Senate
26 November 1941

16th Parliament · 1st Session



Thepresident (Senator the Hon. J. Cunningham) took the chair at 3 p.m., and read prayers.

page 859

ASSENTTO BILLS

Assent to the following bills re ported -

Sales Tax (Exemptions and Classifications) Bill 1041.

Sales Tax Bills (Nos.1 to9) 1941.

Customs Tariff Validation. Bill (No.2) 1941.

Customs Tariff (Exchange Adjustments) Validation Bill (No. 2) 1941.

Customs Tariff (Special War Duty) Validation Bill(No. 2) 1941.

Customs Tariff (Canadian Preference): Validation Bill (No. 2) 1941.

Customs Tariff (New Zealand Preference) Validation Bill (No. 2) 1941.

Excise Tariff Validation Bill 1941.

Invalid and Old-age Pensions Bill 1941.

page 859

JOINT COMMITTEE ON RURAL INDUSTRIES

Senator HERBERT HAYS brought up the second progress report of the Joint Committee on Rural Industries.

Ordered to be printed..

page 859

SENATORS’ TRAVELLING. ACCOMMODATION

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

-I direct the attention of the Minister for the Interior to the fact that a great deal of difficulty has been experienced by honorable senators in the last two or three months in booking of sleeping berths on interstate railways. We realize that the railways are taxed to their utmost capacity, but we consider that we do not receive the same consideration as that given to private persons. In many instances we have applied f or berths a week, ten days and even a fortnight ahead,and have been told that accommodation was not available, but that we should be informed later regarding the matter. We have often found that, even after long waitingperiods, berths have not been obtainable. I think that it will be agreed that when a senator applies for a berth at least a week in advance,his application should be successful.

Senator KEANE:
Minister for Trade and Customs · VICTORIA · ALP

– I shall have the remarks of the honorable senator brought to the notice of the Minister for the Interior, who is temporarily absent and ask that an early replybe furnished.

Senator ALLAN MacDONALD:
WESTERN AUSTRALIA

– In view of the question asked by Senator J ames McLachlan regarding the difficulty experienced by honorable senators in obtaining berths on the interstate railways, will the Minister in charge of navigation make inquiries as to the vacant passenger accommodation on the Governmentcontrolled interstate vessels plying between the eastern ports of Australia and Western Australia, with a view to ascertaining whether it would be possible to use that accommodation for the transport of many departmental officials and others who now travel on the trans- Australian railway? Those passengers are known in railroad circles as “ dead-heads “, and most of them are not in a hurry when required to travel on business. That would reduce the present urgent demand for berths on the railways and make use of the space available on interstate steamers that are now plying from port to port with an extremely small number of passengers.

Senator FRASER:
Minister for External Territories · WESTERN AUSTRALIA · ALP

– I shall endeavour to get the information desired by the honorable senator, but 1 remind him that departmental officers often have important duties to perforin, and are not all “ dead-heads”.

page 860

QUESTION

SEMI-OFFICIAL POSTMASTERS

Permanent Appointment of Returned Soldiers

Senator BRAND:
VICTORIA

– Has the PostmasterGeneral any information to convey to the Senate regarding a suggestion that returned soldiers who have occupied positions as semi-official postmasters for nearly twenty years should have their appointments made official and permanent?

Senator ASHLEY:
Minister for Information · NEW SOUTH WALES · ALP

– The honorable senator indicated to me this morning that he intended to ask that question. I have been supplied with the following information : -

There are seventeen returned soldiers occupying positions as semi-official postmasters in the Commonwealth and the question as to whether they come within the provisions of section 84 (9) (c) of the Public Service Act is one for determination by the Public Service Board, to which reference is being made.

Inquiries are being made into the matter, but are not yet complete.

page 860

JOINT COMMITTEE ON BROADCASTING

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

That the time for bringing up the report of the Joint Committee on Wireless Broadcasting, appointed on the 3rd July, 1941, be extended for a further three months from the 3rd January, 1942.

page 860

QUESTION

CONSCRIPTION

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

asked the Minister for Information, upon notice -

  1. Was the Honorable N. Makin, Minister for the Navy and Minister for Munitions, truthfully reported in the press in the statement that Diggers of the Australian Imperial Force in the last war pronounced definitely against the adoption of conscription?
  2. If so, will the Minister for Information supply his ministerial colleague with the result of the Diggers’ vote in the referendums taken in 1916 and 1917?
Senator ASHLEY:
ALP

– The answer to the honorable senator’s questions is as follows : - 1 and 2. The Minister for the Navy has made a public correction of the statement.

page 860

QUESTION

AUSTRALIAN DEFENCE FORCES

Christmas Leave

Senator AYLETT:
through Senator Darcey

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

  1. Hasany arrangement been made for travelling facilities for members of the forces visiting their homes at King Island and Flinders Island on Christmas leave?
  2. If not, will the Minister, owing to the heavy bookings, make similar arrangements with Australian National Airways as he has already made with Tasmanian Steamship Proprietary Limited, to ensure to members of the forces the same opportunity of visiting their homes when on leave at Christmas?
Senator KEANE:
ALP

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

Arrangements are being made to ensure that members of the Military Forces will be able to visit their homes in King or Flinders Islands during their period of Christmas leave.

page 860

QUESTION

DEHYDRATION OF MEAT

Senator GIBSON:
VICTORIA

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

Will the Minister furnish the Senate with particulars of the dehydration of meat that is being carried out in Queensland and the prospects of success of this process?

Senator FRASER:
ALP

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

Experiments which have been carried out in both Sydney and Brisbane have been directed to the dehydration of mutton. Sample shipments have been made to the British Ministry of Food, and advice is awaited regarding the outturn. Officers of the Council for Scientific and Industrial Research are co-operating with representatives of the industry in this matter.

page 861

QUESTION

CENTRAL WOOL COMMITTEE

Senator E B JOHNSTON:
through Senator Allan MacDonald

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

  1. Is it the intention of the Government to increase the growers’ representation on the Central Wool Committee?
  2. If so, when?
Senator FRASER:
ALP

– The Minister for Commercehas supplied the following answer : -

  1. and 2. The matter is at present receiving consideration.

page 861

QUESTION

EXEMPTED OCC U P ATIONS

Senator FOLL:
QUEENSLAND

asked the Minister representing the Minister for Defence Co-ordination, upon notice -

  1. Is it the intention of the Government to immediately revise the list of exempted occupations in order to make available additional men for recruits for the Australian Imperial Force?
  2. Is it the intention to utilize womanpower wherever possible in order to free men tor the fighting services?
Senator KEANE:
ALP

– The Minister for Defence Co-ordination has supplied the following answers: -

  1. Industries and occupations covered by the list of reserved occupationsare under constant review by the Man-power Committee and the Man-power Priorities Board.
  2. The answer falls into two divisions -(a) Civil industry - Yes, if no alternative male labour is available within the limits of certain occupations and subject to certain safeguards. (b) The Services, where the circumstances may vary - The Navy: If no alternative male labour supply is available, the matter will receive the consideration of the Government. The Army: Approvalhas been given for the formation of an Australian Women’s Army Service, the members of which are to perforin such work in connexion with the Army as can suitably be carried out by women with a view to releasing men from the rearward administrative services. It is not, however, the policy to dispense with men at present enlisted, but to transfer them for more active work with the forward formations and fighting units. The Air Force: Yes, if no alternative male labour is available within the limits of certain occupations and subject to certain conditions. In the case of the Air Force, members of the Women’s Auxiliary Australian Air Force will he employed on such duties as those of wireless operators, teleprinter operators, tailoresses, nursing orderlies, clerks stores, clerks general, clerks pay, telephone operators and the like.

page 861

QUESTION

WHEAT PRICES

Senator E. B. JOHNSTON (through

What price per bushel will be paid as the first advance on the coming wheat harvest?

On what date will the first advance be available?

Senator FRASER:
ALP

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

The matter has not yet been determined, but it is expected that an announcement of the Government’s intention will be made at an early date.

page 861

AUSTRALIAN DEFENCES

Senator KEANE:
ALP

– On the 20th

November Senator Brand asked whether a copy of Major-General Sir Iven Mackay’s report on the Australian Defence Forces would be made available to honorable senators. The Minister for the Army advises that it will be appreciated that security considerations preclude the publication of the whole of the report of the Commander-in-Chief, Home Forces.

page 861

MILITARY TRAINING

Statement by Minister for the Army.

Senator KEANE:
ALP

– On the 21st November Senator Brand asked if the Minister for the Army had been correctly reported in the press which stated that the Minister had remarked that a raw recruit could be made into a soldier in a week. I undertook to discuss the matter with my colleague, and am advised that drill as such will, in the future, play a very minor part in the training of the Australian soldier. What was implied in the remark by the Minister for the Army was that sufficient drill will be taught in a week to make a trainee efficient to carry out his sterner training for battle, and not that the reduction of the period allotted to drill would make an efficient soldier in a week.

page 861

INCOME TAX ASSESSMENT BILL 1941

Bill received from the House of Representatives.

Standing and Sessional orders suspended.

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

Secondreading.

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– I move -

That the bill be now read a second time.

This bill is designed to place theburden of income tax evenly on the shoulders of the whole community, chiefly by closing avenues for evasion of tax and by eliminating concessions that are considered, tobe not justified under war-time conditions. The most important of the amendments effected by the bill is designed to discontinue the exemption hitherto allowed to resident shareholders on. dividends paid by companies out of exempt ex-Australian profits. Last year, the Commonwealth abolished the rebate of tax previously allowed on dividends included in the taxable incomes of individual shareholders’. By that action it departed from the principle which operated previously that the profits of a company are the profits of its shareholders. Now that recognition has been give to the principle that the profits of a company and the dividends paid out of those profit’s are separate items for purposes of taxation, there is no logical reason for treating income which is exempt in the hands of the company as retaining its exempt character when distributed by way of dividends to the shareholders. The exemption of dividend’s creates anomalies as between shareholders receiving equal amounts of dividends, inasmuch as one shareholder is obliged to pay tax on the full amount of his dividend whilst another shareholder is either free from tax on his dividend or is liable to tax ononly a part of it. The abolition of the exemption willremove this discrimination. As a result, dividends paid by companies out of their exempt ex-Australian profit’s will now be included in the taxable field, and the further exemption allowed to shareholders in respect of dividends paid by companies out of profits arising from the sale or compulsory resumption for public purposes of non-trading assets of the company will also be discontinued. It is not proposed that the removal of the exemption shall have any retrospective application ; the new law will apply only in respect of dividends declared after the 29th October, the date on which the Treasurer (Mr. Chifley) delivered his budget speech and’ announced the Government’s proposal to discontinue the exemption.

Another important feature of the bill is the repeal of section45 of the principal act. That section relates to Commonwealth loan interest included in dividends distributed to shareholders. To the degree that dividends are paid out of Commonwealth loan interest the dividends are taxed to the shareholders at the rate of tax applied in 1930-31. The origin of section 45 may be traced to the agreement made in 1931 between the Commonwealth and the bondholders stating the terms on which bonds were to be converted. Included in that agreement was a provision that interest on the converted securities should not carry a greater rate of tax than that applying for the financial year 1930-31. That agreement did not, however, extend to dividends paid out of Commonwealth loan interest. In the following year the then Government introduced into the law the provisions which it is now proposed to repeal. The incorporation of section 45 in the law was justified on the ground that it was the logical extension of. the undertaking, given to the bondholders when they converted their loans. It was then contended by the Government that if section 45 were not enacted the agreement with the bondholders would be partly nullified. This Government does not subscribe to that view. The undertaking given to the bondholders applied to the interest on the loans, and in the view of this Government there was no justification at all for any extension of the concessional rate to dividend’s which section. 45 authorizes. The tax imposed on interest received by companies from these converted bonds does not exceed1s. 4d. in the £1, which was the rate applied to companies for the financial year 1930-31. Accordingly, the company, as the recipient of the interest, has in the past received, and will continue to receive, the advantage of the difference between the 1930-31 rate and the ordinary company rate as well as freedom from super tax and the undistributed profits tax of ls. and 2s. in the £1 respectively. Whatever siew any previous government may have had in regard to this matter, the .present Government is satisfied that there was no justification for the introduction of section 43 into the law, and it now proposes that .that provision be repealed. I may add that .the view taken by this Govern.ment coincides with the view taken -by the Royal .Commission on Taxation, which in 1932-34 conducted an investigation and recommended the repeal of the section.

