Senate
16 May 1947

18th Parliament · 1st Session

  1. Senate
  2. 18th Parliament
  3. 1947

The President (Senator the Hon. Gordon Brown) took the chair at 10.30 a.m., and read prayers.

page 2501

TORONTO TRADEFAIR

SenatorCOOPER.-I ask the Leader of the Senate whether it is a fact that the Canadian Government intends holding an international trade fair at Toronto in May and June, 1948? Has the Australian Government received an invitation from the Canadian Government to stage an Australian display at the fair? If so, what decision has been made? “Will the Minster ask the appropriate Minister to discuss with Cabinet the staging of a display which will advertise the potentialities of Australia?

Senator ASHLEY:
Minister for Supply and Shipping · NEW SOUTH WALES · ALP

-I am not aware that the Government has received any invitation to participate in the trade fair at Toronto next year. I am sure that the Government will take advantage of any apportunity presented to it to secure the representation of Autralia at the fair. I shall obtain the information sought by the honorable senator.

page 2501

QUESTION

SHIPPING

Matson Liners

Senator LAMP:
TASMANIA

– I ask the Minister for Supply and Shipping whether it is a fact that the Matson Line steamers running between San Francisco and Sydney operate under a subsidy from the United States Government? If so, will the Minister confer with the Government of New Zealand with a view to taking some action against this pernicious practice?

Senator ASHLEY:
ALP

– I am not aware of (he conditions under which Matson Line steamers operate. I shall 1 inquire into the matter.

page 2502

QUESTION

THE PARLIAMENT

Broadcasting of Proceedings.

Senator LARGE:
NEW SOUTH WALES

– In view of the fact that the names of honorable senators who intend to participate in particular debates are known three or four speakers in advance, will -you, Mr. President, arrange’ to have announced over the air when proceedings in the Senate are being broadcast cbe names of the next two or three honorable senators who intend to speak at the conclusion of the address by the honorable senator who has the floor?

The PRESIDENT (Senator the Hon Gordon Brown:
QUEENSLAND

– On the occasion of long or important debates in which many honorable ‘ senators desire to participate the party Whips make out a list showing the order in which honorable senators will speak. Do I understand that the honorable senator wishes that this list shall be handed to the officer supervising the broadcasting of debates?

Senator Large:

– Yes; in order that the names of the three or four honorable senators to follow the speaker who has the floor may be announced in advance.

The PRESIDENT:

– I shall discuss the matter later with honorable senators.

page 2502

QUESTION

PENICILLIN

Senator SAMPSON:
TASMANIA

– I ask the Minister for Heal’.h .whether patients in public hospitals, when treated with penicillin, are obliged to pay for- this drug,, or is the drug included in the formulary?

Senator McKENNA:
TASMANIA · ALP

– Under the hospital benfits agreement, the States undertake that there shall be free treatment and free medicines of all kinds for the occupant of every bed in a public ward in all public hospitals. Penicillin unquestionably would be one item that would be supplied free of charge. Under the pharmaceutical benefits bill, that is to be introduced in the very near future pencillin and other important life-saving drugs will be available to the public, apart from the hospitals scheme.

page 2502

QUESTION

STEEL

Newcastle Works:. Coax Stocks v Strikes - Exports - Nationalization of Industry.

Senator McLEAY:
SOUTH AUSTRALIA

– Has the Minister for Supply and Shipping read the report in to-day’s press headed “ Newcastle Steelworks may be closed - Broken Hill’* plant needs more coal “, and stating -

Newcastle steelworks might have to close unless coal production was increased to meet the needs of the Broken Hill Proprietary Company’s major works, Mr. Keith Butler said yesterday.

Mr. Butler, the B.H.P. Newcastle manager, said coal stocks and the inflow of coal to the steel industry hod deteriorated alarmingly in the last two weeks.

Mr. Butler said that for months the Newcastle steelworks had been working with very low coal reserves.

As the conciliation powers with which the chairman of the Joint Coal Board is clothed have not prevented a continuation of strikes, in the coal industry, what action does the Government propose to ensure that the serious coal shortages brought about by constant industrial trouble shall be avoided?

Senator ASHLEY:
ALP

– I am afraid that the question asked by the Leader pf the Opposition will not assist a solution of the industrial problems at Newcastle. Honorable senators opposite seldom miss an opportunity to ventilate industrial disputes in this chamber for political propaganda purposes. I remind him that .in 1940, when we were in the midst of a war, 10,000 coal-miners were on strike at Newcastle for more than ten weeks, during which coal production amounting to nearly 1,000,000 tons was lost. An anti-Labour government - was in office at that time, but the then Opposition did not take advantage of the occasion for propaganda purposes. This Government is just as desirous as the Opposition or anyone, else that there should be a continuity of production, but certain factors arise. The dispute at Newcastle is an inter-union dispute, and efforts ere being made to settle it. The machinery for settling such disputes exists, and I do not think that any government, whatever its political, complexion may be, should interfere with the work of industrial tribunals. I ask the Leader of the Opposition what action he would have this Government take.

Does he want the Government to interfere with the Arbitration Court or the other tribunals that handle disputes such as this? If the Leader of the Opposition will say frankly what he wants us to do we may be convinced that he is not merely indulging in political propaganda.

Senator McLEAY:

– Is the Minister prepared, as a responsible member of the Government, to enforce the law against the strikers who are defying the law?

Senator ASHLEY:

– The Leader of the Opposition is very vague. He asks whether I am prepared to enforce the law in regard to the strikes that are taking place. My reply is that I am in no better position than the honorable gentleman was in when he was a member of the Menzies Government and men were out on strike on the northern coal-fields for ten weeks. No enforcement of the law took place on that occasion.

