterGeneral has supplied the following answers : -
asked the Minister representing the PostmasterGeneral, upon notice -
Why is the evening British Broadcasting Corporation broadcast of Empire war news curtailed ?
– The PostmasterGeneral has supplied the following answer: -
The whole question of the British Broadcasting Corporation broadcast of Empire war news is being reconsidered by the Government.
asked the Minister representing the Postmaster-General, upon notice -
Will he see if it is not possible for an official broadcast of reliable war news to be made by his department, to take the placeof war news now being put over the air by an announcer known as “The Watchman”?
– The PostmasterGeneral has supplied the following answer ; -
page 1402
asked the Minister representing the Prime Minister, upon notice -
When will the £100 recommended by a Senate select committee to be paid to Captain Conway, be paid to him?
– The Prime Minister has supplied the following answer : -
The Government has considered the matter and has decided that it cannot see its way to accept the recommendation of the select committee that the sum of £100 be paid to Captain Conway.
page 1402
Validation of Wills
asked the Minister representing the Attorney-General, upon notice -
Will the Government introduce legislation to validate wills made by members of the Australian Imperial Force under the age of 21 years who have enlisted for active service?
– The whole question of soldiers’ wills is at present receiving consideration.
page 1402
asked the Minister for Commerce, upon notice -
– The answers to the honorable senator’s questions are as follows : -
page 1403
asked the Minister for Commerce, upon notice -
– The answers to the honorable senator’s questions are as follows : - 1 and 2. As far as is known, there is no general agreement for the purchase of Canadian wheat by the Government of the United Kingdom. The Government of the United Kingdom purchases wheat from various countries on specific orders. The question of resale by the United Kingdom Government does not appear to have arisen.
page 1403
asked the Minister representing the Treasurer, upon notice -
– The Treasurer has supplied the following answers: -
page 1403
asked the Leader of the Government in the Senate, upon notice -
– This matter is at present receiving consideration.
page 1403
asked the Minister for Commerce, upon notice -
Gallic of the clip will be held back?
– The answers to the honorable senator’s questions are as follows : -
page 1404
– I move -
That Statutory Rules 1039, No. 100, National Security (Gold Excise) Regulations, made under the National Security Act 1930, be disallowed.
My reasons for submitting this motion I shall -give in the course of my remarks. But, first, I assure the Government, as I seem to have developed a habit of doing, that I om not raising this matter in any spirit of carping criticism. This motion is of very serious import to every honorable senator. It involves a principle extending far beyond this Parliament, because serious inroads have been made by the Government upon the rights of a free Parliament, which is an integral part of the system of constitutional government enjoyed by the British Commonwealth of Nations. If we wish to encourage the onslaughts being made in other parts of the world on democracy, all we ourselves need do is to allow particular and favorable features of democracy to be slowly, but surely, whittled away from this Parliament. If we look through the history of constitutional government, the situation becomes exceedingly interesting, because the history of parliamentary control of taxation, is the whole history of constitutional government, n.s we know it to-day. It is a wonderfully entrancing chapter of the world’s development from crudity to at least a measure of democratic control. Parliament in its origin was a very humble institution, so far as the nature of the power which it exercised is concerned. It had the power to vote taxes - which, paradoxically as it may appear, did not include the power to refuse them - to humbly petition and to answer questions. What, then, is the reason for the development of so powerful and vital an institution as the modern parliament? The reason can only be found in the gradual growth of the control of parliament over taxation. There is no need to go into the history of different classes of taxes, although the development of parliamentary control of them differed in each instance. But it is fairly safe to say that the recognition of parliament’s power over taxation was well established in the reign of Edward I., the end of the thirteenth century. This recognition, however, was subject to all sorts of exceptions, and also to the claims of various monarchs who retained the prerogative to tax without the consent of parliament. These exceptions and these claims of prerogative formed the basis of the struggle which continued over so many centuries. That struggle is still going on. The power of parliament is not yet recognized as the complete thing which most of us imagine that it is, and which all of us believe it ought to be.
The early history of parliamentary control of taxation shows that the Commons were prepared to vote a tax rather than have it imposed without their consent. They thus sometimes voted taxes to which they did not agree, rather than have them imposed against their will, and often they tacitly asserted their right to control the public purse. Another development that is most important is that during this long struggle, the theory also arose that, although the King could modify or apply an old law on his own prerogative, there was impropriety in his making new laws without the consent of the barons, or, as it later developed, the consent of Parliament. Elements of confusion arose in this connexion, but this was the beginning of the legislative power of Parliament. The real origin of Parliament’s right to initiate legislation was the petition for tho redress of grievances, and, as it became established that the King could not tax without the consent of Parliament, the Parliament found that it had a valuable lever by which it might force the King to consent to proposed legislation initiated by it. Thus it may be seen that, at root, the whole legislative power of Parliament depends on the control of taxation. Take that power of control away from the established Parliament of this or any other democratic country and Parliament might as well close up. I stress the fact that the development did not occur without a struggle. “We are the heirs of all the ages, and of all the victories won by the struggle throughout the centuries to secure for Parliament that supreme power which it is supposed to exercise to-day in democratic countries, but which, as I have already indicated, is being slowly whittled away. The struggle was not unmarred by civil Avar, and, indeed, resulted, as honorable senators know, in the execution of one king and the deposition of others before the modern constitutional practice was established. To-day the control of taxation is the protection which the people have against the arbitrary action of the Executive, and will, I hope, be just as jealously guarded as it was jealously fought for during the long centuries of the constitutional struggle.
I have made these introductory remarks because I am asking honorable senators to forget for the moment their political alliances. We on this side are, I hope, just as loyal to the party to which we belong - and that will not be denied even by political partisans - as honorable gentlemen opposite are loyal to their parties ; but, we on this side, at least,’ do occasionally take action in this Parliament and cast votes for what we believe to be in the best interests of the nation as a whole, rather than give slavish, adherence to the tenets of our political creed. I do not impute improper motives to honorable senators opposite. All that I am asking them to do is to approach this matter, not in a spirit of political partisanship, but with a desire to deal impartially with a matter that goes to the roots of the rights of this Senate. If my motion be not endorsed - and there can be no compulsion in regard to the votes of honorable senators - it will mean that those who oppose it are not jealous, as I believe they are, of the rights ot tins branch of the National Parliament. I am not putting the matter from that aspect in any unkind or disrespectful way.
There are occasions when we cannot afford to submit to tyrannical action, and then boast that we are members of a deliberative assembly of a country that is part of the British Commonwealth of Nations. If we look at the situation abroad, and remember the statements made in this chamber only last night, in which war aims were spoken of, we shall find that one of the evils we are resisting is the power of those who have ceased to respect the democratic rights of the people or their institutions, and are riding rough-shod over the community, because they have achieved the. power to defeat the democratic institutions and to become complete and ruthless tyrants. Honorable senators may say that, that is a far cry from the motion now before the Senate, but I ask them to cast their minds back over the remarks that I have just made, and to realize that, after all, this motion is but one more phase of the constitutional struggle down the ages. I know that we arc at liberty to say what we feel about this matter without being arrested or beheaded, but, unless we are prepared to uphold the more civilized methods made available co us by parliamentary and constitutional procedure, we shall be recreant to th?. heritage handed on to us, and achieved only by the willingness of those who have gone before to sacrifice themselves in the struggle for liberty.
What are the facts regarding this regulation ? A certain measure was submitted in the House of Representatives for the consideration of the Parliament. The bill passed the House of Representatives, and was then received by the Senate. Honorable senators realize, of course, that when a measure comes here from the House of Representatives’ it is not then a law; it is only a bill. Until it leaves this chamber bearing imprimatur of the Senate it cannot become a law. That bill reached the Senate and was fully debated here, but this chamber in its wisdom decided by a majority-
– No, there were sixteen votes for and sixteen against the measure.
-It was decided in exactly the same way as the present motion will be decided this afternoon. The voting was equal, and, therefore, the bill was negatived. I believe that this motion will be resolved to-day in the affirmative. It came before the Senate on the 20th September, and that decisionwas come to by this chamber.- On the 23rd September, three days later,- this regulation was promulgated in order to defeat the expressed will of the Senate.
– Not the expressed will of the Senate.
– May I say, in answer to Senator Dein, that what was done here was done in exactly the same way as things are done in the House of Representatives. If it is suggested that the voting being equal, the Senate had no mandate to reject the bill, I say that this Government has no mandate for ninetenths of the things which it is doing by means of regulation rather than by the process of law. When the bill came before us the Minister for the Interior (Senator Foll) said -
The object of the bill is to provide for a tax on gold delivered to the Commonwealth Bank of Australia or to an agent of that bank on and after the loth September, 1939.
Later Senator Johnston asked by way of interjection -
Why should the gold-mining industry be treated differently from such companies as the Broken Hill Proprietary Company Limited, General Motors Holdens Limited and the Colonial Sugar Refining Company Limited, one of which is making a bonus distribution of over £i,000,000?
The Minister then said -
All of the companies mentioned- by the honorable senator would prefer to pay their war taxes on the basis adopted in this bill.
I am not going to argue about that point now. The Minister’s statement was true, and I think the reasons are obvious. Later I shall elaborate those reasons, or if I do not, my colleagues will. I repeat that on the 20th September the Senate rejected’ the bill. Perhaps that will please Senator Dein. Therefore the bill did not become law and the Government’s action in imposing this tax by mother means was an abrogation of the rights of this chamber. The Ministry, by a back-door method which this chamber should not tolerate, circumvented the decision of the Senate. The Acting
Treasurer (Mr. Spender) in speaking to the proposal in the House of Representatives gave’ some of the reasons why the Government’s action was considered to b’e necessary.
The regulation imposing the excise duty on gold was in these terms -
I ask honorable senators to note that the date fixed for the commencement of the duty Avas the 15th September, 1939, and to remember that the bill was rejected on the 20th September - duty of excise be collected on all gold pro>duced at any time in Australia or in any territory under the authority of the Commonwealth of Australia and delivered in Australia or in any such territory to the’ Commonwealth Bank of Australia (in these resolutions referred’ to as “the bank”) or an agent of the bank after the time aforementioned.
That was not the phraseology of the pro,posal which reached this chamber and upon which the Senate voted. It was merely a “ snide “ way of defeating the will of this chamber by substituting 50 per cent, for 75 per cent, the original proposal being to levy a tax of 75 per cent, on the value of gold in excess of £9 an ounce. If honorable senators believe in that kind of thing they declare their lack of faith in our democratic institutions and the responsibility must be. on their shoulders.
I point out also that this matter has another aspect- the right of the Executive to govern by regulation. I know that all governments do this except those that are under the control of tyrants who know no will but their own. I know also, and I am saying this in order to forestall any weak criticism which mightbe indulged in, that a Federal Labour government on one occasion issued a number of regulations–
– In defiance of the will of the Senate.
– The Minister’s smile and chuckle of satisfaction are a bit premature, because no government has ever attempted to do what this Government has done. The Scullin Government did promulgate regulations repeatedly which were repeatedly disallowed by the Senate. But those regulations were made under a measure which had become law, whereas the regulation which I am now asking the Senate to disallow was made in defiance of the -Senate’s rejection of a measure of similar import. I hope honorable senators can see the distinction between the two proposals. I do not deny the right of an executive to govern by regulation on occasions, and provided it has the authority of a law to do so. I do not regard the National Security Act as such a law.
– Of course, the honorable senator must qualify his statement.
-I say this because section18 of that infamous act, which we on this side of the chamber did our best to prevent from becoming law, condones this offence, but it doesnot dispose of the vital principle that is at stake - the right of the Senate to do as it pleases and as in its wisdom it decides, and the right to have its decision respected by the Government. If I wished to indict the Government, I could point to a long list of damning political crimes which it has committed ; but nothing could be more condemnatory than its action in foisting this tax on the people by means of this regulation. Without the authority of Parliament, and behind the hack of this Senate, after we had gone into recess, it issued this regulation which, in effect, is merely a. clever device to thwart the will of this chamber. If Government supporters endorse its action, I shall be perfectly happy about the matter because I shall know that this afternoon, at all events, the Opposition has endeavoured to get rid of its share of responsibility for what the Government has done. I leave the matter there. Summed up, the questionwhich every Member of this Senate has to answer Can be answered in one of two ways. One question is: Are youagreeable that after an orderly and properly-conducted debate, and after one of the most ‘exhaustive in vestigations’ which I have ever heard given to so simple a measure as that which we were then considering, the will of the Senate should be flouted? Honorable senators can say “ yes “ with all the enthusiasm that they wish to display, by voting against my proposal.
– The Senate did not express its will in this matter.
– The question which honorable senators have to answer is’ whether or not the will of the Senate as a Component part of the Parliament of this country is to be flouted. Honorable senators may answer that question with enthusiasm and dishonour by voting against my motion, or they may answer it just as enthusiastically and with complete honour by voting for the motion, thereby protecting the rights of the Senate.
– The Leader of the Opposition (Senator Collings) has availed himself of the undoubted right of every member of the Senate to review a regulation which has been issued by the Government. Consequently I do not disagree with the remarks which he made in the early part of his speech this afternoon. Indeed, I believe that all honorable senators entirely agree with him that we should, as far as possible, maintain in their entirety the democratic principles underlying the rights and privileges of this legislature. But when the honorable gentleman endeavoured to show thatthe Government, in taking certain action, attempted to undermine the rights and privileges of this Parliament, he was on much less sound ground. Anticipating that some other honorable senator would raise the point, he admitted that the Government, in issuing this regulation, had acted entirely in accord with the powers conferred upon it by the National Security Act. He also referred to the action taken by a previous government in repeatedly promulgating a regulation of which the Senate had definitely expressed its disapproval. If ever there was a flouting of the will of the Senate, surely it was when that Government acted in direct conflict with the expressed view of the Senate.On this occasion, ‘the Government, ‘exercising a “right which it undoubtedly possesses, issued a regulation, well knowing that the Senate could either approve or reject it. The honorable senator also made some references to what he described as the iniquitous National Security Act.
– I referred to section 18 of the act.
– I think that the honorable senator spoke of the act generally; but even if he referred only to section 18 of it, I remind him that the act containing that section was approved by both branches of the legislature. I also remind him that a previous government with views similar to his own introduced the War Precautions Act, which I suggest was a worse piece of legislation than the National Security Act.
– The Assistant Minister admits that both of them were bad.
– That is entirely a matter of opinion. I do not admit that the National Security Act is a bad piece of legislation. 1 believe that the people of this country recognize that, in times of war, it is sometimes necessary for a government to act promptly along the lines represented by this regulation. I do not think that the people believe in the policy which has been advocated by the Labour party - although I do not say that any policy of that party is adhered to for long - of taking a referendum of the people in order to decide whether or not this country should engage in war.
– The Assistant Minister cannot find any such proposal in the policy of the Labour party, but I admit that the suggestion is a good one.