The bill also contains a special provision to apply -where income-producing assets .are transferred by a taxpayer to his wife. In -view of the heavy incidence -of war-time taxation, it is , necessary to provide :a .safeguard :against the possibility of .a taxpayer .dividing his income producing assets between his wife and .himself, with the object -of avoiding taxation. This provision will .ensure that, where such action has ‘been taken, the same amount of tax will ,be payable on tlie income from the gift or the transfer-red property as would have been payable had the husband retained the .gift .or property. As an instance of the working -of this provision, if ;a taxpayer transferred to his wife property from which a net income of £600 was derived and, in addition, the taxpayer himself derived .a taxable income o’f £1,400, tax >will .bc pay-able by the husband on £1,400 and by the wife on £600, at the rate -applicable to ;a taxable income of £2,000. If, -however, the wife derives income from sources ether than the property transferred to liar by her husband, she will be .assessed on that income at the rate applicable thereto. -Using the example cited previously;, and assuming that the wife derived -a net income of £400 from sources other than the property transferred to her by her .husband, she would thus be .taxed on that amount .at “the rate appropriate to £400. This tax would, .of course, ;be in addition to the tax on the £600 derived by her from the transferred property. It is not proposed that this new la.w -should have retrospective .application.; it will apply only in respect of gifts and- transfers of property without fully adequate .consideration made subsequent to the 29 th -October last. The Government does not desire that this provision should .apply where a taxpayer, without .thought of avoiding ‘taxation 1-ia-bility, makes necessary provision for his wife’s future security. To meet such a position, it is proposed that the amendment shall not ;apply where the wife’s taxable income does not exceed £200 irrespective of the sources of the derivation of that income. It is likely that in some instances the transferred property affected by this proposal will consist of assets o’f a business, in the conduct of which the wife ns actively engaged. In cases of that nature, the Commissioner will -determine the proper value of the services rendered ‘by the wife in the conduct of the business, and when ascertaining the net income from the transferred property for the purpose of applying the provision, will allow a deduction for such services. As war-time needs have prompted this proposal, it is provided that this provision shall cease to ‘be operative when the National Security Act is repealed.

It is proposed to -discontinue the concessional .deduction for children in respect of whom .the child .endowment benefit is payable. This amendment implements the proposal which was made clear when the child endowment scheme was introduced. P,art of the revenue -to finance the scheme was to he .obtained from additional collections of income tax arising from the disallowance of the concessional deduction for children in respect of whom child endowment was payable. The amendment will not, however, disallow the .deduction in respect of children who reached the age of sixteen years ‘between the 1st July, 1940, and thc .30.th June, 1941 -, in other words, children in .respect of whom child endowment is not payable. As child endowment will not be payable for a full twelve months in respect of a child attaining the age .of sixteen spears during the period from the 1st July, 1941, to the -30th June, 1942, it is recognized that there is an .equitable claim -for the .allowance of some deduction for such a child. The amendment therefore -provides for the allowance of a proportionate part of the deduction of £50, according .to the length of time .during 1941-42 that the endowment will not be payable in respect of such children. For example, in respect of a child reaching sixteen on the 30th September, 19.41, the parent will receive three-quarters of .the -£50 allowance, whilst in respect of a child who will become sixteen on the 31st March, 1942, the allowance will be one-quarter of the £50 deduction. This concession will be applicable in assessments for this year only. It is not intended that it be continued beyond this year.

Under the bill, the deduction of amounts paid as calls to mining companies in arriving at taxable income will be discontinued. Instead, it is proposed to allow a rebate of tax calculated on the amount of the calls at one-third of the rate of tax payable on the taxpayer’s taxable income. The tax concession as now proposed is designed to allow substantially the same tax benefit as was enjoyed in pre-war years.

The measure also provides that, where a trust has been created for children and the children are minors and unmarried, the trustee will bc required to pay the additional tax that the settlor would have been liable to pay on the settlement income if he had retained the settled property. By creating trusts and settlements of this nature, the settlor avoids liability to tax on income which is applied in meeting what is really his responsibility for the maintenance of his children. This has a detrimental effect on revenue which it is proposed to remedy.

The bill also makes provision for the removal of the exemption of income derived by a deceased person in his lifetime from, the period commencing on the 1st July up to the date of his death, if the estate is liable to Commonwealth Estate Duty. The existing exemption is based on the argument that the income of the period immediately preceding death can be presumed to have been included in the value of the estate on which estate duty will be paid, and the exemption is necessary to avoid double taxation. This argument, however, overlooks the fact that all of the assets of a deceased person at his death represent, in the main, accumulations of incomes derived by him during his lifetime, on which he has paid income tax. From this point of view it is considered that no justification exists for making any distinction in respect of the income derived in the period immediately prior to his death. A further objection to the continuance of this exemption is that it confers unequal advantages in different cases. The estate of a person who dies towards the close of a financial year obtains a greater advantage than the estate of a person whose death occurred soon after the beginning of such a year. Another feature of the withdrawal of the exemption is that it is a further step towards the goal of uniformity in State and Commonwealth taxation laws.

It is also proposed to bring within the assessable income field of a deceased person which had accrued due to him prior to his death, but which is received by his personal representative. The cases principally affected by this provision will be those of professional men such as doctors, solicitors, &c, as well as businesses conducted by individuals for the purpose of effecting sub-divisional sales of land on the instalment principle and persons engaged in selling goods on the hire-purchase system. As these are receipts in the nature of income and would have been so assessed if the deceased person had not died, no reason exists why his personal representative after death should not be taxed thereon.

It is also proposed to repeal section 160 qf the principal act which provides for the allowance in certain cases of a rebate of tax to an individual carrying on business. The rebate is the excess of the individual’s rate of tax over the company rate on 15 per cent, of his income from the business. Section 160 was designed to give to individuals a concession similar to that formerly allowed to a private company which permitted the company to retain onethird of its taxable income free from liability for the additional tax on undistributed income. This concession to private companies was withdrawn last year, and no justification remains for the continued allowance of the rebate to individuals.

The bill also provides for an abatement of tax in cases in which the combined Commonwealth and State taxes exceeds 18s. in the £1. The Government’s scale of income tax rates has been based on a maximum weight of combined Commonwealth and State taxes of 18s. in the £1. It is realized, however, that cases may arise in which the combined weight of the two taxes will exceed this maximum rate. This provision has accordingly been made in order to give appropriate relief in these cases. The relief which the Commonwealth will give to the taxpayers concerned is the proportion of the excess rate over 18s. in the £1 which the Commonwealth weight of tax bears to the weight of the combined Commonwealth and State taxes. For instance, if the combined weight of tax is, say, 21s. in the £1 consisting of 14s. Commonwealth tax and 7s. State tax, the Commonwealth will give relief to the extent of 2s. in the £1. It then rests with the States to abate the remaining1s. The proposed rebate will apply to companies as well as to individuals.

It is also proposed to amend the provisions relating to the assessability of the pay and allowances of members of the forces with the object of removing certain anomalies which exist under the present provisions of the law.

The matters which I have mentioned are the more important features of the bill. Points upon which honorable senators may desire information will be explained during the committee stages of the measure. I commend the bill to honorable senators.

Debate (on motion by Senator McLeay) adjourned.

page 865

QUESTION

ESTIMATES AND BUDGET PAPERS 1941-42 (REVISED)

Debate resumed from the 25th November (vide page 787), on motion by Senator Keane -

That the following papers be printed : - “Estimates of Receipts and Expenditure (Revised) and Estimates of Expenditure for Additions, New Works, Buildings, &c. (Revised), for the year ending the 30th June, 1942” and “Budget 1941-42 (Revised) Papers presented by the Honorable J. B. Chifley, M.P., in connexion with the revision of the Budget 1941-42.”

Senator CLOTHIER:
Western Australia

– Yesterday when I asked leave to continue my remarks I was about to deal with the position of our wool-growers. Last May when I asked a question in this chamber regarding the price of wool I was informed that either party to the existing agreement between the Commonwealth and the

British Government may seek a review of the agreement in May of each year. The existing price does not give a fair return to the growers. I have received correspondence from growers in every part of the Commonwealth pointing out that the minimum economic price should be 15½d. per lb. I hope that when the present contract is reviewed in May our representatives will endeavour to obtain that price for our growers. Whilst our wool-growers have put up with the present price for a long period, I have no doubt that the gentlemen in Bradford who are reaping the bulk of the profit from the sale of our wool are in exceptionally comfortable circumstances.

Senator Allan MacDonald:

– They are having a thin time.

Senator CLOTHIER:

– They are making a “good thing” out of our wool. When the existing contract is reviewed I hope that a minimum price of 15½d. per lb. will be secured. That price was paid during the last war and was based on the cost of production, and no good reason exists Why that method should not be followed on this occasion.

Senator Sampson:

– What prices are our growers receiving now?

Senator CLOTHIER:

– Prices range from 7½d. to10½d. per lb., according to quality. The price realized by the British Australian Wool Realization Association in 1916 averaged £22 10s. a bale, whereas under the present scheme the average price is £17 15s. a bale. In the meantime, our costs of production have increased substantially. On this subject I quote the following press extract: -

Increases of costs since the present war began are important in a consideration of this matter.

The increase of retail prices from September, 1939, to September, 1941, was 10.2 per cent. The index of wholesale prices increased during the same period by 23 per cent.; the imports section by 42 percent., and the home section by only 13 per cent. The export index showsthat the price of Australia’s exports increased from ‘September, 1939, to September, 1941, by11¼ per cent. whereas the imports index shows that the prices of imports have risen 44 per cent., or that imports to Australia for the war period have risen in price 33 per cent. more than our exports. Now these figures show that theprices of imports over the price of wool increased from 10 per cent. to 12 per cent. and the cost of living by 10.2 per cent. Therefore, the price paid in Australian currency for our wool should be in keeping with the increase of the prices of our imports and with the increase of the cost of living which graziers and all others associated with the wool industry have to pay. The return to the grazier for his wool should be 15½d. per lb.

That isa fair proposition. The present cost of production of wool is much higher than it has been for many years. The wool-grower has as much right as the wage-earner to a fair return for his labour.Our wool and wheat growers should be guaranteed a fair return for their product based on costs of production. Some people have an idea that because a man is on the land he is well off. That is not so. Personally, I think that it would be wise to devise a specific farming policy in respect of the wheat and wool industries. Wheat is an essential foodstuff, and therefore it must be regarded as indispensable in time of war. Many say that it is unnecessary for Australia to produce the large quantity of wheat at present being grown, but I venture to suggest that the time may soon come when all our wheat will be required to feed the peoples overseas. Unfortunately, shipping space is not available at present.

Senator Allan MacDonald:

Senator Courtice suggested that our wheat should be sent to Russia.

Senator CLOTHIER:

– That, too, has much to commend it.

Senator Allan MacDonald:

Senator Courtice also said that probably the Russian soldiers would fight better if they were fed on Australian wheat.

Senator CLOTHIER:

– I believe that they would. Thank God that the Russian soldiers are doing such a magnificent job to-day. Owing to enlistments for service overseas and in our Militia Forces, our man-power resources have been greatly depleted, and great difficulty will be encountered in harvesting this season’s crops of primary products. I suggest that men undergoing military training who possess a knowledge of farming in its various forms should be released from camps to assist with the harvesting. That is my idea, and naturally I regard it as a good one. A year ago the late “ Texas “ Green and I approached the then Government with that suggestion, and we were successful in securing the release of a number of militiamen to undertake seasonal works in rural areas. There is no reason why that should not be done this season. I also suggest that if conveyances be unprocurable to transport the wheat when it is harvested, military trucks should be made available for that work. There are many hundreds of such vehicles which could be used. I am anxious to assist the farmer in every way possible.

Senator Allan MacDonald:

– Why not make the internees do some work on the farms?

Senator CLOTHIER:

– That is a matter which is governed by international convention. The suggestion which I have made would overcome the difficulty.

SenatorFoll. - Some of the honorable senator’s colleagues claim that there are still some unemployed. Why not enlist the services of such men for harvesting?

Senator CLOTHIER:

– There are not many unemployed.

I am pleased that the Government intends to establish a mortgage bank.

Senator McBride:

– When?

Senator CLOTHIER:

– It will be established at the first possible opportunity. Successive governments supported by honorable senators opposite had not the courage to provide such a bank. The establishment of such a bank is long overdue.

Senator Allan MacDonald:

– There is a mortgage bank in Western Australia at present.

Senator CLOTHIER:

– Yes, but it would be better with the support of a Commonwealth-wide mortgage bank. Moreover, even though the people of Western Australia are provided for in that respect, the need exists in the other States. Farmers want greater security of tenure than they have had hitherto. Honorable senators who know something of farming conditions realize the difficulties which exist to-day.

Considerable criticism has been voiced by honorable senators opposite concerning the Government’s proposal in regard to soldiers’ pay. My view is that a bird in the hand is worth two in the bush. With an increase of active service pay, more money will be in circulation instead of being tied up in the banks as it would be bad the previous Government’s proposals been accepted. Why should not the wives and families of soldiers serving overseas have an opportunity to spend at least some of the money which their men folk are earning? If they wish to save it, they can. It is much better for the people generally to have additional purchasing power. Women are just as good money -savers as are men.

Senator McBride:

– The Prime Minister has been advocating a reduction of spending.

Senator CLOTHIER:

– I agree that expenditure on certain goods must be curtailed, but people must eat to live. That is why we should assist farmers to get their foodstuffs on to the market.

Senator Foll:

– Apparently there has been a rift in the Caucus.

Senator CLOTHIER:

– No. I am fully in accord with the Government’s decision to increase soldiers’ active service pay. I am also pleased to know that invalid and old-age pensions have been increased. Unfortunately, it is still insufficient, but some day I may want an oldage pension myself, and 23s. 6d. will be very acceptable. It: cannot be denied that the work done by men and women who to-day are in receipt of the old-age pension, has been responsible for honorable senators being where they are to-day. These old people deserve some credit for their efforts, and they should be paid as much as the country can afford to give them.

