16th Parliament · 1st Session
The President (Senator theHon. J. Cunningham) took the chair at 3 p.m., and read prayers.
Motion (by Senator Uppill) - by leave - agreed to -
That two weeks’ leave of absence be granted to Senator Allan MacDonald on account of urgent private business.
– Will the Leader of the Senate state on behalf of the Government whether the press statement is correct that, whereas yesterday there were strikes in eighteen collieries in New South Wales, to-day there are 22 strikes on the coal-fields? Has the Minister any information to give to the Senate as to what action is being taken by the Government with regard to this matter?
– I have seen the report to which the honorable senator refers. I also remember the statement made by him in the Senate yesterday. I have now to inform him that already 278 convictions for absenteeism in the coal industry have been recorded this year, although we have only just entered the third month. There are other prosecutions pending, in addition to the Corrimal cases. All that I have to add is that the Government is doing the best it can in the matter.
– Will the Leader of the Senate state whether the Government intends to expend some millions of pounds on the production of aluminium? If it does, where will the expenditure be incurred, and what sum will he expended? Is the Minister satisfied that aluminium is of the same value as magnesium for the purpose for which it is chiefly used ?
– Statements on matters of government policy are not usually made in reply to questions.
– by leave - On the 10th February last, Senator Cooper referred to the difficult position of a manwho has not been in an operational area, but is discharged as medically unfit. He stated that he is informed thai such a man cannot be assisted by the Repatriation Department, and at the same time he cannot be assisted by the Army authorities during the period in which he is convalescing. It would appear that there has been some misapprehension with regard to this matter. The present procedure is that which has been in operation since the commencement of this war, and is as follows: - In the case of a soldier who has had service overseas, pension and medical treatment are provided by the Repatriation Commission in respect of any disability which results from any occurrence happening during the period of service. In the case of a member of the forces who has served in Australia only, pension and medical treatment- are provided in the case of any disability which was directly attributable to service. Prior-to-enlistment disabilities which have been aggravated by service are recognized in both instances, excepting that, in the case of a man whose service has been confined to Australia, no responsibility is accepted by the Commonwealth unless such member has served at least six months in camp.
As indicated in the second-reading speech of the Minister for Repatriation (Mr. Frost) on the 17th February last on the Australian Soldiers’ Repatriation Bill 1943 the Government intends to amend the principal act to include service in Papua and New Guinea as representing overseas service, and thus provide eligibility for medical treatment and pension on a wider basis than exists at present. Power will also be given to include certain areas in Australia as the equivalent of overseas service. This does not mean, however, that all disabilities suffered by men on discharge will be recognized as war disabilities. The basic principle of the Australian Soldiers’ Repatriation Act must always be recognition of disabilities which are ascribable to war service. Unfortunately, as was shown in the Minister’s second-reading speech, it is not possible in all cases to prevent the enlistment of men who are suffering from definite mental and/or physical diseases. Where men enlist suffering from priortoenlistment conditions, the acceptance or otherwise of these complaints depends on the circumstances, but the benefit of doubt is given to the soldier in every case.
The medical treatment of serving members of the forces is, of course, a matter for the service department concerned. In connexion with the conditions relating to medical care, discharge and after-treatment, the practice is as follows : -
In general terms, a member of the naval, military and air force who, following examination by a medical board, is, in the opinion of the department, suffering from some condition which renders him unfit for further service, will be discharged from the forces -
when he is no longer, at the time, in need of further active medical treatment as an in-patient, and is capable of -
resuming his pre-enlistment occupation; or
following some other occupation; or
being trained for some skilled occupation; or
when he is, whether in need of further active medical treatment or not, unlikely within a reasonable period to improve sufficiently for employment in the general labour market; or
when the period of treatment in a service hospital in Australia has totalled six months, provided that, in special cases, on the recommendation of medical board, the period of treatment in a service hospital ma; be extended, but the maximum period of treatment in a service hospital in Australia shall not, in any such case, exceed twelve months.
– Has the Minister representing the Minister for Transport any reply to make with regard to a matter raised by me on the motion for the adjournment of the Senate on the 10th February last, when I referred to the administration of transport by the Deputy Director of Emergency Road Transport in Tasmania, Mr. M. S. Wilson, and alleged that he had not dealt equally with all sections of the com- munity. Has theMinister given consideration to my request that an independent member of this Parliament should visit Tasmania in order to ascertain whether my complaints were justified?
– I have no knowledge of the matter raised by the honorable senator, but if he will place his question on the notice-paper I shall see that a reply is obtained for him.
– by leave- In January the Deputy Director of EmergencyRoad Transport in Tasmania imposed certain restrictions on transport in that State. Although I realize the necessity to conserve rubber, petrol and machinery, and desire to give all the help that I can, I brought this matter to the notice of the Minister by means of a deputation as well as in writing.
– I rise to a point of order. The honorable senator has obtained leave to make a statement. Is it permissible for him to raise a subject which could just as well be dealt with on a motion for an adjournment of the Senate? If this practice is. to be permitted, every honorable senator may claim a similar privilege.
– I inquired whether it was the pleasure of the Senate that Senator Aylett should have leave to make a statement, and leave was granted.I cannot override a decision of the Senate.
– After I placed this matter before the Minister, a check was made by one individual; but I was not satisfied with the reply given to me. I therefore asked that the evidence on which that reply was based should be placed on the table of the Senate. Believing that the. restrictions imposed on road transport in Tasmania were not justified, I raised the subject on the motion for the adjournment of the Senate on the 10th February, when I pointed out that the action taken, instead of conserving man-power, petrol and rubber, would, in fact, mean a waste of men and material. I still contend that the sacrifices which are demanded of the people are not equal, and that certain interests in Tasmania are being victimized. As I pointed out previously, some districts which are served by the most up-to-date train service in the State - there are from two to four trains a day, including fast express trains - have also omnibus services running parallel to the railway line, whilst outback districts which have, perhaps, the worst train service in Australia, have had those services curtailed, with the result that connexions between various services cannot be made and much dislocation is caused. I do not complain so much that people in outback districts are being victimized, as that the action taken hinders Tasmania’s war effort. The Minister has. ignored my representations on this subject. Apparently, he is prepared to accept the word of the Deputy Director of Emergency Road Transport in preference to the word of those who have made representations to me. These people, who would be prepared to give evidence on oath, or to sign a declaration setting out their case, include justices of the peace, shire councillors, mine managers, saw-millers, and others, all of them being people who are highly esteemed in the community. I shall not have it said that their representations were a pack of lies, and that the only man who is telling the truth is the Director of EmergencyRoad Transport. Who is the Mr. M. S. Wilson who holds that position? What is his record? Some time ago he “ butted in “ and established a system of zoning in connexion with the delivery of milk and bread, although he had no authority to do so. When Mr. Weber went from Melbourne to investigate the matter, he removed the restrictions imposed by Mr. Wilson, because, instead of being a help, they were a hindrance. Then Mr. Wilson took action in connexion with the delivery of meat by butchers. Under regulations of his own making, he confined deliveries of meat to Tuesday and Friday in each week. The butchers wrote to me on the subject, and I approached the Minister, only to ascertain that there were no regulations governing the delivery of meat. Mr. Wilson’s action amounted to a victimization of butchers in business in a small way, because Tuesday is the day on which they do their buying. Later, when regulations to control the delivery of meat were gazetted, this man did not give effect to them for two months.
– Does the Minister know of these- things?
– He will know of them before I have finished. After failing to put the regulations- into force for about two months, he, apparently, was censured by the Minister, and action was ultimately taken. Later, Mr. Wilson became Deputy Director of Man Power in Tasmania, but he made such a mess of things that he was put out of that position. During his term of office as Deputy Director of Man Power, he agreed that some men who had been ordered into camp need not do so. He made this decision without checking the facts. I have examined the files and can give the names of the individuals concerned. Honorable senators may be interested to know what this man thinks of members of Parliament. In the allocation of priorities on motor cars, he has given to a brewer’s agent a No. 3 priority, whilst a baker’s delivery van is given a No. 5 priority. Members of Parliament who use their cars for important government work have been given a No. 9 priority. 1 cite those instances in order to show that when complaints involving this gentleman are made they should be checked up. I have taken this opportunity to deal with the matter in the Senate in order to forestall any propaganda that complaints made against Mr, Wilson are unfounded, and are sheer untruths. If the Government wants to obtain a 100 per cent, war effort, it should appoint to responsible positions officials who are prepared to assist it in thai direction, and deal justly with all sections of the community, not victimizing one section and extending privileges to another section. If the Minister for Transport (Mr. George Lawson) is prepared to send an officer to Tasmania to investigate the complaints I have made, and allows me to accompany that official, I undertake to substantiate the complaints that I have just voiced.
– A ruling by a previous President lays it down that -
A senator in asking leave to make a statement should indicate the nature of it. thus enabling the Senate to judge whether permission should be granted, but the Standing Orders limit such statements to matters of a personal nature or concerning the business of the Senate.
– I rise to order, Mr. President, though you have just touched upon the subject which I wish to mention. It is most unfair for an honorable senator to ask for leave to make a statement without complying with the ruling and Standing Orders to which you have referred. I am not concerned with the merits of the case raised by Senator Aylett; but he has been most unfair in making an attack under privilege upon a public servant who has no opportunity to defend himself. If any honorable senator should ask for leave to make a statement of that kind in the future, I shall certainly object.
– I have to inform the Senate that the Standing Orders Committee met this day and considered the application of Standing Order No. 406 to the reading of speeches in the Senate. The committee decided that it is not advisable to amend the Standing Order, but agreed that if a senator desires, for special reasons, to read his speech, he should be able to do so by leave of the Senate. I rule accordingly.
– Are we to understand, Mr. President, from what you have just said, that leave shall be refused to an honorable senator to read his speech if one honorable senator objects ?
– That is so.
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
Will the Minister take into consideration the extra cost of orchard requirements and labour in Tasmania and Western Australia and grant an increase in the unit price of apples and [tears under the acquisition scheme?
– The Minister for Commerce and Agriculture has supplied the following answer: -
Consideration is being given to requests for increased payments to apple and pear growers in Tasmania and Western Australia.
Minister representing the Minister for Commerce and Agriculture, upon notice -
SenatorFRASER,- The Minister for Commerce and Agriculture has supplied the following answer: -
In reply to a similar question in another place the Attorney-General has advised that he will make a statement covering this subject at an early date.
asked the Minister representing the Attorney-General, upon notice -
Will the Minister give early consideration to the appointment of a conciliation commissioner in Tasmania to adjudicate on local disputes which may occur between employers and employees engaged in industry in that State?
– The AttorneyGeneral has supplied the following answer : -
As occasion requires, a conciliation commissioner visits Tasmania and that practice will be continued. The question of the appointment of a permanent conciliation commissioner for Tasmaniawill be considered.
asked the Minister representing the Treasurer -
If so, have the following factors been taken into consideration: -
SenatorFRASER. - The Treasurer has supplied the following answers: -
Motion (by Senator Collings) proposed -
That Standing Order No. 68 be suspended up to and including the 26th March next, for the purpose of enabling new business to be commenced after 10.30 p.m.
– I should like to indicate that the Opposition is prepared to sit from 11 a.m. to 11 p.m., but is not in favour of all-night sittings. In the interests of good government, and in view of the importance of the measures to be placed before us, the Opposition believes that honorable senators should not be asked to sit later than 11 p.m.
Question resolved in the affirmative.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motion by Senator Fraser) read a first time.
SenatorFRASER (Western Australia - Minister for External Territories) [3.32].- I move-
That the bill be now read a second time.
As honorable senators are aware, the Government has already outlined its plan for ensuring minimum social and economic standards throughout the community. Briefly, those plans involve the introduction, stage by stage, of a comprehensive scheme of welfare services, including health, unemployment and sickness, and other associated services. Bills covering some parts of the scheme have already been prepared, and, it is hoped, will be dealt with during the present sittings. These bills relate to maternity benefits, a liberalized scheme of maternity allowances, and funeral benefits for invalid and old-age pensioners. Preliminary work on unemployment and sickness schemes is in hand, and it is anticipated that the bills covering these two benefits will be ready for consideration by Parliament within six months. It will be realized that the preparation of a comprehensive scheme of welfare involves considerable inquiry and investigation. The Social Security Committee is at present dealing with the health side of the scheme, which includes medical and hospital services, and the provision of medicines. As soon as its inquiries have been completed, bills dealing with these schemes will be submitted.
To finance these national welfare schemes, this bill proposes to establish a National Welfare Fund, which will take the form of a trust account under section 62a of the Audit Act 1901-1934.
Commencing from the 1st July, 1943, it is proposed to pay to the National Welfare Fund out of Consolidated Revenue an annual sum of (a) £30,000,000; or (b) a sum equal to one-quarter of the total collections each year from income tax on individuals for Commonwealth purposes, whichever is the less.
In the next financial year, 1943-44, the position will be as follows : -
In the first year, therefore, the Estimates suggest that the contribution to the fund will be about £30,000,000. Bills are now before the Senate containing the Government’s proposals for the increased taxation necessary to provide the contributions to the fund. Clause 5 of the bill provides that the fund “ shall be applied in making such payments as are directed by any law of the Commonwealth to be met from the fund, in relation to health services, unemployment or sickness benefits, family allowances, or other welfare or social services “. The charges on the fund in the next financial year will depend, of course, on how many services it is possible to begin in that year. For a full year, the services which I have just mentioned - maternity benefits, maternity allowances and funeral benefits - will cost, it is estimated, £2,250,000. If, as anticipated the unemployment and sickness schemes are commenced during the course of the next financial year, the cost of these will be met from the fund. When the welfare scheme becomes fully operative, it is unlikely that there will be any balance from current contributions to the fund. In the earlier stages, however, the fund will build up some credit balances. These will be used later when the welfare scheme reaches full operation. These balances will not be allowed to remain idle. Sub-section 1 of section 62b of the Audit Act, which provides for the investment of trust account balances is as follows: -
Moneys standing to the credit of the trust fund may be invested by the Treasurer -
in any securities of, or guaranteed by, the Government of the Commonwealth or of any State; or
on deposit in any bank.
If the balances are invested in Government securities, a useful source of temporary finance for war purposes will be provided. Later, as greater demands are made on the National Welfare Fund, the securities will be realized as required for the social welfare purposes approved by Parliament. Interest from the investment of any moneys standing to the credit of the National Welfare Fund will be credited to the fund.
Debate (on motion by Senator McBride) adjourned.
Debate resumed from the 9th March (vide page . 1314) on motion by Senator Fraser -
That thebill be now read a second time.
– The people of Australia who take an interest in the financial position of their country must be alarmed at the serious drift in the finances, and the position that will be revealed on the 30th June, 1943. We had the opportunity a few weeks ago of listening in this chamber to a speech by the Deputy Leader of the Opposition (Senator McBride), who put the facts before Parliament clearly and forcefully. I regret that greater publicity was not given to that speech, because the people of Australia should be told by their leaders in Parliament what they think of the problems confronting them. We have heard the financial statement of the Treasurer, and now we have this bill and the Income Tax Bill 1943 before us, and also the latest trick, the National Welfare Fund Bill, but the Standing Orders require us to confine our remarks to the measure before the Senate.
– I rise to a point of order. I object to a Government measure being termed “ the latest trick “, and I ask that the remark be withdrawn.
– -That is an accurate description of it.
– The Leader of the Senate takes exception to the remark of the Leader of the Opposition that a certain bill is a trick, and asks that the expression be withdrawn.
– I regret that I used the phrase, but when looking through the Treasurer’s speech, I noticed that he stated that “ no legerdemain can produce the needs of war”. Leger-de-main, of course, means sleight-of-hand, juggling, and trickery. However, I regret having used a term that is offensive to the Leader of the Senate (Senator Collings), and I withdraw it. It is estimated that by the end of June of this year, should the Government be successful in raising the £100.000,000 in April, thi3 country will be relying upon bank credit to an amount of approximately £300,000,000. Honorable senators will recall that in his budget speech in September, 1942, the Treasurer (Mr. Chifley) estimated that there would be a gap of £300,000,000 which would have to be filled by means of public loans; but what is the position in which we find ourselves to-day? Up to dato only £83,000,000 has been raised by way of loans, and if we are successful in raising a further £100,000,000 in April - ‘[ hope that the loan will be successful, and I shall give it my fullest supportthe total will be only’ £183,000,000. Various odds and ends probably will bring that sum np to £200,000,000; but what provision has been made for the other £1.00,000,000, plus the extra £90,000,000 required to cover additional expenditure not foreseen by the Treasurer? It seems that we shall be faced with a treasury-bill issue of approximately £207,000,000, which, coupled with the carry-over of about £83,000,000 on the 1st July, 1942, makes a total of £290,000,000. As I have said, the Treasurer’s estimate of expenditure was exceeded by £90,000,000, and it seems that he was wrong in his estimate of borrowings by £100,000,000. I should like to refresh the memories of honorable senators in regard to what was said by the Treasurer in his budget speech in September last. I snail quote the honorable gentleman’s remarks, because I consider that there is no better guide to the future than the experience of the past, and in a friendly manner I wish to draw the attention of the Leader of the Senate and his colleagues to the need for drastic action to meet the desperate financial situation into which we arc drifting rapidly. The Treasurer said -
We must resolutely face die fact that wre are engaged in an “all-in” struggle for our very existence. in that struggle physical resources will be the deciding factor. Those resources must come from the people. J hoy must lie need to the fullest capacity and whatever sacrifice is necessary must, hu accepted.
And here is the part I wish to emphasize -
No legerdemain can produce the needs for war. Neither can they be obtained by easy financial expedients. The plain fact is we aic lighting with all our resources for the very right to commence life as a nation afresh.
Without wishing to be discourteous, it would seem that the last paragraph was inserted for the benefit of our friend, Senator Darcey, who is always trying to convert honorable senators to his own pet financial theories, and apparently has been successful in converting the Cabinet. It is a fallacy to believe that we can continue to use unlimited bank credit, and when the history of these years is written, it will bc shown that, this Government failed to practise what it preached in the budget speech of its Treasurer to which I have referred. 1 have no hesitation in saying that I welcome this measure, and that I am prepared to support it. My only regret is that this step was not taken earlier.
Until now, the Government has failed to face up to the realities of the situation.