Senator O’FLAHERTY:
SOUTH AUSTRALIA

– In view of the shortage of steel required for manufacturing purposes in industry, which appears to have been deliberately caused on account of prices control, and which Mr. Butler, the managing director of Broken Hill Proprietary Company Limited, says is due to the shortage of coal, will the Minister for Supply and Shipping have inquiries made in order to ascertain whether it be possible for the Commonwealth Government, in conjunction with the Government of New South Wales, to take over the steel works of that company with the object of supplying steel to Australian industries? ‘

Senator ASHLEY:

– I am not convinced that there is as much impediment to the production of steel in Australia as is suggested by Mr. Butler. Every member of the Government is anxious that the needs of the people in this regard shall be satisfied, because steel is very important in Australia to-day. I shall have inquiries made as the honorable member suggests, but I do not view very favorably the prospect of the Government deciding to take the action which he proposes.

Senator McLEAY:

– Has the Minister read a newspaper report that Mr. C. Mitchell, of the Roberts Construction .Company Proprietary Limited, of South Africa, said yes terday that steel industry disputes in this country have lost Australia an annual contract for £130,000 worth of steel for his company ? Mr. Mitchell said America had secured the contract.

The PRESIDENT (“Senator the Hon Gordon Brown:
QUEENSLAND

-Order ! There is a tendency on the part of honorable senators to overlook the standing order which prohibits the quotation in extenso of extracts from newspapers in asking questions. It is not permissible to read lengthy extracts from newspapers. If it is desired to ask a particular Minister whether he is aware of something appearing in the press the usual method is to ask the Minister whether he has seen the press report. I am loath to interrupt the Leader of the Opposition while he if asking a question, but if I do not act now the tendency will probably persist

Senator McLEAY:

– Has the Minister’s attention been drawn to a press report which states that Mr. C. Mitchell,, of the Roberts Construction Company Proprietary Limited, of South Africa, said yesterday that he had had to cancel a contract for the annual supply of £130,000 worth of steel because of continued strikes, and’ his subsequent remarks that many contracts have been lost to Australia, the orders going to the United States of America ? fs the report correct ? If so, does the Government propose to do anything about it?

Senator ASHLEY:

– The Leader of the Opposition is certainly in an inquisitive mood this morning. With regard to the question he asked concerning the loss of orders for export of steel for this country, I have not seen the press report to which he refers. I do not always have time before coming to the chamber to read all the various newspapers. However, I would point out to the Leader of the Opposition that because of Australia’s natural resources and the ability of its workmen, this country produces the finest steel in the world, and I should be surprised if orders were lost to Australia through industrial disputation. There may be some falling off of production, but that is not to be wondered at in such a huge industry as the steel industry. Industrial unrest is not confined to Australia ; indeed some of the disputes which have occurred here have been the result of upheavals in the industrial life of the

United States of America. I pointed out yesterday that even when bombs were falling on Britain there was trouble in the British coal-mining industry. At the present time there are industrial disputes in the United States of America, South Africa and other countries. Unfortunately, some people in Australia who do not seem to understand that production will not he increased by such action constantly malign the workers. No one is more desirous to increase production than is the Government, but the constant maligning of industrialists has a detrimental effect on production and does not tend to promote peace in industry.

Senator LARGE:

– Seeing that the slogan of the Opposition parties a few years ago was “ Tune in to Britain does not the Minister think that now is an appropriate time to follow Britain’s lead and nationalize the steel industry?

Senator ASHLEY:

– When the Opposition parties were in office they did advocate that Australia should follow Britain’s lead. There was nothing wrong in that, as Australia is a member of the British Commonwealth of Nations. When the time is opportune, action along the lines suggested by the honorable senator may be taken into consideration.

page 2504

QUESTION

SHALE OIL

Glen Davis Operations

Senator HERBERT HAYS:
TASMANIA

– I ask the Minister for Supply and Shipping how much money has been expended on the development of the shale oil deposits at Glen Davis. How much oil has been extracted from shale in the last six years? How many men are employed on the project? What is the cost a gallon of petrol extracted from Glen Davis shale?

Senator ASHLEY:
ALP

– The Glen Davis project is one of the industries that the Labour Government inherited from its predecessors. This industry was established by the Menzies Government and it has had the full support of the present Government, which believes in the development of Australian industries. Unfortunately, the history of the Glen Davis project has not been a happy one. Extreme difficulties have had to be overcome. For example, water supplies were not adequate for the proper conduct of the industry, Large quantities of water are needed for treatment of the shale. Only in recent months has sufficient water been available. During the war, it was not possibleto instal an adequate water supply system because men and materials had to be employed on more urgent war requirements. I shall endeavour to obtain the figures requested by the honorable senator and supply them to him at the earliest opportunity. I believe that he will find that a considerable improvement has occurred at Glen Davis and that there is a prospect of oil being recovered at a reasonable cost.

page 2504

SOCIAL SERVICES CONSOLIDATION BILL 1947

Senator COLLETT:
WESTERN AUSTRALIA

– With regard to the Social Services Consolidation Bill, which consists of 149 clauses, the explanation of which by the Minister for Social Services in his second-reading speech yesterday occupied fifty minutes, and which will involve the expenditure of £72,000,000 of revenue, does the Minister consider that, in expecting the Senate to proceed immediately with the discussion of the measure, the best interests of the country are being served? Were copier of the bill circulated to any members of Parliament before it was introduced by the honorable gentleman yesterday?

Senator McKENNA:
TASMANIA · ALP

– In reply to the first question, whatever time the Senate needs to consider this measure will be readily afforded to it. The Government realizes the great importance of the bill and desires that it be given the fullest consideration. In reply to the second question, I advise the honorable senator that copies of the bill were made available to several members of the Opposition late on Wednesday as a matter of convenience to those who were likely to speak immediately after my second-reading speech.

page 2504

QUESTION

RATIONING

Sugar and Tea Coupons

Senator COOPER:
QUEENSLAND

– Has the attention of the Minister for Trade and Customs been drawn to a decision of the Federation of Retail Grocers and Storekeepers Associations of Australia that, in order to prevent rusk buying of sugar and tea, the currency of coupons for those commodities should be limited to four weeks in order to coincide with the currency of butter coupons? If so, will the Minister have the proposal examined, consider it, and inform the Senate of the decision reached?