– That policy was enunciated by a former leader of the Labour party. I claim that the Government had complete power and justification for its action.
– It certainly had the power.
– And the justification also. The Leader of the Opposition did not advance one argument as to the merits or demerits of this regulation, nor did he show that the intention of the regulation is in any way contrary to what ought to be done in the present circumstances. On this matter, the Labour party, which is usually noted for its solidarity, has split. When the legislation referred to by the honorable senator was before the other chamber, it was supported by the Opposition, but when it came to the Senate we saw evidence of a split in the party.
– Frequently there is evidence of differences of opinion among Government supporters.
– It is not unusual for members on this side of the chamber to express independent views, and, consequently, some of them have at times voted against the Government. I ask honorable senators to examine this regulation on its merits.
– Will the Assistant Minister attempt to justify the action of the Government in defying the Parliament?
– The Government did not defy the Parliament in this instance, because the proposals contained in the regulation were never considered by ‘ the Parliament. The hill to which reference has ‘been made was for a 75 per cent, collection of any amount above a certain price whereas the regulation provides for only 50 per cent. The attitude of the Opposition on this occasion is inconsistent with ite professed views regarding unearned increment. If ever there was an unearned increment, it is the increased price of gold which has resulted entirely from the war. In my opinion, that is a proper field for the levying of a tax, and therefore I ask the Senate to consider the regulation entirely on its merits, and not as an attempt by the Government to flout the will of the Senate.
– I do not propose to follow the Leader of the Opposition (Senator Collings) through all his interesting remarks about the control of taxation by the Parliament, although I commend him for the thoughtful and restrained manner in which he delivered them. His views should he considered carefully by every honora’ble senator who has an open mind on this subject. As I listened to the democratic sentiments expressed by the Leader of the Opposition, I regretted that he was not a member of this chamber some years ago when it devoted a good deal of attention to certain regulations dealing with waterside workers.
I propose to take the advice of the Assistant Minister (Senator McBride) and to discuss the regulation on its merits. On the second reading of the Gold Tax Bill, I spoke at length in opposition to the new and vicious principle of taxing the production of gold, or any other commodity, instead of taxing profits. A recognized principle of Australian taxation hasbeen the right to tax profits, but not production.
– What about the excise on tobacco?
-Surely the Assistant Minister does not compare a necessary commodity, such as gold, with luxury items like tobacco and liquor?
– What about the excise on petrol?
– Very little petrol is produced in Australia, and consequently very little excise is paid on that commodity. ‘Gold production, which in Australia is exclusively a country industry, is confined chiefly to Western Australia; that State produces 75 per cent. of the gold output of this country. Onboth those grounds, I object to gold being subjected to the differential treatment which is applied to it under this regulation. On the 20th September last, when I dealt at length with the position of the Wiluna gold-mine and other lowgrade mines in Western Australia, I stated that those controlling suchundertakings are strongly opposed to this tax. Although capital amounting to £1,559,012 has been invested in the Wiluna mine and nearly £2,000,000 has been expended on machinery and developmental work, the shareholders have not received a dividend for over three years.
– That must be due to inefficient management.
– If the Wiluna mine had not been managed efficiently it would have been unable to carry on. For three and one-half years it has been kept in operation for the benefit of the employees, the business people in the township, and the community generally, because the shareholders have not received any return on the heavy capital expenditure. Two years ago the general manager of the mine, Mr. Carroll, in formed me that if there should be only a slight increase of costs the mine might be compelled to close down, and if that should occur practically 1,000 men working on the property would lose their employment.
– The honorable senator does not suggest that the imposition of this tax will cause the mine to close down.
– The position at Wiluna has been serious, although I believe that recently some important discoveries have been made.
– If the price of gold were to drop would that mine cease to operate ?
– It cannot be expected to carry on if costs increase. That gold-mine is the mainstay of the ‘ township of Wiluna, which has a population of 7,000 persons, and itis being jeopardized by this tax on production instead of on profits. When the bill on this subject was before the Senate, I read a lengthy telegram from Mr. Carroll, the general manager, in which he objected very strongly to a tax on production.
– Does Mr. Carroll still hold those views?
– Yes, as do all those who are associated with low-grade and prospectingshows. The prospectors operating in Western Australia and in other parts of the Commonwealth are willing to pay a tax on profits, but they object strongly to a levy on production. In Western Australia hundreds of prospectors operating on a. small scale are ekeing out a very precarious existence. No work in Australia is conducted under conditions of greater hardship than that of prospecting, particularly in Western Australia, where it is undertaken in isolated arid inland districts. Owing to the shortage of water prospectors in many instances take their jives in their hands. In the early days they could not travel far from the railway without camels, but although motor transport has now almost entirely replaced camels, the risk to life, owing to the absence of water, is always present to the out-back prospector. When the Gold Tax Bill was before the Senate a number of semi-official suggestions, if not promises, were made that serious consideration would he given to the exemption of the production of prospectors until they were deriving profit, but no such concession has been granted. Senator Allan MacDonald and others have been most active in that respect, but nothing has yet been done to relieve prospectors of the heavy burden imposed on them by this tax on their gold production. We can visualize the protests that would be lodged should the Government decide to acquire 10 per cent. of the value of the total production ofthe Australasian Glass Company, the Broken Hill Proprietary Company Limited, or the Colonial Sugar Refining Company.
SenatorFoll. - That is not the basis of this tax; the Government is collecting 50 per cent. of the unearned, increment caused by war conditions.
-Costs have increased and one ounce of fine gold to-day actually purchases less in the United States of America and other foreign countries than it did before the war. Operating costs at Wiluna must have increased by 50 per cent. since the outbreak of war.
– The honorable senator is concerned only with the Wiluna mine?
Senator E. B. JOHNSTON.No, I am dealing with the conditions generally in the gold-mining industry, particularly from the point of view of those operating lowgrade shows. Recently a statement was published that the Government would invite the mining industry to endeavour to accelerate the production of gold. In the Sunday Times, published in Perth on the 12th of this month, the following comment on that proposal appeared : -
From Canberra came the intimation during the week that recommendations may be shortly made to the Federal Government to institute a campaign for Australia to accelerate gold production. It is emphasized inmaking this announcement that an increase in the gold production of the Commonwealth would help Australia to build up American credits for national purposes.As the gold industry., which is mainly Western Australian, has already been singled out by the Commonwealth for special taxation, this announcement is in keeping with a lot of the fool statements that have come from Canberra since the war.
That is quite true.
Thosewho realize the hardship thathas already been placed on our gold-mining industry by the Commonwealth since the war, might well ask, after reading the Government’s announcement, “ When do we laugh “?
It is not a laughing matter when we find that this Government, which wishes to institute a campaign to accelerate the production of gold, is taxing the gold-mining industry on production instead of on profits.
– What did the Commonwealth do when the industry was “down and out”?
– It provided a gold bounty which was strongly opposed by some honorable senators. The payment of a bounty on gold production stands to the credit of the Scullin Government, and, like the financial guarantee which the Commonwealth provided in connexion with Wiluna, did not cost the country anything, and only one small bonus was ever paid. That Government was anxious to assist the production of gold, but this Government, which also wishes the output to increase, is imposing an unjust tax on production. If the Commonwealth Government seriously desires to accelerate gold production in Australia it should abolish the excise on production. Should it decide as an alternative to tax excess profits little objection would be raised and a substantial production of gold would be assured. With gold alone can the Commonwealth purchase from the United States of America aeroplanes, fuel oil, machinery and other equipment which it must obtain. I have received a cablegram on this subject from Mr. C. de Bernales. of London, who has been responsible for the investment of several millions of British capital in Western Australian gold mines.
– Can he be regarded as an authority?
– Yes, he is a very high authority on gold-mining. He was entirely responsible for the flotation of the Wiluna gold-mine, which has been a great success, and since then has introduced millions of British capital into the Western Australian mining industry.
– The members of the London stock exchange did not think so.
– The case to which the Assistant Minister refers is sub judice, but when the report is made it will show that Mr. de Bernales acted legally and honorably. No one could expect him to float some of the biggest gold-mines in Australia without receiving some adequate reward. Since the mining revival in which Mr. de Bernales was a leading figure, two rich discoveries which may prove to be equal to any gold-mine in Western Australia have been made. At the Yellowdine mine and the Comet mine near Marble Bar, both under the control of the de Bernales management the prospects of valuable production are highly satisfactory. Mr. de Bernales is also a director of the Great Boulder gold-mine, which is one of the largest and most successful gold-mining undertakings in the Commonwealth. In these circumstances, I make no apology for giving his views, which are worthy of the consideration of the Senate. I attach great personal weight to the opinion of Mr. de Bernales, who is prominently associated with the gold-mining industry in the heart of the Empire. On the 18 th instant he sent me the following cablegram: -
If gold excise duty allowed become law it is certain industry must rapidly shrink in view other heavy taxation both in Australia and England together with rise in working costs. This especially applies to Wiluna and many back-country mines. Something must be done to save industry and permit mines grade their treated ore in ratio to rise in gold price thus assuring continuity maximum output maximum employment and maximu.ii extension of lives of mines.
Those are three pertinent points made by Mr. de Bernales - maximum employment would help Australia, maximum output would help the Empire, and the maximum extension of the lives of our mines would help both Australia and the Empire. His cablegram continues -
Please approach Queensland representatives and other members Senate prevent pass? ing this unfair selective legislation. All my and several other gold mining companies disagree entirely with publicly expressed opinion Kalgoorlie Chamber Mines.
I urge honorable senators to give very serious consideration to these views, which, I believe, are those of the industry’s representatives in London. They are certainly the views of the mining industry of Western Australia, with the exception, possibly, of half a dozen of the largest and richest gold producers. But the main producers will contribute the bulk of any tax imposed on profit.
– To what form of taxation are mining companies subject to-day ?
– In Western Australia and Tasmania gold-mining companies pay income tax or else a dividend tax. In addition, through the tariff, they have been taxed by the Commonwealth in respect of the major part of their requirements during the past 25 years, and that impost has been continually increasing. Irrespective of State taxation of these companies, however, the Commonwealth should take a broad national view of this subject and translate into deeds the desire which it has so often expressed to see the production of gold increased as much as possible. I opposed the Gold Tax Bill in September last, and I shall at least be consistent in opposing the continuance of the present excise duty on gold. I can give the Government no better advice than that it should abolish this tax and so enable Australia, by increasing its production of gold, to play a greater part in assisting the Empire to win the war.
– I support the remarks of the Leader of the Opposition (Senator Collings) and Senator Johnston. I was rather surprised at the casual manner in which the Assistant Minister (Senator McBride) dealt with the introductory remarks of the Leader of the Opposition. From his attitude one would think that this was not a serious matter. He suggested that because certain action had been taken by a previous government, this Government, therefore, enjoyed a licence to do likewise, or worse. That, I submit, is not the issue before us. This chamber, as a part of the Parliament of the Commonwealth, was called upon to endorse, or reject, the Government’s proposal to levy a tax on the price of gold. The Senate rejected the proposal. The Government then resorted to other means; it levied an excise duty on gold, a form of taxation which, I submit, is unprecedented in the history of this or any parliament since the inception of responsible government in Australia. Today we must ask ourselves whether the Senate is to remain part and parcel of the Commonwealth Parliament. Is the Senate to have any say whatever in the legislation of this Parliament? As senators are we not jealous of the rights of this chamber? For what purpose are we here? The Assistant Minister is not fully alive to the responsibilities of his position in this chamber, otherwise he would have adopted a more serious attitude when dealing with the remarks of the Leader of the Opposition this afternoon. We have been told repeatedly in this chamber, and Ministers have announced the fact when travelling through the Commonwealth, that the Senate- is the States’ House, that the framers of the Constitution provided a second chamber in order to grant the States representation on an equal basis, thus ensuring that the rights of any individual State would receive proper consideration at the hands of our legislators. Each of the States look to the Senate to do the right and proper thing by it, when taxation measures come before this chamber. In September last we fulfilled that duty by each of the States, when we rejected the Government’s proposal to levy a tax of 75 per cent, of the price of gold in excess of £9 an ounce.
– What was the price of gold at that time?
– I think it was about £10 Ils. an ounce, but that is beside the point. The issue to-day as it was then, is whether the Government should levy a tax on price instead of on profit. When its previous proposal was rejected the Government imposed an excise duty of 50 per cent, on all gold sold to the Commonwealth Bank at over £9 an ounce. That kind of taxation savours of back door methods, and embodies the same principle as the Senate rejected in September last, because it is a tax on price. It was said that the reason which prompted the Government to introduce the Gold Tax Bill was that any system of securing the revenue it required by means of a tax on profits would be too cumbersome. I do not agree with that view, because the necessary computations «o far as gold production is concerned, could be made quarterly. Indeed, no reason exists why such computations could not be made monthly, with annual adjustments. ‘ In any case, however, I do not believe that that was the reason which actuated the Government. On the contrary the Government realized that onlyestablished profit-producing mines would be called upon to pay a tax on profit, whereas a tax on price would embrace our total gold production. The existing excise duty applies to all gold whether it be produced by companies operating at a profit or not, so long as the price of gold exceeds £9 an ounce. Is it just to tax companies which are not making a profit on the same basis as those which are operating at a profit? To-day many concerns are working low-grade propositions at a loss. These* include syndicates, prospectors and companies which are carrying out developmental work in order that when the price of gold falls they will be able to reap the benefit of this work, and thus be enabled to continue in production, despite low prices. To-day certain mines cannot be operated at a profit with the price of gold at £9 an ounce. If the producers were allowed to retain the full benefit of the price ruling to-day, namely £10 13s. an ounce, the possibility is that many low-grade propositions would be brought into production. The Leader of the Opposition has submitted a motion asking for the disallowance of a regulation promulgated to frustrate the rights of Parliament. Is there any good reason why Parliament was adjourned hurriedly a few weeks ago? More time could have been taken for giving this matter necessary consideration before the Government fled into recess and imposed an excise duty to replace the tax that had been defeated. If it were important then that a tax should be levied for the purpose of securing the revenue necessary to enable the Government to play its part in the successful prosecution of the war, could not time have been taken for the purpose of giving that proposed legislation proper consideration ? Even now the Government has made no pronouncement as to what it proposes to do. We are told that we must wait a few more days until a supplementary budget or some newfinancial proposals are introduced.
