17th Parliament · 3rd Session
The PRESIDENT (Senator the Son. Gordon Brown) took the chair at 10.30 r.m., and read prayers.
– Will the Minister representing the Prime Minister ask him to confirm or correct a statement attributed to him over the national broadcasting stations on the night of Thursday, the 2Sth March, that ex-servicemen differing from malaria are entitled to the same pension us those suffering from any other war disability? Will a clear statement bc made as to the treatment and benefits to which a sufferer from malaria is entitled? I have received letters asking whether a new policy has been ii dop ted with regard to these cases. At present an ex-serviceman affected . with malaria is given hospital treatment, during which ho is paid an allowance, and after a certain period he returns to his normal work.
– I shall be pleased to confer with the Prime Minister and seek the information desired by the honorable senator
– Is tho Minister for Supply and Shipping aware that from time to time ships arrive in Tasmania in ballast in order to load cargo in that State?
– Name them!
– Those which carry coal and steel products ‘to Victoria. I shall supply a list of such vessels. Will the Minister cause an inquiry to be made as to why this tonnage is not being used for the conveyance of general merchandise, at both Sydney and Melbourne, which is urgently needed in
– I . shall have an inquiry made into the matter raised by the honorable senator, but in view of the grave shortage of shipping, and the need for using all available space,- 1 am sure that there has been no neglect on the part of the shipping control authorities to utilize all vessels to the greatest advantage.
– In view of the continuous and alarming ‘ reports from the United States of America that the Australian representative, Colonel Hodgson, is out of step with the British and American representatives at the meetings of the Security Council of the United Nations, will the Acting Leader of the Senate make a statement before the adjournment to-day as to the attitude of the Government in the matter, and inform us whether the reports are correct. Tho latest statement is that Colonel Hodgson has adopted the Gromyko tactic* by retiring from tho Council meeting, although on this occasion he was persuaded to remain..
– I am not prepared to mako any statement to-day along the lines suggested by the Leader of the Opposition. If be is sincere in his desire for information, I suggest that he place a question on the notice-paper, in which event I shall endeavour to obtain an answer from the Attorney-General.
– Is tho Minister for Supply and Shipping aware that numbers of young dentists who either have been discharged or are awaiting discharge from the fighting forces find it impossible to obtain the dental equipment and accessories necessary to enable them to carry on their practices? Is he also aware that in Western Australia there is a quantity of such equipment which has been declared surplus by the defence forces and -is awaiting disposal? Will he institute inquiries as to the reason for the delay in disposing of that material, and expedite matters so as to enable these young exservice dentists to make a living?
– I am aware that there is a shortage of dental equipment, as there is of many other commodities. During the war, many young men were trained for service as dentists in the defence forces of this country. _ Some of them are now returning and wish to set up in the profession, of dentistry. I shall have inquiries made to ascertain whether dental equipment previously used by the forces is awaiting disposal in Western Australia. The honorable senator can rest assured that the departments dealing with the rehabilitation of ex-servicemen are given first preference when machinery or equipment suitable for their use is being disposed of.
– Is the Minister for Supply and Shipping aware that numbers of young professional ex-servicemen and others who are awaiting discharge from the forces - dentists, accountants, architects and others - find it impossible to obtain office accommodation or surgeries in the city of Perth owing to many .office buildings being still occupied by administrative staffs of the various service departments? Will the Minister institute an inquiry in order to ascertain if it is necessary for those administrative staffs to remain in occupation of such premises, as their presence there is debarring these young exservicemen from practising their professions?
– I am aware that there is a lack of office accommodation in Perth, but that state of affairs is not peculiar to that city. The position is the same in every city of the Commonwealth. No buildings have been erected during the war to meet the requirements of the large numbers of professional and business men released from the services. I shall have inquiries made into the possibility of the Commonwealth departments vacating office accommodation in Perth in order to relieve the shortage of office space that now exists in that city.
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
Will the Minister furnish the Senate with the following information: -
Comparable prices of the same articles mentioned in (!) (a) at ceiling prices in the State of Victoria.
Retail prices, in (1) Victoria and (2) Great Britain, .of -
– The Minister for Commerce and Agriculture states that the information required to answer the honorable senator’s questions is being obtained, but, in view of its nature, some time will elapse before it is available.
asked the Minister representing the Minister for Transport, upon notice -
– The Minister for Transport has supplied the following answers : -
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minister has supplied the . following answers : -
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
– The Minister for
Commerce and Agriculture has supplied the following answers: -
Is a surplus.
Debate resumed from the 4th April (vide page 981) on motionby Senator Ashley -
That the bill be now read a second time.
– Last night I obtained leave to continue my speech in reply. After listening to the Leader of the Opposition (Senator McLeay) and his colleagues’ one would get the impression that all of the Government’s financial problems, so far as war commitments are concerned, disappeared when hostilities ceased. Apart from the problem of demobilization and the rehabilitation of the men and women who defended this country, the Government is confronted with other grave problems, as part of the aftermath of war. Indeed, honorable senators opposite have in the past recognized that fact, and I challenge them now to reverse their attitude in that respect. Let me enumerate some of those financial problems. The Government must provide £75,000,000 for war gratutities, that being an entirely new charge, £54,000,000 for deferred pay, and £62,000,000 as payment of a debt which we owe to Great Britain. These amounts total £191,000,000 which is more than double our pre-war expenditure. But these are only a. few of the commitments which we must meet in the future. No honorable senator opposite would suggest for one moment that the Government can escape any of those obligations. However, despite any criticism which they may level at the Government in respect of these items merely for party political purposes in preparation for the next general elections, the Government will honour every obligation to the men and women who have preserved Australia’s freedom. The Leader of the Opposition said that the present high rates of taxes destroyed incentive to increase production. As usual, he resorted to the coalmining industry to bolster up his weak arguments. ‘ I shall not deal with his contentions in that regard, because ‘ I believe that they were answered adequately and clearly by Senator Armstrong.
The Government appreciates to the full the need for increased production; but increased production will not be achieved by the Opposition traducing and criticizing the workers. It was interesting to note that the Leader of- the Opposition and his deputy, Senator Leckie, could not agree in the arguments they advanced in this debate. The Leader of the Opposition claimed that high taxes resulted in a lack of incentive to increase production. Then Senator Leckie refurred to an industry in Tasmania in which men who had been making 164 cases a day while on a weekly wage, had made 480 cases a day on contract rates. Presumably, they increased their earnings considerably.
– Of course, they did. They had incentive to increase production.
– They also increased their working hours.
– Yes. They worked many more hours, and probably doubled or trebled their earnings. Apparently, high taxes are not’a bar to the incentive of these men to increase their wages. That argument is in conflict with the statements of the Leader of the Opposition. I have no objection to honorable senators opposite displaying their election placards and indulging in political propaganda during this debate, but I suggest that they should endeavour to achieve some uniformity in their statements. The Opposition oan hardly expect to make a very good impression on the electors unless they can agree upon a uniform- policy.
Reference has been made to the variation of the depreciation allowances for income taxation purposes, in respect of machinery installed for- amenities and scientific research. There is a special depreciation allowance of 33^ per cent, for plant and equipment used in providing certain amenities for’ employees.
– That refers to plant purchased in one year.
– Quite so. It was stated by the Leader of the Opposition, when discussing- this- measure yesterday, that improved conditions for’ the workers should be provided, and we are progressing along that road. A couple of years ago I visited the paper manufacturing works at Burnie on the north-west coast of Tasmania, and was agreeably surprised at the amenities provided for the employees. They have a dining-room nearly as large as that provided in this building for members of this Parliament. The room is exceptionally clean, and upstairs a doctor and a dentist have suitable accommodation. Amenities of this kind should be provided in every large establishment.
– Those referred to by the Minister have, been provided by private enterprise.
– The present Government has provided more amenities for the workers during the war period than they have ever previously enjoyed.
– “Why not cite one of the government factories?
– In many of them similar amenities have been provided. The Government desires that the depreciation allowance shall continue. It is not an exceptional deduction. Similar allowances are made with regard to those conducting commercial aeroplane services. The allowance for depreciation in that respect is 25 per cent., and on agricultural implements 10 per cent, is allowed. It is well known that machinery depreciates, and the allowance is spread over a number , of years according to its life. A depreciation allowance of 10 per cent, is granted even in respect of working bullocks, so there is every justification for providing a depreciation allowance of 33J- per cent, in order that amenities may be provided for human beings. As the - result of the war the equipment installed for’ the provision of these amenities’ has deteriorated and replacements are necessary. The Government desires to encourage the’ owners’ of these’ establishments to modernize their plants and produce to the maximum extent. The allowance is a good on”e, and it is not new.
Th’e Leader of the Opposition and also Senator” Mattner referred to a desire for an exemption in respect of ex-servicemen. Senator Mattner read a long’ letter from a returned soldiers’ organization containing this request, but ‘any concession in the way of exemption from income tax as a reward to a returned serviceman would thus b’e measured by his income. An ex-soldier earning £300 a year would benefit to the amount of only £50, whereas a more fortunate man earning £5,000 a year would be relieved of tax in respect of about £3,300. The Government considers that the most effective way to help ex-servicemen is to assist them in establishing themselves in business, engaging in trade or commerce, or taking up life on the land. This has been provided for by the Government, and its efforts in. that direction have earned the commendation of the” people.