Senator COURTICE:
Minister for Trade and Customs · QUEENSLAND · ALP

– My attention bas been drawn to this matter. The Director of Rationing was in attendance at that conference, and when I receive from him a report as to what actually took place I shall make a statement to the Senate on the subject.

Senator COOPER:

– Has the Minister for Trade and Customs received any request from grocers that they should be recompensed for the responsibility and time involved in collecting and preparing coupons for the replenishment of stocks of tea, sugar and butter? If so, what decision has been made in the matter ? If not, will the Minister consider the request and make a statement on . the subject ?

Senator COURTICE:

– No request of the kind mentioned by the honorable senator has been made to me ; but, as I am always anxious to give consideration to any matters relating to rationing or prices, I shall furnish the information sought by the honorable senator as soon as possible.

page 2505

QUESTION

CLOTHING

Senator TANGNEY:
WESTERN AUSTRALIA

– Has the attention of the Minister for Trade and Customs been drawn to the enormous increases of the prices of men’s, women’s and children’s clothing, such increases being as much as 400 per cent, in respect of woven rayon goods? Can the Minister say whether such increases are justified in view of the poor quality of some of the goods offered for sale?

Senator COURTICE:
ALP

– The honorable senator has not indicated the period during which prices have increased to the degree mentioned by her. It is a fact that the prices of clothing have risen, but the Prices Commissioner exercises a close scrutiny over such matters. If manufacturing costs rise appreciably, it is only to be expected that they will be reflected in some degree in the prices- of manufactured goods. “With regard to many items, of that kind, it has been the. policy of the Government to ease prices by means of a su’bsidy, but the policy of the Government now is gradually to eliminate subsidies wherever possible. It is impossible to avoid increases of prices of goods of the kind mentioned by the honorable senator. I should like to check up on the figure of from 300 per cent, to 400 per cent, increase. I snail examine the matter further.

page 2505

QUESTION

REPATRIATION

Senator BRAND:
VICTORIA

– In view of the amelioration of the conditions of a very deserving section of the community a3 proposed under the Social Services Consolidation Bill, I ask the Minister representing the Minister for Repatriation whether the Government intends to appoint a joint parliamentary committee to inquire into repatriation pensions, particularly those payable to war widows and dependent parents who lost sons on war service ? Other anomalies have arisen under the Australian Soldiers’ Repatriation Act. which also could be dealt with by a committee similar to that which was appointed some years ago to examine repatriation legislation. Does the Government intend to appoint a similar committee for the purpose I have mentioned ?

Senator McKENNA:
TASMANIA · ALP

– At present, the Government has no such, thought in mind. I snail bring to the attention of the Minister for Repatriation the suggestion made by the honorable senator. It may be that, with the passage of time various anomalies have arisen and that improvements oan now be effected to the legislation which was first enacted following World War I. I assure the honorable senator that the idea underlying his suggestion will receive careful consideration by the Minister. I remind the honorable senator, however, that at the time ordinary civilian, pensions were increased, an announcement was made that war pensions also would be increased. Legislation to do so will .be introduced shortly in the House of Representatives, and 1 : believe that it will come before the Senate before the present session concludes.

page 2506

QUESTION

INTERNATIONAL CONFERENCE ON TRADE AND EMPLOYMENT

Senator McLEAY:

– I ask the Minister for Trade and Customs whether he will be able, possibly next week, to make a progress report on the International Conference on Trade and Employment now being held in Geneva? Is it a fact that at the preliminary conference, the leader of the Australian delegation, Dr. Coombs, agreed in principle that Empire preference would have to be abandoned?

Senator COURTICE:
ALP

– I should like first to consult with the Prime Minister before I could undertake to make a progress report on the conference at Geneva ; and I shall consult with him on the matter. In reply to the honorable senator’s second question, I should be surprised, and so would the Government, to learn that Dr. Coombs had made any statement of the kind attributed to him by the honorable- senator. So far as I! know, Dr. Coombs has not made any -udi statement.

page 2506

QUESTION

PAPER

Senator FINLAY:
SOUTH AUSTRALIA

– I ask the Minister for Trade and Customs whether he has any statement to make with respect to the request which I made last week that a further supply of paper be made available to bag manufacturers in South Australia for the purpose of supplying to canteens and shops bags suitable for the wrapping of workmen’s luncheons?

Senator COURTICE:
ALP

– I am unable at this juncture to make a statement regarding that matter, but I shall supply the information sought as early as possible.

page 2506

QUESTION

MOTOR VEHICLES

Senator ARNOLD:
through Senator Large

asked the Minister for Trade and Customs, upon notice -

  1. Is the Minister aware that it is practically impossible to buy second-hand cars except at blackmarket prices?
  2. What action, if any, has the Prices Branch taken to enforce its ceilings?
  3. Does the Minister realize that owners of second-hand cars regard the ceiling prices fixed by the Prices Commissioner as far below their real value?
  4. Has the Minister given consideration to the question of removing second-hand ears from price control?
Senator COURTICE:
ALP

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

  1. It is practically impossible to buy mechanically-sound second-hand cars at all, because their owners want them for their own use. Used cars are normally placed on the market for one of three reasons - (a) The owner has acquired a new one; (6) the owner has left the Commonwealth; (c) the owner has died. It is evident therefore that only a limited number of cars reaches the secondhand market and under present conditions the owner of a. vehicle is not anxious to part with it. The blackmarket in second-hand motor cars consists mostly of a limited number of worn out and useless vehicles which come back again and again into the hands of unscrupulous traders. There is not the flow of used cars on the market that existed when there were ample new cars to replace them.
  2. During the six months ending the 31st March, 1947, (i7 persons were convicted of selling second-hand motor cars at excess .prices. One was sentenced to imprisonment for two months and one for one month, fines and costs totalling £2,81!) were imposed, and refunds totalling £1,818 were ordered.
  3. The fictitious value placed on second-hand cars to-day is based on the shortage of supply and not on the value of the vehicle as a piece of mechanical equipment. If there were a plentiful supply of new cars to-day even at current new prices it is believed that few second-hand cars -would realize the maximum prices fixed by the Prices Commissioner. The maximum price of a .popular car for which the new price in 1939 was £412 is now £294 - representing a. depreciation of less than £15 a year for eight years. If the price had been as high as £700 in 1939, the maximum price of £294 would still be higher than its normal value for insurance purposes or its normal value for taxation purposes.
  4. Yes. It is feared that if second-hand cars were removed from .price control in Australia the experience of England would be repeated. As an example of what is happening in that country there is evidence that a price of £850 was realized at auction for a used 1940 vehicle of which the new price was £422. If cars were decontrolled the same thing would happen in Australia.