The Senate should accept this motion, irrespective of what, previous governments have done. Even in connexion with, the Mother of Parliaments there has been a movement to reform procedure and adopt more up-to-date methods of introducing taxation and other measures. Is there any reason why, because some government in the past took certain action, the present Government should follow the precedent then established? Not at all, because to-day we are faced with a new issue. Thinking people throughout the world are seriously reviewing what is taking place in countries where systems of government other than the parliamentary method are being introduced. As a unit of the British Commonwealth of Nations we should, rather than belittle Parliament, be ever on the alert to uphold the high ideals of parliamentary government. The present ministry is adopting totalitarian methods ; the practices of the dictators are apparently useful to it. The Opposition declares that the Government would be justified in bringing down in this session legislation similar to that rejected at the previous sittings. The Government is entitled to submit legislation to recover the revenue necessary to enable Australia to take its part in the war against the enemies of democracy, but this Senate has the right to request such amendments as it thinks fit. We should stand . up for the preservation of the rights of this branch of the legislature, because there is a movement in this country in the direction of placing governmental powers into fewer hands. This tendency must be combated in the interest of the democracy of Australia. The Opposition is not prepared to give away any of the powers of the people, and, if the Government desires to get its taxation measures through Parliament, it will have to allow the Senate sufficient time for their fair and proper consideration.
We had a discussion on the proposed gold tax and we rejected it. The Senate should now challenge the right of the Government to collect the tax in the form of an excise duty by means, of a regulation issued under the National Security Act. It was never intended by the Parliament that the powers conferred under that act should be used in this way. When the measure was presented to the Parliament, the avowed object was to secure the interests of the people of the Commonwealth against what might be done within ‘
Australia by the enemies of this democracy in the interests of our common foe. The object of the legislation was not to deny to the people of Australia, through their elected representatives, the right to refuse to pass the taxation measures of the Government. That is a right of which the electors are jealous, and they expect every honorable senator to uphold it.
Senator ALLAN MacDONALD (Western Australia) [4.44 J. - The Leader of the Opposition (Senator Collings) has based the whole of his argument for the disallowance of this regulation on what he terms the control by Parliament of the power of taxation, and he contended that the Government, in doing something which amounted to ignoring a vote of the Senate, was bringing this branch of the legislature into disrespect. Not one word did he say regarding the justice or otherwise of the imposition of this excise, except as to the method by which the Government had applied it. He gave no reason whatever for disagreeing to the tax and its incidence on the people engaged in the industry. His case was built up solely on the fear that the Senate would be brought into disrepute by the Government’s action. Any member of the Labour party who makes such a charge in this chamber should hold down his head in shame because, if there was ever a government that brought this noble chamber into disrepute, it was the Scullin Government of the same party as that now in opposition. That Government deliberately flouted the wishes of the Senate, not once, but a dozen times. After the Transport Workers Regulations had been disallowed many times, Sir George Pearce, then Leader of the Opposition, included in a motion an intimation that the Senate was .about at the end of its patience. I shall read the last motion submitted toy him in that regard, lt appears in Journals of the Senate, No. 105, of Thursday, the 18th June, 1931. Item 5 refers to the Waterside Employment Regulations and shows that Senator Sir George Pearce, pursuant to notice, moved -
That Statutory Rules 1931, No. 72, Waterside Employment Regulations. be disallowed: and that the Senate enter an emphatic protest against the making, during the present session of Parliament, of any further regulations nf the same or similar import or intent, on the grounds that the making of such further regulations would be derogatory to the equal law-making power of the Senate with the House of Representatives provided for in Sac Mon 53 of the Constitution, and destructive of the right oi the Senate to disallow regulations as provided for by section 10 of the Acts Interpretation Act
Yet the Leader of the Opposition had the temerity to question something that the Government may or may not nave clone to bring this chamber into disrepute I His arguments were as hollow as the action of the Scullin Government when it deliberately and repeatedly flouted the wishes of this chamber. I suggest that in future, if a motion is to be submitted by a member of this chamber for the disallowance of a regulation, somebody other than a member of the Labour party should move it.
– There is nobody in this chamber, apart from members of the Opposition, competent, to make such a motion.
– I may even undertake the task myself. Every honorable senator has the right to move for the disallowance of regulations, and it is advisable, in order to retain a right, to exercise it. But when submitting such a motion an honorable senator should take good care to advance sound arguments. This could not be said of the Leader of the Opposition this afternoon. If he had wished to secure the support of honorable senators on this side, he should have advanced more cogent reasons. Instead, he offered no suggestion why we should vote against the Government which we support. He certainly seemed to have convinced Senator Johnston, though I imagine that that honorable gentleman’s mind was made up before the Leader of the Opposition spoke.
– How does the honorable senator intend to Vote?
– I have been active in Western Australia and elsewhere in connexion with this gold excise. I have had several interviews with the Acting Treasurer (Mr. Spender), with a view to bringing this form of tax into the realm of sanity, because I still disagree with the methods employed by the Government. For this reason, and because the Ministry would not agree to my motion for the adjournment of the debate when the Gold Tax Bill was being discussed in the” Senate, I voted against the Government. My purpose was to ensure proper consideration of the proposal to tax the gold industry of Australia. I feel confident, as the result of my inquiries, that something will be done to iron out some of the anomalies clue to the imposition of a flat rate of tax.
In addition to the matters which I have already mentioned, the Leader of the Opposition also conveniently overlooked the fact that when the Gold Tax Bill was before this chamber he gave it his blessing. This is what he said -
We on this side while criticizing this measure and claiming the right to criticize other measures which may be introduced do -not intend to oppose the passage of this bill.
I am unable to discover the reason for the honorable gentleman’s volte-face, unless, perhaps, he thought that there was some ‘chance of defeating the Government. That was the reason, in my opinion, for his change of front in September last, when, after stating that he would not oppose the bill, he induced his followers to vote against the Government. This motion, I believe, has indeed been submitted in the same party spirit.
As I said, I have made a number of inquiries, and have had interviews with the Acting Treasurer (Mr. Spender) with reference to the incidence of this tax. I have also consulted representatives of the Western Australian Goldfields Prospectors Association. During the recess I visited Kalgoorlie three times in order to meet the prospectors, who, I feel sure, are fully aware of what actually happened in connexion with the Gold Tax Bill in September last. They are anxious that some relief should be provided for those whose return approximates the basic wage. Many prospectors earn less than the basic wage. I have tried to impress upon the Acting Treasurer the need for some form of relief for these men, numbering about 800 in Western Australia. I ‘understand that a validating bill will come before the Senate during this session and that it will contain some provisions exempting prospectors. Whilst not wishing to panies. One glaring instance shows that say anything that might be regarded as a threat, I tell the Government that if some such relief be not given in a validating bill, I shall have fo consider my position and probably vote against the Government.
– When will the validating bill be submitted?
– It must be brought in this session.
– The Government can go on adjourning Parliament indefinitely, and so avoid the necessity for bringing in a validating bill.
– I have sufficient faith in the Assistant Minister for Commerce (Senator McBride) and his colleagues, especially the Acting Treasurer, to rest assured that the position of prospectors will be dealt with in a validating measure. Some such provision should apply, also to lowergrade non-dividend-paying mines. A very large number of miners in Western Australia, working low-grade propositions, have been responsible for the production of a huge quantity of gold, although very many of them have not been profitable enough to pay dividends. Those who venture their capital in the exploitation of mining shows are entitled to a return in the form of dividends. In Western Australia many lower-grade mines have not paid dividends during the last two or three years. I hope that the Government will seriously consider their position and grant similar exemptions, only stepped up somewhat, as I have asked for on behalf of prospectors.
page 1415
The DEPUTY PRESIDENT (Senator James Mclachlan). - Two hours having elapsed from the time fixed for the meeting of the Senate, Orders of the Day must be called on.
Motion (by Senator McBride) agreed to -
That Orders of the Day be postponed till after the disposal of the motion moved by Senator Collinss for the disallowance of Statutory Rules 1939, No. 100 - National Security (Gold Excise) Regulations.
page 1415
Debate resumed.
Senator ALLAN MacDONALD.There are so many matters requiring attention in connexion with the gold-mining industry that the time is ripe for the Treasurer or the Taxation Department to consult with the industry concerning the most equitable method for the imposition of this tax. All of the representatives to whom I have spoken are unanimous that, especially during the war, the industry must contribute its quota to the success of the British Empire effort. But there is not unanimity as to the method to be employed for the imposition of the tax. I am, however, convinced that any difficulties that stand in the way may be overcome. To this end I urge the Acting Treasurer to consult representatives of the industry, so as to obtain a clear-cut idea of the most appropriate method for the collection of this tax, instead of merely making a stab in the dark by the application of a flat rate.
–In that country conditions in the gold-mining industry, are totally different from those obtaining in,- say, Western Australia. I remind Senator Keane that the figure which he has mentioned, £7 10s. an ounce, is on a sterling basis, which is equivalent to about £9 7s. 6d. a fine ounce, so that the Commonwealth Government is taking very little less than the tax levied in South Africa. Also, as I have said, mining conditions in South Africa are totally different. The government there helps the industry in ways that would not be tolerated in Australia. Eoi- instance, it assists in obtaining black labour for the industry and the South African Government enjoys additional benefits from the proceeds of the sale of gold. In the 1939 issue of Skinner’s South African Mining Journal - a very interesting publication - reference is made to the amounts which the Government of the Union of South Africa receives from the mining com- the Government received a colossal sum in return for benefits extended to certain companies. I refer to the Modderfontein leases, which are known as the Government Gold-Mining Areas. The accounts for 1927, which are the last to be published, show that the profit of that mine was £3,01S,000, that the dividend paid to the shareholders was £1,200,000, and the amount paid to the Government, £1,700,000. It will be seen that the Government received more than was paid to the shareholders. The conditions which obtain in South Africa cannot be applied to gold-mining in Western Australia.
– Huge profits are being made by the Bulolo company in New Guinea.
– The cost of mining varies so greatly in different parts of Western Australia that it would be difficult to apply a general rule. For instance, wages and district allowances differ according to the district. For that reason, my suggestion that the tax on gold should be the subject of a conference with representatives of the industry should be given serious consideration. .
I remind the Senate that this motion for the disallowance of a regulation is an attempt to forestall the debate on the validating bill when it is presented to this chamber. The action of the Leader of the Opposition will not lead to the more efficient management of gold-mining If this motion were carried - and of that there does not appear to be much chance - the Government would have to refund to the industry the amount which it has already collected under the excise, amounting to probably £200,000, or even £250.000. The whole subject of the taxation of gold-mining would then be put into the melting pot, in which event the Government, instead of taking the £1,000,000 which it proposes to obtain by means of the excise, would probably revert to its former proposal to take £1,500,000.
– Why did not the honorable senator say that before?
– By throwing the whole question into the melting pot we may do a disservice to the gold-mining industry, which I am sure the Leader of the Opposition does not desire. As the weeks pass, the expenditure on defence grows apace, and it may be that the Government would seize the opportunity tl> obtain from the goldmining industry more than £1,000,000. Since that amount was decided upon, the price of gold has risen 2s. an ounce.
– That is due to a reduction of insurance rates.
– The motion of the Leader of the Opposition may have an effect entirely opposite to that which he desires, and for that reason I propose to vote against this motion. I have told the Prospectors’ Association at Kalgoorlie that it is well to be sure of clean water before throwing out dirty water. Unlike the Labour party, which recently has done nothing to help the prospectors for gold, I have made some attempt to assist them.
– The honorable senator will find himself in the ministry again before long. .
– I am quite satisfied with the present representation of Western Australia in the Cabinet. The members of the Prospectors’ Association know the conditions in the industry much better than do honorable senators opposite. I conclude by repeating that the inadequacy of the attention devoted by the Labour party to this subject is equalled by the inattention given to it by the Government. That is the reason why on a previous occasion I voted against the Government, and why on this occasion I shall vote against the motion of the Leader of the Opposition.
– 1 shall not deal at length with the gold tax, but, like the Leader of the Opposition (Senator Collings), I emphatically protest against the action of the Government in issuing a regulation after a bill to the same effect was defeated in this chamber.
– The Government’s action is perfectly in order.
– I remind the Assistant Minister (Senator McBride) and Senator Allan MacDonald that there is a great difference between what the present Government has done in this instance and the regulations dealing with waterside workers which were promulgated by the Scullin Government. In one instance there is an attempt to defy the authority of this Parliament; in the other there was no such attempt. The Assistant Minister had a difficult task in attempting to justify the action of the Government in issuing this regulation after the defeat of the Gold Tax Bill. I shall not discuss the merits or demerits of the tax, because I did so on a previous occasion.
– The honorable senator did not vote on the merits or demerits of the tax.
– According to Senator Allan MacDonald, the Leader of the Opposition has given no sound reason for disallowing the regulation, but I remind the honorable senator of the arguments which he himself advanced against the Gold Tax Bill. He even complimented the Opposition on the case that it presented against the measure. He then said -
I regret that the Minister did not see lit to agree to my motion for the adjournment of the debate in order to give the Western Australian Government and the gold-mining industry an opportunity to place before the Commonwealth Government their views of this tax. I agree with previous speakers that whoever was responsible for this measure knows very little about the industry, particularly in Western Australia.
On the occasion referred to, the honorable gentleman took strong exception to the action of the Government in introducing that legislation. He then contended that the only logical way to tax gold-mining was by the imposition- of a tax on profits. Since then representatives of the Chamber of Mines have probably told him that they are prepared to accept the Government’s proposal in preference to a tax on profits. Accordingly, the honorable senator is not now willing to assist the Opposition to disallow the regulation. He attempts to justify his change of front by saying that he has made representations to the Minister and is confident, that something will be done for the prospectors. I remind him that the case for the prospectors was put before the Senate when the bill was under discussion, as was also the claim of the companies working low-grade ores. I have not so great a knowledge of gold.mining as lias Senator Cunningham, but I do know that the application of this excise will be disastrous to men working in a small way, who have to cart their ore 30 or 40 miles. The large mining companies are making such enormous profits that they prefer an excise on gold to a tax on profits.
– They pay a tax on profits to the .States.
– Only since the price of gold has risen. That tax has been imposed in order to recoup the Treasury for compensation paid to miners who have contracted silicosis and other mining diseases.
– This is legislation in the interests of the wealthy at the expense of the poor.
– It will act as a deterrent to the development of low-grade deposits. With Senator Allan MacDonald, I hope that the enabling bill will contain provision for prospectors.
– The honorable senator is trying to prevent that measure from coming before us.
– No; but as Senator Allan MacDonald has intimated that he will not support the motion for the disallowance of the regulation, the hill will probably be passed. If we must accept the less of two evils, I say in all sincerity to the Assistant Minister that the bill should contain provision to protect those engaged in gold-mining in a small way. Senator Allan MacDonald is not alone, in having consulted with the men who are engaged in gold-mining at Kalgoorlie, Coolgardie and elsewhere. I am concerned particularly with the men who from time to time win small quantities of gold. Under the financial emergency legislation in operation in Western Australia, a wage-earner has to pay a tax of 4-)d. on every £1 by which his income exceeds the basic wage, and if at the end. of the financial year his aggregate earnings do not exceed a specified amount the tax is refunded. In these circumstances the Government, should give some consideration to the men conducting gold-mining operations on a small scale, many of whom do not receive the equivalent of the basic wage and find it exceedingly difficult to make a living. I trust that provision will be made in the validating bill to exempt prospectors. Apparently Senator Allan MacDonald. intends to oppose the motion because some influential persons prefer to pay the excise now imposed rather than a tax on profits.