Criticism has been offered of the cost of various government departments. The Leader of the Opposition said that in 1940-41 the Department of Supply and Shipping, then known as the Department of Supply and Development, involved an administrative cost of £200,000. He could have gone back to the year 1939-40, when the total cost of the department was only £36,000. I suppose he was reluctant to do that because that is the year when he was a member of the Government. In stressing the increased cost, however, he made no reference to developments that had taken place, or to the fact that tho control of shipping had been added to the responsibilities of the department. Naturally, the administrative expenditure would be greater in 1945- 46 than it was in 1940-41, because the department had more functions to perform. Take, for instance, the Commonwealth Disposals Commission. The expenditure in that direction during 1945-46 will considerably exceed £100,000, and there is justification for it. Each week the commission deals with goods to the value of many millions of pounds. In the first financial year of its operations it will return approximately £40,000,000 to the Treasury in revenue. The surplus goods which are to be disposed of are situated not only in all parts of the Commonwealth but also in the islands to the north of Australia, at such places as Wewak and Rabaul and other centres, where Australian troops have been stationed. The work of the Commonwealth Disposals Commission in ‘ itself means an enormous addition to the cost of the Department of Supply and’ Shipping. In the peak period the salaried staff of the department numbered 3,109 and an additional 4,619 were in receipt of wages, making a total of 7,728. The staffs are diminishing in size and consequently costs also are decreasing. On the 31st July, 1945, the salaried staff totalled 2,548 and an additional 2,158 were in receipt of wages. On the 12th October, 1945, the respective figures were 2,410 and 1,963. A month later - on the 15th November, 1945 - the salaried staff numbered 2,365 whilst 1,869 were in- receipt of wages. In other words, the total staff has dropped from 7,72S to 4,234. More recent figures are not available in detail, but they indicate a continuing decrease of staff except in respect of the Commonwealth Disposals Commission. It is not the desire of the Government that there should be wasteful expenditure in any department. There is no waste in the departments under my control, and instructions have been issued by the Prime Minister (Mr. Chifley) that- the .departments shall be constantly examined with a view to removing any surplus material at one place to other places where it can be used to advantage. It is all very well for members of the Opposition to say that high taxes destroy the incentive to work. That argument has been used ever since taxes were first imposed. Whenever an Opposition wishes to criticize a government it resorts to an attack on the Government’s taxation policy, knowing full well that if the people can be “ touched in their pockets “ there’ is a good chance of convincing them that there should be a change of government. I admit that I have used that argument myself; and I have no doubt that other honorable senators also have done so. I suggest however, that in criticizing a government, Opposition members should not depart from the facts. We should not have, as we had yesterday, the Leader of the Opposition relying on the argument that high taxes constitute an impediment to production, and the Deputy Leader of the Opposition (Senator Leckie) pointing out that, because of a change in their conditions of their employment from wages to the contract system, some workers had greatly increased their incomes. The honorable senator did not say that as a consequence they had to pay more in taxes. Had a government consisting of members now in Opposition been in office, it would have had to face the same financial problems arising out of the war as the present Government has had to face; and I suppose that if I were sitting in opposition I would be critical of that government. I would, however, try to be fair, and to present only facts to the Senate. Moreover, in such circumstances, a Labour Opposition would present a united front. I shall not say more at this stage. If any honorable senator desires further information during: the committee stage of the bill I shall endeavour to supply it.
Question resolved in the affirmative.
Bill read a second time.
Motion (by Senator Cooper) - by leave - proposed -
Clint it be an instruction to the Committee of the whole on the bill to consider an amendment to section 75 of the Principal Act.
– Is the motion seconded ?
– I second it.
Question resolved in the affirmative, there being more than fifteen senators present, and no dissentient voice.
Clauses 1 to 4 agreed to.
Clause 5 (Exemptions).
– I should like the Minister to explain what interpretation will be placed on the definition of “ service out of Australia “ in paragraph j. This definition appears to discriminate against those who volunteered after the 13th February, 1946. Does it mean that those who volunteered for the interim force or the force of occupation after the 13th February, 1946, will not enjoy the same exemption as those who volunteered prior to that date? In my opinion any differentiation between men serving in, the same place and on exactly the same conditions of service is unwarranted. If that is the effect of the definition, members of Parliament will be inundated with complaints from members of the forces.
– Pay and allowances earned outside Australia will be exempt in the cases of all members of the forces whether they enlisted before or after the 13th February, 1946, pro:vided that they continue to receive pay and allowances at special war-time rates. The only difference between those who enlisted before and after the 13th Feb- ruary, 1946, is that the former group receive retrospective and prospective exemption in respect of pay and allowances earned in Australia, whereas the latter group do not. All military personnel of the rank of sergeant and under will be completely exempt from tax until the 30th June, 1947. The revenue involved in all of these amendments is approximately £2,500,000.
– I wish to have it clearly and expressly stated whether or not those who volunteered before the 13th February, 1946, will receive privileges that will be denied to those who volunteered after that date.
Senator McKENNA (Tasmania) [11.21J. - I believe that there should be a distinction between men who enlisted for service in the interim force before the 13th February, 1946, and those who enlisted after that date. There should be no complaint on that score from men who enlisted after that date because after the Government’s announcement in the matter was made, men who enlisted in the three arms of the services were informed specifically of ‘the taxation conditions at the time of their enlistment. Some line of demarcation had to be drawn by the Government, and.it was a matter of clear contract between the Commonwealth and those who enlisted after the 13th February, 1946, that Australian income earned prior to the date of their enlistment should not enjoy exemption and that, moreover, they should not be exempt in respect of the threemonthsperiod following their return to Australia.
– Was that clearly shown on their attestation papers?
– I am unable to say ; I am ‘not familiar with the attestation form. I have made personal inquiries into the matter and I find that each individual was specifically informed of the ‘ taxation conditions under which he enlisted. Honorable senators will, I am sure, recognize that a distinction should be drawn between a man who joins the profession of arms while a. war is still in progress and one who joins that profession when service in it does not involve participation in hostilities. I’ agree that in relation to income earned in Australia there is a distinction between those who enlisted at a particular date and those who did so after that date;’ but again that was a matter of clear contract between the Government and the parties concerned. There is no suggestion, -I -am sure, that those who ‘enlisted after the pertinent date we’re misled in the matter; they knew- exactly what they were doing.
– The explanation given hy Senator McKenna is clear and concise but he has no authority to commit the. Government. Does the Minister confirm the views expressed by the honorable senator?
– du respect of pay and allowances earned in Australia, the man who enlisted before the pertinent’ date does enjoy a privilege which is denied to the man who enlisted after that date.
– I appreciate the point raised by Senator McKenna; but at the same time 1* am not unmindful of the fa:ct that when a man is being attested for service in the aimed forces he is called upon, to sign a lengthy document containing terms and conditions the meaning of which is very often not clearly understood by him. I suggest that 90 per ‘cent, of these volunteers would not know of this differentiation in respect of taxation, because, in the nature of things, it is not to be expected that enlistment officers would draw the attention oi each volunteer to it. Perhaps, “a very great amount of money is not involved, “but ‘the proposal involves an important principle. In this country, we have always regarded volunteers for military service overseas as being in a special class. This proposal gives rise to the regrettable position that men doing the same job as members of the same unit will pay tax at different rates.
– The argument of the Leader of the Opposition (Senator McLeay) that these men will not be told of this differentiation when they join up is groundless, because ho loss will be suffered by any volunteer who holds the rank of sergeant or a lower rank. They are not affected at all by this provision. The reason for the provision is that a line of demarcation must be drawn somewhere. I repeat that in respect of the period of service overseas all volunteers will be on the same footing. When new recruits join up they are acquainted with the conditions of enlistment.
– Is it proper that different rates of tax should apply to the income of men who will be doing similar work under similar conditions? If that is the position, I protest strongly against the proposal. Another point arising from the Minister’s ‘reply concerns the period of enlistment. I should like to know whether all volunteers upon enlistment were definitely informed that on the 1st July, 1947, the exemptions would be removed? Many officers are paying high rates of tax. That is a very important consideration to these volunteers.
– The argument of the Leader of the Opposition (.Senator McLeay) with respect to ‘sergeants and those holding lower ranks having been answered, he now takes up the case with respect to commissioned officers. J repeat that this differentiation will apply to officers only in ‘respect of service within Australia: It will not apply to service overseas. So ‘far as the period of overseas service is concerned all volunteers will be on the same footing. ‘It wou’ld appear that the Leader of the Opposition is somewhat Confused.
.- The Leader of the Opposition (Senator McLeay) raised the point as to whether the period of enlistment of those now enlisted would be still current as at the ‘30th June. 1947. After that date the exemption that applies in favour of income received outside Australia will cea.se. I understand that men who have been ‘enlisted in the occupation forces will he given an opportunity to leave those forces prior to the 30th June, 1947, and that the period of contract is eighteen months. I was .present at a conference which ‘-was attended by the Secretary of the Defence Department when that point was raised, and 1 was assured that each man would be given an opportunity to leave those forces before all exemptions ceased on the 30th June, 1947. Any volunteer who elects to remain after that date will enter into a new contract, one of the terms of which will be that the exemption applying up to that date will not be applicable. That is a matter of pure contract which each volunteer may reject or accept.
– I should like to know for what period these volunteers have enlisted in the occupation forces.
– I think that the period is two years.