page 2506

QUESTION

GOVERNOR-GENERAL

Purchase of Motor Car

Senator COURTICE:
ALP

– Yesterday, in reply to a question by Senator James Mclachlan, I undertook to make inquiries about the price paid for the motor car purchased for the Governor-General. I have ascertained that there are so few vehicles of this type in the country that they are not listed in the order issued by the Prices Commissioner fixing maximum prices for specified makes and models. Because of this a. special application had to be made for a price, and the figure at which the vehicle was purchased was actually that fixed by the Prices Commissioner.

page 2507

QUESTION

SUPERPHOSPHATE

Senator ASHLEY:
ALP

– On the 1st May Senator Gibson, asked a question regarding the subsidizing of road transport in Victoria to enable the urgent delivery of superphosphate to farmers in that State.

The Victorian Government has arranged for payment of a subsidy for the road transport of superphosphate for cropping in wheat areas. It is understood that this subsidy amounts to 2d. per ton mile based on the mileage from source of supply to the railway siding nearest the consumer, with payments retrospectively to the 1st April, 1947. The Victorian. Railway Authorities recently arranged to provide rail trucks for the transport of 21,000 tons of superphosphate weekly. In these circumstances, it will be appreciated that every assistance is being provided to facilitate the delivery of superphosphate to farmers in Victoria.

page 2507

INCOME TAX BILL 1947

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator ASHLEY:
New South WalesMinister for Supply and Shipping · ALP

– I move -

That the bill be now road a second time.

The bill before honorable senators provides for a substantial reduction of the existing rates of income tax payable by individuals. The reduced rales will apply to income derived from the 1st July, 1947. As I indicated in my second-read ing speech on the Income Tax Assessment Bill, the Government also proposes to increase the amounts on which concessional rebates for dependants are to be based. The combined effect of these proposals will be to reduce the revenue from income tax by £24,500,000 per annum. Taken in conjunction with the proposed reduction of the social services contribution, the total relief to be granted to taxpayers will approximate £33,000,000 per annum. Under the new scale of rates, liability to income tax will not commence until the income reaches £251, instead of the present figure of £201. The personal exertion rate will average one-tenth of one penny in the £1 on a taxable income of £251, and will increase progressively until an average rate of 9s. 1.6d. is reached on a taxable income of £5,000. Where the taxable income exceeds £5,000, the first £5,000 will bear tax at the rate of 9s. 1.6d. in the £1, and the excess over £5,000 at the rate of 13s. 6d. in the £1. In addition to income tax, a social services contribution at ls. 6d. in the £1 is payable, making a total maximum combined rate of 15s. in the £1 . Rates of tax for property income are slightly in excess of those for personal exertion in the lower brackets of income. The margin between the two rates progressively increases until the income reaches £1,000, at which point the combined rate of income tax and social services contribution on income from property is approximately 25 per cent, greater than the combined rate on income from personal exertion. Thereafter, the difference between personal exertion and property rates gradually diminishes until the maximum income tax rate of 13s. 6d. in the £1 is payable on the excess over £5,000, whether the income be from personal exertion or property.

The new rates of tax, combined with the proposed increase of the amounts upon which rebates for dependants are to be based, will have the effect of raising the amounts of income which may be derived by persons with dependants before incurring any liability for income tax as distinct from the social services contribution. The amounts which may now be derived before becoming liable to income tax, as distinct from the social services contribution, as compared with existing i mounts, are as follows.: -

As I have already mentioned, the new r;ites will apply as from the 1st July next, and, under the “ pay-as-you-earn “ plan, will be reflected in the tax instalments to be deducted from salary or wages payable on and from that date. A corresponding reduction will also be made of the provisional tax payable in respect if income, other than salaries or wages, nf the year ending the 30th June, 1948. Tables showing the amounts of income i :ix and social services contribution payable by persons on selected incomes and comparing these amounts with amounts payable under the existing scale and under the war-time scale, have been circulated to honorable senators. These tables show that although all classes of taxpayers will benefit from the reductions, the greatest benefit will be received by persons with dependants. These taxpayers will receive reductions ranging from 100 per cent, on the lowest income to approximately 10 per cent, on high incomes.

Lt will also be noted that the total tax iii id contribution payable by the majority nf taxpayers will be less than one-half, of the war-time tax on a corresponding income. For example, a taxpayer with m dependent wife and two children will hil ve received reductions amounting to more than 50 per cent, of his war-time tax if his income does not exceed £800. The other provisions of the bill correspond to those included in the annual income tax rating measure. I commend the bill to the Senate.

Debate (on motion by Senator McLeay) adjourned.

page 2508

SOCIAL SERVICES CONTRIBUTION BILL 1947

Bill received from the House of- Representatives.

Standing and Sessional ‘Orders suspended.

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

Second Reading

Senator ASHLEY:
Minister for Supply and Shipping · New South Wales · ALP

– I move -

That the bill be now read a second time.

The purpose of this bill is ito reduce the rates of’ social services contribution payable in the lower income ranges. The proposed reductions, combined with the increased rebatable amounts for dependants, as proposed for income tax purposes, will cost approximately £8,500,000 per annum. “When the reduced income tax rates are also taken into account, the total loss of revenue will be £33,000,000 per annum. It is proposed that the new rates of contribution shall operate as from the 1st July next.