– Honorable senators opposite have dealt at length with the position of those engaged in the goldmining industry, and particularly prospectors; but in doing so, they have overlooked the effect of the motion moved by the Leader of the Opposition (Senator Collings). Had the honorable senator been able to show that the Government is endeavouring to defy a decision of this chamber, I should have supported him. What do the regulations accomplish? They have been promulgated under the National Security Act, but they do not enable any government, however eager it may he to collect taxes, to levy such taxes. When the decision »f the Senate on the Gold Tax Bill became known, the Government tabled an excise schedule in the House of Representatives in which provision was made for the imposition of a rate of tax lower than that provided in the bill which the Senate rejected. Excise has been levied in the customary manner, and the allowance or disallowance of these regulations will have no effect whatever on the duty imposed, this debate is futile. Excise duties tabled in the House of Representatives have to be agreed to by Parliament, and when they arc before the Senate, honorable senators have an opportunity to debate them. It is wrong to suggest that the action of the Government in this instance has been taken in defiance of a decision of this branch of the legislature. All that the Government has done has been to promulgate certain regulations to facilitate the collection of the excise duty imposed.” Under regulation, the export of gold from Australia is prohibited, and sales can be made only through the Commonwealth Bank. The privileges of the Senate have not been violated in any way, because the Government has the power to table an excise schedule whenever it so desires. The proper time to request amendments will be when the schedule is before this chamber. We can then act on behalf of those who we think may be penalized.
– What was the object of the bill rejected in this chamber ?
– Its object was to obtain a portion of the amount by which gold increased in price as the result of international developinments.
– That bill was defeated in this chamber.
– The measure was rejected because the voting on it was equal. The Leader of the Opposition stressed principles to which we all subscribe, because decisions in this chamber must not be ignored. In this instance the decision of the Senate has not been ignored.’ These regulations have nothing whatever to do with the amount of tax imposed, and even if they be disallowed the impost will continue and other machinery will he devised to provide for its collection.
– The damage has been done.
– ft o damage has been done, but even if damage had been done it could not be rectified by disallowing the regulations. For a moment I was ‘under the impression that taxation was being imposed under these regulations, but I find that they are only of a machinery character. I doubt whether power is provided in the National Security Act to impose taxes by regulations.
– Under section 18 of the National Security Act the Government has power to do anything, and regulations such as these need not ever, be ratified by Parliament.
– Every regulation promulgated is subject to the Acts Interpretation Act, under which the Senate derives the power of disallowance. A tax is not imposed by these regulations.
– What is their purport?
– To enable the Commonwealth Bank to collect an excise duty already imposed. Perhaps the honorable senator, who possesses such a logical mind, has not had time to read the statutory rule. For his benefit, I point out that it covers definitions, the method of collection, and arrangements for the payment of duty through the Commonwealth Bank, which is constituted the agent of the Government.. There are other provisions dealing with other matters, including refunds of duty to producers of any amount overpaid.
– But the tax has been collected.
– And the Government will continue to collect it, whether this motion be carried or not. If the motion be carried, perhaps the tax will be collected in a more ruthless manner than is now provided for.
– Senator. Allan MacDonald said that if the motion were carried, the Government would be obliged to refund all of the tax which it had collected.
– With all respect to my colleague, I do not think that would be the case. This motion, in fact, means nothing, because the excise duty would remain operative until the Senate rejected it. Honorable senators should not be carried away by any suggestion that the Government has acted in this matter in defiance, of this branch of the legislature. That is not so..
– Had the Senate not rejected the Gold Tax Bill, the Government would not have imposed the excise duty.
– Apparently, if the Senate had passed that measure, every thing in the garden would have been lovely. However, the Senate rejected the bill, and the Government promptly imposed an excise duty. Now, it is for us to wait until we have an opportunity to consider the duty. Then we can insist on such amendments to that excise as will give relief to men who are doing a very valuable service for this country by going into the outback and producing gold. That, however, is beside the question now before us, because we should not help them . in the slightest degree by adopting this motion. All we should accomplish would be to upset the detailed arrangements of the Government, for collecting an excise duty which is perfectly lawful. I suggest that we should wait until that duty comes before the Senate in due course, when we may voice our views regarding the importance of the gold-mining industry to this country, and to the world at large.
– In reply to the contention of the honorable senator who has just resumed his seat, that we shall accomplish nothing by adopting the motion, I point out that by such action we can at least protest against the excise duty on gold. I endorse the remarks of the Leader of. the Opposition (Senator Collings), who so ably moved the motion, and also those of Senators Cunningham, Eraserand Johnston. Unfortunately, I cannot include in my commendation Senator Allan MacDonald. As for Senator Collett, I feel sure that, but for his ministerial responsibilities, he would support the motion.
– The honorablesenator is assuming too much.
– The Government has gone about this matter in the wrong way. It should have consulted theWestern Australian Government, which, for many years past, has been doing everything in its power to foster the goldmining industry, and has made availablelarge sums of money for that purpose. In this way it has provided much additional employment, and its efforts in that direction have been rewarded, because prospectors whom it has helped have produced gold to the value of £200,000.
– Much of” that finance was provided by the Commonwealth -Government.
– That may beso, but the fact remains that the Western Australian Government expended themoney wisely.
– I admit that it did: remarkably well.
– The Commonwealth Government has acted most unjustly in making a capital levy on thegoldmining industry. ‘Such a policy will discourage expansion. Itwill shorten the lives of many mines, and at the sametime deny to many engaged in the industry a full reward for their labours. With gold at its present price of £10 13s. an ounce many mines hitherto neglected could be worked at a profit, but the exciseduty will prevent the development of such propositions. In addition, it will deny to many men the opportunity to gain employment in the industry at reasonable wages. The Assistant Minister (Senator
McBride) declared that the present high price of gold was solely attributable to the war. When he was Minister for Mines in Western Australia, the late Honorable S. W. Munsie stated, two years ago, that the price of gold would reach £10 or £12 before it commenced to drop. Senator Johnston and other honorable senators from Western Australia will substantiate that statement.
– Surely, no one would deny that recent increases of the price are due to the war.
– I disagree with the Assistant Minister. I am perfectly satisfied that the late Mr. Munsie knew what he was talking about. When he made his prediction he was not thinking of the possibility of war. At that time he had just returned from England where he had been in touch with world representatives of the industry, including Mr. de Bernales. Many people do not like Mr. de Bernales, but the fact remains that he has done much for gold-mining in Australia.
– He has shown great faith in the industry.
– The policy of the Government is unwise, particularly when we can assist the Empire so much in the present war by increasing our gold output. Undoubtedly this is one of our most valuable industries. The Government of Western Australia has strenuously protested against this tax. The duty is wrong in principle, and I go so fa,r as to describe it as unconstitutional. Having done all in its power to foster this industry, the Government of Western Australia is greatly discouraged by the action of the Commonwealth Government, which apparently desires to reap all of the benefits resulting from the State governments’ work on behalf of the industry. This duty is cruel and unjust in its incidence. Undoubtedly, gold plays an important part in maintaining our credit overseas. It is vital to our economic welfare as a whole. No one can deny that. I do not agree with -Senator Allan MacDonald’s remarks as to the views held by prospectors concerning this tax. In recent weeks I have been closely in touch with prospectors in Western Australia, and invariably they expressed opposition to any tax on price. They suggested that the only just method of taxing the industry was on the basis of profit. One man told me that in eleven months he had found 4 ounces of gold. He will be obliged to pay tax on those 4 ounces. That is most unfair. During the last war a request was made to the gold-mining industry throughout the Empire to increase production as much as possible. This tax will have the effect of discouraging production. The Government, therefore, will be making a serious mistake if it continues to levy the impost.
In view of the fact that the profitable mines in Western Australia are working on low values and owe their success wholly to present high prices, the only fair and equitable method of taxing the industry is on a profit basis. Through the expansion of the mining industry in Western Australia in recent years, employment has been found for 10,000 additional men, whilst to-day the value of gold produced in that State is £10,000,000 greater than it was about ten years ago. Obviously this increased production has contributed in a large measure to the maintenance of our favorable trade balance and our credits overseas. I repeat that any tax on price is wrong in principle. If it wishes to treat the gold-mining industry fairly, the Government will abandon the excise duty on gold and substitute a tax on profits.
– I was very interested to hear Senator A. J. McLachlan say that the adoption of this motion would mean nothing at all; that whether the motion is carried oi not the excise duty will remain. I compare the honorable senator’s statement with that made by Senator Allan MacDonald, who, speaking on the authority of another legal gentleman, informed us that if this motion were adopted, the Government would be obliged to refund probably £250,000, which it had collected, by way of excise duty on gold.
– I was expressing only my own opinion.
– I thought that the honorable senator said he had been frequently conferring with the Acting Treasurer (Mr. Spender), and I deduced that he was repeating an opinion that had been expressed to him. The honorable senator is influenced by a belief that, if this motion be passed, the Governmnet will have to refund the tax collected. In view of the statement by Senator A. J. McLachlan, who is well qualified to express an opinion on the matter, will Senator Allan MacDonald reconsider his position? If Ave allow the Government to defy the will of Parliament without a protest Ave shall be recreant to our trust as representatives of the people.
I Avas privileged on Sunday last to address a public meeting at Ballarat. I remarked that parliamentary democracy based on private individual property relations had gone forever, and that we noW had a parliamentary dictatorship based on private monopoly relations. An interjector asked “ What about Australia “. I replied that this change applied to Australia, and that just as dictatorships had arisen in Europe they would be established in Australia, unless the people take a definite stand against them.
– The audience did not take .the honorable senator seriously.
– It was profoundly impressed when I stated that, although a bill providing for a gold tax had been ‘ defeated in the Senate in accordance with the Constitution, a regulation had been brought down a few minutes afterwards to provide for the levying of the same tax by means of an excise duty. I pointed out that the Government Avas acting consistently Avith the policy to which it Avas committed - that of conserving the interests of big business. I was asked how a gold tax would affect those interests, and 1 explained that the tax as imposed and collected by the Government applied to all concerned in the industry, irrespective of their ability to meet the impost. All people who produce gold are taxed, not in accordance with their ability to pay, but so that the tax will be spread over as many people as possible, in the interests of the gold monopolists in this country. If profits instead of prices were taxed, the profits of the companies would be reduced to the extent of the tax. But, when prices are taxed, every body concerned .is compelled to pay the levy. Thousands of the men who are now engaged in searching for gold have very small incomes, yet they will have to pay the tax, even though they may not be receiving the equivalent of the basic wage.
This tax, which imposes an additional burden on a section of the community that can ill afford to bear it, indicates that the democracy of Australia is to be replaced by a dictatorship similar to those established in practically every country in Europe. Even in Great Britain, France and the United States of America this change is threatened, and, if a protest be not made, Ave shall acquiesce in the po’.icy of the Government to establish a dictatorship in Australia by easy stages. Speaking in the House of Representatives, the Prime Minister (Mr. Menzies) made this significant statement -
It would be, in my opinion, a card:nal error to assume that, if this war lasts for three years, we shall, at the end of it, revert to the same economic structure and life as we had last year.
The right honorable gentleman indicated that the economic structure, which includes the political superstructure, will not be the same after the
Avar as it is to-day. I go even further than that, and say that the change will be made independently of whether the war goes on or not, if this Government can effect it. The Government is deliberately using the power. vested in it under the National Security Act to do two things - to prepare for the defence of Australia, and to prepare for the establishment of a dictatorship in Australia.
– What makes the honorable senator say that?
– The evidence of the facts. The change will come about if the people are prepared to allow it to be done. Why is advantage taken of the fact that we are at Avar to capitalize the fears of the people, and to do things that would not be done in time of peace?
– The honorable senator is ghost-haunted.
– I am afraid that in this instance the ghost wil materialize.
The Senate showed clearly that it Avas opposed to a gold tax, but, almost immediately after its decision had been reached, the tax was imposed in the form of an excise duty.
– A validating bill will come before this chamber.
– Senator A. J. McLachlan reminded us of that fact ; but, in the meantime, the purpose of the Government is served, and the damage is done. Hundreds of thousands- of pounds will have been collected from persons who can ill-afford to pay the tax, and this will have been done in order to protect the interests of rich mining companies. Senator McBride said, in reply to the Leader of the Opposition, and Senator A. J. McLachlan also admitted, that the Government had power, independent of a specific bill, to impose the tax. Why, therefore, was it necessary to introduce the bill? Was the Government deliberately wasting the time of the Parliament? Was it trying to mislead the people? Is it bankrupt of arguments to justify the use of additional power, or was it merely trying to mislead its opponents in the Senate ?
– The answer to each question is “ No “.
– If the honorable senator were in the witness box, I think that any impartial jury would convict him of perjury, and, in saying that, I do not reflect on the honorable gentleman personally. I desire to know why the Government asked the Senate for additional power to impose a tax on gold, when we arc assured by Senator McBride, Senator A. J. McLachlan, and others well qualified to speak, that the Government already has full power in the matter. In my opinion, the Government had an ulterior motive in bringing down a bill which its own supporters say was unnecessary. The Government refuses to state the reason for its action.
The gold industry is different in many respects from other industries. It is one in which poor as well as rich men are engaged. It is very different from an industry such as that controlled by the Broken Hill Proprietary Company Limited, which has a monopoly. Many miners are engaged in treating old dumps by means of the cyanide process, which enables them to secure an income of a few pounds a week, which they could not obtain in that way if the price of gold were not high. I suggest that the increase of the price of gold is due, first, to the inflationary policy of practically every country, including Australia, and, secondly, to the demand for gold for war purposes. We are told that the price now paid in the United States of America for Australian gold is £10 13s. an ounce, and we receive in return for it a credit on the ledger or commodities. As Senator Johnston has said, gold, at the inflated price, buys less to-day of many commodities. It might interest honorable senators supporting the Government, if, apart from lip service, they have any interest in this matter, to know that, in terms of gold, the present basic wage is about 25s. below what it was in 1907. In that year the basic wage was £2 2s. a week; to-day it is £4 ls., but the purchasing power of the pound note has depreciated by more than 62 per cent. This represents, in round figures, a reduction of the purchasing power of the present basic wage, compared with the basic wage in 1907, by about 25s.
– That is very convenient reasoning.
– It is convenient and, since it happens to be accurate, it is convincing. If Senator Dein would care to examine the position, he would find, that my calculations are correct.
– What would be the difference in real wages’?
– The real value of the basic wage to-day is less than it was in 1907, from every point of view, nominal, relative or aggregate wage. But £4 ls. will purchase approximately the same quantity of goods as could have been purchased by the basic wage of £2 2s. a week in 1907.
– A worker on the basic wage to-day is better off by about 7 per cent.