– If that be so, an extraordinary position will arise in respect of the volunteer who enlisted prior to the 13th February, 1946. Was he told that the privileges given to him under his contract would be altered by virtue of this measure at the 1st July, 1947? Thousands of volunteers must be covered by these contracts. Under the bill the Government intends to break that contract. I protest against such action. This exemption will involve considerable savings in respect of commissioned officers.Further, if the point raised by Senator McKenna be correct, any volunteer who has entered into this contract for a period of two years will have the right to break it; and that could create widespread confusion. I also point out that commissioned officers who volunteer to serve in the occupation forces will naturally require some security of tenure, because they will not find it easy to obtain civilian employment. I realize that the Opposition’s representations will not be heeded, because caucus has already reached a decision. All we can do is enter a most emphatic protest if the facts are as we believe them to be. We are getting into a serious muddle on this issue, and I hope that the Minister will satisfy honorable senators, including his own colleagues, on the points I have raised.
– Apparently the Leader of the Opposition (Senator McLeay) is under the impression that anybody who enlists for service in the occupation force is sent to Japan immediately, whereas most of the men undergo six months training in Australia before their departure for Japan.
– Some went to Japan without any special training at all.
– The Government of which the honorable senator was a member sent Australian troops overseas without adequate training; but that is something that will not happen under a Labour administration. Members of the occupation force are trained in country camps. The men who enlisted for service in Japan .prior to February of this year, probably had six months training in Australia before their departure. When their two years’ period is up in June, 1947, they will not be affected by the provision to which the honorable senator has refered.
.- Will the earnings of members of the occupation force, from sergeants down, who are also in receipt of income in Australia, be subject to income tax?
– That means that all members of the occupation force, up to the rank of sergeant, will be subject to discriminatory treatment in regard to taxation, according to whether the date of their enlistment was before or after the 13th February, 1946. Those who contracted to serve for two years under present conditions will not enjoy exemption from taxation after the 30th June,- 1947, even though they are serving in Japan or in island territories. Is that the position?
.- ‘ As there appears to be some misunderstanding on this vital provision, I suggest that consideration of it be postponed until a clear interpretation can be obtained.
– The Leader of the Opposition (Senator McLeay) has now adopted another line of argument. He asks if income earned in Australia by members of the occupation force will be subject to tax. With certain exemptions, such income has always been taxed, so that the present proposal is not a departure from established practice.
– Does that mean that privates, sergeants and others who come within that category, will be affected, by this legislation?
– There is no difference.
– The first point made by the Minister for Supply and Shipping (Senator Ashley) was that all ranks, from sergeants down, were not affected. The argument I advanced was” that all personnel up to the rank of sergeant, who had earned income in Australia, must be affected by the bill.
– The Leader of the Opposition (Senator McLeay) is continually shifting his ground. When he learned that the rank and file of the occupation force for whom he expressed so much concern, would not be subject to discrimination, he raised the case of officers. Now he is making inquiries in regard to income earned in Australia by any member of the occupation force. The treatment of income earned in Australia will not be altered by this measure.
– I am afraid that the Minister for Supply and Shipping (Senator Ashley) is not very clear in his own mind on this matter, and consequently is not able to clarify the minds of other honorable senators. The Leader of the Opposition (Senator McLeay) has asked a question in relation to income earned in Australia by members of the occupation force. Presumably, tax will be imposed upon that income at the property rate.
– Not necessarily.
– Not necessarily, but probably. I should like to know if, for the purpose of arriving at the rate, of tax on Australian income, the two incomes will be added. I should like a definite assurance on this matter. Citizens of this country serving overseas should not be penalized because they are doing their duty. It seems to me that a member of the occupation force will be making an unduly heavy sacrifice if, as a result of his absence overseas, his income in Australia is to be taxed at the property rate.
– Once again the Opposition has shifted its ground. Senator Leckie now wants to know if the pay and allowances of a member of the occupation force will be added to his income, if any, from investments or property in Australia for the purpose of arriving at a rate of tax. It will not. The incomes will be dealt with separately.
– What he earns as a member of the occupation force will be ignored ?
– The pay and allowances of members of the occupation forces from the rank of sergeant down are not taxable, but taxes are imposed upon the pay and allowances of officers.
– Now the matter is becoming a little clear. A member of the occupation force above the rank of sergeant will be taxed on his Australian income and on his military pay and allowances. ‘ The two incomes will be added and the rate of tax struck on the total.
– I have already explained that those holding the rank of sergeant or a lower rank and who have no Australian income will not have to pay income tax ; hut if they have an Australian income exceeding £250 a year it is taxable. The income earned in Japan will be free from tax.
– Can the Minister assure me that every serviceman who has volunteered for this specific job has had brought to his notice the fact that if he enlisted after the 13th February, 1946, he will lose certain privileges enjoyed by men who enlisted before that date? My second question is whether each of these men has been notified that on the 1st July,’ 1947, the £250 exemption will no longer exist? A statement should be made as to how the exemption is to be tapered off. The use of the word “ sergeant “ is misleading.
– The Department of the Treasury has circularized all of the service departments, which have advised all service personnel* of this alteration.
Clause agreed to.
Clauses 6 and 7 agreed to.
Clause 8 (Basis of depreciation)”
, - Does this clause mean that depreciation at the rate of 33-J per cent, will be allowed for three years on capital expenditure in respect of the provision of equipment for meals? No time factor is specified, and it appears that within three years the taxpayer will have enjoyed the benefit of exemption in respect of the total expenditure.
– It is a simple calculation to discover that depreciation allowance of 33& per cent, for three years equals the total outlay.
– Despite what has been said by the Vice-President of the Executive Council (Senator Collings), the depreciation allowance of 33^ per cent, per annum does not necessarily wipe out the total cost in three years. If I had a plant costing, say, £6,000, the allowance for depreciation in the first year would amount to £2,000, leaving a balance of £4,000. For the second year the allowance would amount to £1,333 6s. Sd. leaving a balance of £2,666 13s. 4d. In the third year, the depreciation would amount to about £SS9, which would leave a balance of a. little over £1,777 not written off.
– The position with regard to depreciation is covered by sections 55 and 56 of the Income Tax Assessment Act, under which an option is given to the taxpayer, once his percentage of depreciation is fixed, to take it on the reducing balance or as a fixed percentage of the- original ‘cost. In other words, if an item of plant cost £100, so long as the taxpayer exercises his right under the regulations made under the act, he may decide to write off the expenditure at; the rate of £33 6s. Sd. a year in three years, or he may say that 33^ per cent, shall be the basis adopted by him, applying that to the reducing balance. It is a matter for the taxpayer, but he must make his choice at the outset. The only difference under this clause is that if he adopts depreciation on the fixed percentage he -will wipe the whole asset off in three years, and if he adopts the reducing balance he will take four years or more to substantially eliminate the item.
– The explanation given by Senator McKenna answers the question which I raised, but what procedure does the Taxation Department propose to adopt with regard to depreciation in respect of the provision of meals?
– There is no intention to allow depreciation in respect of meals supplied. The deduction applies to expenditure on utensils, tables, chair3, and other equipment used in supplying meals. .
– I am not quite satisfied with that statement. We had better ask Senator McKenna to act again as our legal adviser.
– In this clause the emphasis is obviously placed, not on meals, but on property used by a taxpayer for certain purposes. The depreciation is to be allowed on the property, and not on the purposes for which it is used. The provision of meals is only one of the purposes.
Clause agreed ‘ to.
Clause 9 (Special depreciation of property acquired within five years after 30th June, 1945).
– I welcome this clause. Some months ago I advocated a higher rate of depreciation in respect of farm machinery. As this clause will apply to the average farmer in, Australia, it may be a good provision, but in Tasmania many farmers have purchased machinery for the purpose of growing potatoes and other vegetables in order to provide food for members of the fighting services. I claim that a higher depreciation rate should be applied to such equipment. Under this clause the allowable- depreciation refers only to machinery purchased since the 30th June, 1945, but farmers in Tasmania incurred great expense in the provision of machinery during the five preceding years. If a farmer bought a tractor for £500 in the last week in June, 194£>, he would receive no concession in addition to the ordinary depreciation allowance of 10 per cent., but if he purchased the machine in the f ollowing financial year which commenced a few days later he would be entitled to an additional £100 depreciation. I am not permitted to move an amendment to this clause, because it would increase the charge on the revenue. Many farmers in Tasmania have done excellent work during the war years, and -they are entitled’ to the benefit of the special depreciation for which this measure provides. If the Minister would make the clause retrospective for two or three years, justice would be done to those farmers. After all, the value of machinery has to be wiped out by depreciation sooner or later. It is only the question of the period allowed. The Government can lose only once. As an extra allowance for depreciation is to be granted, why not make it retrospective for four or five years?
– No provision in respect of taxation is without its anomaly; it would he impossible to satisfy everybody. In any case, there must be a clear line of demarcation somewhere. If we made the provision retrospective the same difficulty would arise. These proposals have been discussed with representatives of Chambers of Manufactures and pf grazing and agricultural interests. The object of the clause is to assist in the re-establishment of industry in the post-war period. The Parliaments of the United Kingdom, New Zealand and South Africa have made provision for a special initial depreciation in respect of machinery bought in post-war years. The ‘rates vary from 10 per cent, to 20 per cent. Allowances have been made for the purpose of off-setting the present inflated costs of new machinery. That is the primary reason for the allowance. Another reason is the desire to assist people commencing in business, and to help secondary industries to establish overseas markets. I should .like to meet the request of Senator J. B. Hayes, but I cannot see my way to do so.