The rate of contribution payable by a contributor who would not be entitled to any rebates for dependants, life assurance, &c, in his income tax assessment, < is the basie rate. This rate at present commences at 3d. in £1 and increases by one-eighth of Id. for every £1 of income in excess of £100, until the maximum rate of 18d. in £1 is reached at an income of £220. The bill proposes that the basic rate shall commence at 3d. in £1, but shall increase by only one-tenth of Id.. instead of one-eighth of Id., for every £1 of income in excess of £100. The effect of this proposal will be that the maximum rate of 18d. in £1 will be reached at an income of £250 instead of £220 as formerly. In cases where the contributor is entitled, for income tax purposes, to rebates for dependants, life assurance.&c., the basic rate will be varied by reference to the total amount on which these rebates are calculated. The rate ;so ascertained will be termed the concessional rate. A slight variation of the method of ascertaining the concessional rate is proposed. This variation, taken in conjunction with the proposed increase of the amounts upon which rebates for dependants are to be based, will have the effect of raising the limits of income which may be derived by persons with dependants before incurring liability for social services contribution. A further effect will be that the maximum concessional rate of 18d. will be reached at approximately the same point as that at which liability to income tax commences.

The incomes at which liability to social services contribution commences and the incomes at which the maximum rate of 18d. in £1 is reached will be altered as follows :

Honorable senators will observe that neither social services contribution nor income tax will be payable by a married person if. his income is less than £201 a year, or £317s. a week. A married person with two children will also be free from both levies if his income is less than £318 a year, or £6 2s. a week. I commend the bill to honorablesenators.

Debate (on motion by Senator McLeay) adjourned.

page 2509

GIFT DUTY ASSESSMENT BILL 1947

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator ASHLEY:
Minister for Supply and Shipping · New South Wales · ALP

– I move-

That the bill be now read a second time.

One of the effects of heavy war-time taxes, particularly estate duty and income tax, was to cause people to endeavour to avoid some part of these lia bilities by making gifts of their assets to members of their families. The main purpose of the gift duty legislation was to protect these sources of revenue by discouraging this tendency, or at least to obtain from such persons a payment of gift duty to off-set the loss of revenue resulting from such gifts. The experience of five years’ administration of the legislation has shown that some amendments of the act are desirable, and this bill contains those amendments.I believe that honorable senators will find that these amendments are not of a contentious nature.

Under the present law, the statutory exemption is £500, i.e., if the value of all gifts made by any one donor within a period of three years does not exceed £500 no duty is payable. It has been decided to increase this exemption to £2,000. The purpose of the increase is to avoid imposing duty in a large number of exceptional cases to which it wasnot intended the law should apply, such as the transfer of a family residence from a husband to his wife, or the purchase of a residence bya wife in her name with money accumulated from housekeeping savings. Another type of case which will be relieved of liability for gift duty under this amendment is the settlement of a son on the land by a primary producer where the gift involved in property and stock does not exceed £2,000 in value. This decision to increase the exemption will be effected by an amendment of the Gift Duty Act, which sets out the rates of duty payable, but an amendment of section 19 of the Assessment Act is also involved. That section at present provides for the lodgment of a return by a person making a gift, the value of which taken together with all other gifts made within the preceding eighteen months, exceeds £250.This provision is being amended to increase the exemption from £250 to £1,500. Whilst the statutory exemption is £2,000, the figure of £1,500 is being adopted so as to provide for a difference of opinion between the donor and the Commissioner of Taxation as to the value of the gift. Section 16 of the act was intended to make liable to duty any disposition of property between relatives where the whole of the purchase money is not paid in cash at the time the transfer takes place. It has been found, however, that the section does not operate in an equitable manner. An instance of inequitable operation, is that if the outstanding balance is secured by mortgage, or in a way which brings it within section 16, the transaction is liable to duty, whilst, if the balance is not secured, the transaction is not liable to duty. A transfer of land in consideration of an annuity charged upon- the land would be subject to duty, but if the annuity were not charged on the land no duty would be payable. In such h case if the transferor retained a life interest in. the property instead of taking an annuity charged upon the land, there would be no duty payable. It was intended that the section should prevent a parent giving his son a property valued at, say, £10,000, and making it appear that he was selling the property to the son by requiring a deposit of £500 and leaving the balance of £9,500 outstanding as a debt due by the son. This outstanding debt could then be forgiven by periodical gifts small enough to avoid gift duty. However, even with, the benefit of increased exemption it would take nearly fourteen years to forgive such a balance without attracting duty. The possibility of loss of any substantial amount of revenue by such a device is therefore considered to be negligible. Under the circumstances the Government decided that, instead of amending the section to remove the anomalies which exist, it would be preferable to repeal it.

Some gifts which have been subject to gift duty subsequently become liable to estate duty by reason of the fact that gifts made within three years of the death of the donor form part of his estate for estate duty purposes. In order, therefore, to avoid a double liability in respect of the same gift, section 15 of the act provides for the allowance of a rebate of the gift duty or the estate duty applicable to the gift, whichever is the less. This is a more appropriate provision and will make for better administration if it is incorporated in the Estate Duty Assessment Act. Section 15 of this act is therefore being repealed and a comparable provision is being inserted in the Estate Duty Assessment Act.

Debate (on . motion by Senator McLeay) adjourned.

page 2510

GIFT DUTY BILL 1947

Bil] received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator ASHLEY:
Minister for Supply and Shipping · New South Wales · ALP

– I move-

That the bill be now read a second time.