Yesterday I spoke of the expansion of war industries in Western Australia and I am pleased to know that the assurance given to me by Senator Collett is quite in accordance with the facts. The newspapers report that a considerable volume of work is proceeding.

Yesterday, I dealt also with the shortage of steel in Australia. As a member of the Joint Committee on War Expenditure, I visited many munitions establishments, including foundries, and the general complaint was that output was restricted owing to a shortage of steel. That state of affairs should not exist while vast iron ore deposits such as those at Yampi Sound are lying idle. The following article was published in the Round Table Club, of the 1st July, 1941, dealing with the production of steel in China : -

page 867

CHINA AND STEEL

China regards the production of steel as one of those public utilities, referred to in Article 123 of the Chinese Constitution, which reads thus: “All public utilities and enterprises of a monopolistic nature shall be operated by the State”. Free China regards steel as such a public utility. The Government, therefore, owns and controls all steel works, and these are operated, not for the purpose of profit, but for national service.

We think that here in Australia we might take a lesson from the Chinese book of procedure. We have here in Australia a monopoly controlling our steel production, and it is most difficult, if not impossible, for any other body to become established.

Senator CLOTHIER:

– It is true. No one can deny that successful efforts were made to prevent the development of the Yampi Sound deposits.

Senator McBride:

– Work was stopped not by the Broken Hill Proprietary Company Limited, but by the Government.

Senator CLOTHIER:

– I have not mentioned the Broken Hill Proprietary Company Limited or any other similar concern ; I merely said that the work had been stopped. The honorable senator has disclosed the actual position when he says that the work was stopped by the Government. The article continues -

This monopolyhas now assumed the proportions of an octopus. Its representatives are not confined to steel production, but are working their way into other spheres of life in Australia. Some day we Australians will have to face this issue. Otherwise, we might find that such monopolies arc determining both our domestic and foreign policies. Their influence at Canberra is already well known.

Free China has a much clearer view of democracy than we have in Australia. We call Australia a democracy, but how can such huge monopolies as those just referred to flourish in true democracy? Free China vests such giant concerns in the people and operates them for the good of the people and not for the dividends of a few financial magnates who sit behind polished tables and direct the destinies of millions of pounds. All capital belongs to the peopleand not to a private or State monopoly. Industry is conducted for service and not profit. Prosperity is determined by consumption and not production. Some men talk of democracy and freedom without attempting to define these terms and failing to realize that there cannot be a democracy or freedom under a profit-making economic order. We affirm with all the emphasis of which we arc capable that this profit-making motive is the very opposite to democracy and freedom.

That could be done in Australia.

Senator Spicer:

– What does the honorable senator suggest that the Government should do about the steel industry?

Senator CLOTHIER:

– It should expand it as nw eh as possible. That would assist Western Australia, which has extensive deposits of iron ore at Yampi Sound. Steel is required for ships, guns and many other similar articles and there is a general shortage of it. All of the manufacturers in Melbourne who use steel complain of a shortage.

Senator McBride:

– No.

Senator CLOTHIER:

– The fact that the honorable senator denies my statement does not prove it to be incorrect. I speak of what T know and have seen for myself. In the course of my duties as a member of a joint committee, I visited various establishments in Melbourne, and I saw workmen standing idle ‘because they were waiting for materials. In one establishment, I was kept in the office while the word was passed round the works that I was making an inspection. I discovered that there was an absolute shortage of steel. I appeal to honorable senators opposite to assist the Government in every possible way, as “Labour senators assisted the previous Administration.

Senator McBride:

– We have put the present Government on the right track several times already.

Senator CLOTHIER:

– That may be so, but honorable senn tors on this side also put the previous Government on the right track on many occasions. I believe that the Opposition intends to assist the Government in its war effort, Australia needs better equipment than that possessed by our enemies, and Australian workshops are turning out equipment that does credit to the country. The progress made in our war production in the last eighteen months or two years has surprised the world ; but, unless our factories can be supplied with the requisite materials, it will be impossible for them to achieve the results desired. What (he Minister for Aircraft Production (Senator Cameron) has told honorable senators regarding the work of the aircraft factories is true. The present Government intends to carry the war effort through to a successful conclusion.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– As this is the first occasion I have addressed the Senate since the advent of the present Government, I add my official congratulations to those that I have already conveyed personally to the new Ministers. Whilst I wish them well, I trust that, in the interests of Australia, their tenure of office will be brief. In the course of this debate, we have had an exhibition in a most vivid form of one of life’s contrasts. When honorable senators who now sit on the Government side formed the Opposition, they denounced the Government vociferously for its actions, but now they sit mute. But this is a time when we should chide one another somewhat gently. The difficulties of Ministers are great, and it is apparent that they are new to their work. The criticisms of former Ministers in this chamber and of Senator Spicer have been extremely pungent, and remain entirely unanswered ‘by government supporters. Whilst I congratulate my friends on the lucidity of their utterances, and their devastating criticism of the budget, the most devastating speech of all was that of that good supporter of the Government, my friend Senator Darcey. Like another member of the Opposition, I find it impossible to understand how Senator Darcey can support even the budget brought down by his colleagues, in view of the principles that he holds regarding financial policy. I remind him of a little transaction that occurred recently when the Government of Russia, a country which some people in Australia regard as having one of the most up-to-date forms of government in the world, borrowed from the United States of America an amount of £192.000,000. How we are to get on without borrowing I do not know. I regret that, with all his knowledge and eloquence, Senator Darcey has not been able to convince me of the soundness of his financial views. When I examine this budget I observe that the honorable senator has not been able to convince the Prime Minister (Mr. Curtin) or the Treasurer (Mr. Chifley) that it is unnecessary for governments to borrow money.

Nobody recognizes more than I do the difficulties that confront the kindly

Treasurer of tlie Commonwealth - if any Treasurer can be referred to as kindly - and the fact that he must have held his shapely head and cursed that hour when the Fadden Government was thrown out of office because of the budget presented by it. The fall of the Fadden Government was imminent. It was written in the skies that it would soon go down. One who wears the Napoleonic lock and speaks fair words convinced the independent members in the House of Representatives that the time was ripe ro oust the Fadden Government. With undue haste, and lacking the forethought which characterises some political leaders, the Labour party brought that government down on its budget, and nobody regrets it more than do the members of that party, because most of the criticisms from this side of the chamber are due to the fact that ihe Curtin Government could not adopt tlie Fadden budget. How the present; Ministry would have liked to adopt that budget! The Treasurer had to devise a different financial instrument, and what has he done?

Senator Courtice:

– He is not downhearted about it.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– No man who had made the statements conrained in the budget speech should be down-hearted about them, for the principles preached are sound, and are the very principles that were contained in the Fadden budget. We were told what was likely to happen to this country, and what were the further charges that would ha ve to be levied on those who were foolish enough to think that they Wouk escape from paying their due portion of the cost of Australia’s Avar effort. Looking round for some way of escape from the pitfall into which the haste of his party, in its desire to reach the tart: shop, had led him. the Treasurer said. ;: T. must do something different. I must abandon that sane principle of deferred pay for the returned soldiers. I must jettison it.” But the jettisoning of that principle is contrary to the sound principles enunciated by the Treasurer in his budget speech. I regard the Treasurer as holding sound views on finance, but, whilst. the principles preached by him are sound, he cannot give effect to them, because some distinction had to be made between the Fadden budget and that submitted by the Labour party. I have no fault to find with the principles enunciated by the Treasurer, but he has not applied them in the preparation of tlie taxation measures introduced by him in order to implement the budget proposals.

Senator Courtice:

– What happened to the Menzies Government ?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The probability is that the honorable senator knows a good deal abour that, bur he should not attempt to draw a red herring aero?.? the trail. The present Government has embarked on a policy of heavy taxation, and i? receiving the support of the parties in opposition, but it, will be disappointed with, the results, because it is killing the goose that lays the golden eggs. High taxation defeats its own purpose, as has been shown clearly in the United States of America and many European countries. We hear a. good deal about making a total war effort, and frequent mention is made of the national income. I am not sure that any of us fully understands either term. Few persons in the community are able to say how the national income is arrived at. But Ave all know that Australia’s Avar expenditure is increasing, and that the sources from which taxes are derived are gradually being contracted. It may be that this legislation is what a golfer would call a “ gradual approach “ - the landing of the ball on the edge of the green by means of a good mashie shot. The “hole-out” will be when all, irrespective of the size of their incomes, do not make an extra contribution, as in New Zealand and Great Britain. It. may be that the Government thought that it would be unwise suddenly to levy more on persons in receipt nf incomes :above £1,500 a year, but implicit in this document is a broad hint that they are to be hit harder in the future, f am confident that before long the Government will find that the springs are drying up and that it ,vill. have to look to the little fountains lower down.

I do no intend to discuss this budget from a party viewpoint, because there are times when party political considerations must be set aside and all must work together as a team in the interests of the nation.

I come now to a small paragraph in the budget speech in which those engaged in rural industries are promised something in the future. For a great many years there have been promises of rural reconstruction, but so far that reconstruction has not taken place. The announced intention of the Government to establish a mortgage bank may also, perhaps, be regarded as a promise to the primary producers. The honorable member for Wimmera (Mr. Wilson) probably takes credit to himself for the inclusion of those two paragraphs in the budget speech, but I point out that several hurdles will have to be jumped before a mortgage bank can be established. For many years I have advocated something along these lines, but I realize that lower rates of interest must be the rule before such an institution can be successful. A more astounding proposal has never reached my ears than the statement that the mortgage bank ‘will be established by the issue of debentures on the security of the bank of central reserve. Why not use the existing financial institutions, such as the Agricultural Bank of Western Australia, the State Bank of South Australia, the Rural Bank of Victoria, and various other banking institutions throughout the Commonwealth? What need is there to set up another bank which cannot getmoney, unless the Government provides it, at less than the current rate of interest? The only rural bank that the primary producers will get will be a subsidy.

Recently, a vacancy occurred on the Commonwealth Bank Board through the retirement of Mr. Drummond, who has been associated with primary industries all ‘his life and is well versed in every aspect of primary production. He knows the requirements of primary producers and his experience is not confined to the better districts but extends into the dry areas of the Commonwealth. First we heard that Mr. Theodore, a former Commonwealth Treasure]’, was likely to be appointed, but, apparently, the Government lacked the courage to appoint him, notwithstanding his knowledge of finance and his wide experience of Australian primary industries. Not only as a matter of common sense, but also as a matter of law, the Government should have selected to fill the vacancy a man with a wide knowledge of the primary industries of this country. Instead, it selected a Mr. Taylor, who, judging by his interview with the press, does not impress me as having the light approach to the high duties of a director of a bank of central reserve - an institution which in effect holds in its hands the financial destinies of this country. Mr. Taylor may be an excellent lawyer, distinguished in his profession, but he does not appear to have approached this new responsibility in the earnest spirit which should characterize a man occupying such a position. In a press interview lie is reported to have said that there is no black magic about finance - none whatever.

Senator Keane:

– Hear, hear!

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The Minister for Trade and Customs (Senator Keane) knows well that two and two make four, but there are some so-called financial wizards who would make the total four and a half, or three and a half, if it suited their purpose. According to the press report of the interview with Mr. Taylor, that gentleman said that he could not discuss details of his appointment, or his attitude towards current financial problems, until he had conferred with the Prime Minister (Mr. Curtin) and the Treasurer (Mr. Chifley). He expected to do so within a few days. I admit that the Prime Minister has a distinguished record as a producer of very good leading articles, but I do not knowthat he is particularly well qualified to give advice respecting wheat, sheep, wool, grain, cattle, or other aspects of primary production. The Treasurer is an engineer, and probably is no better acquainted with primary production than is his lea.der. Yet Mr. Taylor announced that he must consult with those gentlemen before he could discuss his attitude towards current financial problems. Surely that is an indication that he has no proper conception of his duty, or of his responsibility for the safety of that institution upon which the future of every other financial institution in this country depends. The solemn silence That has reigned since Mr. Taylor’s statement appeared in the press leads me to think that he has seen Mr. Curtin, .and that it would be well for us to draw a veil over what happened at the interview.

Senator Keane:

– Many of the appointments made .by previous governments will not bear investigation.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Some of them were excellent appointments, and some of them perhaps otherwise. But previous governments never appointed a lawyer to control the destinies of the butter industry, or other primary industries. Mr. Taylor’s appointment to the Commonwealth Bank Board was unashamedly a political appointment. He is the senior vicepresident of the New South Wales branch of the Australian Labour party.

Senator Courtice:

– What is wrong with that?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– There is nothing wrong with that. Mr. Taylor may be a gentleman and a competent lawyer, but his remarks on his appointment, particularly the levity in which he indulged, do not reveal him in a favorable light. He appears to have no proper regard for the institution on which the whole of the economic life of this country depends. Whatever may he said of the Commonwealth Bank .by way of criticism, the fact remains that upon it the solvency of this country depends. There can be no escape from that situation.