Senator J. B. HAYES (Tasmania) posals were introduced only after consultation with various interests. I am not certain that farmers of the type that I have mentioned were consulted. As the Minister says that there must be a definite line of demarcation, I’ suggest that it be fixed at the date of the commencement of the war. If the date were fixed at some time in’ 1939 or 1940, instead of a date in 1945, there “would already have been four or five years’ depreciation at 10 per cent., which would reduce the value of the machinery to about one-half, so that’ the higher rate would apply to only one-half of the value of the machinery. It would not cost the Government much, but it would do justice to farmers who have done good work in supplying much-needed food.
– There have been some instances of the kind mentioned by Senator J. B. Hayes, but they wOUld not be general. Some machinery purchased for special purposes, as well as some factories erected for special purposes, ceased production when the war ended, and their” cost became a dead loss. Other machinery was purchased by farmers under guarantee, but owing to the change of events production has ceased. In some instances, a dead loss has occurred in connexion with machines bought for a specific purpose. I ask the Minister what would be the position if a machine were sold by a farmer in the open market involving a loss of over 50 per cent.? What would be the position of a man who sold a machine which cost £400 for- £i0. Could he deduct the loss from his income?
– Yes) he could deduct the amount of the loss.
– If the special allowance for depreciation is to apply only to machinery bought after the 30th June, 1945, a great injustice will be done to many people. Indeed, most of the machinery to which the allowance should apply will be excluded from the benefits intended to be given. A great proportion of the machinery acquired by farmers to give effect to the Government’s desire to increase the production of food-stuffs, particularly vegetables, was purchased when the scheme was inaugurated. It will be recalled that farmers were encouraged to mechanize production in order to supply food for the fighting services. If the Government wishes to do the right thing, it should agree that the deduction shall be retrospective to 1940 or 1941 - whenever that scheme was inaugurated. That would be only common justice. If the deduction operates only from the 1st July, 1945, not more than 20 per cent, of the machinery purchased to assist the Government in increasing production will be covered by it.
– I am astonished to hear so much discussion and so many protests concerning a tax concession. It has been suggested that this concession should be made retrospective for several years. That would involve an examination of assessments for a number of years, and would cause many administrative difficulties. I cannot offer any hope that such a request will be agreed to by .the Government.
.- In reply to Senator Aylett, the Minister for Supply and Shipping (Senator Ashley) made an extraordinary statement. Senator Aylett asked for information regarding a machine sold by a farmer at a loss. I think he instanced a machine which cost £400 being sold for £10, and the Minister replied that he would be allowed to write off the difference ‘between what he paid for the machine and what he received for it. I do not want the committee to misunderstand the position. I do not think that the Minister’s reply to Senator Aylett was correct, and therefore it should not be allowed to pass. If the Minister be correct, the position is totally different from what it has been in the past.
– If the written down value and the price received for the machine differed, the taxpayer would receive consideration.
.- What does the Minister mean by. the “ written down value and the price received for the machine”’? The, illustra tion related to a machine which cost £400 and was sold for £10. Does the Minister mean that the taxpayer would be allowed £390 as depreciation? That was’ the effect of his original explanation. He has not made the position any clearer by his further remarks.
– He would get an, allowance in respect of the difference between the depreciated value of the machine and the amount he received for it.
.- Most of the machinery that was obtained to fulfil Government contracts was bought at high prices. Moreover, the purpose for which it was purchased no longer exists; contracts have fallen off. If the value of a machine has . fallen by, say, 50 per cent., the important thing to determine is what depreciation shall be allowed in respect of it. Another point to consider is who will assess the value of the machinery.
– The answer to Senator Herbert Hays is the same as that given to Senator Leckie; the taxpayer will get a reduction in respect of the difference between the depreciated value of the machinery and the amount he receives for it. If the written down value of the machinery were nil, he would not get anything.
– It appears that persons engaged in secondary industries have been treated more generously than those engaged in primary production. As has already been pointed out, most of the machinery obtained for special purposes during the war was bought prior to July, 1945, at inflated prices. In his second-reading speech the Minister indicated that the special depreciation rate of 20 per cent, had been provided to meet this position. I am not certain whether the 33^ per cent, additional depreciation deduction in respect of amenities applies to amenities installed prior to the 30th June, 1945. Under this proposal employers who provide amenities will be permitted to write off the whole of the cost within a period of three years, whereas those who expend money on the purchase of plant and machinery may claim depreciation at the special 20 per cent rate for only one year. Although they expend the same amount, a taxpayer in the first category will get a benefit for three years whilst the taxpayer in the second category will get a benefit for only one year. Many farmers have bought tractors and other special purpose plant to increase production and thus contribute a greater share to the nation’s food resources. On the face of it it does not appear to be equitable that they should get a benefit for only one year, whilst those who expended perhaps the same amount of money on equipment and buildings for the provision of amenities should be able to claim depreciation at a higher rate which would enable the cost to be completely written off in three years.
– When . I spoke earlier about special machinery, I had in mind seed-sowing machines and the like. Honorable senators who maintain that tractors and other heavy machinery of that type bought during the war for war production will rapidly become obsolete are talking utter nonsense. In Tasmania there is a big waiting list for farm tractors because of the shortage of supplies ; but in the meantime Tasmanian farmers will continue to produce all the commodities for which those machines are required. It was only because of the shortage of labour that such large orders for tractors were placed and the fact that farmers generally found wider uses for tractors in the working of their land.
.- I should not like this debate to degenerate into a discussion of the rights or wrongs of Tasmanians. What applies in Tasmania applies with equal force in a large portion of Australia and accordingly this matter should be dealt with from an Australian viewpoint. I am not much concerned about the type of machinery to which the special depreciation rate of 20 per cent is to apply, but I am puzzled by the statement of the Minister that a taxpayer should be allowed to depreciate the value of machinery without regard to its re-sale value. Let us take the case of a man who buys a machine for, say, £400, and later sells it for scrap for £10. Is it intended that such a taxpayer may deduct from his income as depreciation £290 for that year?
– That being so, the same rule will affect secondary industries and as soon as a machine becomes obsolete a deduction may be made for ‘the cost of the machine.
– The honorable senator will find that the position is clarified in section 59 of the principal act. That section sets out plainly the position outlined by the Minister and also provides that if a taxpayer sells plant and makes a profit that profit must be included in the assessable income in the year in which the sale is made.
. - Senator Leckie asked that the difference between the 331/3 per cent allowed for amenities and the special 20 per cent allowed for machinery be clarified.’ The reason for the higher rate being allowed for the former is to encourage employers to provide amenities for their employees.
Clause agreed to.
Clauses 10 and 11 agreed to.
New clause 11a.
.- I move-
That, after clause 11, the following new clause be inserted: - “11a. Section seventy-five of the Principal Act is amended by inserting after paragraph (f) the following paragraph: -
The purpose of this amendment is to make expenditure on the prevention orcontrol of soil erosion an allowable deduction. Section 75 of the principal act provides : -
Expenditure incurred in the year of income by a taxpayer engaged in primary production on any land in Australia in -
the eradication or extermination of animal or vegetable pests from the land :
the destruction and removal of timber.scrub or undergrowth indigenous to the land;
the destruction of weed or plant growth detrimental to the land;
the preparation of the. land for agriculture;
ploughing and grassing the land for grassing purposes; and
the draining of swamp or low-lying lands where that operation improves the agricultural or grazing value of the land, shall be an allowable deduction.
During the past few years thethreat to pastoral and agricultural lands throughout Australia caused by soil erosion has been brought into very great prominence. The Government has taken active steps to induce farmers and landholders to do all they possibly can to avoid any further erosion on their lands and to make fertile again areas rendered barren by the effects of soil erosion. This is a major problem which must be tackled seriously in the post-war period if our agricultural and pastoral holdings are to be preserved. A concession in the manner proposed would assist in that direction.
.- I support the new clause. Although it would appear that expenditure on soil erosion might be covered by paragraph e of section 75 of theprincipal act, the uncertainty that exists should be removed. Preventive measures against soil erosion involve largely a matter of labour, and the cost of that labour should be deductible. The new clause moved by Senator Cooper, if agreed to, will clear up any doubt as to whether expenditure on this account is an allowable deduction.
– The Government appreciates the importance of preventive measures against soil erosion. I agree with Senator Cooper that there is doubt as to whether expenditure on that account is covered by section 75 of the principal act. The new clause moved by the honorable senator will be referred to the taxation authorities for consideration and will be dealt with when any further amendments of the act are under consideration. I regret that at this juncture the Government is unable to accept the amendment.
The Minister’s comment on the new clause moved by Senator Cooper, that he does not know whether the expenditure on soil erosion is covered by the principal act, is to say the least of it, peculiar.
– At the moment I cannot say whetherthe point is covered or not; and neither can the honorable senator.
– That is so ; but has the Minister any objection to making that provision ?
– No; but the matter must first be inquired into.
– The Minister simply promises that the matter will be investigated. He does not know whether the point raised by Senator Cooper is already covered in the principal act or not; but the Minister does not say that should it be shown that the point is not covered, steps will be takento remove an anomaly. If he would give that promise I, and I am sure Senator Cooper and Senator Gibson, would be satisfied..