Briefly summarizing the position today, it can be said with justification, first, that the Labour party’s weak financial policy has produced an acute rise of the cost of living - 12 £ per cent, in twelve months and still it is rising. Secondly, the increased expenditure on war has occurred mainly because of increased costs and not because of increased efficiency or increased production. That point was established exceptionally well by Senator McBride. Thirdly, Australia’s financial position has become desperate and acute inflation appears to be inevitable. Acute inflation will affect all sections of the community seriously, particularly in regard to soldiers’ deferred pay, life assurance policies, savings banks deposits, and value of money generally. An examination of the causes of Australia’s acute financial position in December, 1942, reveals that one of the main reasons was that this Government has been more concerned with playing the party game than with playing the national game. It is interesting to read the election speeches made by party leaders in June, 1940. The then Prime Minister, the right honorable member for Kooyong (Mr. Menzies), drew the attention of the people of Australia to the financial difficulties that faced this country, and said that he was not prepared to make any reckless promises that he thought could not be fulfilled. The people of Australia in five States at least decided to support the policy enunciated by the right honorable member. The Labour party, then in opposition, was anxious to gain control of the treasury bench, and was prepared to follow the course which it thought would please its political supporters. It refused to face up to the necessity for increased taxation, and its opposition to the Fadden budget in October, 1941, has meant that there has been a delay of eighteen months in facing up to the true position. It is interesting to go back a few years and examine some views that have been expressed by the Leader of the Senate and by the Prime Minister (Mr. Curtin). I have no wish to be personal in this matter; I merely wish to indicate to the people of Australia just where this Government’s financial policy is leading. On the 28th November, 1940, speaking on the Estimates and Budget pa-pers, the then Leader of the Opposition (Senator Collings) said -
Apparently the Leader of the Senate has seen the light of day because he is now sponsoring a measure the principle of which is contrary to the words that he uttered on that occasion. On the 28th November, 1940, at page 240 of Hansard, the Leader of the Senate said -
Had 1 the power, my reprisals to these taxation proposals would be drastic. By act of Parliament I would provide that, for the duration of the war and twelve months thereafter, any one who attempted to justify the existence of this budget should be paid only what the Arbitration Court prescribed as the basie wage.
In discussing the 1941-42 budget, the Labour party was anxious, with the help of two members of the Opposition, to get into office, so it decided to attack the Fadden Government’s proposals, because that was a popular course to adopt and easier than taking the financial action which was demanded by the circumstances. The Prime Minister (Mr. Curtin), according to ‘Hansard, volume 168, stated on the 1st October, 1941-
When a government begins to tax incomes of £150 for the purpose of financing the war, it is beyond all doubt taking everything that the people in receipt of those incomes possess. Such persons arc being called upon to give everything except their lives. Everything they have must go. Their standards of living go at once. They are the first victims of the sacrifices imposed by war. Our view is that, apart from the soldiers and their families, the persons on low incomes should be the last victims of financial policy.
What are the sacrifices of men and women without dependants who have not contributed to the cost of the war? Under the first taxation proposals of the Curtin Government, in South Australia alone, 26,000 taxpayers without dependants were exempt from income taxation; but the Government, in order to obtain uniform taxation, promised that, as far as that year was concerned, no increase of tax would be made. What are the sacrifices of men in receipt of £156 a year, and without dependants, compared with those of members of the fighting forces in New Guinea and other theatres of war? At page 614 of Hansard, we find that on the 1st October, 1941, the Prime Minister said -
But when we step down into those categories of income receivers below £300, having regard to their obligations and the fact that so many of them are soldiers, we are not really diverting civil consumption to military purposes, but are greatly endangering the physical capacity of the country to withstand the demands of the war, for the majority of the workers in the factories and the majority of the men in the fighting forces are in receipt of less than £400 per annum.
Those figures display the attitude adopted by the present Government at that period. It is interesting to note that in the Fadden budget of 1941, which provided for post-war credits, the amount of tax that would be paid by a taxpayer without dependants, and in receipt of £156 a year, would be £11, whilst under the proposals now before us the tax will be £10 10s. A taxpayer in receipt of £200 a year is to pay income tax amounting to £21 15s. under the present .proposals, but under the Fadden proposals his tax would have amounted to £22 4s. It must be pleasing for the Leader of the Senate to be able to change his views on this matter; but I should think that his. conscience would prick him.
An interesting comparison can be made between the proposals now before the Senate and the rates of income tax in operation in Great Britain and New Zealand. The following table gives a comparison of the income tax imposed in Great Britain and in New Zealand for the year 1942-43, and that proposed for Australia under this bill. The United Kingdom figures include post-war credit amounts -
It will be seen from the foregoing figures that some people in this country are not contributing to the cost of the war to the same degree as people on similar incomes in Great Britain and New Zealand. New Zealand has adopted the right policy, and it is far preferable to inflation during or after the war, because all sections of the people would suffer from the effects of a serious depreciation of the currency. The present Government has adopted a policy which shows that it has been unable to dissociate itself from the vicious attack made by Labour organizations and Labour members on a small section of the community which has rendered good service to Australia. I refer to those engaged in private enterprise, many of whom have risen from the ranks of the workers and many of whom are largely responsible for the fine war effort that Australia has made. The present proposals are reminiscent of the vicious policy which the Minister for Aircraft Production (Senator Cameron) has often preached on the Yarra Bank. On incomes of £1,500, the income tax to be imposed in Australia will be £619, in Great Britain £606, and in New Zealand £534. Persons with incomes of £2,000 a year will pay £951 in tax in Australia, £856 in Great Britain, and £S05 in New Zealand. Those with incomes of £3,000 a year in Australia will pay £1,747 in tax, whilst similar taxpayers in Great Britain will contribute £1,462, and in New Zealand £1,472. Taxpayers on the £5,000 mark in Australia will be called upon to pay tax amounting to £3,530, whilst the taxpayer in Great Britain with a similar income will pay £2,837, and the New Zealand taxpayer £3,204. Under the Government’s proposals these people will have a further tax imposed on them ; the rate may reach 18s. 6d. in the £1. Having regard to the necessity to finance schemes for post-war reconstruction it is a great mistake to impose on high incomes a tax which can only be described as vicious, because if there is one thing that this country will need in the post-war period it is that people with money shall invest it in this country. Should taxation amounting almost to confiscation be in force we shall not get people with money to come here, so that whatever government is in office it will find its path more difficult than it should be. I, therefore, appeal to the Government not to overlook that aspect of the subject when considering financial proposals for the future. Official figures supplied by the Treasury some time ago showed that only 11,000 taxpayers had incomes of over £2,000 a year, whilst those with incomes in excess of £5,000 totalled only 2,000 persons. These people constitute a valuable national asset. It is a short-sighted policy on the part of the Government to make taxation so vicious that people with money will wish to leave this country, whilst others, who might otherwise invest their money in Australia, will be discouraged from doing so.
Under the Government’s proposals private companies will be placed in a different position. Small companies will bc worse off than bigger companies because, through their inability to create reserves, they will lack the capital and resources which would enable them in the post-war period to employ as many of the people as they may desire.
– In the depression years large sections of the community had to exist on the dole.
– During the depression years from 1929 to 1931 a Labour government was in office. Its record is not particularly inspiring. However, the sane financial policy of succeeding governments enabled this country to recover quickly from the depression.
At this stage I shall not oppose the Government’s proposals, but in committee I. shall move three amendments. The first will relate to clause 8, which deals with the deferred pay of soldiers. Senator McBride pointed out a few days ago that the deferred pay of 2s. a day which commences when a soldier leaves Australia may not be worth more than ls. 6d. a day when he returns, because of the increased cost of living in the meantime due largely to the Government’s use of bank credit to finance this country. I appreciate the Government’s need to obtain money from every available source and its reluctance to accept amendments which would involve any considerable sum, but my proposal in respect of the tax on deferred pay would not represent a great amount. It is not the fault of the Government that the deferred pay of the members of the fighting services i-s to bc taxed ; rather is it due to a provision in an act which has been in force since about 1916 empowering the Commissioner of Taxation to assess for income purposes 5 per cent, of an annuity. “With the zeal which the Commissioner rightly displays, I understand that he now proposes to tax 6 per cent, of the deferred pay of soldiers; but in view of the increased cost of living I ask the Government to make provision whereby this tax will not be imposed. I realize that certain exemptions already apply to members of the fighting forces, but these men are entitled to every concession that has been granted to them.
My second amendment will relate to clause 15. I propose to ask that a widower with children under sixteen years of age. who employs a housekeeper, shall be allowed the same deduction as is now granted in respect of a wife or a blood relation of the family.
The third proposed amendment relates to refunds of excess payments by taxpayer?. Although I shall reserve most of tuy comments on this subject until the committee stage has been reached, I point out now that in the third report of the Royal Commission on Taxation, elated the 12th April, 1934, Sir David Ferguson, a Judge of the Supreme Court of New South Wales, and Mr. E. Y. Nixon said -
Simplicity is not the only consideration, and vrc arc not prepared to recommend any method of collecting tax on wages at the source that does not provide for an eventual adjustment of over or under payments.
A careful examination of the Government’s proposals reveals that they differentiate between classes of taxpayers. The departmental experts will calculate what Ls a reasonable deduction to make each week for 52 weeks in order to obtain from each taxpayer the amount for which lie will be liable, but a taxpayer may have the misfortune to incur heavy medical expenses during the year. The limit of concessional deductions in respect of medical expenses is £50, and in respect of life assurance £100. Concessional deductions are also allowed in respect of gifts to charitable institution” and rates. In many cases departmental officers may not allow for th c maximum of concessional deductions in respect of taxpayers who qualify to claim the maximum. A taxpayer with a wife and two children may have an income of £1,000 a year. He spends £180 on life assurance, medical expenses, rates, superannuation, and the like. His weekly deductions at the prescribed rate will amount in 52 weeks to £261. On the £180 he will be allowed a rebate of £64. His tax, according to lists supplied to us, amounts to £285. If we deduct £64 from £285, his net tax is £221, yet his weekly deductions amount to £261. In twelve months, therefore, he would overpay £40. Under this measure it a proposed to issue certificates of credit to cover overpayments of tax, and to pay interest at the rate of 2 per cent, on the amounts overpaid. It is obvious that overpayments will occur only in the case of salary or wage-earners, and will not apply to taxpayers in business, because the latter will make their return at the end of the year. This system is bad in principle, because it applies one set of conditions to one class of taxpayer, and another set to another class. The Opposition intends to move an amendment to provide (hat overpayments of tax be refunded to any taxpayer who applies for such a refund. No doubt, thousands of taxpayers will not worry very much about overpayments, but at present, when the rates of tax are particularly high, many people will find it necessary to apply for a refund of overpayments. It is unfair to oblige such persons to plead hardship to the Commissioner in order to obtain such refunds. The Opposition’s proposal will ensure that justice is done in such cases. The proposal to issue certificates of credit is due entirely to financial stringency owing to our war expenditure. Many married women who to-day are earning more than their soldier husbands will leave their employment at the end of the war and return to their homes. When they do sr>, they will still be called upon to pay tax, and the object of the Treasury, no doubt, is to provide a reserve out of which those people will be enabled to meet their tax at that time. However, such reserves could be more equitably established under a system r>f post-war credits, based on ability to pay. Thousands of people would bless the day t that such a scheme were adopted. It would s spare them the embarrassment of having to approach the Commissioner to plead hardship in respect of the payment of tax after the war has ended when, most probably, they will be unable to meet their commitments from their reduced incomes. I again urge the Government to establish a system of post-war credits along the lines of the proposal advanced by the Fadden Government. Having gone so far as to tax incomes on the lower ranges it should deal with this problem thoroughly by compelling people to build up reserves upon which they can rely when their incomes are substantially reduced after the war.
Senator J. B. HAYES (Tasmania) 1 4.15]. - I realize that the Treasurer (Mr. Chifley) must be enabled to obtain sufficient money to meet the Government’s budgetary commitments. Although the Government has associated a proposal to establish certain social services with the taxation of incomes in the lower ranges, it is admitted that the money to be raised from that source is primarily required to meet war expenditure. I do not think that the people as a whole will object to that procedure. They realize that taxes to-day are necessarily heavy. At the same time, however, they expect that the money will be carefully expended. I have no charge to make against the Government in this respect; but wherever one goes to-day, in the trains, in the street and at home, one hears stories of wasteful expenditure. When large expenditure is being incurred it is impossible to watch every penny, but the people have a right to expect the Government to ensure that there will be no undue waste. The prevalence of the stories of wasteful Government expenditure reminds me of the saying that where there is smoke there is fire. It would seem that some aspects of Government expenditure to-day would bear investigation. I am pleased to note that the Government has at last decided to tax incomes in the lower ranges. About eighteen months ago our national income was estimated at £800,000,000. To-day it must, be nearly £1,000,000,000 annually, and about 80 per cent, of that income is owned by people who earn less than £8 a n-eek. Until recently that source of revenue was left practically untouched. To-dev. however, dire necessity has forced the Government to tax lower incomes.
We cannot have an all-in war effort unless every one pays his share. However, the Government’s proposal to tax incomes in the lower ranges will not be so effective as the post-war credit scheme put forward by the Fadden Government. That was an excellent proposition, because it at least guaranteed post-war savings to people who could least afford to make any contribution to our war expenditure. I urge the Government to reconsider the proposal to establish post-war credits. The proposal under this bill to retain overpayments of income tax is inequitable, because it is to be applied only to wage and salary-earners. The time has come when we must tackle the whole position. I believe that the Government should return the excess money which it takes in instalments, unless it is prepared to go all the “way and bring the taxation system up to date. It is necessary, in the interests of both the Government and the taxpayer, to bring our taxes and taxing machinery up to date. There is at the present time a lag of a year in taxation. Various opinions have been expressed upon the subject. I believe that the Crown Law authorities recently gave an opinion that there was no lag, and that, if one goes back over the twenty years during which we have been paying Commonwealth income tax, it can be argued that there is no lag, but two or three simple examples can be given which at least prove conclusively that a lag exists. If a man has an income of £1,000 this year, and no other assets, loses his position, and earns nothing next year, he must next year pay the tax on that £1,000. That is a situation which we should do something to avoid. The necessity of taking steps to introduce a fairer system is made more urgent by the fact that the taxes are so high. We have all known about the anomaly for years, but when we were dealing with normal taxation in normal times, and could take things, as it were, in our stride, and nobody was’ affected very much, the necessity for a remedy was not very much felt. With the present high taxation, however, there is a great need to consider this subject as it has been considered in other countries. I believe that a formula can be adopted whereby the taxpayer will get. tremendous relief, and the Treasury
Senator ./. 11. Hanes. will not suffer very much. I read about this matter last September in a letter which I propose to read to the Senate, because it Sets the position out so clearly that it would be an advantage to place it on record. It. came from the National City Hank of New York, which sends out a. monthly letter to anybody interested. I know that because 1 receive a copy every month. I wish to give to that bank and its letter the credit for having brought it to public attention in this country, where the view there expressed has since been widely adopted. This part of the letter is headed, “ The Rum Pay-as-you-go Tax Plan “, and is as follows : -
The increased coverage and high rates of personal income taxes, with the inevitable increase in difficulties of tax collection, have enlisted growing support for the pay-as-you-go plan proposed by Mr. Beardsley Ruml, treasurer of R. H. Macy & Co., and chairman of the Federal Reserve Bank of New York.
In brief, what the Ruml plan offers is a way of adjusting income tax payments to a current basis, instead of the present one-year lag, without forcing a “ doubling up “ of taxes on the taxpayer in the year of changeover.
That an adjustment of some kind to a pay-as-you-go basis is needed has become increasingly evident as the war tax programme lias advanced.
For one thing, the expansion in the number of taxpayers from a comparatively small number to some 20 millions, many of whom are not accustomed to make out forms, has greatly increased the need for some form of withholding tax, or collection at the source, to ensure collection and lessen the trouble and expense to the Treasury pf checking millions of small returns. And a withholding tax is, of course, a pay-as-you-go tax.
Secondly, the high rates to which taxes have advanced have made it more than ever desirable for individuals to pay taxes currently as income is received and when they have the money, rather than wait a year until the money may have been spent and the ability to pay taxes possibly reduced by shrinkage of income. Because of the tendency towards delay in passage of tax bills until late in the year, but with taxes retroactive to the first of the year, people do not even know what their tax liabilities are until too late in many cases to make adequate provision for them.
Thirdly, the lag of one year in tax collections, enhances the danger of inflation. With incomes rapidly increasing, the situation calls for taxes that can be applied promptly and mop up purchasing power before it can be spent.
The Treasury has recognized the need for pay-as-you-go taxation, and in a statement on the Ruml plan said that the present method of collecting taxes in the year after the income is earned is “ poorly suited to a mass tax a.t high rates”. The current tax bill provides for a beginning in this direction by requiring, starting January 1, 1943, a S per cent, deduction of tax at the source, to be followed by 10 per cent, in 1944. The difficulty is that any change of this kind runs headlong into the problem of collecting two years’ taxes in one, which with rates as high as at present would mean a total levy that large numbers of people would have very serious difficulty in meeting.
To avoid this doubling up, the Ruml plan proposes that individual income taxes now being paid on 1941 incomes be considered as taxes on 1942 incomes instead. In 1943 the tuxes payable would then be taxes on 1943 income, and the whole system would be on a current or pay-as-you-go basis. Adjustments for the difference between taxes paid and actual tax liability in any year would bo made the year following. While this plan means the dropping out of the taxes on 1941 income, the Treasury would continue to receive its revenue and the taxpayer would continue to pay his taxes. It would not involve any writing off of assets by the Treasury, whose accounts are handled on a cash rather than accrual basis, but would mean, of course, a loss of one year’s taxes when and as each individual taxpayer’s income ceased. Such loss would thus be spread over the lifetime of those already paying taxes, and would be offset in part if not entirely by lessened tax evasion and tax delinquency, higher estate taxes, and the fact that future tax rates should bc far lower than present war-time rates. /”lie Treasury, while endorsing the payasyougo objective of the Ruml plan, opposed the dropping out of the tax on 1941 incomes in their entirety on the grounds that it would constitute a “ windfall “ to some taxpayers having targe incomes in that year, and suggested that only the normal tax and the surtax on the first bracket of $2,000 of net income should be dropped. The Senate Finance Sub-committee, headed by Senator Clark, of Missouri, voted to recommend to the full committee the Ruml plan, with some modifications, but rejected the above alternative suggestion offered by the Treasury.
The full Senate committee at first rejected the report of this sub-committee, but as this goes to press, is reconsidering the matter in response to a widespread public interest in the plan.
I understand that the Ruml plan was at first rejected, but I have heard since over the wireless that it was being considered. It is now stated m the press that the Ways and Means Committee of the American Congress has adopted it. We have heard many times that a prudent man should pay his current taxes out of current income, but it is seldom done now. What we are now doing is to pay last year’s tax on last year’s assessment out of instalments collected from this year’s income, and of course we are always a year behind. Some one has to pay it eventually, generally at a time when he can least afford it, or else his executors have to pay it. It is not all one-sided, however. The Treasury and the taxpayer would both be distinct gainers. The Treasury would benefit by collecting larger estate duties, as the New York letter states, because if the taxation were not paid on estates there would be more estate duties to pay. I know that that would not be an adequate set-off, but it would be appreciable.