This bill gives effect to the Government’s decision to increase the minimum amount liable to duty from £500 to £2,000, and removes an existing anomaly by providing for the tapering-off of the duty in those cases where the value of the gift exceeds £2,000 by only a small amount. The rate of duty on gifts up to £10,000 is 3 per cent., so that, if no tapering-off of duty were provided for, gifts of an aggregate value of £2,001 would be subject to duty of £60, whilst if the value were only £2,000 no duty would be payable. This anomaly is overcome by the insertion of a provision which ensures that the duty on the gift shall not in future exceed one-half of the amount by which the value of the gift, or the aggregate value of all the gifts within the statutory period of three years, exceeds £2,000. By this means the full rate of 3 per cent, tax does not apply until the value of the gift exceeds £2,127.

One of the effects of the increase of the exemption is that it will comply with many requests recently received by the Government that exemption from gift duty should be granted on gifts to exservicemen to a maximum value of £2,000. The Government is glad to have been able to comply with these requests.

Debate (on motion by Senator McLeay) adjourned.

page 2510

ESTATE DUTY ASSESSMENT BILL 1947

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Secondreading.

Senator ASHLEY:
Minister for Supply and Shipping · New South. Wales · ALP

– I move-

That the bill be now read a second time.

It was found necessary to amend the Estate Duty Assessment Act in regard to the special deduction of £5,000 allowed in the case of estates of members of the forces, and opportunity has been taken to make some other necessary amendments, none of which is of a contentious nature.

Clause 3 of the bill provides three amendments to the principal act, the first of which will, I am sure, be very welcome to solicitors and trustee companies. It provides for exemption from duty of all gifts inter vivos of amounts not exceeding £50 in value, or, where more than one gift is made to the same person by the deceased, the aggregate value does not exceed £50. It has been represented to the Government that it is inequitable to charge duty on small gifts which form part of the normal expenditure of the deceased person. Furthermore, the tracing and identification of these small gifts in the accounts of the deceased impose additional work on executors and solicitors out of all proportion to the revenue involved. It has, therefore, been decided to grant the exemption contained in the bill. The second amendment embodied in clause 3 corrects an anomaly arising from the present wording of paragraph c of sub-section 4 of section 8 of the act. That paragraph provides for the inclusion in the estate of the deceased person of property comprised in a settlement made by the deceased under which he had a life interest, whether or not he had surrendered that interest at any time before his decease. Under this provision the property comprised in such a settlement forms part of the deceased’s estate for estate duty purposes even though he may have surrendered his life interest many years prior to his decease. The surrendering of such an interest more than three years prior to his death means, of course, that the deceased has divested himself of all interest in the property comprised in the settlement, and that the same conditions should apply as to other gifts inter vivos, i.e., they should not form part of the estate unless made within three years of the death of the deceased. It is therefore proposed that effect shall now be given to this view, and where the lifeinterest of the deceased has been surrendered more than three years prior to his death the property shall not form part of his estate. The third amendment proposed by clause 3 inserts in the act a provision for the allowance of a rebate to avoid double duty in respect of property included in the estate as a gift inter vivos, which is also subject to a gift duty. Provision for the allowance of such a rebate is at present contained in the Gift Duty Assessment Act and it is being transferred to the Estate Duty Assessment Act in order to make the administration of both acts more efficient. Clause 4 of the bill redrafts section 9 of the act. Section 9 provides for a deduction of £5,000 in the case of the estates of members of the fighting forces who have died or die during the war or within three years after its termination, as a result of injuries received or disease contracted on active service. It has been found, however, that the section does not apply in the case of persons who have been discharged from the forces. Clause 4 removes this anomaly and the new provision will apply in the cases of discharged members as well as members of the forces.

Sections 17 and 18 of the act provide for the deduction of debts due and owing by the deceased at the time of his death, including Commonwealth and State income and land taxes which become due and payable after death and within one year after the payment of estate duty. The intention was that income andland taxes assessed subsequent to death on income derived and land owned prior to death should be allowed as deductions. Because of the wording of the present act, however, many large estates are receiving deductions for substantial amounts of taxes assessed in respect of income derived and land owned by the executors of the estates subsequent to the date of death. The amendment made by clause 5 of the bill will ensure that the original intention shall become effective.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Progress reported.

page 2512

COMMONWEALTH CONCILIATION AND ARBITRATION BILL 1947

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

page 2512

SOCIAL SERVICES CONSOLIDATION BILL 1947

Second Reading

Debate resumed from the 15th May (vide page 2440), on motion by Senator Mckenna -

That the bill be now rend a second time.

Senator FINLAY:
South Australia

– In continuing the debate which was adjourned last night, I express any delight that such an important billis being initiated in the Senate. Far too few measures are initiated in this chamber ; almost invariably honorable senators have to deal with legislation which has already been thoroughly debated in the House of Representatives. My delight is, however, tinged with regret that the discussion by the Senate of this important bill, which will affect every person in the community, is not being broadcast to-day. En my opinion, arrangements should have been made for that to be done. It is true that the speeches of honorable senators will be recorded in Hansard, but the listening public will not have an opportunity to hear the debate in this chamber.

The Government is to be complimented on the introduction of this measure. In reply to a question, the Minister for Social Services (Senator McKenna) supplied me with some most interesting figures relating to the cost to the people of Australia of social service benefits, and showing, also, the amounts which it would be necessary to invest at 3 per cent. per annum - the ruling rate of interest on government bonds - in order to provide sufficient funds to provide those benefits. The weekly commitments of the

Government in respect of these benefits and the capital required to provide them are shown in the following table : -

Those figures are for the first nine months of the present financial year. It will be seen that the amount of capital which would have to be invested to meet those weekly payments would be enormous -

Senator Collett:

– What is our national income?

Senator FINLAY:

– I have not that figure at hand; but we know that the total cost of social services at present is £72,000,000 a year. This Government has done more than any other government in the world in an honest attempt to give effect to the first two freedoms of the Atlantic Charter - freedom from want and freedom from fear. In view of the magnitude of the benefits to be provided under this measure, it behoves all of us to do everything possible in the future to ensure that the money required to finance them shall he provided. To my mind one of the most welcome features of the scheme is that the money necessary to provide these benefitswill be provided from the incomes of those best able to carry this burden. I was interested to note that a taxation measure introduced this morning will exempt from income tax, and also from social service contribution, a large section of the people who will be eligible to receive the benefits under this measure.