– Senator Leckie seems to be somewhat perturbed about the manner in which I rejected the new clause moved by Senator Cooper. I have said that it is doubtful whether the point raised by the honorable senator is covered by section 75 (e) of the principal act. Although I am not an expert, I have had some experience in primary production, and I know that one of the best ways to prevent soil erosion is by ploughing and grassing the land. Our present problem of soil erosion is due largely to removal of timber and herbage and the continual over-stocking of land. Whilst I decline to accept Senator Cooper’s new clause, I assure him that the matter will be brought to the notice of the Government for inquiry, and that’ if the point he raises is not already covered the Government will take steps to do so.
– As we are dealing with concessions designed to encourage primary production, I suggest that the Minister should agree to postpone consideration of the new clause with a view to resolving doubts on this matter; and should it be found that the point raised by Senator Cooper is not covered the Government immediately should accept a new clause to cover the point.
– I do not intend to accept any amendment at this stage.
– The Government would be well advised to clear up doubts immediately, and, if necessary, amend the measure to apply this concession in respect of expenditure incurred in the prevention, of soil erosion. All of us agree that such assistance is vital to the primary producer. It is apparent, as Senator Cooper has pointed out, that in respect of these tax concessions the same measure of assistance is not being given to those engaged in primary production ah is .being given to those engaged in secondary industries. Both the Commonwealth . and State Governments are very concerned about the problem of soil erosion. The Government of South Australia is doing much in that direction. 1Now that the war is over, and we are considering ways and means of encouraging producers to increase production, the Government should ensure that this tax concession should apply in respect of expenditure incurred in the prevention of soil erosion. If it declines to do so, the Opposition- will have no choice but to press Senator Cooper’s amendment. The attitude adopted by the Minister is simply that the Government intends to bludgeon through the measure. The framers pf the Constitution intended that the Senate should be a house of review, but during the twelve years I have been a member of the Senate it has become the. practice, that the Senate cannot alter any decision made in the House of Representatives. Under that wretched and miserable system the Senate is being prevented from carrying out its functions. I protest emphatically against the attitude adopted by the Minister in this instance.
– I am sure that the Minister for Supply and Shipping (Senator Ashley) is sympathetic towards the views expressed by Senator Cooper, myself and others. All I ask him -to do is to get an interpretation from the Taxation Department of section 75 (e) of the principal act in order to see whether that section already provides that expenditure incurred in the prevention of soil erosion is an allowable deduction. Surely, it cannot be said that such expenditure is in the nature of capital expenditure. That being so, such expenditure is an allowable deduction. If the taxation authorities agree that such expenditure is an allowable deduction under section 75 (e) of the principal act we shall be satisfied.
– All expenditure in respect of labour employed in the prevention of soil erosion is now an. allowable deduction!
– But this is not only a matter of labour; expenditure is also incurred in grassing and contour ploughing, which is not ordinary plough- . ing. However, the taxation authorities may say that expenditure on work of that kind is capital expenditure, and, therefore, it is not an allowable deduction. In my view, such expenditure is an allowable deduction under section 75(e) of the principal act.
– The problem of soil erosion in Australia is becoming increasingly a.cute. Perhaps, under the principal act, expenditure of the kind instanced by Senator Cooper is an allowable deduction, although I do not agree that the section cited by the honorable senator makes provision in :the direction desired. However, provision may be made under another section of the act, or, possibly, under other legislation. “We shall not r arrest soil erosion merely by grassing land. In order to deal .effectively with this problem we must undertake a comprehensive programme of reafforestation to make good the damage caused by the destruction of forests in the past. I have not the slightest doubt that if we do not take effective steps immediately to deal with the problem, much good pasture land will in 50 years time be desolate country. If we expect farmers to tackle this, problem they will be involved in considerable expenditure in the near future in order to maintain the productive capacity of their properties, and to prevent erosion of large areas at present unused. In view of the seriousness of the problem, I suggest that the Minister for Supply and Shipping (Senator Ashley) should ascertain whether expenditure incurred in the prevention of soil erosion is, or is not already provided for. It is clear that should the farmers themselves fail to tackle this problem, Commonwealth and State Governments will have to come to their assistance in the very near future. In the meantime the problem may become so serious as to involve the abandonment of many farms. For instance, many farms which were highly productive a few years ago are completely deserted to-day. Therefore, I urge the Minister to clear up all doubts upon the matter immediately.
Sitting suspended from 12.W to 2.15 p.m.
Senator COOPER (Queensland) “2.3.5]. - In section 75. of the original act, provision is made for deductions in respect of expenditure on such work a? the draining of swamps or low-lying lands to improve the agricultural or grazing value. The prevention of soil erosion is. in effect, the saving of the land from complete destruction. In most parts of the Commonwealth erosion is evident at least in a small way. Gullies on sloping land are generally filled with gravel to prevent their extension, and stonework has to be put in to divert the water to some other channel. Forestry and other similar work is neces-.sary, but it would appear that such expenditure would not be an allowable deduction for income tax purposes. A deduction could be claimed in respect of the labour employed on that work, but that would involve a technical breach of the law, and I ask the Minister for Supply and Shipping (Senator Ashley) to give further consideration to this matter.
.- I move-
That now’ clause 11a be postponed.
I take this action pending clarification of this matter by the Taxation Department.
Question resolved in the affirmative.
New clause postponed.
Clause 12 agreed to.
Clause 13 (Deduction for member of Defence Force, Sac.).
.-This is the clause in which provision is made for the exemption of £250 in respect of members of the defence forces. I have been informed that members of the forces who volunteered for service prior to the 13th February, 1946, will be called upon to serve only until the 30th June, 1947, which means that their contract to serve under specific conditions will not be broken. That would cause much dissatisfaction, and represents an anomaly which this Parliament should not permit without protest.
– I and not in a position to say whether , or not members of the occupation force all enlisted six months prior to the 13th February, 1945, which would mean that they would complete nearly two years’ service by the 30th June, 1947. 1 cannot give a guarantee that if they did not enlist six months prior to the 13th February they will be able to resign at the end of June, 1947. That is a matter for the Army.’
Clause agreed to.
Clauses 14 and 15 agreed to.
Clause 16 (Interest paid by a company on bearer debentures).
– I should like the Minister for Supply and Shipping (Senator Ashley) to give an explanation of this clause.
– The object of this amendment is to facilitate the collection of income tax on interest on bearer debentures in cases where the names and addresses of the holders are not disclosed to the Commissioner of Taxation. By section 126 of the principal’ act a company, which term includes a public or local authority, is made liable for income tax upon interest paid or credited in respect of debentures payable to bearer where the names and addresses of the holders of the debentures are not supplied to the commissioner. The company is authorized by the section to deduct and retain from the- interest payable to the holder of any of those debentures a proportional amount of the tax which it is liable to pay under the section. The section requires the rate of tax payable by the company to be determined “by reference to the total amount of interest paid or credited to debenture holders who do not disclose their names and addresses. Interest on hearer debentures is ordinarily payable half-yearly, and the issuing authority has no means of determining, with any degree of certainly, the total amount of interest which will be paid or credited on the two dates of payment within the year of income to persons who refuse to disclose their names and addresses. It is, however, necessary for the company to predetermine the rate of tax which will be payable on that amount of ‘interest. It has been represented to the Government by the issuing and paying authorities that there are’ serious difficulties in the way of full compliance with the law, and it has been decided that the law should be amended ;o provide for the imposition of a definite rate of tax instead of the present uncertain rate. The rate of tax proposed is that which would be paid by an individual in receipt of a taxable income of £8,393 from property. That rate is approximately 15s. in the £1. The section is coercive in its operations, being designed to compel holders of these debentures to furnish their names and addresses so that the receipt of the interest can be checked into their returns by the Taxation Department. It is accordingly essential that a high rate of tax be fixed in order toprevent evasions. The holder can avoid any deduction of the tax by simply disclosing his name and address when collecting the interest.
Clause agreed to.
Clauses 17 to 19 agreed to.
Clause 20 (Payment of tax to have priority over all other taxes).
– I should like the Minister for Supply and Shipping (Senator Ashley) to give an explanation of this clause.
– This clause proposes an amendment to section 221a of the principal act. That section gives priority of payment of Commonwealth income tax over State income tax for the duration of the war and one year thereafter. It is proposed to amend the section to give permanent effect to the Commonwealth’s right of priority in the payment of income tax.
Clause agreed to.
Clauses 21 and 22 agreed to. Postponed new clause 11a (vide pages 1082-1085).
Senator ASHLEY (New South WalesMinister for Supply . and Shipping) [2.26 . - I am advised by the Taxation Department that to the degree to which expenditure on soil erosion is represented by contour ploughing of the land, such expenditure will be an allowable deduction under the “provisions of the Income Tax Assessment Act.
– Provision for ploughing is clearly made in section 75 of the act, so that this measure actually does not go any farther than the existing legislation. The only difference is in the addition of the word “ contour “ mentioned in the Minister’s statement. No provision is made for stoning, gravelling, or any other work that might be necessary to combat soil erosion. I had hoped for a more liberal provision and I am inclined to press my amendment.
Senator ASHLEY (New South WalesMinister for Supply and Shipping) [2.30J. - This is a complex matter. For instance, action to combat soil erosion might include re-afforestation. However, I undertake to examine the matter with a view to extending the scope of the provision in the direction mentioned by the honorable senator.
– In view of that statement I ask permission to withdraw my new clause.
New clause - by leave - withdrawn.
Title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Debate resumed from the 2nd April (vide page S49), on motion by Senator Ashley -
That the bill be now read a second time.