– It would not be a set-off at the same time, either.
– That does not come into the question, because the Government is getting its taxes at the present time on a cash basis. T do not think that it would mean any appreciable or immediate embarrassment to the Treasurer. I would not. advocate it if I thought that it would embarrass the Treasury, but my view is that such a scheme could be introduced without causing embarrassment, and that sooner or later some government will be forced to do it to protect its revenue. In a recent speech the Prime Minister (Mr. Curtin) forecast that some incomes would be lower in the future. Every one realizes that in many cases present-day incomes are abnormal, and that when the war is over they will be reduced greatly. When that occurs taxpayers will be called upon to pay high taxes out of greatly reduced incomes, and the taxation authorities will not be able to collect the money. It is impossible to get blood out of a stone. That loss of revenue could be avoided by the introduction of a “ payasyougo “ scheme, and now is the time to introduce it while wages are high. I am convinced that a. system could be evolved which would not embarrass the Treasurer, and which would be of tremendous benefit, to the taxpayer.
– Virtually it would mean limiting purchasing power.
– Yes, that is what the letter from the United States of America says. It would be a check on inflation, and I am scared of inflation. Every one knows that one ha.= to pay double the price which ruled twelve months ago for many articles. It is all very well to say that the cost of living has risen only by 22£ per cent. ; the fact is that in many directions the increase has been much greater than that. It is necessary that steps should be taken to check inflation, and a scheme such as I have advocated would be a definite check. Similar action has been taken in Canada. The taxation systems operating in .the United States of America and in Canada are similar to ours, and if such a scheme has been found necessary in those countries, it must have something to commend it. I do not say that a “ pay-as-you-go “ scheme has been introduced in the United States of America and Canada solely in the interests of the taxpayers. No doubt the governments of those countries desired also to protect their revenues. They could see the time coming when the taxation authorities would not be able to collect their revenues because of greatly reduced incomes. I realize that we cannot do anything about the matter when considering this measure or the other measures associated with it, because, for one thing, we have not time to establish a new system. Also, we have not all the data before us, nor have we obtained the advice of taxation experts who have devoted their lives to the study of these matters. In my opinion the taxation authorities would be very pleased to introduce a “ pay-as-you-go “ plan, because they realize that some time in the future they will find it impossible to collect their revenues. Although I am not keen on all-party committees, 1 think that, when this measure has been passed, the possibility of introducing a “ payasyougo “ scheme should be investigated by a competent body. When two great countries like the United States of America and Canada have seen fit to introduce such a scheme, there must be something in it. I ask the Government, to give this matter consideration, not only from the point, of view of the taxpayer, but also from the point of view of all concerned, because I believe that it should be possible to achieve something worth while in this direction.
– I was inclined to rise and challenge the statement of the Leader of the Opposition (Senator McLeay) when T heard him accuse. me of advocating the use of bank credit. Bank credit, as the honorable senator described it, amounts to bank debt, and I have never advocated that. For years I have urged the use of national credit through the Commonwealth Bank, but not through the private banks. The Leader of the Opposition eulogized a speech made last week by Senator McBride, who, unfortunately, left the chamber very soon afterwards, probably realizing that if he remained here he would hear the other side of the question from me. The Leader of the Opposition also- laid strong emphasis upon the heavy taxes imposed in New Zealand; but is the honorable senator aware that for years past a huge -octal service system has been in operation in New Zealand, and that notwithstanding the fact that the Government of New Zealand bought out the Central Bank of New Zealand established by Sir Orto Niemeyer it still borrows from the private banks? Surely the honorable r iia tor is aware that most of the revenue derived from taxation to-day is being used to pay interest on past loans and that notwithstanding the fact that we have paid more than £400,000,000 in interest, we are still repaying loans raised during the last war. Senator McBride complained about the tremendous increase of our note issue. Of course the note issue has increased ; does the honorable senator not realize that, tens of thousands, or even hundreds of thousands, of. people who did not have jobs prior to the outbreak of war arc now earning income? Obviously, these people cannot be paid in silver and copper, so that it has become necessary to increase the note issue. The honorable senator also said that before the war the private banks had only £13,000,000 worth of .notes between them ; but he did not say that in the first year of the war the private banks bought £67,000,000 worth of inscribed stock and treasury-bills. Yet it, is he who claims that banks do not create credit. Senator J. B. Hayes referred to what, is being done in regard to taxation in the United States of America, but is. he aware of the fact that although the total amount of taxes that it is possible to raise in the United St.°tes of A merica ?s 29.000.000,000 dollars, already the private banks in that country have loaned the Government of the United
States of America 49,000,000,000 dollars? The honorable senator also quoted a statement by the manager of the Central Reserve Bank in New York, but surely he knows that that bank is. a private institution like the Bank of England, and that, obviously, the advice of any private bank in regard to taxation would be to make the imposts as heavy as possible. I do not consider it right to tax individuals who are earning only £2 a week. I remember very well telling honorable senators, a few years ago, that not until they were paying away one-half of their salaries by way of taxes would they realize the truth of my remarks in regard to the use of national credit. Now it has come to pass, and I wonder how they feel. On an income of £1,000 a year the present uniform tax is £256, whereas under the proposed uniform tax it will be £355, so that whereas at present honorable members have £744 left out of their salaries, when the new scales are introduced, they will have only £645. The “heavier the taxation that is imposed the quicker will come to pass the fall of the present system. That is why those who “hold the same financial views as I do are :not very much concerned about the present heavy taxation. The Government will realize some day that instead of borrowing money from the private banks it rita obtain ail the finance that it requires from the Commonwealth Bank. Of course, the bogy of inflation is still being raised. As I have explained before, inflation simply means an increased cost of living. In seeking subscriptions to war loans the Treasurer (Mr. Chifley) is leading the people to believe that all the money that they subscribe will be paid back. They do not realize the great depreciation in the value of money which will take place before that time. In order to protect those who invest money in war bonds a fund should be established to compensate for any depreciation of the currency between the time when the bonds are issued and when repayment is made to the lender. It is proposed in Great Britain to take a proportion of the present income of the taxpayer and pay it hack to bini after the war, but how will the money be raised to enable repayment to be made? The Government is prepared to sell to a citizen for 16s. a certificate which in seven years will be worth £1, because it has not the necessary money at present with which to carry on the war; but how will the money be obtained to pay back the 20s. when the certificate matures? That can be done only by further borrowing. We need to raise, not money, but credits. Wars are not fought by means of money at all. Some honorable senators declare that we could pay for the war as we go by raising the necessary revenue by means of taxes, but the absurdity of that argument with respect to a war bill amounting to about £1,500,000 a day ought to be obvious. The Leader of the Opposition stated that he thought that copies of a recent speech made by his deputy. Senator McBride, ought to be widely distributed, but, in my opinion, the h’.-s publicity given to such a misleading utterance the better. That speech bristled with inaccuracies, especially where it referred to financial matters. For many years Senator McBride has supported the orthodox method of finance, which is responsible for the present financial tangle.
The people of Australia have never had a government worthy of their inheritance. We have had men in. power who knew nothing about finance. We started the war with a national debt of £1,200,000,000, fmd the interest on that debt has to be provided by a population of about 7.000,000, many of whom are children. Why does not the Opposition talk about national credit as opposed to bank debt? The Commonwealth Bank, as has been shown by the report of the Royal Commission on the Monetary and Banking Systems, could lend interest-free money to the Government or to anybody else. The highest financial authorities in the world have said that money can make or unmake governments. I read a statement in this chamber about a week ago relating to the financial position in Great Britain, where the war is costing £12,500,000 a week. -Sir Kingsley Wood has been asked over and over again why the Government of Great Britain does not use the national credit, but he will not hear of it. He asked for £1,000,000,000. not because the previous vote of a similar sum had been exhausted, but because the war expenditure had increased by £250,000 a week. Every £1,000,000 advanced to the Government through the private banks is new money created out of nothing, yet Senator McBride has told, us what a great financier Dr. Schacht was. When the latter was manager of the Reichsbank before the war, he desired to finance the German war effort by means of the old orthodox system of finance, but he was “ sacked “. When it was said that Germany could not go to war because if had not the necessary money, a finance committee in that country showed that ir was not necessary for Germany to Iia ve money in order to embark on war. The Bank of England lent £50,000,000 to Gem any before the war broke out. and Mr. Montagu Norman said that it was far better to lend Germany that sum, even if the bank did not obtain repayment, than to have Europe overrun by Bolshevism. We know to-day, however, u bother Nazism or Bolshevism is “ playing the game “ fairly.
The DEPUTY PRESIDENT (Senator Brown). - The honorable senator must confine his remarks to the bill.
– -I have come to Canberra to fight the money monopoly. T have done so for years, and I hope to live to see my financial views accepted by the Senate and the Government, in order that the present extremely heavy taxation may be avoided.
Senator MCBRIDE (South Australia) 4.4S j. - I congratulate the Government upon the introduction of this bill, which gives an indication that Ministers realize their financial responsibilities. I imagine that this measure is a product of great travail, and that Ministers generally have had much difficulty in inducing their supporters to agree to its presentation to Parliament.
– Honorable senators opposite are still disagreeing with regard to it.
– I hope that honorable senators on this side will show their support of the measure in a practical way by voting for its second reading, but we cannot help having real sympathy with the Government, at this period. The Leader of the Opposition (Senator
McLeay), during hi3 speech, referred to remarks made by the Leader of the Senate (Senator Collings) and by the Prime Minister (Mr. Curtin). I can quite imagine that they found great difficulty in completely reversing their policy on this occasion. I am not greatly concerned with the difficulty that it has had with members of Parliament, because, after all, members of Parliament should be able to appreciate the difficulties confronting the Government, but I am concerned that ever since the war’ began Ministers have told the people many th ings which they now admit were wrong. There might have been some excuse for such utterances prior to the war, but not since the war began. When I was a member of a previous government, I well remember the then Opposition saying that it would be a crime to lower the standards of the people of this country by imposing taxes on the lower group of incomes. At that time such sentiments found ready acceptance on the part of many of the people of Australia. They were entitled to believe that their representatives in the Parliament were in a position to know the facts and were courageous enough to tell them the truth. I repeat that I have considerable sympathy with the Government, but I have more sympathy with the people who, until now, have been ‘completely misled. The Opposition realizes that the Government would not have brought this measure before the Parliament had it not been convinced that such action was necessary. Although the people outside may not realize the necessity for such legislation, I know that this measure, and, indeed, other measures of a similar character, are necessary in order to preserve the integrity of Australia and maintain its existing financial structure. I believe that in order to get the support of its followers in the Parliament the Government has had to resort to a subterfuge, which is just as misleading and damaging as statements regarding taxation made prior to the introduction of this measure. In effect, the Government now says that, in spite of what it said earlier, the exigencies of war make necessary the imposition of taxes on the lower groups of income. I do not say that the Government has said so in plain language, but that is the underlying reason for its action. Even though the taxes to be imposed under this measure may not be so severe as are the taxes in some other countries, these proposals reverse everything which the Labour party previously said. However, the Government has sugar-coated the pill because it has suggested that, in return for the payment of taxes, certain measures of social security will be enacted.
– The honorable senator should not anticipate other legislation.
– It has been suggested that some of the revenue to be obtained under these proposals will not be used directly for war needs, but will be set aside for other purposes. The present proposals are more severe in respect of all ranges of income than anything that we have had in this country previously.
– Increased war expenditure is responsible for these heavy imposts.
– I realize that that is so, but I do not admit that the Government has frankly told the people the real reason. It is well to examine the position. Under the proposals now before us, the direct taxation to be imposed upon the people of this country in the next financial year is expected to yield about £200,000,000. I admit that that sum includes amounts to be raised on behalf of the States, but as the money will come out of the same pockets, the total amount must be taken into consideration when calculating the degree of direct taxation that is being imposed. In addition, indirect taxation in that year is expected to yield about £96,000,000. It will be seen, therefore, that taxes aggregating nearly £300,000,000 are to be extracted from the people. I do not say that the taxpayers will not receive substantial benefits in return, but I do say that nearly £300,000,000 is a considerable sum for a nation of a little over 7,000,000 to raise in one year. The national income of Australia is about £1,000,000,000. I do not propose to argue whether it is really only £900,000,000 or even £950,000,000, because for the purposes of illustration £1,000,000,000 is a sufficiently accurate estimate. The pro.posals of the Government mean that about 30 per cent, of the national income is to be taken from the people of this country. I repeat that that is a very severe impost; hut the present financial drift indicates that even this impost will not be sufficient to meet the Government’s needs in the near future. This taxation is too belated. In the past, governments which stubbornly refused to realize what they were up against and delayed taking the necessary step3, caused very great suffering to the people even ‘ when, belatedly, they took such steps. Australia had that experience during the regime of the Scullin Government from 1929-31. Supporters of that Government went to the country full of promises and bright hopes, but not very long after their election they realized the impossibility of carrying out their promises. Unfortunately for the country they were not prepared to admit their mistake in good time, but preferred, by every possible means, to avoid the inevitable. The consequence was that when that Government at last decided to take the action rendered necessary as the result of circumstances aggravated by its delay, it was obliged to impose much heavier taxes than would otherwise have been the ease. I believe that the present Government will have a similar experience. Severe as these imposts are they are too belated to enable the Government to meet its needs. As I said on a previous occasion, this Government is the first in the history of this country to have the audacity to reveal to Parliament and the people a serious drift in its finances, and at the same time to refuse to take a single Step in order to stem that drift. These taxes are designed to meet expenditure during the financial year 1943-44. I am aware that the Treasurer (Mr. Chifley) has stated that a sum of £8,000,000 to be raised under these proposals will be collected during the current financial year; but that amount will not be available to meet any of our expenditure next year. Consequently, I warn the people that these impositions, despite their severity, will not stem the present drift in the country’s finances. At the same time, the Government is endeavouring to reassure the people that these proposals will enable it to meet its present requirements. I tell the people clearly that with the exception of the £8,000,000 to which I have referred none of the revenue to he raised under these proposals will help in the slightest degree to bridge the gap of £200,000,000 which will exist in the Government’s finances at the 30th June next. Consequently, the Government, which has, in season and out of season, assured the people that it will place the burden upon those best able to bear it, is deliberately - and I say that advisedly - placing the most unfair burden upon the mass of the people that any government has yet conceived. It is depreciating the currency. Thus, in addition to imposing taxes on a graduated scale, it has by depreciating the currency imposed a flat rate of 12-^ per cent, or 2s. 6d. in the £1, on every person in the community. Despite its avowals that it would place the burden on the shoulders of those best able to bear it, it has imposed a flat rate of 2s. 6d. in the £1 on the incomes and savings of every person in the community. Unlike the Labour Government in New Zealand, it has refused to impose a war tax and a social service tax on a flat rate. A continuance of the Government’s present policy will mean that, during the next twelve months, it will place an additional tax of ls. in the £1 on the incomes and savings of every person in the community. Yet, this is the Government which claims that it has the welfare of the wage-earners at, heart, and has invariably charged members of the Opposition in this Parliament with being unsympathetic with the underdog. It was loud in its promise to safeguard the mass of the people; but, in fact, it has done more than the Government of any other allied country to depreciate the value of money in the community. That, of course, means an impost on every section of the community. It is time that the people of this country woke up to what is happening in that respect. .1 believe that they are becoming alive to the facts, and that very soon no camouflage, or subterfuge, on the part of the Government will conceal the facts from them. I hope that now that the Government has- taken this first step in the right direction it will immediately adopt measures to stop the depreciation of the Australian £1.
– How can it do that?
– By raising its revenue by taxation, by loans, either voluntary or compulsory, or both; and by using the minimum of bank credit, instead of following its present policy, which cuts right across that enunciated by the Treasurer and the Prime Minister. We know perfectly well that the people of this country have not contributed towards loans on anything like the same scale, proportionately, as the people of Great Britain. The Treasurer, in his budget speech, said that if the people of Australia subscribed on a basis proportionate to that of subscriptions by the people in Great Britain, the sales of war bonds and war savings certificates in this country would amount to £60,000,000 annually; but, the fact is that, we are raising only £10,000,000 annually by that means. The explanation of that disparity is that the Government of Great Britain is courageous and truthful, and tells the people of that country exactly what is required of them. I have every confidence that the people of this country will stand up to their obligations in a manner at least equal to that of the people of Great Britain, if only they can get a government which has some courage and is prepared to tell them the truth. I congratulate the Government on the first step it has taken. There are many more steps which it must take, and take quickly, to preserve the financial stability of the Commonwealth. I am prepared to support the bill, which I hope is only the forerunner of a change in the financial policy of Australia.
.- It is rather hard to discuss this bill and, at the same time, exclude from consideration the other two bills which have come before the Senate. They are so intermixed that it is difficult to keep one’s observations upon them apart. The first and outstanding feature of this bill is the fact that, although the Government is in war-time raising £40,000,000 by now taxation, only £10,000,000 of it is to go towards war purposes. The question arise: Is this *a time for a further saturnalia of spending, when even the Treasurer (Mr. Chifley) has admitted that in about six months his estimate of expenditure has been exceeded by practically £100,000,000? What confidenee can we have in a Treasurer, or in financial experts, who in five months’ time, have been so far out in their estimate ?
– It has made a great difference to the war effort, too.
– I suppose that the war effort is also 25 per cent. out. Although the £40,000,000 is needed for war purposes, 75 per cent, is to be diverted to some other purposes altogether.
– There is nothing in this bill about that.
– It is very difficult to refrain from discussing the othermeasures. In his second-reading speech the Minister for External Territories (Senator Fraser) actually stated that under the bill £40,000,000 of new taxation would be collected, of which £30,000,000 would be diverted to other purposes. If the whole £40,000,000 were to be raised for war purposes, there might not be so much objection to it. We would welcome it as a step towards preventing the inflation that is now going on, but £30,000,000 is to be extra money for distribution amongst the spending community, thus lowering the value of money. That is the first feature that strikes me in the bill. The second is that the Government has now adopted what, is for it the new principle of taxing lower incomes. It has gone even farther by adoption a policy which I should call confiscation. In this case it is confiscating the money of men who are least able to afford it. What justification can there possibly be for the Government retaining overpayments of income tax?
– The honorable senator’s leader showed the justification.
– He did not. He advocated post-war credits, but surely the Minister does not claim that this is a post-war credit system, on the same terms and conditions as was proposed by this party when it sat on the government benches? The Minister cannot pretend that, post-war credits were to go only -to people on lower incomes, and that the rest of the community were not to contribute by means of compulsory loans. This clause appears to me to be thoroughly dishonest.