– I do not admit, that. The purchasing power has remained practically constant, but the productivity of the workers has increased, in some cases one hundredfold, the result being, as I have endeavoured to explain, that the nominal, relative and aggregate wage to-day is lower than it was in 1907.
– Capital investment has also increased ‘tremendously.
– That is the inevitable result, the natural corollary, of a reduction of living standards. Through the manipulation of the currency and in other ways, there has been an accumulation of capital and a consequent increase of investment.
– Would the honorable senator say that the standard of living of the workers to-day, compared with the standard in 1907, is lower?
– There was never a time in the history of this country when so many thousands of men, women and children depended on Government relief. All that we have done since 1907 up to to-day has been to stabilize poverty. There was never a time when so many children in Australia were suffering from malnutrition, or when so many thousands of adults were prevented from earning a decent livelihood. This afternoon, Senator Brown directed attention to the fact that thousands of citizens of Brisbane were reduced to the bread-line despite the fact that we have more foodstuffs - more wheat, more eggs, more butter and more meat - than we know what to do with. In terms of goods we were never richer; in terms of actual purchasing power of the basic wage, we were never poorer. The price of wheat was never lower and the price of bread was never higher.
I join with other honorable senators in supporting the motion because I can see what is coming. This Government, consistent with its principles, and because it is tolerated by the people, is giving effect to its policy of defying the will of Parliament on every occasion that it. deems fit to do so. So long as we refuse to acquiesce in what the Ministry does, it willcontinue to defy Parliament when it suits its convenience to do so. Notwithstanding that its policy was challenged in the Senate, which defeated its original proposal to levy a tax on gold, it imposed the tax in defiance of the will of this Parliament. In order to justify their action all sorts of specious arguments are being employed by Government supporters who should know better. It has been stated that the tax will stand because the Government is determined to retain it. This motion was necessary in order that we might be able to inform the people that we are opposed to any executive act, the purpose of which is to defy the will of Parliament. If we on this side had not taken this stand, we should not be able to justify our existence as a Labour party. It has been said that Labour is split on this issue. That is not true. Our leader (Senator Collings) submitted his motion this afternoon with the full approval of the party.
Sitting suspended from 6.14- to 8 p.m.
– Finally, I desireto refer to the hope expressed by Senator Allan MacDonald that in future the Government will confer with the representatives of industry before again acting in a similar way. When he made that statement I wondered whether the honorable senator was serious, because I could not imagine the Government doing anything of. the kind. Even if it desired to do so, with whom would it confer? Did the honorable senator mean the directors of the mining companies, and if so, how does he think that arrangements could be made to meet them all? Did he mean that the Government should confer with officials of the Mine Owners Association, or with the mine managers, who would act under instructions from the mine-owners? Or did he mean that the Government should confer with representatives of the labour organizations? I cannot imagine the present Government even attempting to do anything of the kind. The mere expression of such a hope will not assist Senator Allan MacDonald, or any one else. I can see no way out of the difficulty but to challenge the Government all along the line. It has given ample evidence that it intends to act in a dictatorial way, rather than in a legislative capacity. In the future we can expect more of government by regulation and less of government by legislation than in the past. The protest that is contained in this motion is both timely and justified, but it will have to receive more solid support from the people if the Government is to change its policy.
.- The Senate is engaged in debating a motion by the Leader of the Opposition (Senator Collings) for the disallowance of Statutory Rule No. 100 of 1939. The action taken by the honorable senator is constitutional, for the law provides that either House of the Parliament may disallow a regulation made by the Government within fifteen days of such regulation having been tabled in the Parliament. What are the facts in connexion with this matter? The Government, acting under the powers, conferred upon it by the Constitution, endeavoured to persuade the Parliament to grant to it the power to levy a tax upon the price of gold in excess of that which obtained on a certain date. In accordance with the long-established practice of the mother of parliaments, hills imposing taxes must originate in the popular house. The Government was able to persuade the other chamber of the legislature to approve of the tax, but that did not end the procedure; the consent of this chamber also was necessary. Honorable senators know that the Senate has not the power to amend money bills; it can make requests for amendments or it can refuse to pass the measure. Acting within those powers, the Senate refused to pass legislation designed to give to the Government the power that it desired. Almost immediately after the Parliament adjourned, the Government decided to do by regulation what the legislature had refused to allow it to do.
– The Government did not do anything of the kind.
– Some honorable senators believed that the proposal of the Government was a departure from the established practice in connexion with the raising of taxes; others objected because they were of the opinion that profits, rather than prices, should be taxed; still others believed that if the Government were granted this power a great injury would be inflicted on the industry concerned. This afternoon the merits of the proposed tax, rather than the merits of the motion before the Senate, were discussed by many speakers. I remind the Senate that the motion before it aims at the disallowance of a regulation which the mover claimed was promulgated behind the back of Parliament. This afternoon Senator Allan MacDonald endeavoured to lead the Senate to believe that he had some inside information as to the intention of the Government in respect of some future legislation. That is not the matter at issue; the question is whether or not this chamber should assert the right conferred upon it by statute to disallow a regulation issued by the Government.
– The regulation does not impose any tax.
– In some quarters it has been suggested that the Senate does not play a very important part in the government of this country. Indeed, it is frequently urged that the Senate could well be abolished.
– That suggestion has come from the honorable senator’s side of the chamber.
– It is true thai the platform of the party of which I am a member provides for the abolition of the Senate, but members of that party believe that if this chamber is to be abolished that change must be only as the result of the considered opinion of the electors.
– In the same way as the upper House of Queensland was abolished !
– The Labour party does not intend to sabotage the Senate, as honorable senators opposite would do. The action of the Government, against which this motion protests, tends to bring discredit upon the Senate. The” attitude of honorable senators who voted against the proposed tax, but to-day are opposing this motion and are endeavouring by specious reasoning to salve their consciences, is amazing. In other words, they are bending to the pressure that has been brought to bear upon them by those interests which would rather see legislation of this kind in operation than be required to pay a tax upon profits. Those honorable senators who are prepared to yield to pressure are not concerned with the dignity and powers of the Senate, or with the preservation of the rights and privileges that have been held dearly by every British parliament. The Labour party is not prepared to allow this country to drift until its government becomes similar to that which exists in another country with which the British Empire is now at war. One of the reasons for engaging in the present war is that we believe that the totalitarian form of government should be destroyed. Yet, under the pressure of war conditions, an attempt is being made to introduce into this country a similar form of government. It is true that the Parliament has vested certain powers in the Executive, but should the Parliament disagree with a policy upon which the Government has embarked, the Government is in duty bound to accept the decision of the elect of the people; it should not go behind Parliament to do by regulation what the legislature has refused it permission to do. Surely this branch of the legislature which has been affronted has the right to say to the Government that it shall not do this thing, and therefore the Senate should disallow the regulation referred to in the motion before it. As the Leader of the Opposition said in introducing his motion, the point at issue takes us back many years in the history of constitutional government. The honorable gentleman referred to the struggle to take from the Crown and vest in the Parliament the right to levy tribute on the people. This regulation seeks to levy taxes which the Parliament refused to sanction.
– ‘Can the honorable senator point to any clause of the regulation which seeks to impose taxes?
– This question must be viewed in its true perspective. I do not pose as a constitutional authority, but I do know that this Parliament refused to sanction the action which the Government has taken. I shall cite one or two authorities on the principle involved. Mr. Cecil S. Emden, barrister at law, of the Middle Temple, and author of The Civil Servant in the Law and the Constitution - a short study of the functions and mutual relations of the executive, the legislature and the judiciary - states -
The legislature has from its earliest individual existence claimed the function of being the sole authority for the raising of money for the purpose of government. The right to exercise this function was formerly reiterated in the Bill of Rights, 1088, in which there appeared the clause “ Levying money for or to the use of the Crown by pretence of prerogative -without grant of parliament for longer time or in other manner than the same is or shall be granted is illegal “. The check on the compliance with this principle is usually applied through the judiciary, and . will accordingly call for treatment in a later chapter. It is possible therefore to pass at once to an examination of the manner in which the legislature checks the expenditure by -the executive of money duly and properly raised for the public service.
– What the honorable senator has quoted has no bearing on the subject.
– It has.
– It has nothing whatever to do with it.
– The honorable senator who persists in interjecting will have an opportunity later to display his legal knowledge and to show me where I am wrong. In view of the fact that millions of men are likely to be engaged in slaughter for the preservation of our democratic institutions, honorable senators opposite should at least endeavour to give this subject the consideration it deserves, and they should not by flippant and irrelevant interjections try to belittle the statements I am making. This regulation is closely related to the subject of taxation.
– It is not; that is the point.
– It is framed with the object of imposing a tax which this Parliament refused to impose.
– The Executive can impose such a duty for a limited period without the sanction of Parliament.
– Parliament refused to sanction the imposition of the tax. I now bring under the notice of Senator A. J. McLachlan and Senator Wilson, the following statement by Mr. A. B. Dicey, of the Inner Temple, Vinerian Professor of English Law, Fellow of All Souls College, Oxford; and honorary LL.D. Cambridge, Glasgow and Edinburgh : -
The main point, of course, to be borne in mind is that all taxes are imposed by statute and that no one can be forced to pay a single shilling by way of taxation which cannot be shown to the satisfaction of the judges to be due from him under Act of Parliament.
I feel sure that Senator A. J. McLachlan will not question that authority. Will honorable senators opposite say that the regulation against which we >are protesting does not levy a tax?
– Of course it does not.
– Then I do not know what it does impose. Is it considered that this excise duty is being levied under a statute?
– Yes.
– That being so. the honorable senator disagrees with the authority I have cited.
– The excise duty was levied under a statute.
– Honorable senators opposite will endeavour by specious argument to bolster up the case of the Government, which they know could not be. sustained before any judicial tribunal. Whether the method adopted is the best means to raise revenue is beside the point. What we have to determine is whether the Government has the power under a regulation made under the National Security Act to ignore a decision reached by Parliament. Some honorable senators have directed attention to the difficulties experienced by prospectors, many of whom it is said cannot bear the burden of this additional impost, but there are also many mining companies which are working at a loss and upon which the tax will he a very heavy burden.
– What would happen if the regulation were disallowed?
– The interjection discloses a type of mind referred to by another very eminent legal luminary, Lord Hewart, author of the New Despotism, to whom Senator A. J. McLachlan thought I was »about to refer.
– Order ! The honorable senator must speak to the motion.
– The Leader of the Opposition has moved for the disallowance of this regulation because we believe that the Government has made a determined attempt to defy the decision of this branch of the legislature. “ When the party whip is cracked, honorable senators opposite, who know that the Government has acted wrongly, are brought to heel. A few months ago Senator Wilson was indignant when the Govern ment issued a regulation prohibiting the export of iron ore from Australia. Tonight he merely raises irrelevant objections when we .protest against similar action by the Government. Here, I suggest, we have an explanation of why responsible government has disappeared in other countries, and is fast disappearing in this country. Our people” are slowly but surely losing faith in our democratic institutions because the Government makes laws behind the back of Parliament. If for no other reason but to assure the people of Australia that we believe in democratic government and respect the rights of the elect of the people, honorable senators should agree to the motion. In different circumstances we might pardon the Government for issuing a regulation of this kind, but when it makes a regulation deliberately to affront this branch of the legislature we must endeavour to disallow it. The imposition of the excise duty on gold under our tariff legislation is not at issue, and the argument that, even were we to adopt this motion the Government could continue to collect this tribute from the gold-mining industry, is also irrelevant. Honorable senators should concentrate on the real issue at stake in this matter. This motion has been submitted with a view to preserving to Parliament its right to say “ aye “ or “ nay “ to the intentions of the government of the day, irrespective of the political complexion of that government. In all circumstances we must defend that right of the Parliament. If we depart from that established principle we shall experience in another form the new despotism, which was apparent during the last war, and of which we have heard so much in this debate, That is the issue before honorable senators at the moment, and they should disregard entirely every other issue. We are not now concerned whether the Great Boulder Company, or any other wealthy gold-mining company, financed by overseas capital, might or might not escape its just measure of tax. We are simply concerned at the moment with the preservation of the democratic rights of the Australian people. That is the issue before us to-night. For that reason every honorable senator should support the motion, particularly when, as senators, we represent the people as a whole, and constitute a truly democratic chamber, in which the intricacies of electoral boundaries and vested interests do not operate.
– The honorable senator once said that he was in favour of the abolition of the Senate.
– If the people of Australia decide that this chamber no longer serves a useful purpose it might as well go out of existence, but I urge honorable senators not to bring further disrepute upon the Senate by adopting the attitude to which, unfortunately, honorable senators opposite are inclined, by endorsing the action of a government which, within five minutes after this chamber last went into recess, seized the opportunity to reverse our decision in rejecting the Gold Tax Bill. For that reason, particularly, I ask honorable senators to agree to the motion.
– I listened with interest to the lecture just given by Senator Sheehan on constitutional reform, but I should have preferred him to confine himself to the motion before the Senate and to direct to that question some of the wisdom with which he seems to be endowed. “When the Leader of the Opposition (Senator Collings) was submitting this motion I was reminded of an incident which occurred many years ago in a South Australian district in which I lived. At the time a drought was being experienced, and some of the good folk in the district requested the minister at the local church to set aside a day of prayer for rain. The minister, who was very practical, and also Scotch, replied, “ What is the good of praying for rain while we have an east wind ? “ That remark can be aptly applied to the Leader of the Opposition in respect of the Government’s original proposal to tax gold. When, the Gold Tax Bill was before this chamber he declared that the Opposition would not oppose it, but as the debate proceeded the wind veered, and, reluctant to miss a golden opportunity to embarrass the Government, he saw to it that the voting was even and the bill consequently rejected. In expounding his arguments to-day the honorable senator did not say one word against the excise, duty itself, but simply objected to the way in which it had been imposed. In his resume of the development of parliamentary government he dealt with legislation by regulation. Personally, I am opposed to abuse by any government of legislation by regulation, but, as the honorable senator is well aware, occasions arise when a government is obliged to adopt such a method. If, as the honorable senator contends, his motion has no bearing on the excise duty itself, I do not think he can say for a moment that the Government imposed that duty without the authority of Parliament. It imposed it under the National Security Act, which is similar to the War Precautions Act enacted in the last war by a government politically akin to the present Opposition. One honorable senator from Western Australia suggested that the Government should not have imposed the duty under that legislation because, he said, the National Security Act was framed with the object of protecting us from our enemies. Surely, it is quite reasonable to invoke that act in order to protect ourselves from our internal, as well as our external, enemies.
– The -Government has a long way to go in order to overtake the profiteer.
– Apparently the honorable senator is not prepared to assist it to control the profiteer, otherwise he would not support the disallowance of this regulation.
– I am not prepared to support any action that will make the poor poorer and the rich richer.