– This bill is complementary to the Income Tax i . Assessment Bill which the Senate has just passed and I support it.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 2nd April (vide page S51), on motion by Senator Co lianos -
That the bill be now read a second time.
– Before I proceed to deal with this bill, I shall make a few general observations on the operation of the principal act. In order to clear up what appears to be a misconception, I point out that unwarranted statements have been made from time to time by various honorable senators regarding the administration of the act. The Minister for Supply and Shipping (Senator Ashley) made light references to this legislation recently, and remarked that ex-servicemen had been “ dealt with. “ under it. He said later that the story of these homes does not make good reading. On the same day, the Minister for Health (Senator Fraser) drew an adverse inference on very unsubstantial grounds. As a matter of fact, the story in respect of these homes is worth repeating. The total number of exsoldiers who have been provided with war service homes is 37,595. Of the houses provided for them, 21,451 were built, 13,032 were purchased and onerous mortgages were lifted in respect of 3,112 others. To-day, 16,182 ex-servicemen own their own dwelling-houses outright. Others are making their final payments at the rate of from 1,200 to 1,400 each year. The members of the Government mentioned seem to have forgotten that they are dealing with an activity which, even if they sanction, they do not encourage.
In order to understand the relation of the War Service Homes Commission to the individual ex-soldiers, it should be remembered that after the termination of World War I. there was a shortage of homes, and prices, as now, were very high. Returning soldiers needed homes, and they also needed protection from exploitation. .In order to aid them, the government of the day introduced certain legislation. In the early stages of its work the commission bought land and built blocks of houses for sale. Some of these ventures were unfortunate and resulted in certain instances in losses to both sides, as well as inferior workmanship. Gradually the real and practical purposes of the project began to emerge, These were to enable the returned soldier to have free choice, within limits fixed by Parliament, to select the site of his home and its design, in accordance with the price which he was able to pay. Each soldier made a free-will contract with the commission which was binding on both parties, and in the great majority of cases this has been faithfully observed. In addition, the ex-soldier got cheap money and the advantage of making repayments over a long term. The Government made a contribution towards the interest payment, and that enabled the soldier to obtain money at a lower rate than that paid by the Government for it.
I shall not go into elaborate figures regarding the activities of the commission; these should be well known to honorable senators. The few that I have mentioned or will quote later certainly indicate that commendation of the commission’s work is justified. When this matter was last discussed, reference was made to evictions and the treatment that clients of the commission received during the depression, but we have heard of threats of eviction even at Canberra under the present regime. It may be possible to conceive circumstances in which such drastic action would be justified. Even recently we had a confession from the Postmaster-General (Senator Cameron) that ho paid rent only under duress, so there may be circumstances under which eviction is justified. In some cases the terms of contracts with the commission were flagrantly disregarded. Instalments due were not paid, despite the proved existence of means, or the property was neglected and allowed to fall into disrepair. Other cases arose in which it became obvious that the client could not meet his commitments, and it was manifestly in his interests to seek other premises rather than pile up a burden of debt. I am not in a position to .-ay ‘hat the commission was right in every instance, but its actions generally were taken in the public interest and for the immediate protection of the public revenue. The depression years gave rise to a set of circumstances which f hope will never be repeated. I suppose the returned soldier was hit hard, if not harder than any other section. Many lost their employment. Others had to suffer reductions of their income. Many abandoned their homes in the pursuit of work. Others moved into the cities in order to be closer to their jobs and thus reduced the cost of their transport. One of the results of this was a number of deserted homes was left on the hands of the commission, and a further result was considerable pillaging and defacement, which entailed no small expenditure for replacements and repairs to the commission’s property. These houses had to be disposed of, and as property was not in great demand at that time they were sold for what they would fetch. The interests of ex-soldier purchasers were still considered, and if by chance the sum received was in excess of their liability the balance was paid over to them.
To enable one to appreciate the crisis that had arisen it may be said that on the 30th June, 1932, there were 2S,000 clients’ accounts on the books of the commission. Of these 14,201 were in arrears for terms exceeding one month, and the total sum outstanding at that time was £179,415.
I now come to reverted properties. During the period from the 1st July, 1929, to the 30th June, 1932, the commission had 1,387 properties left on its hands through voidance of contracts. Out of 28,000 clients only 1,387 defaulted. Of those 1,3S7 houses, 582 were subsequently sold and 805 were let for rental. The transactions showed at the time a loss of approximately £19,000 to the commission. The unsatisfactory features of that state of affairs could not have escaped the notice of the government of the day - ‘ the Scullin Government - but it remained for the Lyons Government to take action in the interests of ex-servicemen. Immediately after that Government’s accession to office it appointed a committee for the purpose -
Of inquiring into and reporting to the Minister administering war service homes upon the effect of tho present industrial depression in, .and economic conditions of, Australia upon the carrying out of contracts entered into by purchasers of homes under the War Service Homes Act 1918-1929 and upon the repayment of advances made under that act; and
The committee conducted an exhaustive inquiry, in the course of which it visited all States. On the 29th July, 1932, it submitted a report which contained the following comprehensive recommendation. : -
Where .the purchaser’!; or borrower’s dependants are less than a wife and three children,, the income is to be regarded as increased by 5s. per week in respect of each dependant less than those four, and where the dependants aremore than the four mentioned, the income is tobe regarded as reduced by 5s. in respect of each additional dependant.
Consideration to be given -to the question of making arrangements to extend to persons granted assistance under the War .Sendee Homes Act. but who are under the control of State institutions, the same concessions as those vouchsafed to purchasers and borrowers under the direct control of the War Service Homes Commissioner.
Referring to evictions, the committee reported -
The foregoing proposals are designed to help those who are in need of assistance in their efforts to acquire homes for .themselves and their families, and are not intended for those men, few in number, who have persistently and deliberately evaded their obligations to the commission, nor for those who have sub-let their properties, unless the sub-letting has been done with the consent of the commissioner, with the object of enabling the men to meet their obligations in respect of their homes. We suggest therefore that the relief to be granted be limited accordingly.
Those recommendations were, in the main, given effect with resultant benefit to many thousands of clients who were helped through difficult times. I ask honorable senators on the Government side to refrain from decrying an institution that has fully justified its existence and was an important factor in the re-absorption into the civil’ community of those who were so long abroad in the years 1914-1S. After all, had there been anything fundamentally wrong with that housing scheme, the Government surely would have made an attempt to rectify it in the bill now beforethe Senate.
As the Minister informed the Senateduring his second-reading speech, the bill is designed to amend the existing act only to a. limited degree. In the first place,, the measure prescribes that the eligibility for benefits conferred by the act shall,, henceforth, cover the men who went overseas to fight in the war of 1939-45. With them may be included the embodied members of the citizen forces who, whilst on. active service, left the shores of Australia. That is an important point; honorable senators have received a circular relating to it. The measure covers,, too, the men of the mercantile marinewho followed their calling in the waterssurrounding Australia under hazardousconditions such as existed off our easternshores in 1942 and 1943. The bill alsocomprehends the women of the Army Medical Corps Nursing Service. Finally - and I am sure that all honorable senators will be pleased to know this- it confers the right of application, upon marriage or upon the production of proof of the existence of dependants, on women, who served outside the Commonwealth whilst enrolled as members of auxiliary corps attached, to the three services.. “ Eligible person “, as defined in the bill, also includes the widow of a soldier, and the mother of a deceased unmarried soldier, provided that she; too, is a widow, or has a husband who is unable to support her. Widows are a special consideration of the commission, although it. has been said that due regard is not always paid to their needs. The pension of a widow under the Australian Soldiers’’ Repatriation Act is 50s. a week without, regard to a means test. It is possible that a widow will marry again, or engage in some lucrative employment. If she has children, there are other sources of income, and, in addition, she has access to a generous system of free education under which the children will be financially assisted. In such circumstances,. it is conceivable that a widow may find herself in a position to purchase, or pay a deposit of 5 per cent, of the purchase money or 10 per cent, of the loan sought, and enter into a contract with the commission for the construction or purchase of a dwelling house, which will then become the permanent abode of herself and her children, in which she will quickly establish a substantial equity. On the other hand, it is probable - and there are many such cases - that for various reasons, women will not desire to assume that responsibility, but will prefer to rent a property, thereby preserving liberty of choice both in respect of the place of their abode and the duration of their residence therein. I know that the commissioner has dealt sympathetically with the claims of widows, but -it never was the intention that the scheme should provide homes at a figure below cost. It is, of course, open to the Government to depart from that policy if it thinks it wise to do so. I would suggest, however, that a more appropriate avenue .for action would be through the Commonwealth and State housing authorities, who could make rebates of rent when the circumstances of an applicant warranted such concessions. The bill also permits the commission to extend its operations to the Australian Capital Territory and the Northern Territory and to meet the needs of holders of perpetual crown leases. A further provision is for the acceptance of a deposit of 5 per cent, of the capital cost’ of the dwelling house and land.. The bill likewise permits a sale of the commission’s own land at a valuation rather than at the original purchase price plus interest added to capital since the date of acquisition. The limit of advances that may he made, which seems to be the major feature of this bill, is to be lifted from £950 to £1,250. This is allegedly in order to meet the increased cost, but it does not necessarily mean that better real value will be secured for the additional amount to be made available. For a while it may prove to be the reverse. The Government might therefore consider whether . the maximum amount should be arbitrarily fixed at so low a figure. This provision brings under review claims for the additional £300 which may be put forward by a client who has already had an advance of £950. Circumstances may justify such action, and I urge the Government to make a statement on that point at an early date. As the Minister has said section 50 c ‘of the principal act is now repealed as having no place in the existing scheme of things.