I should like the Minister in charge of the bill to enlighten me on several points. I refer, first, to persons who have reached the age of 65 years, but, because they have been sufficiently thrifty to put aside savings, cannot qualify for the old-age. pension, and at the same time, because they are not able to sustain themselves from those sources are obliged to continue to work in industry. In the past, these persons have been at a very distinct disadvantage, because, unless the DirectorGeneral of Social Services saw fit to approve their application, they could not qualify for an old-age pension; whilst, should they lose employment because of strikes in other industries, or other causes they are not eligible to receive unemployment benefit. They are excluded from receiving either the old-age pension or unemployment benefit. I should like the Minister to inform me what is to he the permanent position of that class of person under this measure.

Child endowment is another important feature of the bill. “Whilst I do not wish co take any credit from the Opposition parties for placing the Child Endowment Act upon the statute-book, nevertheless, that legislation was introduced for a purpose not altogether worthy. The government of the day called into consultation on the matter a judge of the Arbitration Court, because at that time the trade union movement had applied for an increase of the basic wage, and the judge had determined that the basic wage at that time was sufficient only to meet the cost of living of a married man with a wife and one child. It was in order to save industry from having to pay the cost of an increase of the basic wage based on the regimen then in existence that child endowment was introduced by the government of the day, and was paid at the rate of 5s. a week in respect of each child excluding the eldest under sixteen years of age. That resulted in the abandonment of the Arbitration Court’s inquiry into the basic wage. Had the inquiry been pursued to its conclusion, an increase of the wage would probably have been granted; but that increase would have been payable to a much wider section of the community than is covered by child endowment, because that increase of the basic wage would have been payable to a single man and a married man with a wife and only one child. Therefore, while the Opposition parties claim full credit for the introduction of child endowment, their action was not so praiseworthy as one might be led to believe. The Oppposition parties were not so liberal as this Government has been in the matter. They introduced child endowment in order to relieve industry of the additional cost of an increase of the basic wage. That was the atmosphere in which child endowment was instituted. Whilst the Opposition parties havestrongly advocated endowment in respect, of the eldest child under sixteen, I am pleased that the Government has not made any move in that direction which would penalize any section of workers, and I hope that it will not do so unless it can see its way clear to pay endowment in respect of the eldest child under sixteen, and, at the same time, retain thu basic wage assessed on the existing regimen which is based on the cost of living of a man, wife and one child. Otherwise, no material advantage will be given to the single man or a. married man with a wife and only one child. Until some improvement is madein the computation of the basic wagewhich allows an amount of 12s. 6d. in respect of one child, the Government, should do nothing to disturb the present arrangement.

The pharmaceutical benefits to be provided under this measure represent a substantial advance upon those already provided. I hope that when the Government has finally reached an agreement on this matter, the friendly societies’ medical associations which have co-operated with the Government right from the commencement of this scheme, will not be in any way debarred from disbursing such benefits. The friendly societies movement ha? done a great deal to assist the Government in implementing this scheme. As a matter of fact, some of those societies have gone so far as to offer, in the event of no agreement being arrived at between the Government and the private chemists, to do what they can to implement the scheme. But, of course, that would he beyond the resources of friendly societies in some of the States, particularly the larger States where the friendly society movement has not developed so rapidly on the medicine benefit side as it has in the smaller States. Whilst friendly societies in one State might be able to meet the Government’s requirements, those in another State are not. sufficiently equipped to do so. I hope that every encouragement will be given to the expansion of friendly societies so far as their participation in the disbursement of these benefits is concerned. That will not place upon the societies a very great burden, because to-day, they employ trained chemists and will only need to obtain sufficient staffs to undertake the duties involved in the free medicine scheme. However, that will involve the training of more chemists than are now available. I mention this aspect because I am particularly anxious to see the greatest possible co-operation between the Government, the friendly societies and the pharmaceutical societies for the mutual advancement of all sections involved.

I should like to obtain an estimate of the actual saving that will be effected in the interests of recipients of these benefits. What cost would they have to meet in order to obtain these benefits personally through insurance companies or other organizations? What would be the weekly contribution involved to obtain coverage in respect of the total benefits provided under this legislation ? I know that it will be said that a section of the community will not receive these benefits because they are debarred by the means test; but there are certain benefits to which the means test does not apply, and it is the intention of the Government to work towards the total elimination of the means test. I hope that we shall be able to achieve that goal. In view of the amount required to be invested at 3£ per cent, interest in order to yield a weekly return of £1,199,000, which is the cost of these benefits, what contribution weekly would recipients have to make personally to an insurance company to cover them for these benefits’!- I believe that the estimate would be astonishing.

I was pleased to hear the Minister, when dealing with sickness benefit, say in his second-reading speech -

In future, the only payments in respect of the incapacity for which sickness benefits is claimed which will be deducted from the amount of benefit otherwise payable, will be amounts in the nature oF compensation, damages or other ([.mounts payable by law. but not including any such payment for which tl’.e claimant lias made contributions.

T am not clear whether that means that in future those who pay contributions to friendly societies and other bodies for sickness benefit will be obliged to join approved societies. At present those entitled to sickness benefit can receive £2 a week without affecting their actual sick pay benefit provided the society is an approved society under the act.’ Thousands of workmen in industry contribute weekly to what are known as sickness and accident funds. These funds provide certain weekly payments ranging from £1 a week upwards. When the unemployment and sickness benefits scheme was inaugurated, it was found that these payments were deducted from the sickness benefit because the societies making them had not become approved societies within the meaning of the act. This caused the organizations concerned to amend their rules to provide that the payment should be made not to the member of the fund himself, but to his wife or some other dependant. This device overcame the obstacle, but I hope that this measure will rectify the anomaly. My reading of the bill leads mo to believe that it will, but I hope that the Minister will enlighten me on this matter, because it is one in which I have been particularly interested. I shall have more to say about the details of this measure when it reaches the committee stage. In conclusion I should like to commend the Minister most sincerely for his enlightening second-reading speech, and for the capable manner in which he has handled the introduction of this measure.