After saying that he would consult with the Prime Minister and the Treasurer, Mr. Taylor related some personal history. Ho did not throw bouquets at himself. Indeed, he was delightfully candid. He said, for instance, that he had not done a great deal at school because he was too much of a larrikin. Is that tlie proper approach to an appointment of such importance? Are statements of that kind calculated to inspire confidence in the institution which he will assist to control ? He then told the public, through the press, that he had been in danger of expulsion on three occasions, once after ho had been convicted at the Ryde Court for playing up in a train. I leave the matter there, with this advice to my friends on the treasury bench, “Do not do these things “. It may be that previous governments made political appointments. But the important point is that it is time that such practices ceased. I admit that I was horrified when the appointment was announced, because it violated the spirit of the law and endangered our primary industries. I do not know what the honorable member for Wimmera, whose vote assisted to put the present Government into office, thinks of the appointment. The Treasurer in his budget speech referred briefly to the Government’s banking policy. At a time such as this I do not quarrel with the Government for promulgating regulations for the control of any individual or organization. Whether they be banks, trade unions, or organizations political or otherwise, they should all come within the control of the law. In an effort to guard against inflation in the future, I understand that the Government proposes to compel the private banks to deposit with the Commonwealth Bank their investable surplus funds. That, I believe, is now done under some agreement which has been made with the banks. Whether it be done by agreement or by regulation, I regard it as a proper step because it is the only one that will enable the central reserve bank to check inflation; but the Government must bear in mind that the central reserve bank is also looking for business in competition with the other banks.

Senator Courtice:

– That is absolutely wrong.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Not at all. It is possible to secure financial accommodation from the Commonwealth Bank as readily as it is from any other financial institution in this country. I suggested to a former Treasurer when he contemplated this method of control that interest should be paid on such deposits or that some provision be made which would prevent the Commonwealth Bank from entering into competition on an unfair basis with other banking institutions with money that really belonged to them. At this critical period in our history when there is a plentiful supply of money owing to the expansion of industry to meet our war needs, it may be necessary to exercise control of the kind proposed by the Government. My friend, Senator Gibson, has a saying that plenty of money and plenty of feed will ruin any man. It will be the duty of the Government and the central reserve bank to contract the supply of money so that lavish credits will not be established throughout the length and breadth of the country. The method adopted by the Government to divert lavish spending on luxury goods, some of which would not be regarded as luxuries in ordinary times, will, we trust, bring about the desired result. Honorable senators will find in the published figures of deposits in the savings banks eloquent testimony of the fact that people are husbanding their money in those institutions. They will spend it how and where they please and the Government will be ultimately driven, if this war continues - and it looks like continuing for some considerable time - to adopt a rationing system in this country. Rationing is a form of control that no one likes to impose; but the position must be faced. The Government will have to adopt a. rationing system similar to that in operation in New Zealand, or it will find that its revenues are far short of expectations.

I should like to make a suggestion which I trust the Ministry will regard as constructive. When I see young men in Melbourne going through their airraid precautions exercises and witness the trial blackouts in Sydney, Melbourne and other places, I think what fools we were not to have made our coastline safe from attack by a policy of naval preparedness. Air-raid precautions will be unnecessary here unless aircraft carriers are permitted to approach close to our shores. At a time like this when we are expending millions of pounds lavishly on the war, I cannot but feel that, had we expended £20/000,000 a little while ago on a naval programme in cooperation with our sister Dominions of Now Zealand and South Africa, we would to-day have had the wherewithal to resist an attack on our coastline, and our people would feel safer in their beds. Active co-operation existed between the previous Government and the Government of New Zealand. I had an opportunity to stay in that dominion for some considerable time whilst I was a member of the Lyons Government. At that time New Zealand, with its 1,500,000 people, was about to commence the erection of a steel-works. The supply of raw materials in the dominion was not in any way comparable with that in Australia; but New Zealand was fortunate in having supplies of alloys which are so valuable to-day in the manufacture of steel used in the production of munitions and other war requirements. Surely there should be a greater measure of co-operation between the two dominions, even if it were only in the nature of a customs union which some people, I fear, view through the eye of a Carmen potato and others through the end of an orange. For God’s sake let us drop these petty dissensions, and get closer together. Let us realize that the New Zealanders can make valuable contributions to assist this country just as we can make valuable contributions to assist theirs. Let the 8,500,000 people of the two dominions work together as an economic unit. If we have to make concessions by all means let us make them; New Zealand, in turn, will meet us half way. Let us do everything to foster our relations with the United States of America. If we are to defeat, for all time, the monstrous Nazi movement headed by that inhuman monster, Hitler, every effort should be made to secure the greatest possible co-operation between the English-speaking races throughout the world. Several days ago I read a speech delivered by M. Poincare om the part played’ by that distinguished Frenchman, General Foch, at the peace conference at Versailles. Among the words he used, so far as I remember them, were these : “ I hope that the world will never live to regret the rejection of your advice at Versailles “. General Foch foresaw a part of what would take place if his advice were ignored, but what has happened has been on a much more devastating scale than he in his most despondent moment ever imagined.

There is a tremendous misunderstanding to-day regarding the new Russian constitution. Many people in this country have not read it, and therefore have no knowledge of affairs in Russia under the new constitution and Stalin’s rule. They are astounded to learn that the people of Russia have complete freedom of worship. These huge juggernauts which rise up in times of revolution find their level in the human beings that surround them. I know of no reason why we should not give the fullest aid to Russia. The Russians are fighting the battle of civilization with us, fighting for the freedom which we hold so dear, the freedom which has characterized our people, and which was established at Runnymede at the time of the signing of Magna Charta. The new constitution of the Russian people is more conservative than any we would care to support to-day. The old Mosaic law that he that does not work shall not pat is embedded in it. What have we to fear by aiding Russia? Apart from its intrusion into the politics of various European countries and its attempted intrusion into the politics of the United States of America, what have the Russians done to make us fear them? When the war is over they are likely to wish to live at peace within their own country. After all, we do not interfere in the politics of other countries, and surely there is no necessity for the Russians to interfere in ours.

There are two matters which I think the Government should regard as of great importance. I say to the Leader of the Senate in all sincerity that it is lamentable that, in time of national emergency and of dire need, this Parliament has no power to prolong its life for a. single day. The Mother of Parliaments and the New Zealand Parliament both have that power, fi- respective of what governm’ent occupies the treasury bench, I shall support any move made to clothe the Parliament with power to lengthen its life for use in time of need. We have only to remember the hurly-burly in Australian politics a little over twelve months ago to realize the disastrous effect of this constitutional inhibition. At that time, when we should have been here doing our utmost on behalf of our country, we were engaged in all the distractions associated with the holding of a general election. I know that there is a feeling in some quarters that we should not approach the British Parliament for an alteration of the Constitution to enable us to prolong the life of the Commonwealth Parliament; but I shall support the endeavours of this or any other Government to secure the necessary power to enable this Sovereign Parliament to prolong its life should the need arise, because I regard such a power as essential. It is a strange commentary on our Constitution that, at a time of war, when the Government is taking to itself unprecedented powers, this Parliament has not the power to prolong its life even for one day. The Leader of the Senate should take up this matter with his Cabinet and endeavour to get something done. Do not let us be for ever talking about it and doing nothing.

We pride ourselves upon our war effort. In that, respect bouquets are due to the predecessors of Ministers and the heads of departments. Our war effort is going forward, and every Minister is endeavouring to pull his weight. But we must guard against one danger. Do not let us get this problem out of its proper perspective. We have only a small population. We must organize and equip a fighting force; and when we look at what lias been clone in that direction, as well as in the manufacture of munitions and war material, we can pride ourselves upon our achievements. At the same time, however, we must pay due regard to the resources of our man-power. I suggest, therefore, that an immediate survey should be made in that direction. A responsible officer of the Government, a man in whom I am sure that all governments have the greatest trust, has told me that this country has only one limit, namely, its physical capacity. I urge the Government to ensure that we shall not go beyond that limit. We must ensure the continuance of industry and trade, because it is from that sphere that we derive the revenue, reduced though it be, required to finance our war effort. However, I can see definite signs of a lack of man-power in many industries. We should take care not to overstretch ourselves in this respect. We should ensure that sufficient men will be a vailable in order to carry on the good work in which the Government is engaged.

I view with considerable alarm the depredations that are being perpetrated in Europe; and I am afraid that the conflict will last for years. At the same time, I have no fears for the future. But we must buckle on our armour and, if need be, tighten our belts. “We must hold our heads high and resolve that whatever sacrifices we may be called upon to make we shall make them in the interests of our civilization and superior humanity. We shall not bow to aggression. We must never think of proposals for peace which may emanate from a man who has been guilty of the crimes of this leader of death and destruction in Europe. Our people should be informed of those crimes. I shall take an opportunity in the future to address myself on that subject to the Minister for Information (Senator Ashley). I emphasize that we cannot think of making terms with Hitler. We must fight to the end, and with that object in view we should set about preparing a sound foundation. We must stop our bickerings and party politics. We must stand by Australia and sink our differences for the time being, bitter though the pills may be. It is no pleasure for me to see those in whose political principles I do not believe occupying the treasury bench in this Parliament. But while they are there I, and, I believe, the party to which I belong, will give every assistance to them, because we want the best that they can give to us. We want them to make every possible effort for the preservation of our civilization and way of life.

Senator ARTHUR:
New South Wales

– The honorable senator who has just resumed his seat dealt briefly with the man-power position in this country. Whilst all sections of the community appear to be united in the prosecution of our war effort, the fact remains that some sections, against which I hope the Government will take prompt action, are threatening to weaken that effort by advocating conscription of manhood for overseas service and conscription of wealth in this country. That policy is entirely wrong. As Senator A. J. McLachlan has just pointed out, our man-power is commencing to dwindle. At the earliest opportunity the Government should disclose to what degree we can afford to continue recruiting tor overseas service.

Senator Allan MacDonald:

– Does the honorable senator think that we should stop now?

Senator ARTHUR:

– I am of the opinion that we may come to that conclusion. In the last war when we had five divisions overseas the cry was for 16,500 reinforcements a month. During that period conscription proposals were defeated on two occasions. To-day, we have four divisions serving overseas. I admit that our present casualties are not to be compared with those which we suffered in the last war; but whilst we have an additional 2,000,000 people in Australia since the conclusion of the last war, the calls on manpower in this war are considerably greater than was the case in 1914-18. We have recruited approximately 200,000 men for the Air Force and the Air Force reserve, 60,000 of whom are serving in the Royal Australian Air Force, and our present naval personnel greatly exceeds our strength in that arm in the last war. Further, thousands of additional men are nowengaged in munitions factories. In these circumstances, can we continue to cry out for more and more men at the risk of seriously depleting our man-power? The possibility exists that we may be attacked at our back door. I admit that we have certain assurances that we shall not lack aid from outside in the event of the war spreading to the Pacific. I urge the Government to make an immediate survey of our resources of man-power in order to ensure that we shall retain sufficienmen in all essential spheres. During the last war we were informed by military experts that a mobile force of 80,000 men. would be sufficient to defend this country effectively under the conditions existing at that time. I believe that to-day one armoured division would provide effective immediate defence in the event of a sudden attack upon this country. 1 can see no reason for continuing the costly circus which is to be witnessed daily in Martin-place in Sydney, and in other capital cities. Such methods are obviously ineffective. It is also apparent that the expenditure incurred in sending recruiting trains all over the country is being wasted. Senator Clothier drew attention to the grave man-power problem which confronts our rural industries. The military authorities refuse to grant temporary exemptions from military service to men who are required to transport wheat to silos. So far as those authorities are concerned the wheat crop can be left to rot in the paddocks. That is happening in the Canowindra district. We also find that military doctors have passed men for service who are blind in one eye or have an artificial limb.

Senator Allan MacDonald:

– Those cases are not general.

Senator ARTHUR:

– I cite those instances in order to emphasize the bad effect of our present recruiting methods and military administration on men who are eligible to enlist. Whilst such conditions continue one cannot wonder if many of our eligible men do not enlist. Some people declare that we have unlimited man-power. That is not so. Undoubtedly many eligible men have not offered themselves for service; but an investigation into their circumstances would reveal that many have failed to enlist because of pressing private responsibilities. Most people are inclined to overlook that fact. I ask leave to continue my remarks at a later date.

Leave granted; debate adjourned.

Sitting suspended from4.46to8 p.m.

page 875

JOINT COMMITTEE ON WAR EXPENDITURE

Senator A. J. McLACHLAN brought up the first progress report of the Joint Committee on War Expenditure.

Ordered to be printed.

page 875

WAR-TIME (COMPANY) TAX ASSESSMENT BILL 1941

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

page 875

ESTIMATES AND BUDGET PAPERS 1941-42 (REVISED)

Debate resumed.