Senator JAMES McLACHLAN.The Great Boulder Gold mining Company in Western Australia cannot be said to be poor. We have been told that an excise duty is a direct tax on production. I remind honorable senators who raise that objection to this regulation that we have several taxes of that kind, including the excise duty on wine. Perhaps, I can take it judging from their remarks, that honorable senators opposite during next summer will refuse to have a drink of beer because beer is subject to an excise duty. I urge honorable senators to look at this matter reasonably. On the 31st August the price of goldwas ?9 8s. 7d. an oz., whereas to-day it is ?10 13s. an oz. This gives a profit over £9 of 16s. 6d. ian oz. to the Government, and 16s. 6d. an oz. to the producer. Although the Government 19 better off to-day by 16s. 6d. an oz., the producer is receiving 8s. an oz. more than he was receiving on the 31st August.
– The Government is taxing the poor man with a wife and five children.
– No. This tax falls not on the gold producers, but on shareholders throughout Australia. An honorable senator from Western Australia cited the Wiluna Gold-mining Company as being in sore distress ; but I maintain that any mine winning gold, which is worth £10 13s. an oz., or, with the excise duty deducted, £9 16s. 6d. an oz., is doing well. The position of the prospector has been mentioned in this debate because it is convenient to argue that the gold tax has been imposed on the poor man. There are nearly 800 prospectors in Western Australia, and they do not rely so much on the small quantities of gold- that they find from time to time as they do upon their chances of striking a reef that may prove to be a payable proposition.
– Not 5 per cent, of them strike reefs.
– I think that the percentage is higher than that. Many of these men will follow no other occupation. They prefer to be prospectors in the hope that they will eventually discover an El Dorado or a Lasseter’s Reef. Some of them have done remarkably well for themselves. When the validating bill is brought down-
– How does the honorable senator know that a validating measure will be introduced?
Senator JAMES McLACHLAN Every member of this chamber who understands parliamentary procedure knows that the excise duty must be validated during the present session, and when the validating measure appears, I shall be pleased to give every consideration to the claims of the prospectors.
Another honorable senator from Western Australia stated that the Assistant Minister, in his reply to the Leader of the Opposition, did not seem to be serious. It appears that some members of the Op position fail to realize that this country is at Avar, and that it is necessary to raise a great deal of revenue for war purposes. It is only fair that the money required should come from the people generally, and from those who have most of it. Why it should be suggested that those connected with the gold-mining industry should be exempt from taxation I do not know.
– We do not ask for immunity for them. We say, “ Tax the profits “.
– The tax is being imposed on excess profits, in that it is collected only in respect of the amount by which the price realized for gold exceeds £9 an ounce. One honorable senator from Western Australia pointed out that the Senate, being a States’ House, should protect State rights. I quite agree; but we should protect those rights only as they affect the whole of Australia, and, in this case, I am afraid that our friends from Western Australia are anxious about the gold tax simply because it affects mainly their own State. I remind those honorable senators that, when the goldmining industry was in such a low condition that it could not be carried on successfully, this Parliament granted a bounty on gold which enabled the industry to recover. At that time the price of gold was about £4 an ounce, but to-day it has increased by over 150 per cent. I feel sure that honorable senators, in their good judgment, will not support the Leader of the Opposition on this occasion, and I am almost positive that some honorable senators who did not support the Government on its original proposal will do so to-night.
– Having misinterpreted the remarks of some members of the Opposition, Senator James McLachlan has been unfair. The Opposition is as bitterly opposed to the exploiter of gold-miners as to the exploiter in any other industry, and no honorable senator on this side is anxious to assist those who are making excessive profits from gold. It is grossly unfair for honorable senators on the tory side to give a false impression to the public of the remarks made by members of the Opposition. We recognize that the commencement of the great struggle in
Europe has influenced, the price of gold, and of other commodities as well, and, if the Government acted consistently, it would tax other industries in which the prices of commodities have been inflated because of war conditions. During the progress of the war, prices of many commodities will no doubt be excessive. Under the present system of finance, there will be inflation, but will honorable senators opposite contend that heavy excise duties should be imposed on industries in which prices are inflated?
– Those engaged in such industries should pay wartime profits tax.
– Yes ; the Opposition believes that, if the price of a commodity is increased on account of the war, the Government should tax the excess profit.
– As a contribution to the cost of national defence.
– Yes. It will still be necessary to tax those who take more than their just due out of industry.
Senator Allan MacDonald, in the course of his backing and filling, has fallen from grace. At the outset, he took a stand along with that champion of the rightsof Western Australia, Senator Johnston, against the imposition of the gold tax in the way in which the Government sought to impose it, but now he. has thrown in his lot with ‘ the Government. While he was performing a somersault he patted himself on the back. I am always amazed at the mental contortions of some honorable senators opposite. Senator Allan MacDonald would have us believe that he alone is interested in, and has done something for, the struggling gold prospectors. The truth is that members of the Labour party have always striven to improve the lot of this section of .cold-seekers. We voted against the Government’s proposal to impose a tax on gold, and we are taking action now in the hope that the Senate will disallow the regulation that “was promulgated in defiance of this chamber. Senator Allan MacDonald has “ turned turtle “. He now intends to support the Government which imposed this tax on struggling prospectors. Senator Johnston refuses to do any somersaulting. For that we give him due credit. The honorable gentleman stands firmly by his convictions on this issue.
– Senator Allan MacDonald was responsible for the somersaulting of fourteen Labour senators when the Gold Tax Bill was dealt with in September.
– If what the Leader of the Senate has said is true - which it is not - we should be experts in that form of gymnastics, but I have no personal recollection of having turned a somersault, either here or anywhere else.
– The honorable senator should ask his leader.
– Nor have I any recollection that my leader (Senator Collings) has been indulging in that form of acrobatics.
– Order ! The subject before the Senate is not somersaults.
– Mr. President, I am speaking of political somersaults, and I hope that I am in order. I have every confidence that my leader will answer effectively these stupid interjections by Senator Dein, and confound all our critics on this issue. Senator McBride takes up the attitude that this regulation has nothing whatever to do with the excise on gold. I under-‘ stand the position perfectly. If this regulation has nothing whatever to do with the excise on gold, why was it promulgated? We know, of course, that it was issued for the very definite purpose of ensuring the proper disposal of the revenue collected by the imposition of an excise duty on gold. Sub-clause 4 of the regulation provides -
That gives authority to the bank to do what the Government intends shall be done.
We are asking for the disallowance of the regulation because we believe that it is wrong for the Government to flout the expressed will of Parliament. We know, without being told by Senator A. J. McLachlan or by Senator McBride, how far this particular regulation goes, and we know that the excise on gold will be retained even if the regulation be disallowed. We are fully aware of what we are doing, but we are making our protest because we object to the Government defying the declared will of Parliament. No amount of specious pleading can dispose of the fact that the Government’s original proposal to impose a tax on gold was defeated. To say that it was rejected but not defeated is merely to juggle with words. If honorable senators who are now supporting the Government were in opposition, they would certainly take the stand that a Government which had done what this Government has done was flouting the decision of Parliament. No one can deny that the Government’s Gold Tax Bill was defeated in a constitutional manner, and if Government supporters now vote against this motion they will be lending support to action which is contrary to the principles of parliamentary government.
The Assistant Minister for Commerce (Senator McBride) and some Government supporters have argued that in 1931 the. Scullin Labour Government promulgated regulations which were repeatedly disallowed by the Senate. It should not be forgotten however, that the majority of the people had returned a Labour Government to this Parliament with a mandate to give effect to its declared policy. When it attempted to do so., it was defeated, as I have stated, by a hostile Senate.
– The honorable senator is now using specious argument.
– There is nothing specious about my reasoning. The facts are as I have stated them. The majority of the people of. Australia returned the Labour party to power with an overwhelming majority in the House of Representatives, but the Senate as then constituted disallowed certain regulations which the Scullin Government had promulgated. I admit that in disallowing those regulations the Senate was within its rights, but it does not follow tint this Government, which, we are told, believes in, and is fighting for, the survival of democracy, should do what it thinks fit in defiance of Parliament. Neither does it follow that because a Labour Government did certain things in 1931, of which we then approved,
Labour senators should now perforce be silent when this Tory Government seeks to defy the will of Parliament.
– No one has ever accused the Labour party in this chamber of being silent.
– And we do not intend to be silent. Two wrongs do not make a right. If the Labour party was wrong in 1931 - and Government supporters declare that it was wrong - that is no reason why we should remain silent in regard to a wrong done by this Government. I very well remember listening to a number of Tory speakers during the campaign that preceded the defeat of the Scullin Government. They declared! that the action of the Scullin Government in promulgating regulations which the Senate disallowed was a negation of democracy. Now, simply because it suits their purpose, these supporters of a Tory Ministry prefer to regard similar action by this Government as democracy in excelsis. And they dare to say that they are not turning political somersaaults !
– This regulation has not yet been disallowed by the Senate.
– We on. this side are arguing for its disallowance. The Assistant Minister, although he believes that what was done by the Scullin Government in 1931 was wrong, contends, apparently, that a similar executive act by this Government in 1939 is right However I shall not pursue the argument further. I know that I shall not be able to persuade Government supporters of the errors of their ways. .
– We have been given to understand that whatever decision is reached by the Senate on this motion the Government, by some subterfuge, will retain the tax on gold. The regulation provides for the disposal of a certain unspecified tax which ‘ is imposed by ‘excise. The original bill which was rejected by the Senate imposed a tax of 75 per cent, on the price of gold in excess of £9 a fine ounce. Theexcise which replaces the rejected proposal provides for a tax of 50 per cent, of the excess price. But the regulation does not enact that all gold produced must be delivered to the Commonwealth
Bank or its agents. There is a loophole in it. I believe that companies producing gold could send sufficient of the metal to the bank to pay their expenses, and could hold the remainder until the war was over. Under an act passed by the parliament of Western Australia a tax is levied to recompense the Government for money which it disburses to miners who contract occupational diseases. Among miners in Western Australia industrial diseases are many and extensive, and for that reason the State Government has imposed a tax to meet the cost of combating those diseases. The Commonwealth Government has added a further tax. The Gold Tax Bill was negatived in this chamber on the 20th September. Three days later a regulation, similar in effect to the rejected bill, was promulgated. Senator Allan MacDonald reached Kalgoorlie on the 27th September, where, I understand, he was met by representatives of the Chamber of Mines, with the result that he remained there in order to consult with them further. On the 28th September, he is reported in the Western Australian as having said that his heart was bleeding for the small prospectors and that he proposed to do something for them. It is significant that the Chamber of Mines is in favour of the Government’s present proposal. That is because a. large proportion of the gold obtained in this country is won by small men. The imposition of this duty means that the levy is spread over the whole of them, and thus the big companies are saved from heavier taxation.
– Does the honorable senator suggest that a large proportion of the output of gold is won by small men?
– Yes, in one State at least. Many prospectors are in receipt of the dole.
– In that event, it is evident that they cannot produce large quantities of gold-.
– In my opinion, it would be better if there were no tax at all on gold. I predict that the tax will be removed if the war and the destruction of shipping continue, making it difficult to establish a favorable balance of trade. In such circumstances, gold would be the only commodity which would enable us to meet our commitments overseas. Then, instead of taxing gold, it would be better to expend, say, £2,000,000, in order to encourage an increased production of gold. The Government speaks of gold as if it were the only commodity whose price has been increased since the war began. There is a precious metal known as cinnabar. The British Government has prohibited its exportation and told us to get it from Italy. Recently, two promising finds of cinnabar in New South Wales have been reported. I am informed that one organization has told the discoverers that, if given a working option for six months with the right to a further extension of six months, it will pay to the owner 10 per cent. of its nett profits. At the beginning of the war that metal cost 5s. 6d. per lb. A fortnight later the price rose to 9s. 6d. per lb. Not long afterwards, it jumped to 19s. per lb. and three days ago it reached £1 5s. per lb. Is the Government prepared to say to those engaged in that industry, as it says to the prospectors for gold, that it will impose a tax on the excess profit? Many minerals are required for the successful prosecution of the war, particularly for use in the manufacture of munitions. Because of the war, the price of wolfram has increased by £100 a ton. Similarly, there has been an increase of £70 a ton in the price of antimony since the commencement of the war. The price of asbestos during the same period has risen by £20 a ton ; of manganese, by £15 . a ton; and of magnesite, by £150 a ton. Prices of copper, feldspar and other minerals have advanced tremendously. Does the Government intend to treat all these cases alike? Most of these mines are operated by wealthy people.
– Would the honorable senator support a proposal to that effect?
– I would.
– Then support this proposal.
– Since the commencement of hostilities, the price of calcite crystals . has increased enormously. Mention has been made of the establishment of new industries, including one for the making of lenses which are used largely in field operations.
Australia needs all the gold that it can produce. When the Gold Tax Bill was before the Senate, a suggestion was made that the provisions of the measure should extend to New Guinea. I should like the Minister to enlighten me as to whether the mandate granted by the League of Nations in respect of New Guinea does not contain a provision that all taxes imposed on the people of New Guinea shall be expended in that territory. We are told that the tax on gold is necessary for war purposes. What is the position in respect of gold produced in New Guinea? In making this regulation the Government has gone behind the back of the Parliament.
– New Guinea needs protection.
– Should this matter come before the High Court the result may be most interesting. I believe that the Government has set itself out to govern this country by regulation. If- so, it is not acting in the best interests of the country, for a continuation of that policy would lead to the establishment of a totalitarian State. I urge the Government to come out into the open and make its intentions- known.
– I have listened with a great deal of interest to the debate on the motion for the disallowance of Statutory Rule No. 100 of 1939 and it seems to me that the Opposition is running true to form, in that it is opposing everything that the Government brings forward. Why should it do so?
– Because the Government’s proposal is not right.
– The Government was placed in power in order to carry on the work of this country. Since it assumed office, it has been faced with the greatest crisis in the history of the world, and, naturally, it has to find additional money for the prosecution of the war in which it is engaged. We on this side are constantly blamed for not being willing to vote sufficient money for social services, and the requirements of defence. Yet, when the Government brings forward a proposal to augment its revenue by obtaining money from an industry which has not previously been taxed by the Commonwealth, but has, on the contrary, been assisted by bounties, objection is raised. I did not object to the payment of those bounties, but during recent years the price of gold has increased, and the industry is no longer in need of assistance. Indeed, it is today in a better position than anyother industry.
– Except sugar.
– An industry which is able to pay taxes should be called upon to do so in a time of emergency like the present. Members of the Opposition who claim that money should be obtained from profitable companies should support this proposal. Why was this regulation necessary? A bill to impose what was believed to be a reasonable tax on the excess price of gold due to the war was defeated in the Senate, and the Government had to find other means of raising revenue from that source. Consequently, it promulgated the regulation with which the Senate is now dealing. It is wrong to say that the proposal contained in the regulation is exactly the same as was embodied in the bill which was defeated. It is certainly a tax on the gold industry, but it ia different from the Government’s original proposal. Moreover, the proposal of the Government meets with the approval of the industry generally.