It differentiates between men on salaries and wages and those with other forms of income. It penalizes them, and prevents them from claiming their usual allowances. A man who has had a hard time during the year, and incurred medical and other expenses, is to be prevented from obtaining the benefit of the ordinary allowances. If he has overpaid his instalments, the only consolation he has is that he will receive 2 per cent, interest on the surplus. He cannot draw it, or set it off against the coming year’s income tax. He has to pay that as he goes, in weekly or monthly instalments, and “will probably have a surplus to his account at the end of the second year. Another man on exactly the same income who is in business for himself has not to contribute anything. I cannot understand how the Government can justify such a policy. I hope that when the bill is in committee the Government will recognize that this provision is unjust, unfair, and inequitable, because that is the outstanding feature of it.
– Is this not a species of credit which the Government is creating for that particular taxpayer ?
– When is the credit to operate? He cannot use it to pay his next year’s income tax, and so far as I can gather from reading the bill it does not even indicate when, if ever, he will get it back. The arrangement is not even terminable at the end of the war. I presume that the scheme of the Government is that if, in consequence of a fall of his income, lie is not able to pay what he owes for tax, the overpayment will be confiscated. I am a great believer in the “ payasyougo “ principle, which means paying the tax on one’s income in the year in which the income is earned. The talk about a lag in income tax payments does not strike a responsive chord in my mind at all. I cannot see where it comes in. This provision appears to be practically confiscation of whatever surplus a taxpayer may have paid. He cannot regulate his payments, which are statutory. So much must be deducted on every pay day from his salary or wages. He cannot say that at the end of the year his salary will be so much, and that every month he will pay so much towards his tax. The Government fixes the amount that he has to pay, and so it is not his fault if he has a surplus to his credit in the hands of the Government at the end of the year. Looked at from any point of view, it has been a great advantage to a number of people to pay by instalments, because at the end of the year they know that there, will be so much to their credit, and the money will be useful to them. Under this bill, the taxpayer who would be glad of a few pounds at the end of the year will find that the money has been confiscated, and that he cannot use it. It will not be a provision in the ordinary way for a post-war credit. It is really a provision by the Government that, if a taxpayer loses his income, there will be enough money in its hands to cover his last year’s tax. That does not seem to be a fair or honest way of doing things. It differentiates between two classes of the community. It imposes a tax upon the taxpayer in receipt of salary or wages, and allows others to go free. It prevents the man on wages or salary from getting his usual allowance for medical expenses and other things, whereas the other class of taxpayer getting his assessment in the usual way, can put in his usual claim for allowances. I am dissatisfied with this bill, first, because the large amount of money which it proposes to raise will not be used solely for war purposes. It is a camouflage measure. The people of Australia would not object to the raising of £40,000,000 for war purposes, but to seek that sum for expenditure in directions other than upon our war effort at a time like this, when money is scarce and its value is decreasing rapidly, is quite wrong. Secondly, the measure is dishonest because it differentiates between various sections of the community, and I am astonished that it has been introduced by a government which has proclaimed from the house-tops its adherence to the principle that, the small man - the underdog - should be protected.
– Ever since honorable senators opposite have been in Opposition they have been urging that income tax should be extended to the lower income groups.
– I am afraid that the honorable senator is not in his usual fair mood. The claim that we on this side of the chamber have made consistently is that every member of the community should be called upon to shoulder his share of the burden in accordance with his ability to pay. In dealing with incomes of £104 a year, we are not dealing with men, but with boys and girls, and I see no reason why they should not have to pay their ls., 2s., or 2s. 6’d. a week, even on their small incomes. Honorable senators on this side of the chamber have always advocated an equitable distribution of the burden, but the proposal in this bill that excess payments of tax shall be retained by the Taxation Department amounts virtually to the imposition of an additional tax upon certain sections of the community. Such a proposition is thoroughly unfair. For those reasons I object to this measure, and I hope that when it reaches the committee stage certain clauses will be amended.
Although there is no specific reference in this bill to the manner in which the money is to be expended, we all know that £30,000,000 will be used for a purpose entirely unconnected with the war. At a time like this, when every ls. is needed for a maximum war effort, we should not be handing out benefits to all and sundry, especially in view of the fact that the very safety of those people to whom it is claimed that benefits will be paid is not yet, assured.
.- It seems to me of the highest importance that any taxation measure should at least deal on a basis of equity and fairness with all sections of the community, and that one particular class of taxpayer should not be treated differently because of entirely fortuitous circumstances; yet this measure proposes to withhold from certain taxpayers all amounts paid in excess of the sums to which they are liable for income tax. Such a proposal is not calculated to place the burden equitably upon the shoulders of all taxpayers. If it were intended that every wage-earner and salary-earner should be required to build up a credit to meet future taxation, I would not have the same objection to the proposal, but that will not be the effect of this measure.
– That is the purpose of it.
– This bill does not impose upon all individuals an obligation to build up a credit. For instance, in the case of one man who is earning, say, £8 a week, the weekly deductions from his salary may work out at approximately the amount of income tax which he owes at the end of the year and no post-war credit will be retained, whereas, another taxpayer, earning the same salary, but who has had the misfortune to be involved in heavy medical expenses, will continue to pay the same weekly instalments although his final debt will not be nearly so great and the excess payment will be retained. I object to taxation in that form, because it is unfair, and it cannot be justified upon any basis of equity. Let me give another illustration - -I shall be interested to learn if the figures which I shall give are not correct: Take the case of a person who is an employee, and’ that of another person who is engaged in his own business ; they each earn £500 a year, and they each have deductions for medical expenses, life assurance, &c, amounting to £100. The man who is employed will pay about £130 by way of instalments, whereas the man who is engaged in his own business, and in respect of whom no deductions are made, will be liable to pay only £82. On the basis of the schedule on which the Taxation Department works, a man on salary will not get the full amount of his. medical expenses, but he will receive an average sum, whilst the man engaged in his own business will get the full deduction for his medical expenses, and it will show an appreciable difference between the actual amounts retained by the two classes of taxpayers. I believe that these figures are based upon the deductions which were originally proposed. I realize that some alteration has been made in the new table of deductions, but the principle is the same in the two cases.
– Anomalies of that kind should not be permitted.
– I am glad that honorable senators opposite are beginning to “ see the light “ in this matter. The measure with which we are concerned provides that a person who has a credit as at the 31st March this year can get the money back, but that a person who has that credit on the 1st April cannot get it back. I cannot see any reason why the line should be drawn at the 31st March.
– It must be drawn somewhere.
– I say that it need not be drawn anywhere. If we have a SCheme with a flat rate deduction from wages, in relation to a tax based on a yearly income, and on which the taxpayer has a right to concessional deductions, there must be anomalies. The only way to deal with the matter is to say to the taxpayer. “ Although in the course of twelve months we may take more from you than you are liable to pay, we shall give you the right at the end of the tax year to get back the excess sum that we have taken from you “. The amendment foreshadowed by the Leader of the Opposition shows the obvious way in which this matter should be handled, otherwise thi* Parliament will have imposed a thoroughly unjustifiable and inequitable tax. This system is to be imposed only upon salary and wage earners, and only upon those of them who accidentally have heavier medical expenses than others, or whose deduction is greater than the amount of tax for which they are liable.
The suggestions put forward by Senator J. B. Hayes are worthy of serious consideration. W’e should endeavour to see whether a system of income taxation could be devised which would embody the “ pay-as-you-go “ principle. Technically, it can be said that there is no lag in income tax. It is quite true that we pay this year’s tax this year, if we are lucky; but the point is that this year’s tax is imposed on the basis of last year’s income, and next year’s tax will be imposed on the basis of this year’s income. Prom the point of view of public revenue, it does not matter much whether the basis of taxation for this year is last year’s income, or this year’s income. The total amount which will be collected in tax will be substantially the same. Of course, there will be variations from year to year. The chances are that, if we based this year’s tax on this year’s income, we should probably get more tax than if we based it on last year’s income. One objection raised to the “ pay-as-you-go “ principle is that individuals may escape tax or may not have to pay so much tax based on this year’s income as they would pay if it were based on last year’s, income. Many people earned no income last year, and from them no tax could be collected, in present circumstances, although this year they have an income. It does not appear to me to be impossible to overcome the anomalies which might arise by a sudden switch-over from the basis of last year’s income to the income of the current year. ‘ If we took an average of the incomes of the two years, or the higher income of the two years, as the starting point, and after that proceeded on the simple basis of a tax determined according to the current year’s income, no difficulty should be encountered.
It will be said that the Government would lose some revenue when a man died, and that his estate would not be liable for the tax now payable in respect of income earned in the year of his death. That is so. If we do not deduct from an estate the amount due for income tax we shall collect a little more in estate duty, because the value of the estate will to that degree be higher. Regarding the problem as a whole, it lias to be borne in mind that, as against the loss of tax incurred as people die, we shall be picking up from those people who contribute to income tax in, the first year in which they earn. From the Treasury point of view, there is nothing to bc lost in terms of revenue this year, and there is much to be gained by having people pay the tax on the basis of their current incomes. I know that this matter is full of difficulties, but in view of the high rates of tax it is worthy of consideration. When it was said that at the end of the war people not then in employment will be liable for taxes in respect of income earned when they were working, it was suggested by way of interjection that there will then be no unemployment. Even if that be so, the problem of dealing with people who may not desire to continue in employment when the war is over will present many difficulties. Among them will be many women who are now earning wages, but may desire to return to their homes when peace is declared. In the year after their retirement from employment they will be called upon to pay taxes in respect of the previous year’s income.
– What about the producer who is not paid for his produce until the middle of the year?
– There may be difficulties in such cases, but there seems to bc no difficulty in getting a monthly contribution from people in receipt of regular incomes. Special provision might have to be made for such persons as Senator Courtice has mentioned, but, after all. such cases would be comparatively few.
– Ten thousand sugar-growers in Queensland are not paid until May.
– Even in their case, the position would be much more satisfactory if, when -they do make their payment, it is in respect of income for that year and not a. payment of tax based upon the income for the previous year. If we switch over to this system a taxpayer will know that when he pays his tax it is paid in relation to that particular year’s income.
– If this scheme can operate for three months of this year, why could it not operate for twelve months ?
– In these proposals the Government appears to be accepting something like this principle: It is taking in this year a tax in respect of income for this year.
– Does the honorable senator object to that?
– No; but I do strongly object to the retention of credits. I have no objection whatever to the payments being spread over a period of twelve months instead of about nine months. It is probably a more desirable system, because it may help to relieve the burden on the taxpayer.
I arn not at all satisfied that the taxation of private companies has been investigated sufficiently. I realize that this bill does not contain proposals for the taxation of companies, but I point out that, owing to the operation of the Income Tax Assessment Act, the whole of this new tax may become a further impost on private companies which already are heavily taxed. Under the private company provisions of the existing law, unless the whole of the profit made by a private company is distributed it becomes subject to tax in the hands of the company at the rates payable by the individuals- who are entitled to it. Therefore, although weappear not to be taxing companies in this measure, we are imposing a tax on them.
– If they pay the tax as companies they will not have to pay it as individuals.
– That is so. The present provisions are a curious mixture. ¥e do not say that a private company i* in the position of a partnership, and w ill pay tax upon the same basis as it would if its income had been distributed among the shareholders. Instead, we start by imposing a 6s. tax, and then we say that the undistributed income - whether or not it can be distributed is beside the point - is subject to a tax which individual shareholders would pay if a distribution had been made.
– They are treated both as companies and as individuals.
– That is so. I realize that we cannot deal with that matter adequately in this bill, but I direct attention to the fact that this measure will impose an additional tax on private companies as well as on private individuals, and that the more we increase that impost the greater is the anomaly which we have created in relation to private companies. The whole situation in respect of private companies is most unsatisfactorily dealt with in the existing legislation. It is extremely difficult to say what a private company is. Recently the matter was referred to in scathing terms in the High Court in a case concerning the Adelaide Motors Company. The High Court had great difficulty in determining what was meant by a private company according to the Income Tax Assessment Act. We in Australia have adopted a definition taken from Great Britain - a definition which, because it had been subjected to scathing judicial criticism, was amended. The result of adhering to a definition which was regarded as most unsatisfactory in Great Britain, is that it is most difficult for both the Commissioner of Taxation and the taxpayer to determine whether a. company comes under the scheme of taxation for private companies or for other companies. That is most undesirable. That is a matter of considerable importance in these days, although it did not matter a great deal before such heavy taxes were imposed on companies. I direct attention to this matter in the hope that some consideration will be given to it, with a view to seeing whether a clearer line of demarcation cannot be drawn between the two classes of companies, and also in order that we may satisfy the public that we are not doing something which places an entirely unjust burden upon that section of the community which happens to have its money invested in private companies. A tax upon companies does not seem to represent a tax upon private individuals, or upon money out of some person’s pocket; but it does. Every penny of tax levied upon a company is paid out of the pockets of its shareholders. No reason exists why people who happen to derive their income from that, source should be subject to heavier imposts than those who derive their income from other sources.
– Is not a company and its shareholders one and the same entity?
– The Leader of the Senate does not show up too well when he gets into this legal atmosphere. He has read about this matter somewhere, but he has taken it up wrongly. A company is a separate entity from its members. 1 know that the whole justification put forward by the Government for its heavy imposts on companies is its contention that a company is a separate entity from its shareholders. For that reason the Government says that companies must be dealt with separately ; it is not sufficient to tax profits in the hands of the shareholders. I am. afraid that the Leader of the Senate has curious ideas about companies. He seems to think that,, because a company makes a profit, and that that profit is shown in the profit and loss account of a company, the company, therefore, has in its till that sunt of money, the whole of which it is able to distribute to its shareholders.
– That is not the position. The company is unable to dis tribute some of that money, because it is represented in the business in stock or plant. Therefore, what is the justification for saying that, because a company retains that profit which it cannot distribute, it must pay a special tax on it?
– The Government says that profits which ought to be distributed, not profits which the company cannot distribute, should be taxed.
– I assure the Leader of the Senate that he is wrong on that point. The distributable income of a private company, for the purposes of income tax, is all the company’s income. That is the basis of the present act. Whether or not a company has a very good reason why it cannot distribute its profits, such profits are subject to tax on the basis that the profits have been distributed. That is the position, and the Leader of the Senate need only look at the act to ascertain that fact. That part of the act, at any rate, is clear, although I could excuse him for misunderstanding some of the other parts of the act dealing with the taxation of companies. A company pays tax at the individual rate on the whole of its undistributed profits, whether it be able to distribute them or not.
– Is there anything wrong with that?
– -First. the Leader of the Senate tells me that I am wrong, and then, when I satisfy him on the point, he asks, in effect, “Why not?” Of course, companies do not vote; they do not belong to the Trades Hall, and, of course, they should be subject to tax.
– That is the reason for the honorable senator’s special pleading.
– There is no special pleading about this. Private companies are not the great financial institutions about which honorable senators opposite love to talk. Many of them are really small businesses which have ‘been turned into proprietary companies. Their income may be only a few hundred pounds, and on the present basis of taxation they are obliged to carry a very heavy burden.
– Cannot the honorable senator bring the widows and orphans also into the picture?
– I have real sympathy with the widows, and orphans. This Government, after all, is not really concerned about the widows and orphans, because it is quite prepared deliberately to follow a policy which is designed to rob the savings of every person in the community, particularly the widows, by nipping off the savings by which the widows expect to subsist, 12^ per cent, of their value. The Government likes to enunciate a policy which appears to relieve people of obligations, but its policy only appears to do that. The fact is that, by depreciating the value of money, the Government imposes upon a widow, who is dependent on some small investment, a far greater ‘burden than any that would be imposed upon her if she were taxed on the same basis as other members of the community, namely, according to her ability to pay. Honorable senators on this side have always pleaded with the Government to endeavour to avoid inflation by ensuring that as much as possible of the surplus income of the community is transferred into the hands of the Government for war purposes. It is useless for honorable senators, to say that the Government is trying to do that. The Government has not tried to do anything like that. In fact, it has, done the least it possibly could in that direction. Prom the time war broke out, all the resistance against dealing with this matter upon a proper basis has come from supporters of the Government. I shall remind them of a few of the steps they took in that direction. When I became a. member of the Senate, a great fight was going on in relation to the budget for 1940-41. If I remember aright, the government of the day proposed to impose tax on incomes down to £150, and the resistance to that proposal came from the Labour party.
– Hear, hear ! The Japanese were not attacking us then.
– That was in 1940, and apparently, the Leader of the Senate is still proud of the fact that his party used its influence to prevent the government of the day from imposing the sort of taxation it thought should he imposed, with the result that the exemption level was then fixed at £200. It is useless for honorable senators now to say that the Japanese were not then threatening Australia.
– They were not.
-It is quite true that they were not, but that suggestion is irrelevant. Let me examine what happened when the Japanese came into the war. In the following year, if my memory serves me aright, the Labour party again resisted our taxation proposals. The necessity for increasing the revenue in order to avoid inflation was pointed out. That was the whole reason for the Fadden plan of post-war credits. It was to start, if I remember aright, at £150 a year, but the Labour party would have nothing to do with it. It still stuck to the idea that nobody earning under £200 a year should be taxed.
– No. We did not like the methods of the party then in office.
– Then it was an objection not to taxing anybody receiving under £200 a year, but to the methods which our party had adopted. At that stage apparently the Labour party objected to post-war credits, arranged upon a perfectly equitable and just basis, whereas to-day it proposes to introduce a post-war credit system on a thoroughly inequitable and unjust basis. That was in October, 1941. The Japanese entered the war in December of that year. The Government did not rush to Parliament saying, “ Now that the Japanese are in the war, all the things that we said before are wrong, and we must tax people down to £150 a year “, or “ Now we must tax them down to £100 a year “. Although the Japanese have been in the war for nearly eighteen months it has taken the Government all that time to pluck up enough courage to impose an income tax of 6d. in the £1 on the office boy who earns £104 a year. That is a very courageous performance on which the Government is really worthy of congratulation. After pondering over it for nearly a year and six months, it is at last courageous enough to impose that small tax. But the Government did not say to Parliament : “ We propose to collect £40,000,000 in additional taxes because the Japanese have come into the war “.
– No, the Government did that for social insurance.
– Exactly ; the Labour party would not agree to the raising of the money for war purposes in October, 1940, because, it now says, the Japanese were not in the war, and it will not raise it for war purposes in 1943, although the Japanese are in the war. It misrepresents to the public that the money has to be raised for social services. No scheme of social services has been put before Parliament. The Treasurer himself admits that the greater part of the money which he is now raising is going to be invested for war purposes, but the Labour party has such a low opinion of the Australian public than even now, eighteen months after the Japanese came into the war, it is not game to say to it : “ We want £40,000,000 from you for war purposes “. It is difficult to imagine a more disgraceful performance than that. This matter has been made crystal clear for us by the Treasurer’s statements. He started off, in the financial statement which he made recently, by indicating to us that his previous estimates were all wrong and that he has expended £90,000,000 more than he anticipated. He has not raised loan moneys, he says, at anything like the rate that he expected. No more Japanese have come into the war since then. Although he told us in September that it was the intention of the ‘Government to impose its will in relation to this matter, that it was going to take surplus income from the public and transfer it to the Treasury, that he would compel the public to hand the money over if it would not do so voluntarily, he now says: “I do not propose to attempt to raise by taxation more than a small part of that £90,000,000 of added war expenditure, or to do anything to fill up the gap between what I expected to get from loans and what I actually will get”.