Senator ARTHUR:
New South Wales

– When I obtained leave to continue my remarks earlier to-day I was about to state that the present Government has inherited a legacy of difficulty due to the maladministration of its predecessors in connexion with the fruit-growing industry. I refer particularly to the treatment of some growers of apples in New South Wales, among whom are numbers of returned soldiers from the last war who were settled on the land at heavy cost to the Government of that State. Many of these primary producers have been ruined deliberately by a previous government. When the Apple and Pear Acquisition Scheme was brought in early this year, it was placed under the control of the then Minister for Commerce (Sir Earle Page), who passed the responsibility on to the Assistant Minister for Commerce (Mr. Anthony), who is one of the principal banana-growers in New South Wales. In appointing a man to operate the scheme in New South Wales, Mr. Anthony chose another big banana-grower to be a dictator in the distribution of apples and pears in New South Wales. The man chosen, Mr. Stevenson, was supposed to take instructions from a State committee, but he set himself up as the dictator of the apple industry, and took steps to ruin the growers. Early in January of this year a meeting of wholesale and retail dealers in apples was held in Sydney. They were asked to say if they would co-operate with the Government, and 98 distributors in Sydney offered to do so. Mr. Stevenson, however, selected only 43 of them, and told the others that they would have no further trade. Some of those were men who had been 30 or 40 years in the trade, and had clients all over Australia. Later, Mr. Stevenson reduced the number of distributors still further. On the 8th January the following circular was sent to growers : -

Circular to all Registered Growers.

Dear Sir,

The board desires to use the regular channels of distribution for the marketing of the apple and pear crop for this season. In this connexion, we desire to obtain information as to the agent who has usually handled your consignments.

Please fill in form attached and return to the board immediately.

Thanking you for your co-operation,

Yours faithfully,

Arthur Stevenson,

State superintendent

Senator ARTHUR:

– We shall see as we proceed. A large number of growers forwarded the names of their agents. Mr. Stevenson then set about to find loopholes. Later he decreed that no agent should canvass for business under penalty of being debarred from further trading. Some growers in the Batlow, Leeton, Bathurst, Arm id ale and Kentucky districts advised their usual agents that they were despatching their apples to them. When that was reported to Mr. Stevenson he debarred those agents from further trading in apples on the ground that they were canvassing, notwithstanding that they had been in the trade for many years, some of thorn as long as 40 years. At a later date the agents were notified that they must not inform growers of the prices received for their fruit in the market.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Was that done by statutory rule?

Senator ARTHUR:

– The agents were notified by correspondence, and they in turn informed the growers.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Action should have been taken against the agents.

Senator McBride:

– The apples were the property of the hoard.

Senator ARTHUR:

– Because of the maladministration of a former government, the unfortunate soldier settlers in the Kentucky districts were told that their fruit was not required, and must be destroyed.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– That is not so.

Senator ARTHUR:

– Is my statement denied ?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Yes.

Senator ARTHUR:

-Fruit from that district was carted onlorries to the station of the wealthy Dangar family, where it was fed to pigs. The board was charged2d. a case for cartage.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– That did happen with some small hail-marked fruit.

Senator ARTHUR:

– It was fruit which would have been welcomed in the western districts of the State.

Senator Fraser:

– It did not qualify.

Senator ARTHUR:

– The fruit was similar to that which is offered for sale in Sydney to-day.

Senator McBride:

-The honorable senator sets himself up as an expert in opposition to those who were appointed to judge.

Senator ARTHUR:

– Both Mr. Anthony and Mr. Stevenson are bananagrowers, and it was to their interest to ensure that there was a shortage of apples, so that bananas would bring a high price, as. indeed, they have done this year. At a rime when apples were being offered for sale at l½d. or 2d. each, excellent bananas were available at eighteen for 6d. That action cost the Commonwealth £1,400,000 last year. The loss could have been reduced considerably by proper administration. Throughout a portion of New South Wales people could not get apples. Indeed, they cannot be obtained cheaply to-day. No experienced man would have put the variety of apples into cold stores as was done with thousands of cases throughout Australia this year, with the result that when taken out of cold storage practically half of the apples were useless, and retailers were forced to repack the fruit before leaving the markets. In normal years a retailer was able to buy the product of certain growers, but Mr. Stevenson denied to growers the right to use their own registered number on cases containing their fruit.

Senator Herbert Hays:

– The fruit belonged to theboard.

Senator ARTHUR:

– There was no need for such action. Previously, retailers could rely on getting good quality fruit if they bought the product from reliable growers, but to-day they do not know what they are getting. Mr. H. V. Smith who is associated with the New South Wales committee and the Apple and Pear Marketing Board is also associated with the Batlow Cooperative Company, an organization of growers which is supposed to be representative of those controlling the packing sheds throughout New South Wales. However, its offices are situated in the same building as the Bananagrowers Association, and the telephone number of both organizations is the same.

This year the apple crop totalled about 15,000,000 cases compared with approximately 6,000,000 cases last year. The following table shows the quantities supplied to a number of agents last year when the season was normal, and this year when there was a record surplus : - l.’h ere has been a regular “ racket “ in the distribution of apples in Sydney this year. There is a registered concern in Sydney named J. Holmes Proprietary Limited, the shareholders of which arc practically identical with the shareholders in another concern called the Commonwealth Fruit and Produce Company Proprietary Limited. This year if. Holmes Proprietary Limited received 79,473 cases and the Commonwealth Fruit and Produce Company Proprietary Limited received 19,059 cases, or a total of 98,532 cases, although the normal purchases of those companies were fewer than. 40,000 cases per annum. Silk Brothers Interstate Traders Limited obtained 4S,27S cases, although in a normal year they bought only 15,000 cases. Another firm, L. T. Locke, got 39,051 cases, although their normal supply was about 22,000 cases. Mr. .]’. Jenkins, another wholesale fruiterer, whose normal trade was 4.9,000 oases, was able to secure S2,000 case?. J. Holmes Proprietary Limited and the Commonwealth Fruit and Produce Company Proprietary Limited are the controllers of a subsidiary company known as the Apex Company, which is not registered. During the last two months apples bought from the board by J. Holmes Proprietary Limited and the

Commonwealth Fruit and Produce Company Proprietary Limited at from 8s. to 9s. a case were passed over to the Apex Company, which in turn sold them to retailers at 24s. a case. No receipts were given for these sales. The committee which inquired into the apple and pear industry should have included in its report a recommendation that a receipt should be issued for every case of fruit sold in the market and that a copy of the receipt should be sent to the board so that all sales may be traced. No record is kept and no receipts are issued in respect of fruit sold for cash in the metropolitan fruit markets to-day. That undesirable practice has been continued for the last 20 years. The operations of the Apple and Pear Board this year have cost, the taxpayers of this country approximately £1,400,000; and although there has been a steady demand for apples most of them have been left to rot on the ground. In The city of Sydney to-day it is impossible to buy an apple much larger than a billiards ball for less than 2d. Apples of larger size are sold in suburban shops for Si-<). each and in some city shops for 4d. each. I.n a year of heavy crops such price? are scandalous. Mr. Stevenson collaborates with firms and individuals such as J. Holmes Proprietary Limited, Mr. J. Jenkins, Silk Brothers Interstate Traders Limited and L. T. Locke and gives them concessions that are denied to reputable dealers. Last week he went to Melbourne, probably to consult with Mr. Mills, the chief officer of the board. After the last war the State governments incurred great expense in establishing returned soldiers in the fruitgrowing industry. With the assistance of r llc’ State Departments of Agriculture these settlers were able to make a reasonably good living until the war cut off their export markets. To-day. however, largely a.= the result of the operations of the Apple and Pear Board they have been forced to accept Stale relief. A grower with a wife and two children receives £6 10s. a. month from the State govern.ment and a grower with a wife and one child receives £5 10s. a month. Had these men been permitted to sell their fruit on the open market- -and the demand for fruit all over the country is very great - they would not have become a charge upon the State. I trust that this Government will see that the business of the Apple and Pear Board is so conducted in future that the enormous loss incurred this year will not be repeated. Provision should be made to acquire the surplus crop only by the payment to the growers of 2s.6d.a case at the tree and the remainder of the crop through traders in the ordinary way. Had that been done, the loss on the acquisition scheme this year would have been considerably reduced.

I propose now to discuss the important subject of the additional excise of 3d. a gallon imposed on beer. In New South Wales, as in all other States of the Commonwealth, breweries are conducted by monopolies, joist as are most of the big industries in Australia to-day, particularly the war industries. According to the Commonwealth Year-Book, the total quantity of beer and stout brewed in New South Wales in 1937-38 was 31,630,132 gallons. The additional excise of 3d. a gallon on that production would yield £395,376.

Senator Gibson:

– Does the honorable senator object to the excise?

Sena tor ARTHUR. - No, but I object to this additional impost being passed on to the consuming public.

Senator Allan MacDonald:

– The breweries have not yet been allowed to pass it on to the public.

Senator ARTHUR:

– They did so on two other occasions when the excise was increased. It is reasonable to suppose that the production of beer has increased since 1937-38, but no later figures are available. I suggest that, of the additional excise of £395,376, Tooth and Company Limited will pay £250,000 and Tooheys Limited will pay £140,000. The profits earned by both of these concerns are so great that they could well afford to bear this additional impost.

Senator Spicer:

– What is the annual profit of those concerns?

Senator ARTHUR:

– It is difficult to obtain a copy of the balance-sheet published by Tooth and Company Limited. The balance-sheet presented to the Registrar-General by that company is a fake. The Commonwealth should draw up a uniform balance-sheet to be presented by all companies and no large number of items should be permitted to be aggregated. The profit and loss account issued by Tooth and Company Limited contains the following item: - “Gross profit on trading, and rents and interest, after making provision for bad and doubtful debts, depreciation and contingencies, £2,251,584”. It would be interesting to know what amount is written off for depreciation in an undertaking of that kind. The wealthy brewing interests have a monopoly not only over the brewing of beer, but also over its distribution. Hotels of an aggregate value of £11,000,000 are owned by brewing interests in Australia. In its published statements, Tooth and Company Limited do not disclose the value of hotels which they own and control.

Senator Spicer:

– What was the net profit earned by Tooth and Company Limited ?

Sena tor ARTHUR. - Approximately £870,000 was disclosed. One item in the balance-sheet published by that company under the heading” Assets “ reads : - “Breweries, freeholds and leasehold properties, at or under cost, plant, machinery, rolling stockand motor vehicles, at cost, less depreciation, £6,706,279 “. Freeholds and leasehold properties obviously consist of hotels and breweries. For some reason best known to the company, the total value of the hotels owned by it is not disclosed. The company usually leases its hotels for a period of three years at a rental adjusted to return the capital value of the property every twenty years. The brewery authorities insist that the agreement entered into by the lessee shall contain a provision whereby the lessee is obliged to keep the property in repair and in good condition at his expense. The general manager of that company has done much travelling to Canberra and Melbourne since the budget was introduced. I urge the Government to prevent that company and similar concerns from passing any further increases of excise on beer on to the public. It passed on the first increase of excise duty by compelling hotel-keepers in New South Wales to use smaller glasses. The cost of effecting that change amounted to from £50 to £100. That expenditure represented an excellent subsidy to the glass combine. The increase of 3d. of excise duty should be borne equally by the hotel-keepers and the brewers. The Government should not allow the price of draught beer to be increased, although it might be fair to allow an increase of Id. a bottle of the price of bottled beer. Tooth and Company Limited have also increased the price of CO2 gas by ls. per cylinder, thus obliging hotel-keepers to pay on the average an additional amount of £3 or £4 a week for that gas which is a by-product of the brewery. The hotelkeeper must also pay a deposit of £1 on each gas cylinder. We can imagine, therefore, the dead money which Tooth and Company Limited is holding to-day, even in respect of that small item. Whilst breweries in New South Wales do not disclose the value of their hotel properties, that information is given by similar companies in Victoria under the Victorian Company law. In that State, Carlton and United Bireweries Limited, in 1939, held properties valued at £1,871,281, and tlie Castlemaine Perkins Brewery Company Limited held similar properties valued at £1,512,162. In 1939 Tooth and Company Limited made a net profit of £855,709 and paid a dividend at the rate of 12 per cent. Its assets in that year were valued at £9,134,288, and its paid-up capita] was £6,182,657. It is, therefore, one of the largest public companies in Australia. How has it been built up ? In 1910 its capital was £900,000, but since that year it has made six issues of bonus shares to the value of £2,150,000. Thus the rate of dividend of 12 per cent, in 1.939 was actually a rate of 33 per cent, upon the original capital. Yet we find some honorable senators opposite appealing on behalf of poor widows because the Government proposes to increase the tax on shareholders in these big companies. Let me now deal with Tooheys Limited, In 1940 that company paid a dividend at the rate of 9 per cent., and its assets were valued at £4,117,615. In Western Australia Swan Brewery Company Limited paid a dividend of 25 per cent., its assets being valued at £1,611,332. Through Colonel H. E. Cohen, a gentleman who resides in Victoria, that company is linked with the metal monopoly in Melbourne.