– It is not unusual to re-introduce a bill which has not found acceptance.
– All honorable senators will agree that additional money is necessary for the defence of this country. In the circumstances, the goldmining industry should pay its fair share of the cost. I shall give to the Senate a few figures in order to show that that industry can pay a reasonable tax. Accepting as a basis the figure 1000 for 1928-29, the following table shows the present position of a number of industries : -
Those figures are taken from the Monthly Review of Business Statistics for October, 1939. In the light of those figures, will any honorable senator say that the goldmining industry should be exempted altogether from making any contribution towards the country’s war expenditure ?
– No one has suggested that.
– The Government is entitled to formulate its own policy for raising money by means of taxes.
– -Why does it not apply the same method to industry generally?
– The whole of industry is being taxed. Hitherto, goldmining was not taxed except by the States.
– The Government says, in effect, that this tax has been imposed because of the war, but Senator Arthur gave instances of other metals which had increased in price but had not yet been subjected to special taxation.
– At present the industry does not pay Commonwealth income tax. Senator Arthur did not substantiate his figures regarding the rise of prices of the metals he mentioned? The monthly Review of Reviews statistics for October, 1939, the latest figures procurable show that the prices of metals other than gold are below the 1929 price basis.
– It is not exempt from State taxes.
– I realize that; but I am dealing with Commonwealth taxes. Had an excise duty not been imposed when the Gold Tax Bill was defeated in this chamber, the Government would have been unable to collect anything from the industry until some other tax had been imposed. As the gold-mining industry is the only primary industry that has shown such marked improvement during the last ten years, it should make some contributions to the national revenue. The excise duty now in force has to be validated by Parliament, and should the validating bill be not passed, the money which has already been collected will have to be refunded. Senator Johnston, who admitted that those engaged in the industry are willing to assist in the prosecution of the war, believes that the tax should be imposed on profits and not on production. The index figure of the pastoral industry, which in 1928-29 was 1,000, decreased in ten years to 657, and that industry is paying both Federal and State taxes. In these circumstances surely the goldmining industry, which is prosperous, should contribute in some form.
– Those on this side of the chamber who opposed the Gold Tax Bill were willing to support a tax on profits.
– Senator Johnston stated that the Wiluna company has not paid a dividend for several years, but that may be due to the fact that the company is over-capitalized. For at least five years prospectors have been able to carry on when the price of gold has been much lower than it is to-day, and I do not believe that this impost will compel them to discontinue their, operations. Apparently the Leader of the Opposition intends to press his motion to a division, but I feel sure that it will not be carried.
– Notwithstanding what has been said by the intelligentsia, the members of the Opposition understand clearly the object of the regulation which the Leader of the Opposition (Senator Collings) has moved to disallow. We realize that an excise duty has been imposed, and that this regulation provides the machinery by which it shall be collected; but the only way in which we can protest against the manner in which the Government has flouted the decision of the Senate is by moving for the disallowance of the regulation. We cannot expect very much from this Hitler-minded Government, which is endeavouring to control the country By regulations rather than by statute. The voting on the second reading^ of the Gold Tax Bill being equal, the bill under the Standing Orders was rejected.. At that time the Government was not sure of the course it proposed to follow, and an excise duty had not then been considered. After the defeat of the bill Senator Arthur, who was speaking on another measure, was asked by the Minister for the Interior (Senator Foll) to ask for leave to continue his remarks at a later hour. He did so, and the Minister then obtained leave to move that the Gold Tax
Bill be restored to the notice-paper. I believe that certain persons associated with the gold-mining industry had informed the Government that they preferred a tax on production rather than a tax on profits. During a suspension pf the sittings of this chamber an excise schedule imposing an excise duty on gold was tabled in the House of Representatives, and had the Government not been in such a hurry to get into recess and thus avoid the criticisms which were being levelled against it, the matter could have been dealt with during the following week.
– The honorable senator voted for the closure, so he cannot bring up that point.
– I am well aware of what I did on that occasion, and T am not ashamed of my action. We are opposed to legislation by regulation. No honorable senator opposite can deny that the Government imposed the excise duty on gold by regulation after the Senate had rejected the Gold Tax Bill, and after this chamber had gone into recess. Senator Allan MacDonald referred to the action of the Scullin Government in repeatedly restoring a regulation dealing with the employment of - waterside workers, in spite of the Senate’s repeated disallowance of it. I point out to the honorable senator that that regulation was made under the provisions of an Act of Parliament. It had a solid f oundation in. that respect, but the same cannot be said for this regulation.
– This regulation was issued under the National Security Act.
– In that case the validating measure which the Assistant Minister has forecast will not be necessary. Honorable senators opposite contend that the Scullin Government acted wrongly in repeating a regulation making a law which the Senate of the day had rejected. I submit, however, that the Opposition in the Senate at that time was antagonistic to that law because it was designed to benefit members of the Waterside Workers Federation, and to raise their standard of living. . In any ease, i’t seems strange that those honorable senators who complain of the action taken by the Scullin Government at that time are themselves prepared to sanction a similar course on this occasion. Senator Allan MacDonald is opposed to the motion. Obviously, the disallowance of this regulation would interfere with the interests of those people who secured his election to this Parliament. At the same time he is prepared to overlook the fact that it is inimical to the interests of the men who go outback prospecting for gold. The honorable senator is not interested in the claims of those men. In New South Wales, thanks to the Lang Government, an allowance of fi a week is paid to prospectors. This Government, apparently, wishes to grab from those men as much as it can of that amount. I am not concerned in the slightest degree about the interests of gold-mining . companies. That matter is irrelevant to the issue now before us, but it has been contended that the Government should tax the profits of such companies. An honorable senator informed us that one company had made a profit of £1,000,000 on which not one penny of tax had been levied. Such profits should be taxed. This Government, however, is prepared to tax the prospector who might win no more than 10 oz. of gold a year. If he produces 1 oz. of gold he must pay tax on his meagre output if the price of gold be above £9 an ounce, whereas a company -which makes a- profit of £1,000,000 is taxed on a production basis also. That is most unfair. Senator Allan MacDonald claimed that he alone is seeking to assist the prospector. If this Government is so anxious to assist the prospectors why did it not propose to exempt them from tie provisions of the Gold Tax Bill? Who can say that the bill validating the excise duty on gold will not be considered an urgent measure^ and, like the rest of this Government’s legislation, - be gagged through this chamber? We should have heard nothing of the Government’s intention to bring in an amending measure in order to exclude the prospectors from this tax had not the Opposition moved for the disallowance of this regulation. But .for our action the Government would have been prepared to sit pat on the basis of the Gold Tax Bill, in which no indication was given of any intention on the part of the. Government to consider the claims of the prospectors. I trust that Senator Johnston will vote for the motion. I regret that Senator Allan MacDonald is opposing it, because only last week in the King’s Hall he informed me that he was very anxious that this regulation should be disallowed. Apparently, something has happened in the meantime to account for the honorable senator’s change of front. I sincerely trust that a number of honorable senators opposite will support the motion.
– I support the motion for two important reasons : First, because it involves a vital democratic principle; and, secondly, because gold is a commodity which we need very urgently in a time of war. Tn this war Great Britain and the Empire are fighting for the preservation of democracy. When the Senate rejected the Gold Tax Bill it rejected the principle involved in the” regulation for the disallowance of which the Leader of the Opposition (Senator Collings) has now moved. The Assistant Minister is quite correct when he says that the regulation was issued under the provisions of an Act Of Parliament, but the point is that it was issued after a measure which involved the same principle had been rejected by the Senate. The Govern- * ment then took action under the National Security Act. Before I was elected to this chamber I was urged by people throughout Tasmanis to do my utmost to prevent government by regulation. A similar cry was raised by the people as ft whole in all of the States. I was not long here before I heard a very able speech by Senator’ Wilson in which he attacked the evil of legislation by regulation. On that occasion he severely criticized the Government for issuing a regulation prohibiting the export of iron ore from Australia, but his attitude today is at variance with his remarks then. Speaking of legislation by regulation he said, “ The effect is to whittle away the authority of this Parliament “. His speech is reported in Hansard of the 20th October, 1938, page 954.
The Government claims that there was no other method of extracting a tax from these companies.
– Nothing of the kind.
– The Minister said that they were making large profits, and Senator Cooper also referred to the progress that they had made. I am pleased to hear of their progress^ but I claim that it is only just that they should be taxed. The right way to proceed is to impose a tax that would apply to the companies, and not to the prospectors who cannot afford to bear the impost. It should be a tax that would not prevent the industry from making further progress* That could have been done a couple of months ago, instead of introducing the present, regulation in defiance of the wishes of the Senate. Reference has been made to companies that are making profits amounting to millions of pounds. If the Government knows of such companies, and is not taking action to see that they assist in paying for the war, it is falling down on its job. The wealthy companies could have been taxed on their profits: Gold is more essential to Australia at the present time than it ever was, but if the Government imposes a tax on the production of gold, the industry will be stifled* The greatly enhanced price of gold has encouraged prospectors to become more active than in the past, and there is every indication that shows which were not payable when the price was low may now prove to be a commercial success. In the last few years, the price of gold has increased to a marked degree, and a further considerable increase is possible in the years to come* Consequently many of the old mines that have been closed down may be reopened ; but, if the Government imposes a duty on the production of gold, the chances of these mines being reopened will disappear.
The main reason why production should not be restricted is that Australia needs gold more now than ever before. It requires hundreds of fighting planes and other defence equipment for the protection of the Commonwealth, and gold is required to pay for them. We should have 100 fighting bombers within the next month, and we may need another 500, but how are we to pay for them? We could buy anything we required if we had the necessary gold, and, therefore, it would be foolish to discourage the production of that commodity. If the Govern- ment submitted a proposal to tax the profits on gold, the Opposition would support the measure. I hope that the Government will not whittle away the democratic rights of the people by retaining a regulation imposing precisely the same tax as the Senate has already rejected.
.- I have listened carefully to the debate, and it has provided the greatest exhibition of shadow-sparring that I have ever witnessed. When this motion was submitted, the Leader of the Opposition (Senator Collings) and members of the Opposition generally said that, if the regulation were disallowed by the Senate, the taxation of gold would immediately cease; but all of their arguments have been directed to the point that the Senate should stand on its dignity and see that a proposal which has been rejected by it shall not be persisted in. I point out, however, that whatever be done with regard to the regulation will have no effect on the gold excise. The regulation which the Opposition now seeks to annul is merely a machinery measure for the protection of, not only the gold producers, but also other people, so that they may easily obtain payment for their gold. If the regulation were annulled it might cause temporary annoyance, but this would be experienced mostly by the prospector himself, who would probably have to go to a good deal of trouble to sell his gold. A cry has been raised about the poor prospector, of whom we heard when the price of gold was only £4 an oz. Senator Aylett ‘ remarked that gold is needed to enable us to pay for bombers, but who is to pay for the gold? The Government does not take the gold, in the first instance; it has to pay the producers for it. The argument has been advanced that the profits of the gold mines should be taxed, but everybody knows that the dividends paid represent simply a return of the capita] that has been invested. A gold mine isa wasting asset, and the profits cannot be ascertained until the value of the ore reserves is known. The annulment of the regulation would accomplish nothing.
– ‘It would be a protest against the Hitler-like methods of the Government.
– The honorable senator, in the course of his speech, cited certain legal authorities, but it is always wise for him to make sure that authorities cited are reliable. Most of the law books, and some of those to which the honorable senator referred to-day, are written by briefless barristers, who write them as “ pot-boilers “ until their briefs come in.
– Is the Chief Justice of England a briefless barrister?
– The honorable senator proceeded to quote Lord Hewart, but became lost in the maze of his own oratory, and then forgot to make the quotation. I do not know what the changed attitude of the Opposition amounts to, because Hansard shows that the Leader of the Opposition remarked that he would not oppose the Gold Tax Bill. He agreed that the money to be raised was necessary for’ the carrying on of the war, and he agreed also that the war had caused the increase of the price of gold. But the opportunity arose to embarrass the Government, and, despite the fact that the Opposition had promised to help the Government to win the war, there was a complete turn-over. Whether members of the Opposition scratched their backs in the process of accomplishing a somersault I do not know, but they are quite capable of doing it.
If this regulation were disallowed, the tax would continue. No objection is taken to the fact that a customs or excise duty becomes operative immediately it is introduced. The same procedure is followed in connexion with this excise on gold. The proposal will have to be debated by this chamber’ within six months ; failing that, the regulation must lapse unless it be renewed.
SenatorFraser. - What relief will that give to prospectors in Western Australia ?
– The honorable senator is trying to arouse sympathy for the prospectors in Western Australia. The fact is that the tremendous increase of the price of gold has put them in a much stronger position in recent years.
– The honorable senator himself very often raises a cry on behalf of the poor manufacturers.
– Senator Sheehan on many occasions in this chamber has declared that there are no poor manufacturers.
– The honorable senator wants high protection for manufacturers who work their employees long hours for low wages.
– The honorable senator is as inaccurate in that statement as he is on many other occasions. He knows that the wages paid by manufacturers are fixed- by tribunals over which the employers have no control. He also knows, or he should know, that wages in the manufacturing industry are higher, and that manufacturers are giving more employment than at any other period in Australia’s history. Knowing this, the honorable gentleman still indulges in cheap sneers about manufacturers who are providing good wages for Australian employees whom he is supposed to represent. In his speech this afternoon, the honorable gentleman drew largely upon his imagination. Usually that does not cause me concern, but I do object when he deliberately distorts the facts. The time of the Senate to-day has been occupied - I was about to say wasted - in the discussion of a motion, the carrying of which would not accomplish anything. It would not remove this tax from gold prospectors or any other section of the community. The tax would still be .collected. For this reason, I believe that the purpose of the motion was to embarrass the Government in this great crisis. Although the Leader of the Opposition in the House of Representatives (Mr. Curtin) declared that his party would give the strongest support to every measure introduced by the Government that was necessary to uphold the honour of Australia . and defend this country, in this chamber, there has been a strong attempt to-day to take away from the Government the sinews of war - the money that is so urgently needed to make effective the defence of Australia.
– in reply - The honorable senator who has resumed his seat (Senator Leckie) has been guilty, unwittingly, I believe, of a very serious misrepresentation of my leader in the House of Representatives. Mr. Curtin has never said, nor has any one else said on behalf of this party, that we shall support every measure and everything which this Government does or thinks is necessary for the satisfactory prosecution of the war.
– I did not say that.
– The honorable gentleman said in effect “ everything that this Government would do “, and I feel sure that Hansard will bear me out. Mr. Curtin has never declared that the Labour Opposition would support everything which this “ Government would do.