Reverting to the subject of evictions, the Minister for Health (Senator Fraser) in addressing the Senate on the 14th March last said -
I say to Senator Herbert Hays that I would rather the capital value of a house be written off and the benefit given to a returned soldier Chan that a man be evicted because he could not pay the rent. This Government has made provision for such cases. During the depression, the values of houses which had been built for £1,000 and in which the occupants held an equity, were forced down and the tenants’ equity was lost. The some sort of thing happened in connexion with farm properties. Steps must be taken to avoid such devaluations in future. To lift the controls in prosperous times, as suggested by Senator James McLachlan, would mean that people who are most in need of homes would never be able to own them.
By interjection, I asked if such a provision was in the new bill, to which the Minister replied, “ Provision is made for a rebate of rental “. The Minister continued -
In keeping with the terms of the Commonwealth Housing Commission’s report, the Commonwealth and the States, at the conferences of Commonwealth and State Ministers, of August, 1944, and August, 1945, hammered out a co-operative agreement whereby the Commonwealth provides finance and meets three-fifths of State losses in a huge building scheme which will cost perhaps £20.000,000 in 1940 and £30,000,000 in 1947. State housing authorities programmes provide for 17.000 houses to be built in 1940 and 25,000 houses in 1947. It is hoped that at least equal number! will be constructed by private interests.
At this stage I interjected and said that those were not war service homes. The Minister continued -
There i& a different agreement in relation to war service homes. As the Acting Leader of the Senate intimated this afternoon, the Government intends to bring down a bill providing for the maximum cost of war service homes to be increased from £950 to £1,250.
After listening to that extract from the Minister’s speech honorable senators may be in doubt as” to his meaning. The bill now before us leaves us in no doubt on the point. In it no provision is made, or authority given, for the writing down of the capital cost of a house because the purchaser-occupier finds himself unable to keep up the prescribed scale of payments. Complaints have .been made as to the slowing up of the commission’s building programme. “With the outbreak of war - and total war at that - the commission, like many other public utilities, ceased to function, or nearly so. The nation’s resources were devoted to other purposes, materials and labour were not available and people found themselves drafted from one avocation to another and from one place of employment to another. In such circumstances little or nothing could be done beyond maintenance work and occasional improvements to existing dwelling houses. T°-day the position is only too well known to honorable senators. There is still an acute shortage of materials and their early supply is prejudiced by industrial disputes. Figures that have been supplied to me indicate that in Western Australia 1,402 applications for homes have been submitted to the commission since the 1st July, 1944. Of these, 267 have been approved, and to date eight houses have been built”, 44 have been acquired and 21 are under construction. One draws little comfort from a view of such a situation, but until the general position of the community improves, little real progress can be made. In Western Australia, the Workers’ Homes Board, a. State Government utility, is the agent of the War Service Homes Commission, and as such, as far as I can learn, functions satisfactorily. Taking a broad view, it would.be well to appreciate that, during the next five years, the community will be in a condition of flux preparatory to settling down under fair peaceful conditions. I feel sure that the War Service Homes Commission will be able to keep pace with progress. It was never intended that if should engage in rush or speculative building, but rather that it should maintain as the primary purpose of its establishment the provision of permanent homes for people in more or less fixed occupations. My one suggestion to the Minister who administers the act with w hich we are at the moment concerned is that a study should be made of local conditions outside of metropolitan areas with a view to greater building activities therein. I have particularly in mind the gold-fields areas in Western Australia. Conditions there are looked upon as transitory, and the risk consequently greater than in other areas, but the advance of science is making possible a greater and more profitable use of nature’s resources. I believe that industries will remain in those areas, and that their populations will remain more or less static for many years to come. Such consideration is due if only in part recognition of the magnificent response and splendid service of the miners of the Kalgoorlie gold-field in both the great wars of this century.”
If it be alleged that during the last six years the War Service Homes Commission has failed in its obligations to exservicemen, that failure has been the result of the impact of Government policy in withholding materials, labour and finance. In the immediate future, progress will be marked by the proportion of the administration’s liberality in respect of those factors. In the meantime the arrangements made in connexion with State housing schemes are providing some alleviation of a very pressing need. The setting aside of 50 per cent, of the houses constructed for occupancy by exservicemen is a provision very fully appreciated. That is a practical form of preference.
Unfortunately it is not customary to praise public servants; but for what has been achieved over the last 27 years in the activities of the War Service Homes Commission, considerable credit should be accorded to the late Mr. C. W. Petersen, and to Mr. H. H. Richardson, the present Commissioner for War Service Homes. The bill is worthy of the favorable consideration of the Senate.
Senator SAMPSON (Tasmania) [3.14 1 . - I welcome this bill because it is a sign that the stagnation in the activities of the War Service Homes Commission during the war years is about to be ended. I trust that the Government will extend to the commission every facility to accept its share in solving what is perhaps one of the most vital problems facing the Commonwealth to-day, namely: the housing shortage. In every State throughout the Commonwealth, not only in the cities but also in the provincial centres and country towns, the spectacle of ex-servicemen and their wives and families Seeking shelter in the most miserable make-shifts is one that must occasion us all the gravest concern. Only three years ago, the Government appointed the Commonwealth Housing Commission, which presented its report in August, 1944. All honorable senators would benefit by studying that report closely, because it deals exhaustively with the housing problem as a whole. Referring to the War Service Homes Commission the report states -
The future administration of the War Service Homes Commissionhas engaged the close attention of this commission.It has been strongly represented to us that the War Service Homes Commission should continue to function as in the past, except that the conditions of eligibility of applicants be broadened to include those still on active service so as not to require suchpersons to wait for their discharge before obtaining the benefits of the act-.
That was in August, 1944, so the Commonwealth Housing Commission was looking well ahead, because at that time not many of us anticipated that hostilities would cease so soon as they did. The commission’s report continues -
There appears to us to be three ways in which the administration of the commission may be carried on -
continue as at present;
merge with the Commonwealth constructing authority; or
transfer administration to State housing authorities.
I hope that the War Service Homes Commission will continue - I shall not say as at present because it is more or less in the doldrums, but it is waking up - rather than be merged with either the Commonwealthconstructing authority, or ‘State housing authorities. The commission should remain a separate entity. The Commonwealth Housing Commission’s report continues -
The chief point raised in evidence in favour of the continuance of the War Service Homes Commission as at present was that the service personnel would feel that their interests would be more sympathetically and better cared for.
I whole-heartedly support that statement that there should be a separate body, that is, the War Services Homes Commission, to deal with the housing of ex-service personnel. I have had a good deal of experience in connexion with the working of the commission. As long ago as 1921, I acquired a war service home of which I later assumed ownership. Subsequently, I disposed of it in order to take up residence elsewhere. My personal experience was that, within the ambit of the act, the commission gave sympathetic consideration to applicants and tenants. At any rate, I, personally, was given a very fair “spin”. It is true that in the dark period of the depression, from 1930 to 1934, when there was unprecedented unemployment in Australia, grave problems confronted the commission; but it did its utmost under those conditions to protect the interest of its “ digger “ tenants, at the same time, bearing in mind the public interest. It, was confronted with extremely difficult and intricate problems at that time. From what Senator Collett has said it is clear that the commission meted out fair treatment to its tenants despite the circumstances existing in those days. Of course, it is so easy for enthusiastic cub . reporters to exaggerate things. At that timethe stunt press made all sorts of allegations of harsh, brutal and ruthless treatment on the part of the commission. It was charged with treating its tenants as one might expect Hitler or the Hun, to treat them. But those allegations did not stand up to investigation. I am glad that under the bill present-day conditions will be met by increasing the maximum value of homes from £950 to £1,250. During the last two, or three years, when I made representations to the Minister in charge of war service homes, he was obliged to say that owing to conditions due to war it was impossible to build homes. He could not make an exception to that rule even in the case of a war widow who, probably had three or four children and could not obtain a home elsewhere. Today, ex-service personnel are anxious to obtain war service homes. In Tasmania, there was wide-spread jubilation and excitement following the publication of the following paragraph in the press a. few days ago :
The War Service Homes Commission has plans ready for nearly 30 homes, which will be erected as soon as Federal Parliament passes a bill to increase the amount which can be advanced to applicants from £050 to £1,250. The bill is now being considered by the Senate.
The Deputy Commissioner (Mr. J. R. Bartlett), commenting on a statement by the Minister for Housing, said to-day that only two war service homes -had been built in Tasmania since 1st July, 1944.