That gentleman is associated with the Electrolytic Zinc Company Limited and Zinc Investments. The firms comprising Carlton and United Breweries Limited include Carlton Brewery Limited, Melbourne, Shamrock Brewing Company Limited, Victoria Brewery, Foster Brewing Company Limited, and Castlemaine Brewery Company Limited. The Government should ensure that the breweries do not pass increases of excise on to the public. They are making enormous profits because they enjoy a monopoly of brewing and distribution. Yesterday the report of the royal commissioner who inquired into the expenditure of secret funds was tabled in the Senate. That report contained certain findings against the president of the Coal Miners Federation, Mr. Nelson. Personally, I disagree with the report. The evidence submitted at that inquiry would not hold in a court of law in any part of the British Empire. However, I am reminded that not so long ago it was a common thing in New South Wales to pick a particular judge, Mr. Justice Pring, and to appoint a certain barrister, Mr. Lamb, to conduct inquiries into any matter in which the interests of the Nationalist party, which is now known as the United Australia party, were involved.

I take this opportunity to give to the Senate some details concerning the operations of companies associated with the coal monopoly to which honorable senators opposite made a present of £S00,000 when they forced the Government to accept an amendment to the War-time (Company) Tax Bill which was considered in this chamber yesterday.

The PRESIDENT:

– I remind the honorable senator that he is not in order in referring to a debate which has taken place in the current session.

Senator ARTHUR:

– Approximately 27 important coal companies operate in New South Wales and these are dominated by an inner ring of four companies, namely, the Adelaide Steamship Company Limited, Howard Smith Limited, Huddart Parker Limited and the Broken Hill Proprietary Company Limited. Those companies constitute the iron and steel combine, and, at the same time, enjoy a shipping monopoly. Their subsidiaries produce five-sixths of the total coal produced in the Commonwealth. The Adelaide Steamship Company controls ten mines. It owns 526,874 of the 1,900,000 shares of J. A. Brown and Abermain-Seaham Collieries Limited. Howard Smith Limited own 38,400 shares and Huddart Parker Limited 16,173 shares in the same company, whilst the heirs of John Brown are also big shareholders in it. The mines controlled by the Adelaide Steamship Company are Abermain, Abermain No 2, Kearsley, Duckenfield No. 1, Pelaw Main, Seaham No. 2, Stanford Main, Stanford Main No. 2, and Stockrington. The Abermain No. 2 mine has come into prominence lately because of its refusal to grant the miners’ claims for holiday pay. The company is empowered by law to charge an additional 6d. a ton on all coal it produces in order to reimburse its cost in respect of holiday pay for miners. By way of that concession it has actually collected an amount of £5,000 from the public. The greatest possible number of working days at the mine during the past year was ‘211, but during that period, owing to the engine drivers’ strike which lasted for three weeks, that number was reduced to 190 working days. In the present dispute with the miners that company will agree to pay an amount of only £360 in respect of holiday pay, yet it has collected £5,000 from the public for that specific purpose. The Invincible mine is owned by Invincible Colliery Limited, and Aberdare, Aberdare Central and Extended and Waratah collieries are owned by Caledonian Collieries Limited; but we find that Howard Smith Limited owns a majority of ordinary shares in both those companies. The Broken Hill Proprietary Company Limited, through Australian Iron and Steel Limited, controls the following mines: - Berrima, Bulli, OsborneWallsend, Wongawilli, and the Burwood John Darling, Lambton and Elrington mines through Broken Hill Proprietary Collieries Limited. Two-thirds of the shares of those companies are held by the Broken Hill Proprietary Company Limited. Berrima mine is owned by Southern Portland Cement Limited, but more than half of the shares in that company are owned by Australian Iron and Steel Limited, whilst Howard Smith

Limited holds slightly less than half of the shares in the same company. Huddart Parker Limited controls three mines, Hebburn No. 1 and Hebburn No. 2, through Hebburn Limited, and the Metropolitan mines through the Metropolitan Coal Company. Huddart Parker Limited owns 400,000 shares in Hebburn Limited and 105,500 of the 120,000 shares in the Metropolitan Coal Company, through which Hebburn Limited is linked with the Broken Hill Proprietary Company Limited, as it owns one-third of the shares in Broken Hill Proprietary Collieries Limited. I point out that the Hebburn No. 1 mine also figured prominently in the miners’ holiday pay dispute. This mine produced in 222 working days 2,221,000 tons of coal on which an amount of £5,565 was collected from consumers at the rate of 6d. a ton to reimburse the company in respect of holiday pay for their employees. We now find, however, that it is proposed to pay the men only for two and one-half days, which will cost £1,250, leaving the owners a cash balance of £4,305. Monopolist interests in New South Wales will benefit considerably from legislation passed by the previous Government, and a thorough examination should be made of the matter. Let us consider for a moment three of Australia’s biggest industries, namely, sugar, banking and brewing. We find that these industries are controlled by the individuals whom, as I have already said, have the economic structure of New South Wales in their hands. The individuals, and the total capital of the companies in which they are interested are as f follows :- -Fairfax family £20,480,000 ; Mr. R W. Gillespie, £2,510,000; Mr. E. B. Knox, £17,119,000; Mr. E. J. A. Massie, £15,902,000; Sir Frederick Tout, £13,744,000; Sir E. King, £1,469,000; Sir Mark Sheldon, £4,495,000. Then we come to some titled gentlemen whose interests include shipping, coal and gas - Sir Samuel Cohen, £11,283,000; Sir Henry Braddon, £9,540,000; Mr. O. E. Friend, £7,083,000; Sir John Butters - one time Chief Commissioner of the Federal Capital Commission - £5,975,000 ; and Colonel A. Spain, £4,569,000. There are also Mr. A. Howard Smith, £4,941,000; Mr. James Burns, £3,749,000. Undoubtedly, a list such as this is wearisome to honorable senators, but in view of the exigencies of the present situation, perhaps it is advisable that we should explore the ramifications of various interlocked directorates of monopolies in this country and the capital they control. I believe that many of these people are substantial contributors to the campaign funds of the political party represented by honorable senators opposite. The list continues: - Mr. T. H. Kelly, £15,163,000; Mr.. O. Phillips, £11,815,000; Mr. G. P. Hughes, £8,1S4,000; Mr. M. Mcllwraith, £9,012,000; Mr. G. B. Love, £9,002,000; Mr. C. A. Sinclair, £8,917,000; Sir Thomas Buckland, £850,000 ; Sir Norman Kater, £11,950,000 ; Sir Philip Goldfinch. £11,700,000; Sir Donald Cameron, of Royal Australian Air Force recruiting fame, £4,739,000; Sir Herbert Gepp, £3,113,000; Sir “Walter Carpenter, £958,000 ; Sir A. Howie, £1,519,000 ; Sir Graham Waddell, £2,991,000 ; The Honorable T. Armstrong, £2,162,000; and the Honorable T. A. J. Playfair, £5,440,000. , / L last-mentioned is associated with the inner group or secret consultative council of the United Australia party in Sydney. There are approximately 45 big companies in New South Wales whose combined capital amounts to £1.75,000,000. To-day, most of them are making exorbitant profits, notwithstanding the fact that their balance-sheets show only 7 per cent, or 8 per cent. The real tost to apply is the original capital invested. Take, for instance, the history of the Broken Hill Proprietary Company Limited. Broken Hill was discovered a century ago by Rasp and was described as “ a heap of mullock “. Samples of ore were taken to Adelaide for testing purposes and the richness of the Broken Hill mineral deposits was revealed. Ever since the Broken Hill Proprietary Company Limited was formed in 1885 to exploit these vast metal deposits its capital has been consistently watered year after year, and dividends have been paid on that watered capital. Prior to the last war, the capital of the Broken Hill Proprietary Company Limited was approximately £800,000, and in Mardi, 1919, bonus shares to the value of £1,500,000 were issued from profits made during the war. A further issue of bonus shares was made in 1935, and then in 1939, the Chairman of Directors, Mr. John Darling, informed shareholders that there would be a further bonus issue in 1940 of 60 shares for every 100 shares held. The money involved was £4,000,000. To-day the’ capital of the Broken Hill Proprietary Company Limited is more than £11,000,000, and the company controls scores and scores of subsidiary undertakings. Its interests include Australian Iron and Steel Limited, at Port Kembla, which has a capital of £5,700,000 and owns five coal-mines; the Southern Portland Cement Limited; Imperial Chemical Industries of Australia and New Zealand Limited, which has a capital of £5,031,175 ; the Commonwealth Aircraft Corporation Proprietary Limited, which is building aircraft for the Commonwealth; the Titan Nail and Wire Proprietary Limited ; the Commonwealth Rolling Mills Proprietary Limited; the Commonwealth Steel Company Limited, which is associated with Vickers; B.H.P. By-products Proprietary Limited ; Rylands Brothers (Australia) Proprietary Limited; Lysaght Brothers and Company Proprietary Limited; Lysaghts Newcastle Works Proprietary Limited; B.H.P. Collieries Proprietary Limited, which owns four coal-mines; the Australian Wire Rope Works Proprietary Limited; British Jute Mills (Australia) Proprietary Limited. In addition, Broken Hill Proprietary Company Limited owns eight ships. One of the outstanding men in the Broken Hill Proprietary Company Limited is Mr. Essington Lewis, who is now doing a good job in connexion with munitions. He has more than 20,000 shares in Broken Hill Proprietary Company Limited, the activities of which are now being extended to shipbuilding, aircraft production, magnesium production and the manufacture of tinned plate and chemicals.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Is not Australia richer because of the enterprise of that concern?

Senator ARTHUR:

– No. Undoubtedly organizations such as the Broken Hill Proprietary ‘Company Limited have played a part in the economic life of this country, but there can be no doubt that the workers are not receiving sufficient of the huge profits that are being made. [ Extension of time granted.]

I have no intention of abusing the: Broken Hill Proprietary Company Limited. I am merely giving the Senate facts in relation to that concern, which no doubt are displeasing to the members of the Opposition, but even more displeasing would be a revelation of the interlocking of company directorates in Victoria and their association with large concerns in Great Britain. 1 refer to theRobertson group and the Baillieu group. The Government should take a stand in regard to monopolies. Octopus-like organizations such as the Broken Hill Proprietary Company Limited have been making exorbitant profits. In 191.5 and 1916- during the last war - the Broken Hill Proprietary Company Limited made a profit of 50 per cent. in each year, which was the foundation of the 1,500,000 bonus shares issued to shareholders at a later stage. In 1933, the Broken Hill Proprietary Company Limited endeavoured to establish the tinned plate industry in Australia, hut under the Ottawa Agreement that could not he done. When that company first proposed to take steps, the president of theSouth Wales Tin Corporation was brought to Australia. When he arrived, he came first to Canberra and asked the Government not to allow the establishment of the tinned plate industry in this country as it would be contrary to the terms of the Ottawa Agreement. Two years ago, Mr. John Darling in his annual report mentioned the possibility of establishing the industry at Whyalla in South Australia, and said that a start had already been made on the provision of a water supply to that centre.

SenatorSpicer. - The Broken Hill Proprietary Company Limited has done a good job at Whyalla.

Senator ARTHUR:

– I admit that. But it will finish up with a monopoly of the shipbuilding industry if honorable senators opposite have their way. Therehas been a great demand for the construction of ships in this country ever since the Commonwealth Government sold the Australian Commonwealth

Government line of steamers to that convicted criminal Lord Kylsant, who has not yet paid for the ships. Our primary producers are crying out for shipping space, but the vessels are not available despite the fact that they should have been built years ago. The Broken Hill Proprietary Company Limited will also have a monopoly of the tinned plate industry in South. Australia. Had it not been for the actions of the previous Government, tinned plate, which is a vital war requirement, would have been available in this country years ago.

The budget proposals of the Government are to be commended by all good citizens of Australia, who must recognize that the measures by which the necessary revenue is to be obtained offers the only solution of our financial problems in the present circumstances. My only regret is that full use is not to be made of the credit resources of the nation through the medium of the Commonwealth Bank, in accordance with the recommendations of the Royal Commission on Monetary and Banking Systems. I believe that the private banking system is of no use to the nation in time of war. Every private bank in the British Empire closed its doors in 1914, except the Commonwealth Bank, and even the Bank of England was shut for two days. If I desired to transfer an account from a suburban branch of, say, the Bank of New South Wales or the Commercial Bank to the Commonwealth Bank, I should be required to obtain the permission of the branch manager of the private bank. For several years persons dealing with private banks have had to obtain permission to open an account with the Commonwealth Bank. Persons with accounts in private banks have been refused permission to open accounts with the Commonwealth Bank, and in many instances have been told to do their business with the private banks.

I deprecate the derogatory remarks that have been made in this chamber regarding a recent appointment to the board of directors of the Commonwealth Bank. Surely it is time new blood was introduced into that personnel of that board. Mr. Drummond, who recently resigned from the board, represented some of the combines, such as the pastoral combine.

Senator Spicer:

– Does Mr. Taylor represent the trade unions?

Senator ARTHUR:

– I believe that he will be a worthy representative of the public of Australia, just as I am an accredited representative of New South Wales in this Senate having been elected by the vote of the people of that State. 1 resent the insulting utterances by Senator A. J. McLachlan regarding the appointment of Mr. Taylor. The record of many of the appointees of the parties now in opposition would not stand the light of day. I hope that the co-operation that, was given to the previous Government by the Labour party will be extended to the present Government by the Opposition.