I am very disappointed with the quality of the debate upon my very simple motion seeking the disallowance of Statutory Rule No. 100. It will be “ remembered that I confined my remarks to one phase and one phase only of the question. I said that if Government supporters voted for the motion to disallow the regulation they would be voting to uphold the rights of the Senate as an integral part of the Commonwealth Parliament, which in its turn is an integral part of the British Commonwealth of Nations; but if they voted against it they would declare, in effect, that the Senate had no rights, or at least that they were not concerned as to how much of its rights were taken away.
– That is obviously incorrect. The fact that we shall vote upon it shows that we are concerned.
– I know all about that. I wish to get credit for the fact that I did not introduce any of those side issues which have been the subject of the debate from the time when I resumed my seat until now. Not one speaker from the Government side debated the issue fairly. “Why did I take that precaution to make the issue as simple as possible?
– Because of the honorable senator’s speech in Hansard.
– I took the precaution to find out whether, if I rose to a point of order when the first attempt was made to introduce a side issue, the point would be upheld, and I realized that if it were upheld the scope of the debate would be limited. I emphasized one point only - that on the night of the 20th Septem ber, the Senate refused to pass a bill which was then before it, having for its object the imposition of a tax on gold. There has been a great deal of by-play because I said that the bill was defeated. Honorable senators opposite have repeatedly declared that it was not defeated, but was merely rejected. Only a few minutes ago the same asinine observation was again made by a Government supporter. The Oxford dictionary has this to say about the- word “reject” -
To put aside, as not to be accepted, practiced, believed, chosen, used; not complied with.
That is what we say should happen to the bill which the Senate rejected. The same authority says about the word “ defeat “?-
To worst in battle or other contest.
This Government was, indeed, “worsted in battle or other Contest” on the night of the 20th September, but by the 23rd September it had found a way out of its difficulty. My colleague, Senator Amour, put the position very effectively. He told us this evening that the rights of members of this chamber, and the civilian rights of the people, were being whittled away by the Executive in the prosecution of a war to uphold democratic principles. We on this side are fighting against the action of the Government in thus attempting ‘to whittle away out rights, and we ‘are emphasizing the danger that threatens this democratic state. It makes me sorry to hear people talk about what would happen if these regulations were disallowed. What I said about the Scullin Government is confirmation of the attitude which I have adopted ‘in connexion with this regulation, that I am asking the Senate to disallow. In 1931, the Senate twelve times disallowed regulations which were promulgatedby the Scullin Government. That being so, what is wrong with my asking the Senate now to vote for the disallowance of this regulation? Government supporters apparently think that the Senate was right, when it disallowed regulations made by the Scullin Government. What is wrong with my action now in asking for the disallowance of this regulation?
– Nobody objects to the honorable senator asking for the disallowance.
– The Assistant Minister has been objecting.
– No; but we do not follow the honorable gentleman’s advice-.
– I see. The Assistant Minister does not object to my motion, but his disapproval of my purpose is so definite that he will not supportit and will also induce his supporters to vote against it. That confirms what I said in my opening address. The Assistant Minister and his friends are not interested in safeguarding the democratic rights of the Senate and the principle of parliamentary government. They have not the pluck to stand up for their rights, which, as I have shown and they know, are being whittled away. We have been told that a validating bill will have to be introduced to safeguard the revenue, and that we shall have an opportunity to say all that we may wish to say when that measure is under discussion. With all respect, I say to the honorable gentleman who made that statement, that that is not in accordance with the facts. The Assistant Minister should know that a validating bill need not be introduced. The Government can adjourn Parliament instead of proroguing it.
– An excise or customs duty must be dealt with within six months of its introduction.
– Nothing of the kind. The Government may adjourn Parliament and need not introduce a Validating bill.
SenatorFoll.- An amendment of the law makes necessary the introduction of a validating measure.
SenatorCOLLINGS.- What is the Government doing now? We metin September and Were soon sent aboutour business. The doors of Parliament were closed in order that Ministers could geton with their totalitarian methodsof carrying on the government of this country. The introduction of the excise on gold and the promulgation of this regulation was a “snide “ processto circumvent the decision of the Senate.
SenatorWilson.-Did not the Leader of the Opposition in September -apply the gag?
SenatorCollings.- That is a matter to which I propose to -refer. I have never known any anti-Labour Government in this Parliament that objected to the gag in order to get its legislation passed at the end of a session. In one session the Senate was expected to deal with 29 bills on the last sitting day. In the last September period there were, I think, nineteen bills presented on the last day, and the only available course was to apply the gag, which is always objectionable to the Opposition. This process has been resorted to in every session. of this Parliament since I became a member of this chamber, and I have no doubt that the heirs and assigns of this Government will continue that process.
– Order ! The honorable senator is getting away from the subject-matter of the motion.
– I am replying to the debate. You, sir, did not prevent other honorable senators from referring to these subjects. I have not touched upon one matter that other honorable senators have not raised. The question has just now been raised by the Assistant Minister for Commerce, who should know better. The only time that the Government complained about the gag was when the Opposition was -strong enough, with the assistance of some of the more liberalminded members on the Other side, to use the party machine. Then ministerialists cried “Shame!” Senator Allan MacDonald said that I had announced my intention to support the Government’s Gold Tax Bill in September last. I did not say anything of the kind.
– I read from the Hansard1 a report of the honorable gentleman’s speech.
– The honorable senator should have read the whole of it. I said that the Opposition would not oppose the bill. That statement was made at the conclusion of a debate in the course of which every honorable senator on this side had spoken against the bill. I think every honorable senator knew that we would not call for a division on it. We had criticized it and said what we thought about it, and were leaving to the Government the responsibility of passing the measure.
– Shadow sparring!
– “When the Government’s own supporters refused to give the. necessary support to carry an important taxation measure, the Opposition had to decide what it would do. Senator Leckie, with his usual incapacity to understand the facts, said that I received certain instructions from outside the Parliament. Everything that I did in connexion with that bill was done with the unanimous approval of my party. Every member of the Opposition was in the chamber when the division bells rang. Do honorable senators opposite suppose that we were so politically foolish as to enable them to get away with a bill of which we did not approve, if we could prevent its passage ? An attempt has been made to show that we favoured monopolies, and wanted the wealthy mining companies to be exempt from taxes. I know what happened. On the night of the debate I. left the chamber while Senator Arthur was on his feet speaking on another subject. The Minister for the Interior (Senator Foll) asked Senator Arthur to oblige him by asking for leave to continue his remarks later. Senator Arthur did so, and then Senator Foll gave notice of motion for the recommittal of the bill.
– I did so, by leave.
– It does not matter how the honorable senator achieved his purpose. He got leave to recommit the bill, but he had too much political sense to go ahead. There the bill stayed, and there it is to-day. The Minister knew that he had no chance to alter the decision at that time. Since then, however, something has happened. I do not object to an honorable senator changing his mind.
– He changed fourteen minds.
– Every one of us knows what happened. The Opposition has its secret service, as has the Government. We know all about Senator Allan MacDonald’s recent visit to his electorate. We know how he peregrinated among the mining companies there, and endeavoured to explain that he had done the best thing possible for them. Unfortunately for the honorable senator, the representatives of the mining companies were not in agreement with him. They told him that he ought not to -nave done anything of the kind: because if he were not careful, the Government would impose a tax on profits, which they did not want. They preferred that the tax should be spread over a wider field, which included numbers of men who should not be called upon to pay it. They also agreed that a 50 per cent, tax was better than one of 75 per cent. They believed that if they got away with the lower impost, they would do very well. Until recently, mining companies have not paid any income tax, State or Federal. They do not pay federal income tax now.
– That is why this tax was imposed.
– For a number of years the Government knew that preparation for the defence of Australia was necessary, yet it has exempted the mining companies from payment of federal income tax. Moreover, with the exception of one or two States, these companies were exempt from State taxation also. While the Government was treating the wealthy mining companies so generously, it imposed a flour tax on the poorer sections of the community because the wheat-growers demanded the justice to which they were entitled. I do not suppose that Senator Johnston or Senator Allan MacDonald would vote with us, but I say to the Government that if it will tax every penny of the amount by which the price of gold exceeds £9 an oz., the Opposition will not object, except on the ground that the incidence of the tax would not be acceptable. If the Government will tax profits, we shall vote to take, all of the’ profits due to wartime inflation. We are prepared to take that stand in relation to all wartime profits made by, not only goldmining companies, but other companies also. What is wrong with a graduated income tax on the profits of mining companies? What is wrong with putting a tax on all war profits? Why does not the Government impose a wartime excess profits tax?
– Senator Leckie would not agree.
– The Government has exempted from income tax many large land owners, in respect of whom the exemptions amounted to millions of pounds a year; but now it says that, because the Opposition objects to the treatment meted out to gold prospectors and to companies which are working lowgrade ore deposits that could not have been worked but for the enhanced price of gold-
– Many of them were, working before the price of gold rose.
– Not on lowgrade propositions. Before that increase the State governments could not afford to assist prospectors, because the low price of any gold that they won would not have enabled them to repay the amounts advanced. The Premier of Queensland, Mr. Forgan Smith, was here when I made my second-reading speech on the Gold Tax Bill. When I had finished my speech I asked him what he thought of it, and he replied that I was on the right track. He went on to say that his government was subsidizing hundreds of prospectors, but that the bill then before the Senate, if carried, would force them to leave the fields.
– Is that why the honorable senator opposed the bill?
– I ask the Assistant Minister to be fair, if he can.
– The Leader of the Opposition himself should try to be fair. I remind him that in my State slime dumps have been treated for five and a half years.
– I know that, and I made that point clear. If I were to be fair to Senator Allan MacDonald, I imagine that he would leave the chamber.
– No, I should stay here.
– I know what happened on the night that the bill was defeated. I have already told the Senate what Senator Foll did. Since then attempts have been made to weaken the loyalty of Senators Johnston and Allan MacDonald to the vote that they cast on that occasion. I know that it was even suggested that there might be a double dissolution as the result of that vote. After that, an attempt was made to influence some of my colleagues. It was suggested that one or two of them might be sent on a fishing trip but I am proud that the sixteen of us are as solid to-night as we were on the 20th September. That is more than the Government can say of its supporters. One honorable senator opposite, who voted with us on that occasion, has weakened, and performed what Senator Brown facetiously described as a “ back somersault “. I hope that it will not be forgotten that action was taken, to bring in this regulation under the National Security Act; nor should it be forgotten that section 18 of that act gives power to the Government to do anything that it likes. I hope also that it will not be forgotten that there is no need to introduce a validating bill, because that act gives to the Government power to do anything that it wishes to do. It has only to take advantage of that act, as advantage was taken of the War Precautions Act during the last war. The Government can, if it likes, get three times the amount of money that it now proposes to take; and, if it does so, the Opposition will support it, although it will not in any circumstances support proposals to tax prices. It will support measures to impose taxes on profits. That has been the attitude of the Labour party all along.
Senator Cooper said that the money to bc raised by the means proposed by the Government was necessary to carry on the war. I have already said something on that subject, but I remind the Senate ‘that the Opposition has expressed its determination, and will stick to it, not to quarrel with the Government about the amount that it says it requires foi the defence of this country. We have said repeatedly that the Government is the Government, much as we may regret it. It is the responsibility of the Government, as it would he our responsibility if we were the Government, to take whatever -means it considers necessary for the safety of the Commonwealth.
– -Does the honorable senator regret that his party- is not on the Government bench?
– Of course I do. I greatly desire to see the honorable senator ‘ and his colleagues over here, while, we sit on the other side of the chamber. That is not because of what we should get out of office, but because the workers of this country are being crucified so long as the present -Government occupies the treasury bench.
– And the wheatgrowers also.
– Honorable senators know what happened to-day in the House of Representatives. The Government and its supporters “ squibbed “ on the wheat issue. The Government will sham fight until real danger has to be faced, and then, like Senator Allan MacDonald, it waves the white flag.
– The great Kalgoorlie twist 1
– Senator Allan MacDonald received his instructions from his party organization and also the Chamber of Mines.
Senator Cooper does not often speak in this chamber, and when he does he is usually kind. He never opens a wound and rubs in salt, but it was not worthy of him to suggest that hy our action today we on this side were trying to prevent the Government from getting the’ funds necessary to carry on the war. What have I invited the Senate to do ? I have invited it to declare that under this regulation, framed as it has been under a measure which was gagged through this chamber and through the -House of Representatives, the Government has filched the rights which we as representatives of the people should possess. I ask Senator Allan MacDonald what right he had to tell the Senate this afternoon that certain things were to be done? In the first -place he must have been breaking a confidence; I feel positive of that.
– I take strong exception to the statement of the Leader of the Opposition that I have been guilty of breaking a confidence. Those words are most offensive to me and I ask that they be withdrawn unconditionally.
– I withdraw them without reservation. I shall not say that he -has broken a confidence; but I ask him whether he made that statement on the authority of the Acting Treasurer (Mr. Spender), who, unfortunately for him, arrived in the chamber just as he made it. The honorable senator informed the Senate that the Government had decided to introduce another measure in which justice would be done to prospector and to those engaged in - working low-grade shows. If he made that statement on the authority Of the Government, it is apparent that Ministers had awakened to their responsibilities after the Senate had taken certain action. They discovered that the proposal did not meet with the approval of their friends, and they then decided to bring it forward in another form. The Government proposes to introduce another bill, not because of altruistic motives, and if it should impose a tax on profits instead of on production the Opposition will support it. If such a basis he adopted the only complaint that the Opposition will have to make will he that the tax is not high enough. I am not sooptimistic as to believe that I have converted a sufficient number of honorable senators opposite to enable this motion to be carried ; but I ask them to consider their position: If the motion be defeated honorable senators on the Government side of the chamber need - never again ask honorable senators opposite to assist them to protect the rights and privileges of this chamber. They know that the Senate does not receive fair treatment. We are -called together whenever the Government pleases and are sent away for indefinite periods when there is important public business to transact. It would appear, that we shall have to wait until a Labour government is in power before the Senate can be rehabilitated, not only in its own interests, but also in the interests of -the people generally.
Question put-
That the motion be agreed to.
The Senate divided. (ThePresident-SenatortheHon. J. B. Hayes.)
AYES: 15
NOES: 17
Majority . . 2
AYES
NOES
Question so resolved in the negative.
page 1442
Motion (by Senator McLeay) agreed to-
That the Senate, at its rising, adjourn till to-morrow at 11 a.m.
page 1442
The following papers were pre sented : -
Dried Fruits Export Control Act - Fifteenth Annual Report of the Commonwealth Dried Fruits Control Boardfor the year 1938-39, together with Statement by the Minister for Commerce regarding the operation of the Act,
Regulations amended, &c- Statutory Rules 1939, No. 148- No. 150- No. 152.
Public Health Ordinance-Regulations (Dairy) amended.
Seventh Annual Report and Balance-sheet of the Australian Broadcasting Commission, for the year 1938-39.
Senate adjourned at 10.55 p.m.
Cite as: Australia, Senate, Debates, 22 November 1939, viewed 22 October 2017, <http://historichansard.net/senate/1939/19391122_senate_15_162/>.