– He never said that, or anything like it.
– What he says is that he is going to raise £40,000,000 by new taxes, of which he will employ £30,000,000 for social services. If the Leader of the Senate can show me, in any of the statements that have been made by the Treasurer, anything to indicate that more than £10,000,000 of the new money is to be used to meet war expenditure, I shall be pleased to see it. Although the war expenditure has increased above the estimate by £90,000,000, this is the time that the Government chooses to indulge in extravagant social services to the tune of £30,000,000.
– Does the honorable senator call that extravagant?
– It seems to me to be the height of extravagance to tell a woman who may have an income of £1,000 a year, that the Government intends to pay her a maternity allowance of £7 103., and £1 5s. a week for eight weeks.
Senator -Collings. - That is not in this bill.
– But it is in the Government’s proposals, and that is where some of the money is going, instead of being used for war purposes. We are told, at any rate, by the Government that it is to be used to meet the cost of new social services. I am in favour of the provision of proper social services for the community, but I do not delude myself into believing that we provide a social service by merely picking out notes from the Commonwealth Bank and distributing them amongst the community. That solves nothing whatever.
– It is very useful to the recipient.
– Very useful for a time, but very disastrous if it goes on for a long period. It is quite obvious that, if the Government desires that the section of the community which has sufficient shall provide for the section of the ^community which has not sufficient, the only way in which it can do it is to take the purchasing power from those who “have the surplus and give it to those who have not. There is no getting away from that proposition. If we obtain finance by means of treasury-bills, we do not take anything from the man who has; we merely add to the total bulk of purchasing power, and in that way depreciate the value of the purchasing power in the hands of every body. There is no escape from it. Do not let us think that this generation in the year 1943 has suddenly found a. miraculous solution of all our financial problems. This has occurred over and over again down through the years. It occurred in Germany and in France after the last war.
– What occurred?
– The very thing that this Government is now doing - attempting to finance the war by means of treasury-bills, national credit, bank credit, or whatever you like to call it. Et simply means failure to extract from the public the money that is required for war purposes, or, in other words, to reduce purchasing power.
– Is taxation not doing that?
– To a degree, yes.
– Does the honorable senator favour higher taxes?
– I do. I shall be quite frank about that. I do not think that taxes are high enough yet; but, I should not like to be misunderstood. Bank credit has its proper place in finance. I do not believe that a war can be financed, solely by taxes; but, on the other hand-, I do not believe that in the course of one year it is possible to issue treasury-bills to the tune of approximately £200,000,000, without causing serious repercussions in every section of the community. It is the duty of every honorable senator in this chamber to see that everything possible is done to avoid that type of finance to the greatest possible degree. My complaint against this Government is that it is far too ready to indulge in that easy method of providing finance, and to resist any proposal designed to impose upon the public the real burden which it must bear.
Sitting suspended from 6.13 to 8 p.m.
– When taxation measures similar to that before us are being discussed in this Parliament, it is assumed by the Opposition, with malice aforethought, that money is real wealth. Basing their argument, on that assumption, they endeavour to build up a case which would seem to be unanswerable, but their arguments, no matter how ingeniously presented, will not bear close analysis. Money simply facilitates the exchange of commodities and is not real wealth, with the exception perhaps of gold, silver and copper, which have an intrinsic value as compared with paper currency. Money is merely a medium of exchange. Its use was adopted as a method of indirect barter as compared with direct barter. Despite any system of taxation, direct, indirect, or deferred, what really matters in the long run is what we have in the form of real wealth, such as commodities, after payment of our taxes. The Leader of the Opposition- (Senator McLeay) asked what sacrifices had been made by those men and women who have been exempt from income tax, because of their low incomes, as compared with the sacrifices being made by the members of the fighting services. I could answer his question pertinently, and I think convincingly, by asking him and other honorable senators opposite what sacrifices they are making as compared with our soldiers, sailors and airmen. I submit that honorable senators are not making the same sacrifices as those in receipt of the lower incomes. It is sheer humbug and hypocrisy to speak of equality of sacrifices, when our soldiers in the front line, and workers in industry, are receiving so much less in the shape of real wealth as compared with what honorable senators get.
– Within which category does the honorable senator fall?
– I was a lowpaid .worker in industry years ago, but I am now in the same category as the honorable senator. If we intend to give effect to the principle of equality of sacrifice, we must either reduce the amount of income that we receive down to the level of the pay of the soldier and the worker, or else we should raise their income to a sum approximating that received by us. When the Leader of the Opposition speaks of sacrifices, these matters should be kept in mind, because they will assuredly be raised by the members of the fighting services on their return to civil life. They will not be deceived after this war so easily as were those who fought in the South
African War and in the Great War. All of the specious arguments and pleadings heard in debates such as this will fail to have much effect on the members of the fighting services, many of whom understand the economic situation much better than did those who returned from the last war.
The wages or salaries of workers are not paid as an act of goodwill. Two factors operate - the cost of subsistence, and the law of supply and demand. We cannot force persons to give service, and particularly the best service, unless we provide them with necessary food, clothing and shelter. When the demand for such services is greater than the supply, we make a virtue of necessity, and pay a much higher wage in those circumstances than we should pay if the supply of labour were in excess of the demand. Those two factors operate in determining the amount of wages paid. For instance, skilled tool-makers are in great demand, and employers are prepared to pay them a very high wage, not because of any respect for them, or because they wish to show generosity, but merely because they must have their services. Therefore, no credit is due to employers who make a virtue of necessity in those circumstances. When the Senate was considering a bill recently to give authority for the raising of £100,000,000 by way of loan, I had the temerity to question Senator Spicer, by way of interjection, and ask whether he was in favour of a capital levy. He gave the answer that I expected. He said it depended on the circumstances, which, of course, meant nothing.
– I said more than that.
– The honorable senator remarked that I did not know what a capital levy was. Such an impost could be introduced by the Government declaring that a levy should be struck on all persons owning capital in the form of money or bonds of a value in excess of £1,000, according to the amount they had. It would be possible for the Government to levy those bonds back again.
– That would be a repudiation of the bonds.
– No; it would be a capital levy. After the last war, many people owned land considerably in excess of their actual requirements. The land was practically useless to them, but, with the help of the governments of the day, they capitalized the war by selling the land to returned soldiers at prices far in excess of its real value. The soldiers were required to pay tribute in the form of interest and other expenses, which became too heavy for them, and many of them were starved off the land after the owners had reaped a rich harvest.
– High prices were received only because of the keen demand for the land.
– I am glad of that admission. Those men had fought for the Empire overseas, and victory had been won. They came back, not to live in idleness or to ask for pensions, but to work and create wealth. Those who had remained behind - the rich landlords and speculators - capitalized the demand for land by charging the highest possible prices, and deliberately, took an unjust advantage of those men who desired to do the best they could for their country. Many returned soldiers, who worked for years after the last war, were just as poor after all their labours as they were when they began. In the meantime, a rich harvest was reaped by speculators, bankers, and other financiers whom honorable senators opposite represent in this chamber.
– In Queensland, the land settlement of soldiers was effected by a Labour government.
– Be that as it may, I am merely reminding honorable senators of what actually happened. Where people own land in excess of their actual requirements, a capital levy could be struck beneficially. Where rich landlords own many more houses than they actually need for themselves, and are charging exorbitant rents, a capital levy could be effectively imposed on them. A capital levy would.prove to-be workable and effective if honorable senators opposite, who say that they are prepared to do much for the soldiers, would give a lead in that direction. Instead, they would resist any such proposal with all their strength. Profits, also, could be subjected to a levy of 100 per cent, without causing any real difficulty to the pro ducers in either primary or secondary industry, because profits represent the amount of capital in excess of what is actually needed to keep industry going and feed, house and clothe the principals. That is what the soldiers are saying. In the March, 1943, issue of the publicationReveille those who speak for the soldiers say -
Not only should the Government forgo duties, but the manufacturers, too, should forgo profits, for the wealthy status of the manufacturers is well recognized, and they could spare a. premium that insured to them their present place of safety and a consolidation of their financial edifices.
– I rise to order. The Minister is not obeying the ruling that he must confine, his remarks to the subject-matter of the bill. His remarks have nothing to do with the bill before the Senate.
– No doubt the Minister intends to connect his remarks with the bill, but for some time he has not referred to its provisions. The subject before the Chair is the second reading of the Income Tax Assessment Bill, and I ask the Minister to confine his remarks to it.
– The Leader of the Opposition had a good deal to say about the sacrifice which the soldiers are making. He compared that sacrifice with what is demanded of others in the community who are in receipt of low incomes. I was pointing out that, on his own argument, wealthy manufacturers are not making a sacrifice which is at all comparable with that of the soldier or of the worker with a low income. In support of my argument, I was about to tell the Senate that the representatives of the soldiers are saying exactly what I say.
– Is this one of the honorable senator’s Yarra Bank specials ?
– The Leader of the Opposition would never attain to the high intellectual level of the speeches delivered on the Yarra. Bank if he lived to be as old as Methuselah. The article in Reveille continues -
War, without profit, would be the slogan of such a tribunal, which would divert from the civilian money-grabbers the means sufficient to provide the soldiers with pay something commensurate to their work and to their risks.
That bears- out what I have said. Soldiers who have returned from this war are saying ‘that they will not be humbugged and fooled as were the soldiers who returned from the war of 1914-18.
The Leader of the Opposition spoke in fullsome praise of private- enterprise. He implied -that private enterprise led the way in Australia’s war effort.
– The Minister knows that that is so in the department under his control.
– Millions of pounds of government money have been used to buttress private enterprise where it was shown to be incapable of carrying on. On one establishment in New South Wales, which is under private control, £2,000,000 of government money has been expended and not one penny of private money. The same thing is true in varying degrees of many munitions annexes throughout the country. There arc many instances -to prove that when this war came private enterprise col.lapsed just as disastrously as it did during the war of 1914-18. I refer honorable senators to a work entitled The Triumph of Nationalism, by Sir Chiozza Money, in which the writer, quoting from authentic documents, explains how governments had to bolster up private enterprise in both primary and secondary industries, as well as assist a number of private financial institutions. What would honorable senators say if private enterprise were in control of our military forces? Under such a system one group of men would be going in one direction and another group in an opposite direction.
– One group might be going as far as the Equator, and another group beyond the Equator.
– The honorable senator is in ‘“Be “ company. He will “ be “ where he is when other men go to fight, and he will “ be “ in the same place when they come back. He is a privileged “sooler on”; he “ sools on” others to do what he will not do himself. He is wonderfully brave. He poses and postures in the reflected glory of better ‘men than himself, and imagines that he is as good as they are. Although private enterprise is playing a part in the nation’s war effort, it has failed in this war just as it failed in the last war. I should be the last person to -withhold from any one the credit that is due to him, but my point is that private enterprise cannot do what is demanded in war-time. In order to obtain the greatest efiiciency and economy, and to- offer the greatest resistance possible to an enemy, the Government must be in control. The Leader of the Opposition said that it was a great mistake to impose a vicious tax on the higher incomes because there would then be no inducement whatever to persons in possession of capital to invest their money in Australia. My view is that when a nation is at war persons with high incomes should be taxed until they reach the same level as the soldiers. That does not mean that the tax on capital or profits would be so high as to make it impossible for industry to be carried on. It simply means that in a time cif war persons, who, in other times, enjoy big incomes, should be prepared to live under conditions similar to those of the soldiers and the workers, so that the materials and man-power employed for their convenience and pleasure may be transferred to Other and more useful purposes. I am not greatly influenced by the argument that capital may not be invested in Australia if we do certain things, because I know that any overseas capital which, after the war, may be available for investment will be invested in countries .where the labour power is the cheapest, so that the highest margin of profit may be obtained in return for the investment. That happened in 1902 after the South African war. Honorable senators may remember that one of the first .acts of the South African Government after that war was to introduce thousands of Chinese coolies into South Africa to take positions which had previously been held by white men who fought for the ‘Empire. What happened then can be attributed to two causes - the policy of the government and the indifference of the people. Fortunately, public opinion was soon aroused, and the Government of “South Africa was forced to send the ‘Chinese coolies back to their native land. After the war of 1914-18 capital gravitated to the countries where labour power was cheapest. Money flowed into Germany, Italy and Japan, particularly Germany and Italy. In Victoria, the State Electricity Commission bought machinery for Yallourn in Germany rather than have it built in Australian workshops; and, despite the efforts of trade unions and others who pointed out the necessity to strengthen Australian secondary industries, that policy was continued until the present war broke out. Only since then has there been any real expansion of the Australian engineering industry.
– What have the Minister’s remarks to do with the bill?
– I am replying to arguments advanced by the Leader of the Opposition. I submit that if he was entitled to express his views I should be entitled to reply to them, if I think that they are worth answering. I repeat that capital ‘ gravitates to the countries where labour power is cheapest. In order to show how capital gravitates in this way, I quote the following figures from the London Economist of November, 1937, and January, 1938. Writing in that journal, Sir Robert Kindersley, a recognized authority on the subject, reveals that British capital invested in Australia and New Zealand in 1928 amounted to £572,000,000, whilst British capital invested in low-wage countries amounted to £839,000,000 in one instance and £252,000,000 in another instance. Those figures indicate that after this war, unless Australian workers, ‘ including returned soldiers, are prepared to work for wages as low as those which will be accepted in other countries, no foreign capital will be invested in this country. The figures prove what I said at the outset, that the object of honorable senators opposite is to cloud the issue raised under this bill in order that its real merits may not be widely understood. The Leader of the Opposition referred to the position which he said is likely to develop after the war. He said that, perhaps, there would be a good deal of unemployment. There will be. The old order will be intensified with regard to employment in Australia and every other allied country, if_ the people of those countries are prepared to tolerate it. The financial institutions will, in terms of money, be millions of pounds better off than they were before the war. Exactly what will happen will depend upon the people themselves. I recall that a few years after the last war, unprecedented unemployment existed in Britain, the United States of America, Australia, and many other countries, whilst, at the same time, the financial institutions, which had made millions of pounds profit out of the war, were investing their capital in the low-wage countries. Thus, I believe, that what Senator McLeay suggests is likely to happen, will happen, particularly if the policy to which the Opposition is pledged is given effect to. There can be no doubt about that. Senator J. B. Hayes referred to stories of extravagant expenditure by the Government which, he said, one hears every day in the street. If the honorable senator is satisfied in. his own mind that money is being deliberately wasted - and I expect that he would, as an experienced politician, be reasonably certain of his facts before expressing an opinion - it is his bound en duty to give specific instances in support of his statements.
– The honorable senator knows perfectly well that the facts are not obtainable.
– -I always found that before I had the privilege of being elected to the Senate I could obtain facts about such matters provided I made up my mind to obtain them. The facts are obtainable. The honorable senator has the right to ask how much money has been expended on this, or that, work, and to obtain details of such expenditure. Even if the answers supplied are not entirely satisfactory, they would, at least, indicate whether money was being wasted on such works. However, the point I made is- that it is ridiculous for any honorable senator to make statements of that kind without supporting them with facts which the Government could investigate. Senator McBride referred to the cost of the war. The real cost of the war will be in terms of manpower and material.
– lt will be expressed in terms of money.
– No. That is one of the difficulties with which the honorable senator will be confronted. The interests he represents will hold bonds representing millions of pounds, and those interests will demand in the form of interest a perpetual tribute to be paid on those bonds. The full cost of the war will be paid in terms of manpower and material on the very day the war ends. The liability will be expressed in terms of money. That will mean, as I have said on previous occasions, that a creditor section of the community, represented by the leading financial institutions, will claim perpetual tribute from the debtor section represented by the wage-earners, who will include thousands of returned soldiers. We shall be faced with that position. We shall not be able to pay fair wages or pensions, and, at the same time, continue to pay almost prohibitive sums’ in interest.
– Is the honorable senator forecasting repudiation ?
– Perish the thought!
– It sounds very much like it.
- Senator Spicer, in very simple language, illustrated the point I am making when he said that we cannot pay anything to the “have nots “ without taxing the “ haves “ That is exactly what I am saying.
– But the Government will not do that.
– Yes ; but it intends to tax that section of the “ haves “ which is best able to pay. I asked, by way of interjection, who paid the “ haves “. The position is that practically all wealth held in excess of one’s every-day needs by the “ haves “ has been contributed, or made possible, by the “have nots”; and if the “haves” are . taxed to assist the “ have nots “, the latter will simply be getting back a share of that which they previously paid to the “ haves “. If Senator Crawford describes that as repudiation, then, to be logical, he must say that all taxation amounts to repudiation. The longer the duration of the war, the greater must be the tax to be paid by those who are receiving greatly in excess of their every-day needs, because the workers who are producing the materials we require cannot be denied their essentia] needs. If that be done we shall not obtain the production we require. Simi larly, we dare not tax the soldiers to a degree that would deprive them of their essential needs. Thus, the longer the duration of the war, the greater will be the amount of material and man-power needed to carry on the war; and that material and man-power can be obtained only by additional taxes. The position will not be altered even if we have inflation up to 100 per .cent., or deflation down to 100 per cent. Our workers, who are indispensable, cannot carry on unless they are adequately fed, clothed and housed. The longer the duration of the war, the greater will be the amount of real wealth needed to carry it on; and there are two groups which we cannot tax to a degree that would render them unable to render the services we need. That cost will have to be paid by the “ haves “. Of course, they, like Senator Crawford, will raise the cry of repudiation. Sometimes, I wonder whether such gentlemen have a proper appreciation of the meaning of the words they use, or the policy to which they are pledged, when, while the nation is at war, their dominant thought is how best to protect and increase their wealth at the expense of those who do the fighting, and those who produce the real wealth of the country. That is the position in a nut-shell. Nevertheless, Senator Spicer poses as one who demands justice for all. He said that he wants higher taxation. He will not be disappointed. I want higher taxation. As I have said on previous occasions, I want to see all those who are receiving in excess of their reasonable needs taxed 100 per cent., and no person, including honorable senators, should refuse to be taxed 100 per cent. But the Opposition will never endorse that policy. That fact is indicated by their assumed righteous indignation whenever a capital levy, or the fixation of a ceiling income, is suggested, or when a proposal is made to impose additional taxes on company profits. Their dominant thought is money; it is not the winning of the war, nor the welfare of the soldiers, or the workers who are producing our real wealth. They look upon the soldiers as essential to their needs, and as men who should fight to protect them, and they look upon the workers as so many dumb-driven cattle to labour for their profit and convenience bath in peace and war. That is the policy of honorable senators opposite, who prate about their patriotism, and who point the finger of scorn at persons, like myself, who, for many years past, have been saying what I am saying now. I am glad to have this opportunity to’ be able to “tell them in this ‘Parliament the facts I 4 n – just stated. I was not able to exercise ‘that privilege during the last war. They should take warning from the fact that the sentiments to which I have directed attention are expressed through a soldiers’ publication. It should give them some idea of what the returned soldiers are thinking and are prepared to do. They and those whom they represent are not asked to make any more sacrifices than the soldiers or the workers are ‘making. -If they are not, they should raise no objections. I heard Senator Poll state that he believes theoretically in the conscription of wealth, ;but I am sure that, in practice, he is pledged to a policy that would oppose it every step of the way. Senator Spicer said, in effect, that he supports taxation according to ability to pay. I do not accept that as the policy :of his party. The incidence of taxation is quite the reverse. Those who are least able to pay, pay the most. Those who are best able to pay, pay the least. Indirect taxation is an example, as I have pointed out over and over again in this chamber. The soldier ‘who buys a packet df cigarettes ‘pays the same tax as an honorable senator receiving £1,000 a year. If we were taxed according to our ability to pay, the soldier would receive his cigarettes for somewhere in the vicinity of 3d. a packet, and an honorable senator would be compelled to pay ls. or ls. 3d. a ‘packet, which he should pay.