Senator CAMERON:
Minister for Aircraft Production · Victoria · ALP

– Amongst a number of more or less misleading statements, Senator A. J. McLachlan said that honorable senators on this side were dumb. I assure him that we do not intend to be dumb. We intend to exercise our rights under the Standing Orders, and we shall submit, on behalf of the Government, a case which cannot easily be disposed of by the Opposition. Senator A. J. McLachlan went on to say that action, rather than words, was required. First he complained that honorable senators on this side were not talking, and afterwards he claimed that they were saying too much. When a senator of his experience speaks in such terms, we wonder whether he means what he says, or knows what he is talking about. He had some scathing things to say about the appointment of Mr. Taylor to the Commonwealth Bank Board. I listened to him carefully and he proceeded to judge Mr. Taylor on a statement in a newspaper report which may, or may not, be true.

Senator Spicer:

Mr. Taylor did not deny the accuracy of the report.

Senator CAMERON:

– He was under no obligation to deny it, if he did not wish to do so. Often I do not take the trouble to refute stupid or misleading statements made concerning me by my opponents.

Senator Spicer:

– Does the honorable senator consider that Mr. Taylor’s statement was stupid?

Senator CAMERON:

– I am referring to statements made by men like the honorable senator. It is not worth while to take notice of every dog that barks. Senator A. J. McLachlan, who has had a legal training, would impress one with his uncontaminated altruism, and of a desire to do justice by his fellow men. Yet almost in the next breath he proceeded to condemn Mr. Taylor on a statement contained in a newspaper report which may or may not be true. I wonder what the honorable senator would say if he were charged in a court of law in respect of a statement based on a newspaper report. I can imagine how indignant he would be, and how emphatically he would speak against the injustice of an attempt to judge him on ex parte evidence. He had nothing to say about the appointment of Mr. J. H. Ashton to the Commonwealth Bank Board on the 29th August, 1939. That gentleman happens to be only a grazier. His only qualifications for appointment are that he is the son of a rich father, an excellent polo player and a Palm Beach celebrity. We did not hear the honorable gentleman say anything against this man, who has had no previous experience of banking and apparently has had nothing to do with the conduct of business on modern lines. He was apparently ignorant of economics and a mere neophyte; but because Mr. Taylor happens to be the nominee of a Labour Government, honorable gentlemen opposite regard his appointment in a totally different light. They cannot rise superior to their political bias, and would not, by direct statement, innuendo or implication, condemn Mr. Taylor as a mere ignoramus. We on this side are expected to take such honorable gentlemen seriously. Personally I do not regard men who have had experience as bankers as being any more able than the average business man. At best they are only expert bookkeepers. A man may be an able bookkeeper, but know nothing about economics. Most bankers in Australia fall within that category.

Senator Allan MacDonald:

– The Labour party once said that of the late Sir Robert Gibson.

Senator CAMERON:

– I knew bini very well. He was an astute business man, but I should not say that he had a working knowledge of economics.

Senator Keane:

– Hu appointment was a political one.

Senator CAMERON:

– Yes ; he had a strong political bias.

Hp to 1930 the private banks managed their businesses in the usual way, but in that year they were confronted by a problem that was new to most of them, and they called in the assistance of university professors. Since then those professors have ‘been at the elbows of those controlling bankers, and have constantly advised them. That indicates to me that, men who are classed as able bankers are merely expert bookkeepers. When faced with economic conditions similar to those confronting Australia to-day, when the national debt is increasing and when governments have to raise revenue to an amount previously thought to be beyond the range of possibility, the banks enlist, the services of professors of economics. I consider that Mr. Taylor has qualifications equal to those of any other member of the Commonwealth Bank Board, and superior to those of .some of them, particularly Mr. Ashton, the last appointee of the Menzies Government.

During this debate 1 had the temerity to interject while honorable senators opposite were speaking. In case I may be misunderstood I wish to make it clear that I do not interject in order to harass any honorable senator, but for the purpose of obtaining, if possible, admissions which I can use later in debate. I should not like it to be thought that my interjections are in any way personal. If results could be obtained by being personal the position would perhaps be different, but results cannot be secured in that way; they can be obtained only by arguing a problem on its merits to the best of one’s ability. If a man is stating I lis case, and, by interjecting, his opponents can obtain an admission, that is a perfectly legitimate thing to do. I do not object to that at all. If I attempt to put up a case on behalf of the Government of which I am a member, and cannot submit a better case than that put forward by my opponents, I should take a back seat. I do not object to any question that is relevant to the subject under discussion being asked during a debate. I obtained a. number of admissions from Senator Spicer, the first of which is that he believes in equality of sacrifice. Judging by the subsequent remarks of the honorable senator, I assume that he meant equality of financial sacrifice. He then went on to say that his conception of equality of sacrifice was that all mustbe taxed ls. in the fi.

Senator Spicer:

– I said that all incomes under £400 a year should pay at least that rate.

Senator CAMERON:

– The honorable senator now seeks to qualify his statement, but I do not remember him making any such qualification during his speech. He will remember that I interjected repeatedly, “ What about the basic wage-earner?”, and that he replied, “ All should be taxed “. The honorable senator receives a parliamentary allowance of approximately £20 a week, whereas an old-age pensioner receives about 22s. a week. If both pay ls. in the £1, the honorable senator would pay fi to about ls. paid by the pensioner.

Senator Spicer:

– I object to the honorable senator misrepresenting what I said, and I suggest that he should not be permitted to do so.

The DEPUTY PRESIDENT (Senator Brown). - It. will be competent for the. honorable senator to make a personal explanation when Senator Cameron has concluded his speech if he considers that he has been misrepresented.

Senator CAMERON:

– While Senator Spicer was addressing the Senate I repeatedly directed his attention to the position of the worker on the basic wage, and, if my memory serves me correctly, be said all should pay ls. in the fi. I consider that I am right in assuming that his conception of equality of sacrifice in a financial sense is that if a basic wageearner has to pay ls. income tax, and the honorable senator is taxed ls. also, that represents equality of sacrifice. Or we may go further and say that if two persons receiving respectively fi and £20 a week were left, with 10s. a week and £10 a week respectively, their sacrifice would be equal. That is the so-called equality of sacrifice which I am. confident that honorable senators opposite are seeking to establish in the minds of the people.

Senator Spicer:

– That is quite wrong.

Senator CAMERON:

– I have in mind the vindictive opposition by honorable senators opposite to certain proposals for raising more money which would still have left the people whom the honorable senator represents with more than sufficient to live on. I am sensible of that opposition, and. therefore, L am certain that, I am right. If there is to be equality of sacrifice, there must be equality of income. If the worker on the basic wage is doinghis best for the basic wage; if the man fighting in the front line overseas is doing his best for the amount that he receives; if all workers in munitions factories, mines and other industries are doing their best for the wages that they receive; the honorable senator cannot claim to be making an equal sacrifice if he is not. prepared to do his best under the same conditions, and at the same rates of pay. Honorable senators opposite vehemently oppose additional taxes being placed on companies, and on persons in receipt of big incomes, although they know that other Australians are doing their best despite the fact that they receive a miserable pitta nce in comparison with the incomes that they themselves receive. When the honorable senator’s claim that he believes in equality of sacrifice is analysed in the light of his subsequent remarks it is clear that he does not mean what he says.

Senator Spicer:

– The honorable senator does not know what I mean.

Senator CAMERON:

– The honorable senator prefers to pose in the reflected glory of the men in the factories and in the front lines who are doing their best for a miserable pittance compared with what he himself receives.

Another admission which I obtained from Senator Spicer was that the only satisfactory system of taxing is one which ensures that every person in the community pays taxes in accordance with his ability to pay.

Senator Spicer:

– That is inconsistent with what the honorable senator has just alleged that I said.

Senator CAMERON:

– I shall show that it is not inconsistent. This is a general statement rather than a specific one. It is a statement which an astute man may make when he wishes to create the impression that he means something entirely different from what he does in fact mean. If every one paid taxes in accordance with his ability to pay, Senator Spicer and myself would be forced down to the basic wage; or, as I have said on other occasions, we should have to submit to our incomes being reduced to £500 a year before anyone receiving less than £500 a year was taxed. Throughout the whole field of taxation the worker on the basic wage pays a great deal more in proportion to his income than is paid by a person receiving more than the basic wage.For instance, should Senator Spicer and a girl employed in a factory board a Melbourne tram and each pay a fare of 3d. to the conductor, the amount paid by the girl would represent a great deal more in proportion to her income than it would in the case of Senator Spicer. In every direction the person whose income is less than £500 pays considerably more in proportion to his income than is paid by persons in receipt of more than that amount. I ask leave to continue my remarks at a later date.

Leave granted; debate adjourned.

page 885

NATIONAL SECURITY (WAR-TIME BANKING CONTROL) REGULATIONS

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– Pursuant to statute, I lay on the table the following paper: -

National SecurityAct - National Security (War-time Banking Control) Regulations -Statutory Rules1941, No. 272.

These regulations give effect to the Government’s decision, as outlined in the financial statement of the 29th October, to bring the operations of the trading banks under effective control. The regulations carry out certain recommendations of the Royal Commission on Monetary and Banking Systems and make other provisions to meet present conditions of war finance. The Government had conferences with the representatives of the trading banks and the Commonwealth Rank before the details of the regulations were finally settled. An exemption from the regulations is being granted for two months to all institutions - other than the private banks specified in the regulations - which are or may appear to be carrying on in Australia the business of banking. This exemption will cover the Launceston and Hobart Saving Banks, also pastoral companies and other institutions which carry on some banking functions. This temporary exemption will give time for inquiry and consideration as to whether amy of these institutions should be brought within the regulations.

page 886

LAND TAX BILL 1941

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator Kea:ne) read a first time.

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– I move -

That the bill be now rend ;i second time.

This bill gives effect to the Government’s proposal to obtain an additional £500,000 revenue from land tax by imposing a super tax of 20 per cent, in those cases where the taxable unimproved value of the taxpayer’s land exceeds £20,000. Honorable senators are aware that the law allows to resident taxpayers an exemption of £5,000 in arriving at the taxable value of their land so that a resident would need to own land of an unimproved value of £25,000 before he would become liable to this additional rax. As absentees do not receive the exemption enjoyed by residents, they will be liable to pay super tax when the unimproved value of the land exceeds £20,000. In order to remove any anomaly which would arise in those cases where the taxable unimproved value of a taxpayer’s land was just over the taxable value of £20,000, the incidence of the super tax has been graduated by providing that it shall not exceed 1 per cent, of the taxable value in excess of £20,000. For example, if the taxable value of the taxpayer’s land is £21,000, the super tax would be 1 per cent, of £1,000, or £10. When, however, the taxable value reaches £24,S00, the full super tax of 20 per cent, thereafter becomes payable.

When the Government was surveying the various avenues available for increasing the revenues, it recalled vividly the very substantial remissions which the payers of land tax in Australia ‘has enjoyed over the past thirteen years and it will, I arn sure, be interesting to honorable senators if I recount the history of these remissions. The reductions commenced in 1927-2S, when the basic 1914-15 rates were reduced by 10 per cent. This reduction was maintained until 1932-33, when they were reduced by a further 33$ per cent., making a total reduction of the 1914-15 rates of 40 per cent. The following year, a 50 per cent, reduction was substituted for the 33$ per cent, granted in the preceding year, so that for 1933-34 the rates of tax operating were only 45 per cent, of the basic 1914-15 rate. The reduced, rates were continued for the next five years until. 193S-39, when they were increased by 11.1 per cent., bringing them up to just one-half of the rates which Ave re in operation in 1914-15. These reduced rates were applied also in 1939-40. but last year, when the previous Government was faced with a huge increase of war expenditure, it doubled the rates and by doing so restored the basic rs tes of 1914-15. The actual money value of the remissions I have referred to is over £13,000.000. and as 75 per cent, of the land tax is paid in respect of city lands and only 25 per cent, in respect of country lands, honorable senators Wl realize that the greatest benefit from these remissions has been enjoyed by the wealthy companies and individuals who own city properties. In view of the very generous remissions which the land.1 taxpayers of Australia have enjoyed over the past thirteen years, the Government considers that they .can now fairly be called upon to make an extra contribution towards the defence of this country and of their own land holdings. This is not the first occasion on which the land tax rates have been increased beyond the basic 1914-35 rates as, at the conclusion of the war of 1914-1S, tlie rates were increased by 20 per cent, without any exemption in respect of holdings below a taxable value of £20,000 such as is contained in this bill. The Government’s decision that the super tax shall apply only where the taxable value of. the taxpayer’s land exceeds £20,000 will mean that approximately 70 per cent, of the total taxable value of country lands will escape this additional impost so that the tax will fall only lightly upon the primary industries of Australia.

Senator McLEAY:
Leader of the Opposition · South Australia

– I do not intend to oppose the passage of this bill. The Government having made up its mind in the matter of the taxes to be imposed, has to accept full responsibility for adding this new impost which will bear heavily on many people.