However, the position was fully explained in- a recent statement by the Minister. I 110De that the measure is only a first instalment of a progressive policy. I recall that the estimate in respect of war service homes last year was approximately £200,000, and of that amount only £93,000 was expended ; whilst in the last budget papers placed before us in respect of .the current year; the sum of £817,000 was provided under this heading. However, if the average cost of a home be £3,250, that appropriation will not provide very many homes. I was very interested to read a report in the press some time ago which attributed to the Minister for Trade and Customs (Senator Keane), on his arrival in San Francisco, this statement, “ Solve the housing problem and you solve the greater part of the post-war industrial problems “. I agree with that view, if the Minister meant home ownership by all persons in the Commonwealth who require houses, and their number is legion. “ But how does that Minister’s views on the housing problem square with -those of the Minister for Post-war Reconstruction (Mr. Dedman) who stated that She was opposed to home-ownership because home-ownership by the workers would make them little capitalists? If we could fry some magic solve the housing problem overnight in this country, wo would obviate much misery and discontent; but that is not possible. The housing problem is colossal, but I deprecate the nonsense that has been talked on the subject in this chamber and outside to the effect that previous governments were responsible f for shocking neglect in this respect. As recently as 1938, houses were not in short supply in the Commonwealth. Any body who endeavoured to dispose of a house at that time realizes that fact. I had that experience, and I know that there was no acute shortage of housing, or any great demand for housing, at that time. I also recall that in 1928 the Bruce-Page Government introduced a measure in this Parliament appropriating !£20;000;000 !f or home building. Although under that legislation easy’ repayment terms were provided very few people took advantage of that scheme to erect their own homes. That scheme was scotched by the Scullin Government. That is history. Therefore, it is nonsense to saythat shocking neglect on the part of past governments to provide houses is responsible for the present shortage. The reason for the present shortage is that for the past six years we have been engaged in a. total war when everything else, except , the struggle for our survival, had to go by the board. That is why homes have not been built since 1939. However, when I resided in Melbourne up to 1941, I was astonished at. some of the places, other than homes, that were erected in that city despite the demands of .war. I hope that the Government will continue to liberalize the policy of which the measure is a first instalment,’ and will retain the War Service Homes Commission as a separate entity charged with the duty of providing homes for ex-service men and women. It would be a great mistake to merge the commission with any other organization. I ask for leave to continue my remarks at a later stage.
Leave granted; debate adjourned.
Motion (by Senator Ashley) agreed to-
That the Senate, at its rising, adjourn to Tuesday next, at 3 p’.m.
Re-establishment: Tools op Trade; University Studies - Volunteer Defence Corps : Rifles ; Recognition - -ARMED Forces : Leave.
Motion (by Senator Ashley) proposed -
That the Senate do now adjourn.
.- Yesterday afternoon the Minister representing the Minister for Repatriation, answering a question asked by me regarding the allowance payable to discharged servicemen for the purchase of tools of trade, stated that the parliamentary committee appointed in 1943 to report on various aspects of repatriation, did not recommend any increase of the allowance of £10.
The inference was that if £10, which was considered adequate after the 1914-1S war, was regarded as insufficient 25 years later, the committee would have recommended an increase. The committee concentrated on the treatment of ex-service personnel and the payment of allowances and pensions. Members of -the committee knew that a separate authority was to deal with rehabilitation, and naturally they left the question of a grant for the purchase of tools of trade to that authority. It is gratifying to learn that from the 26th March, 1946 - a week ago - the Repatriation Commission is to have an opportunity of prior purchase of tools and other articles of trade from the Commonwealth Disposals Commission. “
– I bring to the notice of the Minister representing the Minister for the Army a matter which at first glance may appear to be of little moment, but nevertheless has been exercising the minds of ex-members of the District Finance Office and the Australian Army Pay Corps Association for the last eighteen months. I propose to read a letter that I have received from the association, the secretary of which is a personal friend of mine, and the president a colleague in the war of 1914-18. The letter statesSir - On behalf of a representative gathering of ex-members of the District Finance Office (Australian Army Pay Corps R..A.S. Showground, Sydney) who served for various periods during 1039-1946, I desire to request your assistance, and at the same time on behalf of hundreds of members and their dependants, register most emphatic t protests against the discrimination which lias been most unjustly exercised by some persons in authority in regard leave under G-E.O. A598 which lias been denied us.
This order clearly lays down that from 1st July, 1942, all members of the A.I.F. and C.M.F. are entitled to leave for two full days each month. The period involved in this cast! is from 1st July, 1942 to 30th April, 1944, on and from which date the order was carried out. However, at no time and under no conditions was the leave granted to us during the period in question and no legitimate reason has been given for withholding such leave privilege.
In reply to all applications for pay and allowances in lieu of such leave, for the period in question, it has been invariably stated that the leave was exhausted by virtue of the fact that members of our unit were dismissed from duty on Saturday afternoons and that in consequence “ four half days “ were accepted as the equivalent to the two full days laid down.
Apart from the fact that a day’s leave for the purpose of this order is a full 24 hours, we are prepared to furnish any number of affidavits denying the statement that we were granted four half-days’ recreation leave each month in lieu of two full days. A clean-cut ruling has been given that a half-day’s leave “for the purpose of the order is from 1200 hours to 1159 hours”.
At no time during the period in question were we aware on reporting for duty on Saturdays, that we would be free in the afternoon, and at no time during the period in question were we dismissed at noon.
Reference to records (time books) which the authorities refused to produce will reveal that on innumerable Saturday afternoons we worked right through and that the times of dismissal on other occasions varied up to 1000 hours, but at no time were we dismissed at midday, any such respite allowed was subject to the whim of the officer on duty.
It is a noteworthy fact that our complaint concerns tho administration preceding the present one because immediately a new administration took command they forthwith put the order into effect and in addition dismissed the staff on Saturday afternoons. This is still the prevailing practice, bence our reference to discrimination.
Previous representations have been made direct to the Minister for the Army who apparently merely “ appealed to Caesar “ by asking for reports from the very people who are responsible for this most unjust discrimination.
It is considered that such a grave matter, should have had the personal attention of the Minister himself, that he should have examined the matter carefully and searchingly. Had be done so. it is impossible to see how he could have ruled otherwise than in our favour.
We have endeavoured to have redress through normal channels and by courteous approach to those responsible.
Under the name of various independent members, this matter has been the subject of correspondence over the last eighteen months. Replies received have ‘ been evasive and unsatisfactory.
As we are determined to have our cases dealt with justly, we now place the foregoing statement of our case before you and solicit your earnest co-operation ,in having this gra ve injustice remedied.
Yours faithfully, ‘ j. H. A*ERY. Hon. Secretary,
I ask the Minister representing the Minister for the Army to endeavour to secure a decision on this matter.
– I bring to the notice of the Minister representing the Minister for the Army and to other appropriate
Ministers the plight of young men who enlisted in the armed forces at the age of eighteen years. Many of them have now three or four years’ service to their credit, but because of their low points total they are not eligible for discharge. Many of them, in the normal course of events, would have become apprenticed to trades,or would have embarked upon, professional careers. The majority of them had secured their leaving certificate or had reached matriculation standard. When the call came they enlisted, and now, because they cannot claim tohave been first-year students at a university, they cannot claim the benefits of the rehabilitation legislation in that regard. Their entire careers are in jeopardy because they are unable to continue their education. They represent evey walk of life, and include the finest types of our youth. I’ suggest that these young men should bo released by the services and sent, not to universities, but to secondary schools for refresher courses. I am in favour of students doing a leaving certificate honours course before entering a university. If something along the lines that I have suggested could be done, the Minister would be rendering a great service not only to thelads concerned, but also to this country. I realize that there are difficulties to bo encountered, but I am sure that the Minister with his usual courtesy will give the matter every consideration.
– I urge upon the Minister representing the Minist er for the Army the desirability of returning rides to former members of the Volunteer Defence Corps for the destruction of pests in country areas. During thelast harvest period in Western Australia, I travelled quite a considerable distance through the Greenough and Lower Murchison districts, and was able to see, first-hand, theresults of the depredations of pests. The worst pests are emus. Owing to the withdrawal of the rifles from former members of the Volunteer Defence Corps, thousands of emus which normally would have been eradicated are now roaming the countryside destroying feed, fences, and other valuable property. The rifles have been returned to ordnance, and I submit that they would be better cared for in the hands of their former owners.
I should like to know when the Government proposes to reach a decision in regard to suitable recognition of the services of members of the Volunteer Defence Corps. Many forms of recognition have been suggested. I personally support the proposals that a medal should be struck for this purpose. The Volunteer Defence Corps included a large number of former members of the First Autsralian Imperial Force - often referred to, jocularly, as “Retreads” - who were precluded by their age from joining the Second Australian Imperial Force. They gave of their best in the defence of their homeland by becoming members of the Volunteer Defence Corps, and it is fitting that they should receive the distinction which their services merit. Many people believe that the wearing of medals is trumpery, but I hold a different view. I believe it would be most fitting, at Anzac Day parades and on other similar occasion, if members of the First Australian Imperial Force were able to wear a medal showing their service in the Volunteer Defence Corps during the war just ended.
The DEPUTY PRESIDENT (Senator Courtice). - In conformity with the sessional’ order that unless otherwise ordered, the motionfor adjournment shall ho put, on Fridays, at 3.45 p.m., I formally put the question -
That the Senate do now adjourn.
Question resolved in the affirmative. PAPERS.
The following papers were pre- sented : -
Customs Act - Regulations - Statutory Rules 194(1, No. 5B.
Lands Acquisition Act - Land acquired for -
Charters Towers, Queensland.
Postal purposes -
Mile End, South Australia.
St. Kilda, Victoria.
National Security Act - Regulations - Statutory Rules 1940, Nos. 88, GO, 01, 02, 03, 04.
Senate adjourned at 3.45 p.m.
Cite as: Australia, Senate, Debates, 5 April 1946, viewed 22 October 2017, <http://historichansard.net/senate/1946/19460405_senate_17_186/>.