– Is that why the Government increased the tax on soldiers’ cigarettes?
– I did not increase it. I am only pointing out that the incidence of the policy of taxation which the honorable senator and I inherited, and which I reject and he accepts, is quite the reverse of taxation according to ability to. pay. Take the subsidizing of the butter industry, the tramways, railways or any other instance in which we all pay the same tax or fare. Those who receive the least by way of income pay a great dea’l more in proportion than those who receive high incomes. “Whether the members of the Opposition are prepared to do so or “not, they will have to getdown “to fundamentals. The more we do - and we are doing it rapidly - to organize _pr’imary and -secondary production on a more efficient and economic basis, the more we expose the extent to which these anomalies exist. If they are not .admitted and adjusted, there will be a considerable amount of trouble not only in this but also in other countries. Senator Leckie said that the money required was not to be used for the war e’ffort. J waited patiently for him to develop his argument in that direction, but he made no attempt to do so. If the money is used to enable the workers to become more efficient in industry as producers of wealth, then it is employed in connexion with the war effort, as it should be. To say that, if it is used to assist expectant or actual mothers, it is notbeing used for the war effort, is to make an incorrect statement which no intelligent man or woman will consider for a moment. I shall conclude by sounding aga’in the note on which I opened. Most authorities agree that taxation is the basis and machinery of government. If we raise money in the ordinary way, that is taxation. If we raise it by increasing excise duties, that is taxation. If we raise it by borrowing, that is deferred taxation. If we raise it by the issue of what are known as bank credits, that i3 taxation. All ‘that money is used for the purpose of obtaining materials and paying for the services of men and women engaged in industry who require them, so that the real taxation is represented by the materials that can be purchased with the money which is raised. The money, therefore, as I said at the outset, is merely the medium of exchange. A good deal has been written and spoken on the ‘subject, all of -which is intended to mystify and bewilder the average unsophisticated person who has never had the time or opportunity to study it. ‘To the extent to which people can be mystified and bewildered about money and its functions, so they can be impoverished, as they were in this and most other allied countries ‘when they were compelled to work in return for the dole The lesson, will not be forgotten. Many who were so- compelled accepted the statement, made in this chamber and elsewhere, that there was a genuine scarcity of money and that nothing else could be done. They accepted it because they did not know any better, but to-day they are realizing; that millions of pounds can he raised, in various ways to carry on a war almost indefinitely. When the war is over, they will ask themselves why, if money can be raised so abundantly and expeditiously to carry on a wai-, it cannot be raised to carry on the work of repair and reconstruction in peace-time. I present that thought to honorable senators opposite for their consideration. They may imagine that they are masters of the situation, and that, if they were in office,, they could do exactly as they pleased. I remind them that they are not masters of the situation any more than we are. The situation that will develop after this war will compel them to legislate on the lines which I have indicated, in such a manner as to do justice not only to returned soldiers but to all. others willing, and able to work. If they do not. do so, they will have to put up with the consequences, which, I warn them,, they will find both painful and costly.
– -I propose to address myself not to the higher branches of economics, or to dry dissertations by John Stuart Mill or other so-called economists, but to the bill itself, and to offer- one or two suggestions which the Government should accept as constructive criticism, because our Leader (Senator
McLeay) has indicated that in the main we shall support the bill. It is just as well that the Government should be reminded that, when the last budget was presented to the Senate, we referred in somewhat caustic terms to the gap in the finances, and the multiplication sum which the Treasurer (Mr. Chifley) was attempting- to do in order to balance his accounts. That gap, as I then predicted would be the case, has, on the statement made by the Treasurer himself in the House of Representatives on 11th February last, become a yawning chasm. In order to meet the. difficulties of the situation, he has now introduced this- measure with a covering of sugar to make it palatable, as I understand,, to a certain section of his followers. I re-echo every word that has been said concerning the danger of inflation, but I direct the attention of the Senate to the fact that the Treasurer, in the statement which was the precursor of. all these taxation measures, himself emphasized the necessity of mopping up a lot of the loose money in the country. In the second paragraph of that statement, he referred to tile increased taxes necessary to finance the scheme of which he spoke, to reduce the excess spending power,, and to provide further contribu-tions for war expenditure. The words I wish- to stress are those in which he favours a reduction of excess spending power.. He completely justifies the argu-ment so well pu t recently by my colleague, Senator McBride, regarding the danger of inflation,. He shows that he is alive to the situation, and that he proposes to absorb, by the method embodied, -in this measure and such others as he may. bring forward, the excess spending power to which he alludes. As he indicated in his budget speech that he was fully alive to the situation in that regard, I do not think that any exception can be taken by honorable senators opposite to the statements made on this- side of the chamber, that, there is an imminent danger of inflation. We need only call to mind what is occurring, in all other allied countries; In Great Britain they have already been very wary concerning inflation. In the vast United States of America, from a financial point of view probably the soundest country in the world, to-day, they are forever issuing warnings regarding the danger of the excess spending power in the hands of the people, brought about by the issue of additional paper money. I suggest to the Government that that is ons of the dangers with which this country also is faced. It is no use denying the fact, however Ministers prate about; credit, that excess spending power in the hands- of the people is the very beginning of inflation. The Treasurer has said so, and it is to prevent inflation that the Government has introduced this measure. We understand from the Treasurer’s statement’ that’ this revenue will be put into a trust fund; that that fund will be drawn upon and that when it has been exhausted by capital expenditure, as no doubt it will be in the course of time, it will be replenished by what the Treasurer has been pleased to call longterm loans. Surely that is unsound finance.
– The Treasurer did not say long-term loans.
– I draw the attention of the Senate to the f ollowing extract from the Treasurer’s speech : -
In the earlier stages, the fund will build up credit balances, which will be used later when the welfare scheme reaches full operation. These balances will not be allowed to remain idle, but will be invested and will provide a useful source of temporary finance for war purposes, which will be replaced by long-term borrowings when the moneys are required later for welfare purposes.
I am horrified to think that such a method of finance could be sanctioned by the -national parliament. Virtually, the National Welfare Fund is to be made up of borrowed money! That is a matter upon which honorable senators will have an opportunity to say something at a later date. In certain circumstances, borrowing from trust funds is a sound practice, and is authorized by the Audit Act, but I hesitate to think what would happen if a private individual were to handle a trust fund in this way. He would very soon be dealt with in the proper quarter. Notwithstanding the fact that I shall support this measure, I should like to stress certain observations that I have made more than once in this chamber. A system of high taxation is bound to defeat its object. It is stated that the National Welfare Fund will be replenished by borrowings, and taxation will be relied upon to secure the revenues of this country; but taxation on the scale proposed in a certain measure which will follow this one is self-destructive. There will be none of the incomes to which the Leader of the Opposition referred left. How then are we to obtain the revenue necessary to reimburse this fund and pay interest upon it? This method of finance is a positive menace. The experience all over the world has been that high taxation defeats itself. Particularly has that been the case in the United States of America.
At present, the Government is obtaining substantial revenue from income taxation because the spirit of the people is such that they are willing to do their utmost to produce everything they can, and so make as much money as possible, irrespective of where it goes; but the time will come when the people will realize what is taking place, and knowing that a large proportion of their earnings will be taken by the Government, they will not have the same inducement to work hard. They will say to themselves, “ What is the use of working ourselves to a standstill to produce this money when the Government will take a large proportion of it ? “ Recently, a man in this city told me that after paying taxation he had only £343 a year left out of quite a high income to keep his wife and young family, who were living in Melbourne, and to provide for himself while in Canberra. Such a state of affairs will not lead to an increasing revenue. We should look at the matter from a national point of view. Surely it is better to encourage people to earn high incomes and to take a reasonable proportion of those incomes by way of taxes, rather than to take as much as 18s. 6d. in the £1 out of certain earnings as we are doing at present and so to reduce the incentive to work. Large incomes are not nearly so numerous as many people would have us believe. In that regard the figures given by the Leader of the Opposition were interesting.
Senator J. B. Hayes advocated the introduction of a “pay-as-you-go” scheme. Whilst I subscribe to his views, and while such a scheme might be admirably suited to certain sections of the community in which fixed remunerations are the rule, from what I have seen of the operation of the present compulsory deductions system in Victoria, it is by no means satisfactory to the wage-earner, and I trust that if a similar scheme bc introduced under this measure, much better facilities will be afforded to the unfortunate individuals who have to cash their excess stamps or redeem overpayment certificates. The lunch-time crowds at the Taxation Office are huge. On one occasion when I happened to be one of such a crowd, one man told me that he had been in the queue for two and a half hours and was afraid that he would lose his job for being away so long. Surely the department could arrange for a more efficient method of dealing with these people. The inconvenience caused is quite unnecessary, and in addition, there is the risk of losing taxation stamps or refund certificates. I know one person who lost his certificate and never recovered it. I understand that representations were made to the Commissioner of Taxation, and something was done, but such inconveniences should not be tolerated if they can possibly be avoided. The waste of time that is going on all over this country in relation to every form of administration is tremendous. It makes me wonder whether we really appreciate the stress under which the people are living to-day. They have to fill in returns for this and for that, and seek permission to do all sorts of apparently insignificant things. For instance, if one wishes to destroy a few opossums, as I found it necessary to do quite recently, one first has to secure a licence, and then take the skins many miles to be stamped, and then a considerable distance to dispose of them. Inconveniences such as that involve a waste of time and petrol, and I see no reason why simpler methods of administration cannot be adopted. I merely mention that matter as an illustration. There are many ingenious minds in the Taxation Department - bright fellows who never miss a chance to extract a farthing from a taxpayer. Surely that superior ability could be applied to devising a method of simplifying this system of taxation.
I can see that there would be certain advantages in a “ pay-as-you-go “ taxation system, but also there would be certain difficulties, as for instance, in the case of a person who carries on more than one vocation. Such a system could never be applied to the taxpaying public of this country as a whole. It certainly could not be applied to primary producers.
I have listened with some interest to the discussion that has taken place on the proposal that the Taxation Department should retain indefinitely any overpayments made by a taxpayer, and I understand that the Leader of the Opposition proposes to move an amendment in that regard when the bill is in committee. This proposal amounts to a scheme of post-war credits, which, when advocated by the Fadden Government, was vigorously opposed by honorable senators opposite. No doubt the proposal will have certain advantages so far as the Taxation Department is concerned, in that it will not be so easy for unscrupulous persons to evade their taxation commitments in future by changing names and addresses and so on. No doubt the Commissioner of Taxation already has been able to make good use of the identity card system for that purpose, because before a person can secure employment, he must produce his card. I do not hold a brief for any one who seeks to evade the payment of his just taxes, and I have no doubt that officers of the Taxation Department devised this scheme so that they will have some hold upon taxpayers in the future, when identity cards have disappeared. I do not know whether or not the amendment forecast by the Leader of the Opposition is acceptable to the Government, but I trust that it will be. The taxation of a percentage of soldiers’ deferred pay is a paltry matter, especially at a time like this when we are dealing with so many millions of pounds. That proposal is not in the best interests of Australia, nor will it do this Parliament any credit in the eyes of the people. Deferred pay is for the benefit of the soldier, and he should have it.
– That provision has been in operation since 1915.
– The power existed to tax the emoluments paid to people for long service, but I deprecate the idea of placing such an impost on. returned soldiers. I support the bill with considerable misgiving as to the benefit that will accrue to the Government from rates of tax as high as those proposed. It may become necessary to impose even higher taxes, but I trust not. I believe that the Government would have been able to obtain more revenue by loosening up a little with regard to the economic activities of this country, and even reducing taxes in some directions. Every industry is carrying on to-day on a smaller margin of profit than in the past. The activities of many industries are cramped by governmental action, arid the revenues will bc- reduced in consequence. I realize the great difficulties experienced by the Government, and I am aware -of the cry that went out as a result of the financial proposals submitted in February, but I still think that the Government should reconsider its proposals. I shall not enter those higher realms of finance where the Minister for Aircraft Production (Senator Cameron) delights to dwell, but I can say, as a practical man, that the .kind of taxation now .proposed by the Government will tend to reduce revenue rather than increase it. Apart fr.om .being unfair and inequitable as between persons within certain ranges of income, the incidence of -the proposed taxes may surprise the Treasurer :and his advisers, but I. shall reserve my remarks on that aspect of the .matter until the bill reaches the committee stage. Statements made bv the ‘Treasurer in the House of Representatives, and which have ,Deen repeated in this chamber., admit the ;principle of post-war credits, upon which the Fadden Government was thrown out of office. The ‘present Ministry (has bowed .its head to the inevitable, -and has decided to impose income tax,on people in the lower income groups, who have been offered as a sop the promise that a national welfare fund of some kind will be established by means of money which -will be borrowed, instantly used ‘for war purposes, and replaced by borrowed money.
– I regret that on every occasion when the “Government submits legislation to confer -benefit on the masses of the people its action is regarded with disapproval and suspicion ;by the Opposition. Senator A. J. McLachlan looks upon this measure as a sugar-coated pill, designed to enable the Government to obtain additional -revenue, but it is nothing of the kind. It represents the first instalment of a scheme for improved social sendees which the Government has planned in the brief time it has been in office. The Opposition parties were in power for many years, but it has remained for the present Ministry to submit a measure which will do much to relieve distress and suffering among the people. I resent the implication that the proposal for a National Welfare Fund is merely a sugar-coated pill to enable increased taxes to be raised.
– It would be a very bitter pill without the additional -revenue.
– In a time of grave national crisis those people who have money which could be placed at the disposal of the nation should not feel bitter about a bill of this kind. After a’ll, their capital and their very existence are being protected by the members of the fighting services who are prepared t» sacrifice their lives. The primary object of the -Government is to absorb certain additional purchasing power, created by war expenditure, that is flowing out to individuals at a -rate far greater than that at which civilian goods can be provided. Unless the -Government can mop up this additional purchasing power the quantity of civilian goods available will be reduced. I believe that the Opposition is -in “agreement on that point. The proposed additional income tax will provide an extra £40,000,’000 a year, and the new civil expenditure is estimated to be £4,280,000 a year, leaving over £3’5,0O0,000 to be devoted to war purposes. Of the sum of £40.000.000 £30,000,000 is to be paid into a trust fund. There is no legerdemain about that. If a company desires to erect a new building, or -increase its plant, it commences some years in advance to set aside a reserve for that purpose, but it does not lock the money up in a bank. It creates a reserve fund for the purpose of replacing -certain assets at -some future date. The Government merely proposes to place £30,000,000 in a reserve fund against a contingency that may arise after the war. The money to be placed in the National Welfare Fund, will be lent out for war purposes.
– Will it not be difficult to replace that money?
– The way in which the Government may invest it is laid down definitely in the Audit Act, section 62b of which provides that money standing to the credit of a trust account may be invested by the Treasurer as follows : -
– How could we recoup ourselves for money that had gone up. in smoke ?
– Perhaps if the honorable senator took a little more notice of Senator Darcey at times, he would increase his knowledge of finance. The investment contemplated under the Audit Act is a legitimate transaction which is carried on in our civilian economy year after year.. It is recognized as an orthodox financial transaction.
It would- appear that honorable senators opposite are keenly in favour of postwar credits.
– Honorable senators on the Government side have now adopted that principle.
– Yes, but it can be applied in more than one way. The way in which the present Government would apply it is slightly different from that adopted by the Government of Great Britain and also from that of the Fadden Government. The present Ministry has selected the method provided in this bill, because it is an equitable one. Compulsory savings are effected under the British legislation by requiring individual taxpayers to pay a certain portion of their income into revenue, the money so paid being set aside for the purposes of post-war credit. Under the British scheme, and also under that proposed by the Fadden Government, persons in receipt of the higher incomes would have a. larger proportion of their income set aside for post-war credits than those on the lower income. The benefits to be provided after the war will not, under this Government’s scheme, be paid back to individuals in the higher income groups, but will be distributed on the basis of the urgent needs of the people in the post-war period. Under the Fadden . plan, of post-war credits persons in receipt of high incomes, who would least need the money, would have the biggest amounts to their credit. Other sections of the community, who today are in receipt of low incomes, will bo in greater need of money when the war is over. Under the proposals of the present Governnent, money will be available in a National Welfare Fund for the benefit of the people who will need it after the war. But even from the standpoint of immediate effects, the plan of the present Government is superior. One aim of the present heavy taxation is the curtailment of unnecessary spending:. Under the scheme in operation in Great Britain a mau who is building up for himself a substantial post-war credit may use his liquid assets to buy unnecessary things because he knows that when the war is over a considerable portion of the money paid by him as taxes- will be returned, to him. Under the Fadden proposals a man who has liquid assets could also indulge- in unnecessary spending whilst another.’ man whose assets were tied up could not do so.
– That applies at all times.
– Under the Government’s proposals-, there- will be- no return to the individual taxpayer and he will be- compelled to conserve his liquid assets. It will be seen, therefore, that, whether judged- on the basis of the present or die : future. the plan of the present Government is superior to cither the Fadden plan or the British plan .
– Does the honorable senator think that it is better for the people to spend money than to save it?’