Senator GIBSON:
Victoria

.- The Minister in his second-reading speech said that 75 per cent, of the land tax is paid in respect of city lands; but f point out that it will not be paid by the owners of land on which big city emporiums and the like are erected but by the men and women who purchase goods sold, by them. This is but another tax on people who cannot afford to pay. There are many other ways of raising the necessary revenues besides imposing a land tax which inevitably must he passed on. The owners of big city establishments will undoubtedly pass it on to the public, despite any attempts made by the Prices Commissioner to prevent them from doing so.

Senator Cameron:

– If prices are pegged surely the tax cannot he passed on ?

Senator GIBSON:

– Those who own big city properties will not pay the tax; someone else will have to pay it for them. The primary producers in Victoria, New South Wales and South Australia and, to a. lesser extent, those in Queensland, where the leasehold system largely prevails, will ‘be called upon to bear the unjust hurden of this tax. It will hit hardest those who hold big properties, particularly pastoral companies regardless of what bad seasons may come their way or what mortgages they have on their properties. This bill proposes to impose a direct tax on the primary producers’ capital. It will not affect the holders of large properties in the cities.

Senator Fraser:

– How would large insurance companies pass on the tax?

Senator GIBSON:

– Just as do the big business emporiums. Whilst I do not intend to vote against the bill, the Government is unwise in -bringing in legislation of this kind which will affect only certain sections of the community.

Senator LECKIE:
Victoria

.- I should like the Minister to elaborate some of the statements which he made in his second-reading speech. In the concluding portion of his remarks he said that 75 per cent, of the land tax is paid in respect of city lands and only 25 per cent, in respect of country lands. I presume that that is correct. Later in his speech he said that approximately 70 per cent, of the total taxable value of country lands will escape this additional impost. I have no desire to lay myself open to the charge of having opposed the Government’s proposals to raise the revenue with which to prosecute the Avar; but 1 should like to ensure that the additional taxation required to meet the Government’s heavy commitments is spread over the community on an equitable basis.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The concluding portion of the Minister’s second-reading speech is quite lucid. What he desired to point out was that, as the unimproved value of holdings in tlie country does not in many instances amount to £20,000, approximately 75 per cent, of the country lands will escape this tax. Although 1 do not intend to oppose this bill, I have always regarded a tax on capital as a most dangerous and diabolical way of securing revenue for the Crown.

Senator Courtice:

– This is but a small increase.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Had the honorable senator the wit to understand the point I am endeavouring to make, he will realize that I am saying that a tax on capital is unwise. During and immediately after the depression of 1930-31, the reports issued by the Commissioner of Taxation showed that some of the producers of the best stud flocks in this country had to approach t he Hardship Board for relief. In cases in which this tax has been imposed upon men who really had no income it has amounted to a levy upon capital. No account was taken of their circumstances. They were placed in the humiliating position of being obliged to approach the Hardship Board in order to obtain relief. This kind of taxation is wrong in principle. Insofar as it affects owners of land in the country, it is iniquitous. As a member of the previous Government, 1 was more or less obliged to subscribe to this tax, or at least to sit quiescent when it was under consideration in this chamber. I realize that the Government must have the revenue it requires; but it is high time that we left this class of tax entirely to the States, and took steps to review our taxation methods generally with a view to backing them with worthy principles. This tax on land is mere confiscation.

Senator McBRIDE:
South Australia

. - I regret that the Government has seen fit to increase the rate of land rax. I admit that I was a member of the previous Government which, last year, increased the rate of this tax. That action in itself indicates that the party to which I belong is not entirely opposed to the principle of land tax. However, (here is a limit beyond which it will be dangerous to go in imposing a tax of this kind. I was interested to hear the Minister suggest that the bulk of this impost will fall upon the large city landholders. It seems to me that the Government has very grave doubts about the wisdom of this impost, and, consequently, has done its best to create the impression among the people who will actually be obliged to bear it that it will be borne by the wealthy landholders. It will, in fact, be borne by a number of landholders who are anything but wealthy. In normal times, when all kinds of taxes generally were less severe than they are to-day, the country landholder found it almost impossible to build up reserves in order to tide him over a bad period. In view of all of the additional imposts which have now been placed upon him, directly and indirectly, it will be impossible for him to try to build up such a reserve and, at the same time, meet this tax. Consequently, this impost will in effect be a levy upon his capital. Honorable senators on this side of the chamber are opposed to capital levies in any form whatever. At the same time, certain honorable senators opposite have implied that they are in favour of that form of taxation. It must be admitted that the majority of city landholders who will be called upon to pay this tax will, as Senator Gibson has pointed out, be able to pass it on. They have passed it on in the past, and naturally they will find ways and means of passing on this increase. Consequently, it will not fall nearly so heavily upon them as upon the primary producer. I warn the Minister that the guile ho displayed this evening in endeavouring to camouflage the effect of this tax insofar as country landholders are concerned will not prove effective. Those people know that they will have to foot the bill. I repeat that they are not in a position to bear this extra impost. Indeed, this form of tax, more than any other, will tend to dry up the pool from which this, and future governments, will be obliged to derive revenue in the years to come. As this is part of the general financial proposals of the Government, we, on thus side, will not oppose the measure. Certainly, we have criticized it just as we have criticized other measures; and I am glad to know that in several instances the Government has recognized the wisdom of our criticism, and has agreed to our suggestions. I sincerely hope, therefore, that it will not only refrain from further increasing this tax, but will also accept the earliest opportunity to reduce it.

Question resolved in the affirmative.

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

page 888

HOUR OF MEETING

Motion (by Senator Keane) agreed to-

That the Senate, at its rising, adjourn till to-morrow, at 10.30 a.m.

page 888

ADJOURNMENT

Federal Union - In tern a tion al Finance - Housing.

Motion (by Senator Keane) proposed -

That the Senate do now adjourn.

Senator DARCEY:
Tasmania

. This afternoon, Senator A. J. McLachlan declared that the English-speaking nations should get together in this crisis. I point out that an association has already appeared in this country which is moving in that direction. However, I should like to warn honorable senators against that movement which is known as Federal Union. An advocate of the movement, which originated in the United States of America, visited Australia, early this year, and complaints were made to the Attorney-General (Dr. Evatt) that he was really a fifth columnist. I give the following details about this movement: -

Federal Union is a scheme hatched in America and is designed, under the cover of war conditions, to bring the British Empire under the complete control of international finance.

Sir Victor Sassoon, Jewish financier connected with the Rothschild family, said,vide Brisbane ‘Telegraph, of 19th June, 1941 - “ A world federation of the democracies with Britain, Australia and Canada becoming part of the United States, was essential “. said the chairman of the E.D. Sassoon Banking Company (Sir Victor Sassoon) who is on his way to Shanghai. “ There is no other way to stop Hitlerhe said. “It is now so obvious to the world’s business men that a federal alliance is necessary that it hardly bears discussion. England must come into the democracy of the United States with the full right of statehood. It. is also obvious that England must give up her traditions and institutions of government.”

Thus Great Britain is to be relegated to the status of an American State.It means the abolition of our monarchy - of our democratic forms of government - of our freedom and liberty and our own British culture, and the substitution therefor of Jewish-American schemes of world slavery of the people.

Dr.Rolland, headmaster of Geelong College, vide SydneyBulletin, of16th July, 1941, said - “I favour absolute union with America even if it means the sacrifice of the British monarchy.” And he is still at large.

Senator Sampson:

– He corrected that; he claimed that he was incorrectly reported.

Senator DARCEY:

Our men are fighting to uphold democracy and our British ideals whilst these advocates of Federal Union, the real fifth columnists in our midst, would sell Australia and the Empire to foreign financiers.

In return for this “ American statehood “ we would have to surrender our Army, our

Navy and Air Force to the central government, which would bomb into submission any country who dared to question its authority or criticize its methods.

The policy of international financiers is the real cause of war. They create war and then tell us that in order to abolish it we must surrender our Empire to them. Why not, instead, the United States come into the British Commonwealth of Nations?

Federal Union is an insult to our British intelligence. We demand the right to fashion and mould our own destiny according to our own British ideals and traditions, and refuse to become the mechanical robots of the international financiers.

Federal Union propaganda is subversive and seditious, and is an attack upon our King and Empire. If you wish, not only to maintain your King and Empire, but to establish true democracy within our Empire, then assert your rights.

I have said on more than one occasion in this chamber that governments do not really govern, but are subject to a power which is above all governments, and can bend them to its will. That power is represented by men like Sir Victor Sassoon, who is a protege of Mr. Montagu Norman, of the Bank of England, and Mr. Eccles Mariner, of the Central Reserve Bank of the United States of America. It is certainly not. encouraging to feel that the British Empire would in any circumstances pledge itself to Wall-street for the rest of its existence. When the late Mr. Chamberlain, as Prime Minister, was on behalf of Great Britain about to declare war on Germany, he said -

I get great consolation when I think of the financial strength of the British Empire.

We know now that that strength fizzled out within a few months, and that Great Britain had to rely upon the United States of America for its lease-lend assistance. All advances made by the United States of America under that legislation must be met. Indeed, it has already been suggested that some of the islands in the West Indies group should be handed over to the United States of America, as part payment of our commitments under that arrangement. We know that those commitments must be met. We also know that the cost of the present war to England is at the rate of £15,000,000 a day. The people who are advancing that credit dictate the policy of the Bank of England. That policy which, amounts to financial enslavement of the British Empire has been in operation since the Bank of England was established in 1694. I notice from the records of the British House of Commons that the member for Ipswich asked the British Chancellor of the Exchequer, Sir John Simon, to bring in a bill to alter the charter of the Bank of England, and to conduct an inquiry with a view to finding out who controlled the operations of that bank. I bring these matters to the notice of honorable senators because they have caused considerable uneasiness among those who understand the situation. Because of the tremendous indebtedness of Great Britain to Wall-street, wo should ensure that the Empire shall not be enslaved by American financiers. Such a plan should be exposed. It is an attempt to force the British Monarchy out of existence, and to make Great Britain a vassal state of the United States of America. I hope that honorable senators will take notice of this important matter. I have here all the authorities for my statements. The matter was brought to the notice of the former Attorney-General (Mr. Hughes), to whom it was suggested that this subversive influences of certain individuals should be counteracted.

I draw attention also to the need for housing throughout the Commonwealth to-day. I have received a circular from the Association of Co-operative Building Societies in Sydney stating -

At a recent conference of tlie above association representing some 200 societies, it was resolved that a plan be adopted to assist in solving the evils attendant on the housing shortage - particularly amongst the workers. Tlie following submissions arc therefore conveyed for your urgent and favorable consideration : -

That the Com mon wealth and State authorities affirm that as the housing position is so serious and is so closely related to defence, it be given No. 1 place on the Priority List for man-power and materials - after actual defence needs.

To the extent that mcn and materials can be made available to satisfy the demand for the construction of homes - finance be made available through the Commonwealth Bank as a matter of national policy.

Over and over again I have pointed out to honorable senators that the Commonwealth Bank can make ample credit available for housing. I also draw attention to the fact that the Lyons Government passed a bill authorizing the expenditure of £20,000,000 on a Commonwealth housing scheme. Of that sum less than £1,000,000 has been expended. That money is still available, and I hope that the Government will give some consideration to the needs of the people who urgently need homes. This evening I visited the Causeway at Canberra. It was my first visit to that suburb, and I was astounded to see the hovels in which the people live. It is estimated that in Canberra alone 400 more houses are required. The circular continues -

  1. Having due regard to paragraph 2, that in so far as Co-operative Building Societies can use finance for the building of homes for applicants with 10 per cent, deposit (with preference for war workers) it be made available to such societies at a low roto of interest.
  2. That the co-operative method of home purchase be adopted as the medium for those who are able to provide an equity and meet repayments based on a 21 -year and 28-year period.
  3. That the steady provision of homes through Co-operative Building Societies will permanently relieve the situation in connexion with problems such as overcrowding, substandard homes, &c.-

It has been stated that slums in Sydney are as bad as those in any part of the world. The circular continues -

Thu association contends that housing of workers is closely related to defence and claims that the utilization of Co-operative Building Societies will lift a burden from the shoulders of the governments. Co-operative Building Societies arc self-supporting, self-reliant, decentralized and entirely free from the potential evils arising out of bureaucratic control.

Tt is also submitted that finance car-marked for housing of this nature does not detract from the war effort but is complementary to it: that it will add to the stability of the economic system by the creation of real wealth and to the national morale by the elimination of discontent caused by the present housing conditions. ‘

The Joint Committee on Social Security is now inquiring into various social improvements. The circular also states that-

The creation of universal home ownership as a right and not a privilege of the workers will also be of the utmost value to the morale of the nation.

I am pleased to have been able to direct the attention of honorable senators to the sensible statements contained in the circular I have just read.

Question resolved in the affirmative.

page 891

PAPERS

The following paper was pre sented : -

Arbitration ( Public Service) Act - Determination by the Arbitrator, &c. - No. 33 of 1941-

A malgamated Postal Workers’ Union of Australia.

Senate adjourned at 10.5 p.m.

Cite as: Australia, Senate, Debates, 26 November 1941, viewed 22 October 2017, <http://historichansard.net/senate/1941/19411126_senate_16_169/>.