Senator HASH (Western Australia) 1 12. 3]. - I welcome the introduction of this ‘bill, the object of which is to consolidate the laws relating to social services. Our social benefits come broadly under five headings, invalid and old-age pensions, widows’ pensions, maternity allowances, child endowment, and unemployment and sickness benefits. A measure such as this is essential, not only because of the benefits for which it provides, but also because it is most desirable that our social services legislation should be available in a concise form. As a member of this Parliament I have been requested on innumerable occasions in the last few years to supply information in regard to social service benefits. Answering these inquiries has very often necessitated a search of our statute-hook. This bill will provide easy reference to these matters.

I, too, congratulate the Minister for Social Services (Senator McKenna) upon the work he has accomplished in relation to this measure, and upon the wealth of information that he provided in his second-reading speech. Any one who listened attentively to that speech could not fail to understand the exact purport of the bill. I was. pleased also to hear the Minister express appreciation of the services rendered to this Parliament by his two predecessors, namely, the present Minister for Labour and National Service (Mr. Holloway), and Senator Fraser, who last held the portfolio of Social Services. These gentlemen worked hard to improve OU] social services. When holding ministerial office, Senator Fraser worked most assiduously on the many intricate problems associated with our social services generally. I have particular regard for the efforts that he made to reach an understanding with the Australian, section of the British. Medical Association in respect of the proposed pharmaceutical benefits scheme. I say “ proposed “, because although the Pharmaceutical Benefits Act is already on our statute-book, it was declared invalid by the High Court, and has yet to be re-enacted in accordance with the new social services powers conferred upon the Commonwealth at the last referendum. In his second-reading speech, the Minister informed the Senate that the Commonwealth’s new powers enabled this Parliament to make laws with respect to maternity allowances, widows’ pensions, child endowment, unemployment, pharmaceutical, sickness and hospital benefits, medical and dental services, but not so as to authorize any form of civil conscription, benefits to students, and family allowances.. This measure does not embrace all those services ; but wc know that at a later stage the Government proposes to introduce further legislation pursuant to the new powers that have been conferred upon the Parliament. It is interesting to note the Minister’s statement that the alteration of the Constitution not only confirmed the Commonwealth’s authority to provide social services benefits already in existence, but also granted almost unlimited power in new and important fields of social services. .That is most important and illustrates the fact that since 1941 when the Curtin Labour Government assumed office,. Labour’s approach to the question of social services generally has been most constructive, and its accomplishments substantial. Compare the achievements of the last six or’ seven years with what has been done by all previous Commonwealth Governments since Federation. In 1909, our first social services legislation, the Invalid and Oldage Pensions Act was placed on the statute-book. In 1912 the Maternity Allowances Bill was passed, and then, in 1941, the Child Endowment Act became law. It is estimated that expenditure on social services for the year 19-47-48 will be £72,000,000. Prior to 1941, the total annual expenditure by the Commonwealth on these services was between £14,000,000 and £16,000,000. These figures emphasize the development that has taken place in national welfare under Labour administration. The Minister said that the total annual cost of social service* in recent years was indicative of the extensive growth that had taken place. He showed that in 1938-39 the expenditure under this heading was £16,400,000, in 1939-40 £16,800,000 and in 1940-41. £17,700,000. Expenditure increased progressively year by year until in 1944-45 it reached £39,400,000. In the following year it rose steeply to £52,000,000, and then in 1946-47 it reached £57,500,000. The Leader of the Opposition( Senator McLeay) expressed the view that owing to the huge social services bill that we were incurring, there was a danger that we might be unable to -find the finance necessary to meet our liabilities.

Senator Herbert Hays:

– The Government cannot altogether disregard that possibility.

Senator NASH:
WESTERN AUSTRALIA

– It is not. This Go.vernment unlike other administrations in this country and elsewhere in the world has not based its social services structure solely on the principle of contributions. It has based its method of financing these services on taxation, which is graduated according to the ability of people to pay.

As cbe Leader of the Opposition has said, approximately 86 per cent, of the taxpayers of Australia pay for social benefits. What is wrong with that? The Government has endeavoured to spread social service contributions and income - tax. payments over as great a range of the people as possible. Owing to. the tremendous expenses caused by the war, it had to levy income tax and social service contributions upon low ranges of income r.hat previously were exempt. However, it Kas since raised the commencing levels, and, as from the 1st July next, further exemptions will become operative. Under the present system, a taxpayer without dependants must earn a little over £2 a week before he is required to make a social service contribution; a taxpayer with n dependent wife must earn a little over £3 a week ; a taxpayer with a dependent wife and one child must earn about £3 7s. a week; a taxpayer with a dependent wife and two children must earn a’ little over £4 a week; a taxpayer with a dependent wife and three children must earn nearly £5 a week; and a taxpayer with a dependent wife and four children must earn about £5 7s. a week. Those commencing rates will soon be raised. This shows that the Government is financing its social services with the least possible hardship to the taxpayers. In effect, what is happening under the present system of social services Ls that people are .receiving, benefits from Consolidated Revenue not because they belong to a contributory scheme “but because, as taxpayers, they are called upon to contribute to the nation’s revenue on’ a pro rata basis. These services benefit not only those who contribute to them but also other -m embers of the community who are not in a -sufficiently favorable economic position ‘ to enable them to contribute. I ask leave to continue my remarks at a later date.

Leave granted ; debate adjourned.

page 2516

PAPERS

The following papers were presented : -

Defence (Transitional Provisions) Act - National . Security (Rationing) Regulations^ - Orders - Nos. 140, 143.

Senate adjourned at 12.20 p.m.

Cite as: Australia, Senate, Debates, 16 May 1947, viewed 22 October 2017, <http://historichansard.net/senate/1947/19470516_senate_18_192/>.

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