– Under the Government’s proposals money .will be taken from the people, but it will be used- to establish a welfare fund from which those who will need assistance when, the war. is over can bc helped’. If the- proposals of the present Government can be described as a post-war credit scheme, it is <a better post-war credit scheme than any which has previously been advocated. It is better because it provides that persons with- high incomes who can afford to pay heavy taxes will not have a permanent lien on the resources of the nation when the war is over. It is better because it provides that a fund will be set up to help those who will need assistance after the war. It is better because it has the additional virtue of not allowing a man with liquid reserves to indulge in unnecessary spending. The proposals of the Government represent a real contribution towards a. solution of the financial problems which are- facing Australia to-day.
– Next Monday the Prime Minister (Mr. Curtin) and the Leader of the Opposition in the House of Representatives (Mr. Fadden) are to open a new Liberty Loan, but I am afraid that the debate in this chamber to-day will not help them in their appeal to the people. References to inflation have been far too numerous. I appeal to honorable senators opposite to refrain from the use of the word “ inflation “ which is due to their fear and apathy. We on this side of the chamber have faith in Australia, but honorable senators opposite are afraid of the future. What else matters so long as we save our country for our children and our children’s children? Money is needed to fight the war, and it must be obtained by some means. The responsibility of Australia in having to raise so much money for war purposes, rests as much on the Opposition as with the Government. Indeed, the present Opposition must accept the greater share of the responsibility because previous governments took little or no notice of warnings to prepare for war.
According to the Daily News of the 8th March, 1938, the House of Commons attached great importance to Mr. Chamberlain’s declaration that the maintenance of naval bases in various parts of the world - . . was not as vital as the defence of our own country because so long as we are undefeated at home, even if we sustain losses overseas, we may have an opportunity of making them good afterwards.
Leading authorities have repeatedly warned us that we cannot rely solely upon Great Britain for protection. In a report in the West Australian of the 7th February, 1.939, Admiral Lord Chatfield, Minister for Co-ordination of Defence, said, “ The Dominions must be strong enough to defend themselves “. In a aeries of review articles on Empire defence by British military experts it was stated in the Herald of the 3rd October, 1938-
Australia and New Zealand cannot greatly depend on assistance from the British fleet and must make radical and rapid changes for their own protection. . . .
The fact remains that the European theatre must always be the first consideration. The British public would be correct in insisting that the fleet must remain in European waters.
Even the right honorable member for North Sydney (Mr. Hughes) admitted in June, 1938, that Australia must accept the responsibility of its own defence. Years before the present war started, the present Prime Minister told previous governments that Australia’s best defence was a strong air force. Those governments did practically nothing in the matter, and that is one reason why so much money is required to-day to provide the aeroplanes which should have been provided then. In the light of the neglect of previous governments it ill becomes the Opposition to attempt to blame the present Government for the existing state of affairs. During this debate honorable senators opposite have frequently referred to what the present Prime Minister said in 1938-39 or 1940. They appear to have forgotten the great changes which have taken place since then. To-day, an enemy is at our door, and our national existence is at stake. Our Navy, Army and Air Force must be built up to their maximum strength, and our industries must be developed to the fullest possible degree. These things cannot be provided without money, yet honorable senators opposite “ squeal “ when they are told that money must be raised. What difference would a 6d. in the £1 tax make to people with big incomes? As has been said many times in this chamber, it is not what a man pays in taxes, but what he has left that matters. A man with an income of £1,000 a year will still have about £700 left after he has paid the taxes provided in this measure, but the man on the basic wage will be in an entirely different position. I hold the view that no person in receipt of the basic wage should pay any direct taxes at all, and I favour his complete exemption from taxation as soon as the war is over. That will be done if a Labour government is then in office, but should this country be. so unfortunate as to have a non-Labour government in power at that time, it will then be another case of Kathleen Mavourneen - “ It may be for years or it may be for ever “. When the present Government took over the reins of office the Opposition promised every assistance, but, during recent months it has done nothing but harass the Government. Attempts have been made recently to discredit the Prime Minister. In this connexion, I am reminded of an incident that occurred at a dinner which was given in Sydney to representatives of the American Navy during the regime of the Menzies Government. The then Prime Minister spoke, as did also the right honorable member for Darling Downs (Mr. Eadden). The present Prime Minister, who was then in Opposition, was asked to speak. When he had finished an officer of the ill-fated American vessel Chicago said to me, “What a man!” That is the unspoken opinion of honorable senators opposite: they rejoice that Mr. Curtin is in office at the present time. Perhaps Senator McBride is an exception, because I do not think that the honorable senator likes anything associated with the Labour party. If I had dictatorial powers, I would do what Germany did in the last war; I would take all profits from business for the duration of the war, and allow only interest on them. We must win the war to safeguard our children’s future. That means that large sums of money are necessary. Honorable senators can think what they like of my views, hut I repeat that there should be no profits in war-time; all profits should be taken by the Government.
– Should there also be no wages in war-time?
– I am talking about profits. I say that there should be no profits in war-time. I ask Senator McBride how much all his property would be worth if the Japanese captured Australia. The chief concern of most of us in this chamber is not for ourselves, for nearly all of us have completed a considerable portion of our span of life. We must act in the interests of the boys and girls who are growing up in our midst, as well as of future generations. I appeal to the Government to do that. The Government should make greater use of the Commonwealth Bank. The late Sir Denison Miller advocated that policy during the last war, and no reason exists why that bank should not be utilized more fully by the Government in this war. Every one should be taxed to the limit of his ability to pay.
It is not the amount which the Government takes from a person by way of tax, but what a person has left after paying the tax that really matters. I did not intend to speak on this measure, but was ‘ impelled to do so because of the misrepresentation of the Government’s policy by honorable senators opposite. However, although honorable senators opposite may attempt to ridicule Ministers, I have no doubt that they have the welfare of the country at heart. All should co-operate in the war effort to bring nearer the day when we shall live in peace and security. I appeal to honorable senators opposite not to harp on the word inflation. By doing so they injure the war effort. The press, also, would be well advised not to apply that term when its use is not justified. Honorable senators on this side have complete faith in the Government and its ability to carry out the wishes of the people.
– Senator Clothier, apparently, has not a grip of the proposals contained in the bill. It provides for a reduction of the statutory income tax exemption in order to bring into the income tax field incomes on the lower ranges. The Government has found it necessary to take this course because it is not getting sufficient money to meet war expenditure. The Government increases wages and salaries at every opportunity in order to make the wage and salary earners believe that they are getting more money, but, in fact, all that it is doing is to pay more money to wageearners in order to be able to ta.ke a little more out of their pockets. The bill also provides for the raising of compulsory loans. The Opposition’s objection on that point arises from the fact that the Government proposes to take such loans only from one section of the community, namely, the salary and wage earners, whereas other income-earners are not to be asked to make any contribution in that way. It is true that the Government will hold such contributions only for a time, and will pay the contributors interest at the rate of 2 per cent. If the Government intends to raise money by way of compulsory loans, it should treat all sections alike. It strikes me as most extraordinary that the previous Government was removed from office because it proposed to raise compulsory loans on a much fairer basis than the present Government now intends to do.. The previous Government proposed to treat all sections of the community alike. The bill also provides for the registration of tax agents. Evidently, no honorable senator objects to that proposal. So far as I can see, those are the only three proposals, embodied in the bill. It is useless for the Government to try to mislead the people in. respect of its finances. Inflation is going on, and it has been going on for some time. We must check it if we can. The least the Opposition can do in the matter is to point out the mistakes of the Government. If the people decide to return the Government, the responsibility for such a policy will be on their heads, and not on ours. However, it is useless to try to gull the public into believing that inflation is not taking place.
– The previous Government had a good innings.
– A glance at our present floating debt will reveal the fact that this Government has already made substantial use of bank credit. Even the Leader of the Senate (Senator Collings) must realize that there is a danger point.
– Where is it?
– We are very close to it now. Should the present Government be returned to office, I shall feel extremely sorry for any people who are hoping to use returns from life assurance policies, or any savings they may have put. aside, to provide for their old age, or for their children, because a continuance of the present- policy of inflation will vender that money practically valueless.
– Has not the honorable senator any faith in the country?
– I have complete faith in the country and its people, but I have no faith in the present Government. Honorable senators on this side are anxious to help the Government. However, it is useless for us to offer constructive criticism of its proposals if Ministers and their supporters adopt the attitude that we merely intend to condemn the Government. We are prepared to accept our share of responsibility as members of the Parliament. The Government should come out into the open, and tell the people frankly that this additional tax is being imposed not for the purpose of establishing the National Welfare Fund, but in order to enable it to obtain sufficient money to carry on the war and so avoid having further recourse to bank credit. I do not object to the objective of the measure; but I criticize .the Government’s method. It proposes to take money out of the trust fund to be established almost as soon as the money is put into that fund, and to use it for war purposes. Interest, is to be charged on that money. That, of course, is against the policy, advocated by Senator Darcey. I am surprised that he acquiesces in the Government’.? proposal to raise £30,000,000 by taxation, to be placed into this trust fund, and after it is taken out of the fund to carry interest at the rate of, probably, from 2^ to 3 per cent. It is bad business to charge the people interest unnecessarily. It would be far better- for the Government to say frankly that it will retain this sum of £30,000,000, but later, when our war expenditure eases, it will establish a. fund for the purpose of providing benefits under a national welfare scheme. The Opposition does not object to such a scheme; but our primary objective to-day should be to raise the funds necessary to wage the war, and to terminate it as quickly as possible. That is our main problem; and it is a full-time job for any government. Every member of the Government should concentrate upon it.
– We are doing so.
– No. The Government is trifling with a lot of other matters which are not nearly so important. The Leader of the Senate must admit that fact. I shall not oppose the bill, but I intend to support the amendments forecast by the Leader of the Opposition. Certainly, the proposed amendment designed to prevent the Government from taking a certain percentage of the soldiers’ deferred pay is justified.
– That was done in the last war.
– No. Deferred pay Ava s paid in full, no deduction whatever being made. In addition, the soldiers were then paid a gratuity considerably in excess of what they expected to receive. I hope that the Government will accept the amendments forecast by the Leader of the Opposition.
– On the whole the Government may congratulate itself on the Senate’s reception of the measure at this stage. It is somewhat difficult to harm onize the speeches made by honorable senators opposite and their declared intention of supporting the second reading of the bill. I presume that the Opposition is confident of amending the bill in certain respects in the committee stage. It would ill become me to anticipate what will happen to the -measure in committee. The Leader of the Opposition (Senator McLeay) traversed quite a number of matters which, without unduly stretching the imagination, must be considered as irrelevant to the measure. By some mysterious calculation he declared that the Government had issued £300,000,000 of .bank credit. However, when he endeavoured to show how that sum was made up he failed to get anywhere near the total he mentioned. I thought at the time how fortunate this country has been by reason of the fact that the distinguished positions which the honora’ble senator occupied in previous governments did not include the office of Treasurer. In view of his kindly nature, I was surprised to hear him say that we were suffering acutely from inflation, and that the Government was doing nothing whatever to correct that tendency. The fact is that the Government has been doing its utmost to prevent inflation. The honorable senator knows that at no time in history has the Government of any country been able, during a war, completely to prevent inflation.
– New Zealand has done much better than this Government in that respect.
-S. - I quite understand that a Labour government in any other country oan always do better than one in the honorable senator’s country. Honorable senators opposite are prepared to say nice things about a Labour Government, so long as it is in power somewhere else. They resemble people who have a good word to say for any country but their own. They have praise for a Labour government so long as it does not happen to be the one that removed them from the treasury bench. Their grievance is that we have not consulted them or adopted their methods. Therefore, no good thing can, in their opinion, come out of Nazareth. I may flatter honorable senators opposite by entering into a detailed criticism of what they have said, but it is unwise to allow all their remarks to go without some defence from this side. .Senator McLeay went on to say that the trouble was that the present Government was more concerned about playing the party game than the national game. In spite of the fervent “ Hear, hear !” from the South Australian bloc, the fact remains that the statement is false, and was, I think, deliberately made, with malice aforethought. As a matter of fact, if one has faith in his party, and believes in its policy, then, as a member of the government of his country, there can be to him no higher mission than to play the party game; but if the party escutcheon has as many stains upon it as have the records of the honorable senator’s party over the last quarter of a century, I can quite understand that the honorable senator does not want too much, said about it. To say that we have played the party game in the sense that the honorable senator meant, as against the national game, is so untrue as to be fantastic because from every quarter of the globe, from visitors from overseas, from every responsible person who has come here to find out what Australia is doing in the war effort under this Government, there has been one continuous testimony to the fact that, on the basis of our population, we are making a war effort which is not equalled by any other country engaged in the war. That cannot be denied, and proves that, at least so far as the wai- is concerned, this Government has played the national game. If I could’ do so, I should, like, in the words I have just used, to scotch that kind of talk, which, does not enhance the dignity of the Parliament, is not helpful to the Government, and has a demoralizing effect on the morale of the people of Austra.lia at a time when we want it to he at its highest pitch. I was considerably honoured by the Leader of the Opposition quoting something that I said in 1940. 1 then expressed the view, according to him, that we should tax higher incomes extensively - I probably said extravagantly - let middle incomes down a little more lightly, and not tax low incomes at all. It is more than likely that I said all that in 1940. We have gone ahead since then, and taxation on higher incomes is now fairly heavy. I was glad to hear the admission by one speaker on the opposite side that it had not gone high enough. I think it was Senator Spicer who said that 18s. 6d. in the £1 was not high enough, and that it would go higher yet.
– I did not say that.
– Somebody said it. I have nothing to retract from the statement I made in 1940. I believed in it then and believe in it now. I believe that the higher incomes of the people for whose assets the brave soldiers in the different theatres of war are fighting, bleeding and dying should, during the time of war, be savagely attacked. I still believe that the middle income section of the community should not be pressed upon too hardly, because their incomes are limited, and mostly fixed, for which reason they undertake commitments which they cannot fulfil if they are taxed too heavily. I still believe that low incomes should not be taxed at all under normal conditions, but, in 1940, conditions were not as abnormal as they are in 1943.
– They were not normal.
– I carefully avoided saying that the conditions in 1940 were normal. Members of the Opposition talk inflation in one breath, and then complain because we put a tax upon people whose income is only £104 a year, although they know that it is deliberately aimed at a section of the people who are getting more to-day than they ever got before. They are a long way off getting all that they earn even yet, but some day I hope that there will be a social order in this country which will enable the people who do the work to get all that they earn At the moment, they are getting more than they ever got before, and, in order to check inflation, this Government has rationed goods, stopped a number of nonessential industries from functioning at all, and endeavoured to see that as much as possible of the extra spending power that has been put into the hands of people because of war expenditure is diverted to government purposes. Because we have been taking those steps, we are accused of inconsistency. It is impossible to please the members of the Opposition. They will not admit that they want less money expended on the war. We must still pour this purchasing power into the hands of the people in order to continue fighting the war effectively, but at the same time the members of the Opposition tell us that we must not say to the people: “You must stop unwise spending, therefore we will make fewer commodities available in order to curb your spending, and make you do with fewer frivolities than you have had before. We will try to divert some of the money into Government channels in order to avoid inflation “. Honorable senators opposite cannot have it both ways. We must, in order to wage this war effectively, go on pouring into the hands of the people this extra purchasing power, and then try to get some of it back by means of loans. We hear a great deal from honorable senators opposite about compulsory loans. We are not introducing compulsion until we are sure that the voluntary system has failed.
– The Government ought to be pretty sure about that by its experience in the last twelve months.
– We have never yet floated a loan which has not been successful. We have sufficient confidence in this country and its people to believe that, so long as they know that the money is being spent for war purposes, they will continue to give it to us voluntarily. In order that the jeremiads of the Opposition may be confounded by my prophecy, and I may be able to say later, “ I told you so “, I make bold to say now that the people of this country have such unbounded faith in the Government that the new £100,000,000 loan will be oversubscribed.
– - That will give the Government only one-half of what it needs. It is not game to try to get the rest.
– The honorable senator will be surprised to learn how game we are. I drew Senator McLeay’s attention by way of interjection to the fact that at the time of which he was speaking, Japan had not come into the war. There was an immediate cry from the Opposition “ that is the old story, do not wake it up “. I tell honorable members opposite that they must either have this Government and its policy to prosecute the war effectively, or have another government which will be controlled, not by the South Australian bloc now sitting in Opposition, but by Tojo, with a policy dictated from Tokyo.
– Who is the Jeremiah now?
– There is no pessimism or jeremiad about that prediction, because we are convinced that, so long as the Labour party retains its control of our war operations, and is responsible for the raising and expending of funds, this country will be safe from invasion.
– The people are not so satisfied.
– It is most unwise to issue challenges. Some one once said, “Do not be too certain about a thing not being able to be done, because you may wake up one morning and find that some one has done it”. Honorable senators opposite should not issue challenges too freely, because one day they may wake up and find that the people have been asked whether they want this Government to continue the prosecution of the war.
– The Minister should not throw challenges across the chamber.
– I am simply warning the honorable senator to be careful. Otherwise one day we might believe him, and go out to see whether he is right or not. I am a great believer in two things in the way of philosophy, first of all to be sure that one is right, and then to go ahead to see whether one really is right. I am not sure that the honorable senator is right, but one day we may go ahead to ascertain whether he is. Senator McLeay also stated that the soldiers’ pay was not what it was represented to be. The public know that it is not what it was, because this Government was so ashamed of the conduct of its predecessor in that regard that we raised it on one or two occasions.
– And took 2s. 6d. in the £1 back by inflation.
– If the Government to which the honorable senator belonged had remained in power, judging by its record no increase would have occurred in the soldiers’ pay. We have no reason to suspect that it would have been generous in that regard, because it never was generous during the war years in which it had the opportunity to act.
– That is not correct, and the Minister knows it.
– Supposing that the honorable senator’s statement, that we raised the soldiers’ pay and then took back 2s. 6d. in the £1 because of inflated prices, be correct, the soldier at least has the advantage of knowing, and I believe appreciates it, that is is better to have had his wage raised, even if 2s. 6d. were taken back by way of inflated prices, than for it to remain stationary, as it did whilst the honorable senator’s Government was in power, and then to have 2s. 6d. pinched. Senator McLeay then went on to talk about New Zealand. If this matter were not so serious, the honorable senator’s line of argument would be really humorous. We have been told ad nauseum by honorable senators opposite that Australia is not doing as much in the way of taxation as New Zealand or the United Kingdom, but the fact is that a comparison cannot be made between taxes levied in this country and those levied in a country like New Zealand. In the first place, the Government of New Zealand has only one parliament to contend with; it does not have to ask six State Premiers whether this or that can be done.
– Uniform taxation is in operation in this country.
– Yes, and we all know what the attitude of honorable senators opposite was to that scheme. As usual, the Government had to fight a ‘flood of hostile criticism. When we are able to say to the people of this country- I have no doubt that we shall be able to say it if we are left in control of the treasury bench long enough - “ We shall give you what the Labour Government of New Zealand has given to the people of that country in return for the heavy taxes that they have to pay “, Australia will be in a happy position. It is true that the people of New Zealand pay far higher taxes than the people of Australia, but it is true also that the people of that dominion receive far greater social benefits. Take ‘for instance the retirement age ‘under their -pensions scheme, the absence of a means test, their hospital and medicine scheme, &c. These are the things that the people of New Zealand receive in return for the payment of high taxes. In the course of this debate we have had to listen to sneers because, in a small way, . this Government is preparing the way for a more generous scheme of .social welfare in this country. Honorable senators opposite cannot have it both ways. It has been quite interesting for me, and, I am sure, .for other honorable senators on this side of the chamber, to hear the remarks that .have been made from the Opposition benches about the taxes which this measure will impose upon people in receipt of low incomes. We know perfectly well - I do not think that even Senator McLeay will deny this - that the cry of honorable senators opposite all along has ‘been, “ You are letting these people off; that is wrong “ ; yet now, when the Government decides that for certain purposes peculiar to these abnormal times, it is in the interests of the nation as a whole that income tax should be paid by the lowe;income groups, we are told that we should not do it.
– Nobody said anything of the kind.
– And because we are doing it, I have been accused of the cannibalistic act of eating my own words. Replying to that assertion by way of interjection, I said that it was much better that we should eat our own words than that we should eat Japanese “tucker”.
I wish to refer now to my genial friend, Senator J. B. Hayes. Whenever that honorable senator speaks, at least he has -an intelligent alternative to offer to what is proposed by the Government, and does not rise solely for the purpose of saying -unpleasant things about the Government or the Leader of the Senate. The honorable senator said that, if it were absolutely necessary to raise the money in this manner - I think that he said he would support the second reading of the bill - every precaution should be taken to see that ‘.it was wisely expended and that the people must ‘be assured that there was no extravagance. I draw the attention of the “honorable senator ‘to the fact that there is a War Expenditure Committee, the object of which is to investigate cases of alleged extravagance. That body has discovered quite a num’ber of instances of what would appear to be unwarranted extravagance, and some such cases have been referred to -me as Minister controlling -.the department which is responsible for constructional work for .all the armed services from Hobart to Darwin. I shall not. deny that, in connexion with certain contracts let under abnormal conditions and involving work of an urgent national character, extravagant expenditure has occurred, but I am able to state that in not one of these instances has the responsibility been sheeted home to the Government. . I shall cite an -example. The War Expenditure -Committee -sent to me a statement detailing four charges of alleged extravagant expenditure, and asked that investigation be made. Tin; charges concerned a huge urgent undertaking in Northern Australia. The first charge was that the camp medical officer had been paid £14 8s. for a week’s work ; the second was that the chief steward of the camp had been paid £22 for a fortnight’s work; the third charge I have forgotten for the moment, but the fourth was that a truck driver had received £42C in a fortnight. An investigation revealed that there was no resident medical officer in the camp, which happened to be near enough to a big town from which medical assistance could be obtained. Apparently the charge relating, to the “ chief, steward “ referred to the chef. It was found that he had been paid the high wage mentioned because, owing to the shortage of. man-power he had been asked to work 100 hours in a single week. He earned every penny of the money he received- because he was paid the awardrates.
– Plus penalty rates foi- overtime ?
– Yes, that is the law of the Commonwealth and of every State.
– Bid the Minister investigate the wages paid to the men who took the dredge to Perth?
-. - As usual, when I give the honorable senator an assurance in regard- to one matter that; he; has raised, he turns immediately to somethingelse about’ which he. knows -just as- little. The honorable: senator was never in the camp to- which he referred. Probably, he obtained his information by means of ananonymous letter. “When jj receive suchcommunications I tear- them up and put them in the wastepaper basket; However, to return to the motor- truck driver mentioned’ in the fourth charge it; was found that, there was no truth in the statement. It was true, however-, that seven motor: truck- drivers had received £85.0 in a fortnight, but, as that- sum had to cover the payment: of seven drivers; the use of seven trucks of varying capacities, and the provision of petrol and oil for- these vehicles, it was not so great as would at first appear-.
– Overtime for the trucks, too?-
– No. Overtime is paid only to the human worker. It is not paid in respect of any mechanical implement used.
– That is interesting. Is the Minister sure of his statements?
– Apparently, Senator Spicer would profess to know more than I do, although I happen to be the Minister who is receiving a salary for understanding the job. If the honorable senator will come to my office to-morrow morning and give me specific instances- in which he considers that extravagant expenditure has occurred, instead of bleating about these matters here, I promise to run every one of them to earth, and I make the prophecy now that whatever allegations he rnakes^ will be completely baseless.
– The matter to which I referred was brought up in this chamber- and no reply was received.
Senator- COLLINGS: - If correspondence has been neglected somebody will be in trouble.
Senator J.. B.. Hayes said that Canada and the United States of America had adopted’ a “‘pay-as-you-go “ income- tax system and asked would the Government obtain a report upon the matter from a committee of’ experts. I assure the honorable senator in all sincerity that all he suggests should be done has been done. We have consulted experts. We do not” pose as encyclopedia of knowledge, or as repositories of the wisdom of the ages ; but- 1: would point out that this Government has for its advisers exactly the same experts as had the previous administration.
– With some additions
– Exactly. We are not prepared to flounder along without securing the most modern views on these matters. I’ come now to the leader of the South Australian bloc in this chamber, Senator McBride. The honorable senator said that, there had been a 12£ per cent, increase of the cost of living since this Government assumed office, and he even went so far as to commit the unpardonable sin of estimating that there would, be a further 5 per cent., rise within the next year.
– I did not let the Government down as lightly as that.
– The -only reasonable inference that I could draw from the honorable senator’s remarks wasthat ho wanted the Government to spend less on the prosecution of the war.
– Nonsense !
– The honorable senator cannot have it both ways. Either we must continue spending money on the prosecution of the war and take the risk of .inflation, or we must stop spending on the war ; and- I should like to know in what direction war expenditure could be reduced.
Of course, we are all quite accustomed to Senator leckie, and we realize that this Government will never be able to do anything which will find favour with that honorable senator. However, it was extremely interesting to find in this year of grace, 1943, Senator Leckie defending people on low incomes. He said, “ Those are the people who deserve our sympathy. I am horrified that this Government should have laid sacrilegious hands on the incomes of the people in the lower income groups “. Not long ago, however, he said, that wages earned in the lower income groups represent 75 per cent, of the national income, and that the Government was letting those wage-earners off scot-free. When the Government, having been led to the penitent form, decides to impose a tax on the lower-paid workers, the honorable senator regards it as the last word in crime. He is utterly incorrigible !
Now I come to Senator Spicer. If I were a medical’ man I should, after listening to the honorable senator’s arguments, know more about the wonders of the human brain than I now do. After he had given utterance to a pearl of wisdom I spent a few minutes in silent cogitation in order to discover how his brain worked. He said, in effect, “You do not want to collect the tax in the way you propose. You are now running the risk of finding out, after the war, that persons now receiving high wages will be unemployed and will be unable to pay the tax demanded in respect of their previous income “. But the honorable senator said a little later that, on the death of a taxpayer, the Treasurer would be able to get his rake-off from the estate of the deceased. That does not mean that the Treasurer would get the amount of income tax he ought to have collected in the year in which the income was earned.
– The Minister did not understand what I said.
– The honorable senator either knew, or did not know, that when the time came for the Treasurer to put in his claim, he would not get the amount of tax to which he was entitled, but would receive a much reduced sum, after waiting for a long while. The honorable senator said that, although the tax had not been collected during the life of the taxpayer, the same amount of tax would be paid by his estate.
– I did not say that.
– I took a note of the honorable senator’s observation. He also remarked that, under this bill, on any profits not distributed by a private company, tax would be paid equal to that which the shareholder would have had to pay had he received his share of the profits. What reason is there for such an obvious declaration ? Some companies are holding money to which they are not entitled.
– Why are they net entitled to it?
– They are not entitled to what belongs to the shareholders. If the profits were paid to the shareholders, the Government could collect tax in respect of it. If those companies employ experts to enable them to hold on to undistributed profits, the honorable senator’s argument is sound, but otherwise, it is not. He went on to say that there would be serious repercussions as the result of the use of bank credit. He knows quite well that this Government is using three methods of financing the war. First, it is raising voluntary loans; secondly, it is using the taxation method; and, thirdly, it is exploring the possibilities and potentialities of the Commonwealth Bank. The honorable senator knows perfectly well that private banks can still build up a superstructure on credit on which they can draw toll from every member of the community who does banking business with them.
– The Government’s plan was drawn up by the Fadden Government.
– The honorable senator knows better than that. To-day, no private bank can gamble in treasurybills, but that could be done ad lib during the administration of anti-Labour governments, even during the early stage of the war. It may be true that this Government is doing everything the wrong way, and that its actions cannot be justified before the people of this country; it may be that by an undue use of bank credit, or by using the
Commonwealth Bank, the Government is doing things which may lead to disaster. I deny that that is true, hut the alternative is to submit to something far worse. On Sunday last, in a remote part of this continent I heard a gentleman talking to a Cabinet Minister - I was not that Minister - and he said, “ This war is a racket and the way your Government is conducting it is a racket”. The reply of the Cabinet Minister was, “Suppose it is. You must have either this racket or Togo’s racket “. I ask Senator Spicer which he prefers.
I was interested in the remarks of Senator Latham, who said that the Government had reached the danger point. Looking like a Daniel bearding the lions in their den he asked, “ Why do you not tell the people the truth ? “ In other words, he might have asked, “ Why do you not tell the people you want this money in order to be extravagant and pay higher wages ? “ . The Government is merely advertising in an extensive way throughout the Commonwealth that it needs £100,000,000 from the people. It is not strutting about posing as the saviours of the country. We say to the people, “ Ladies and gentlemen, this country is at war. We believe that if we can keep the Japanese from obtaining a foothold in the islands which they desire to occupy, and can drive them from the islands where they are already established, we can prevent them from invading Australia. We want £100,000,000 from you now, and we know that we are going to get it.” There is nothing heroic about that. The people know that when the £100,000,000 has been raised, a demand will be made later for a further £100,000,000. Senator Latham says that the Government desires to do something ultra-courageous, and should say frankly what it wants this money for. He said another thing which I regard as unkind. You. Mr. Deputy President, have the good fortune at the moment not to be a Cabinet Minister. Some members of the Government who are more or less new to ministerial duties have had gruelling experiences in the last sixteen months. An honorable senator asked me a few moments ago at what hour the Senate would meet to-morrow. When I replied that it would meet at 3 p.m., he asked, “Why not 11 a.m.?” I replied that Ministers must have some time during the day to do their ministerial work. Senator Latham also said, “ Ministers are not fully engaged in war work “. That remark comes with ill grace from an honorable senator who does not know anything about the duties which the war imposes on Ministers. Senators McLeay, McBride, Foll and Leckie are acquainted with the pressure of ministerial duties, and that pressure has not slackened since the previous Government relinquished office. The gibe that Ministers are not doing all they could in connexion with the war is exceedingly unkind and is not in accord with the facts.
– Does the Minister believe in the bill?
– It is remarkable that I should be twitted with not dealing with the bill before the Senate, since I have merely replied to criticisms offered by honorable senators opposite. Obviously, their remarks also were not strictly confined to the measure. No doubt the bill will pass its second reading, and I hope that- it will pass its remaining stages, because the Government must have the bill. The war, unfortunately, will go on, and the Government must have the revenue which it seeks to raise under this measure, if it is to do the job which it considers should be done. I express my gratitude to the Opposition for the fact that, although its criticism has been harsh and unjustified at times, it has promised to support the second reading of the bill.
– I am. somewhat bewildered at the reception given to this measure by the Opposition. There has been joy on the part of honorable senators opposite in the knowledge that persons in receipt of low incomes are to be taxed, and sorrow that they themselves are not on the Government benches to levy that tax. The Opposition has decided to support the second reading of the bill with a view to moving amendments in committee. Honorable senators opposite have raised objections to the bill on two or three grounds. Exception has been taken to the statement that in 1940, when the then
United Australia, party Government proposed to reduce the exemption below £200, the Labour party applied pressure, and the proposal was not proceeded with. This afternoon. Senator Spicer made clear the weakness of a, previous government’ which, notwithstanding that it had a majority in, both Houses, surrendered to the Labour party in connexion with an. important taxation measure.
– It was not- a surrender, but a mutual arrangement.
– It was a surrender. I believe that proceedings were held up for a day or two while the leaders of the parties conferred. A good deal’ has been said- about the need for courage, but it remained for” the Curtin Government to taKe the courageous step of reducing the income tax exemption. As the Leader of the Opposition (Senator” McLeay) gave certain figures in connexion with post-war credits, I desire to compare the proposals of the Fadden Government with the measure now before the Senate. The Leader of the Opposition cited examples of the effects of taxation proposals on incomes of £150, £200 and £250 a year. Before dealing with those examples, I remind the Senate that the 1941-42 budget, which was rejected by the Parliament, proposed to refund a sum of £20,000,000 of the national contributions. We were told that that amount was practically equal to the assessments on the lower incomes. A point ignored by the Opposition, is that when the Fadden Government introduced its post-war credit scheme the contemplated war expenditure for the year was £217,000,000 compared with £500,000,000 to-day. Let us compare the figures in the Fadden budget with the proposals now before the Senate. Under the present scheme it is estimated that the collections of uniform income tax on individuals will amount to approximately £139,000,000 for 1943-44. Of that sum, £21,000,000’ will be collected on behalf of the States, leaving the collections for Commonwealth purposes at about £118,000,000. One quarter of that sum would be £29,500,000 or, say, £30,000,000. According to the Leader of the Opposition, John Smith, a taxpayer -with an income of £150, would have paid £11 as a national contribution under the Fadden proposal, and his post-war credit, taking the average for all States, would have been £’7 12s. Under the present proposals, John Smith with a: similar incomewill pay £10 5s.-, but as- the amount- to be raised is £500,000,000 compared .with £2ie;000,000 under- the Fadden Government’s proposals, it will be seen howmuch better– off he- will be under theseproposals: Under the Fadden post- war credit scheme he would have a postwar credit of £11 5s. A married man with, an income of £200’ a- year would have contributed £22 4s., and would have had a post-war credit’ of £15 14s. under the Fadden scheme,. whereas under the present scheme,, which provides for a war expenditure two and a half times- greater, he would pay 9s. less; and share in the benefits for which the scheme provides-. According to the Leader of the Opposition a married man with an income of £250 would have paid. £33 6s. under theFadden scheme, compared with £36 14s. under the present proposal, and would, have had a post-war credit of £16>2s. lit is reasonable to assume that a married, man will incur medical expenses of at least £16 a year. My point is that fora payment of £3 8s. more than under theFadden scheme he- will be provided with social security throughout the year, the benefits including insurance against unemployment, doctor’s expenses, medicine,, a liberalized maternity, allowance, and so* on. I emphasize also that the figures given by the Leader of the Opposition are similar to the rates on individual incomes. This difference is accentuated when werealize that the amount involved under this scheme is two and a half timesgreater. The social security scheme proposed by this Government is estimated tocost 50 per cent, more annually than theam ount which the Fadden Government proposed to refund to the people by way of post-war credits. Much has been said about the fact that the Government now proposes to tax incomes in the lowerranges. I point out that the circumstances pvevailing to-day differ entirely from those existing in 1940 and 1941. Manythousands more people are now employed in industry. At present, many members of thousands of families are engaged” in industry, whereas previously only the- bread-winner was in employment, and whereas he brought into the home from £5 to £6 a week, the total income being earned by members of the one family now amounts to from £20 to £25 a week. With regard to the Government’s proposal to issue certificates of credit in respect of overpayments of tax, any government must, at this time, pay regard to the fact that thousands of married women now earning substantial wages will be obliged to relinquish their employment at the conclusion of the war. Therefore, it is the duty of the Government to put intooperation a scheme to establish reserves from which those persons will be enabled to meet their tax commitments when they return to their homes. If such provision be not made, it will be found that the soldier husbands of many women will, on their return, be obliged to pay the tax commitments of the latter,who will not then be earning any income. Honorable senators opposite have not suggested one improvement of the Government’s proposal in that respect. The Leader of the Opposition (Senator McLeay) was generous enough to say that provision of this kind must be made in order to protectthose persons who are now earning substantial wages, but will have to relinquishtheir present employment when the war ends.
Many of the remarks made by the members of theOpposition during this debate willnot helpour war effort. Some honorable senators opposite constantly refer to inflation. The same practice is indulged in by responsible personsoutside this Parliament. They have declared that within twelve months the £1 note will be worth only about 10s, Those persons who are always crying inflation do -the country a disservice. Honorable senators opposite declare that they will do their utmost to ensure the success of the next war loan, but they are certainly not helping in that direction by making speeches such as they have made during this debate. Any government, regardless of its political colour, cannot completely prevent inflation. Honorable senators opposite also take every opportunity to draw comparisons between conditions in Australia and those in New Zealand with the object of disparaging this Government. The fact that New Zealand is in a favorable posi tion to-day is because, in 1936, a Labour government in that country stabilized the prices of primary products. Had United Australia party-United Country party governments in the past adopted a similar policy in Australia,we should now be in as favorable a position as New Zealand. Further, those honorable senators who are pr one to draw such comparisons to our detriment always fail to complete their comparisons. For instance, they have failed to point out that the Australian people to-day are paying 70 per cent, more for wool than they paid before the war, in order to maintain stability in the wool industry.
– The price of wool has not increased by more than 15 per cent.
– It has increased by nearly 70 per cent, on pre-war figures. Further, honorable senators opposite who arc constantly attempting to draw comparisons to our detriment between conditions in Great Britain and those in Australia have failed on this occasion to point out that whilst the cost ofliving in Australia has increased since the outbreak of the warby 221/2 per cent., in Great Britain it has increased by29 per cent. Any undue increase of the cost of living in this country has resulted from the maladministration of past governments, which, with the exception of two years, during the last quarter of a century, have been United Australia party-United Country party administrations.
– Great Britain is obliged to import a large number of products.
– I commend the bill to the Senate, and hope that, in the committee stage, due consideration will be given to the amendment which the Government proposes to introduce.
Debate (on motion by Senator Fraser) adjourned.
The following papers were pre sented : -
National Security Act-
National Security (General) Regulations - Orders -
Prohibiting work on land (2).
Taking possession of land,&c. (156).
Use of land (15).
Regulations - Statutory Rules 1943, No. 35.
Senate adjourned at 11.11 p.m.
Cite as: Australia, Senate, Debates, 10 March 1943, viewed 22 October 2017, <http://historichansard.net/senate/1943/19430310_senate_16_174/>.