18th Parliament · 2nd Session
The PRESIDENT (Senator the Hon. Gordon Brown) took the chair at 3 p.m.. and read prayers.
BIRTH of Son.
– by leave - I desire to inform the Senate that the Governor-General has received the following - cablegram, dated the 14tl November, 1948, from the private secretary to the King: -
I am to inform Your Excellency that Her Royal Highness Princess Elizabeth, Duches of Edinburgh, was safely delivered of > Prince at 9.14 p.m. to-day.
The Governor-General has advised the King that the news of the birth of fi Prince was received by the Government and the people of Australia with the greatest pleasure, and has asked hi* Majesty to. convey felicitations to Their Royal Highnesses.
– I ask the Acting Attorney-General whether it is a fact that” the Metropolitan Gas Company of Melbourne has increased the price of gaf by 5d. per 1,000 cubic feet, although it* dividend last year was 10 per cent., and probably will be greater this year’, and whether such action was sanctioned by the Victorian Liberal Government? I* the Minister aware that the dispute al the Metropolitan Gas Company’s works on Friday night, which was . settled bv negotiation’s on Sunday, was an act of premeditated and calculated provocation for the purpose of influencing the State by-election at Geelong which the Liberal party candidate won on the preferences of the Communist candidate, and for the purpose of implementing the Essential Services Act which was passed by the Victorian Parliament and is the most vicious attack yet made on. the fundamentals of trade unionism in the history of the Commonwealth.?
– I understand that the Metropolitan Gas Company of Melbourne has increased the price of gas by 5d. per 1,000 cubic feet and that. that increase has been made with the authority of the prices organization set up by the State of Victoria following the Australian Government’s abdication, of the field of prices control. The action that has been, taken by the Victorian Government to - give effect to its Essential Services Act i6 one which that State has taken upon its own responsibility. As to the motive that actuated- the State in taking that action, and whether it is in line with the suggestion implicit in the honorable senator’s question, I am unable to say. The dispute may, or may not, have had an effect upon the State ‘by-election at Geelong. Again, I do not pass an opinion upon that point. However, I inform the Senate that, information, made available to me to-day ds that, the strike that was planned for to-day by various unions in protest against the application of the Essential Services Act is to cease to-night. [ understand- that the unions concerned met this morning and agreed to resume work this evening.
– Order! Before honorable senators ask any further questions, I point out that they must confine their questions to inquiries of Ministers without, including any unnecessary information. My remark is prompted by the terms of the last question asked, and I trust that, honorable senators will in future bear in mind the necessity for complying with the Standing Orders.
American Army First-Aid Kits
– Can the Minister for Supply and Development say - 3. Whether it is a fact that United States. Army first-aid kits which are sold by the Commonwealth Disposals Commission each contain three ampoules of morphia drugs ? 2. What number of such kits have been sold,, and in what lots or quantities?- 3. What number, of kits are still on hand awaiting sale: 4. Whether the. sale’ of such kits provides morphia addicts and others who are not legally entitled to obtain possession of the drug with an opportunity to purchase substantial quantities of it ?
– From my knowledge of the administration of the Commonwealth Disposals Commission, 1 should be greatly surprised if parcels containing morphia or other dangerous drugs’ are on sale in unlimited quantities. However,. I shall make inquiries from the commission and inform the honorable senator of the result.
– Can the Minister representing the Minister in charge of the Council for Scientific and Industrial Research supply any information regarding the proposal to establish a research station of ‘the Council for Scientific and Industrial Research at Kojonup, in Western Australia, for the conduct of. investigations of infertility in sheep and other problems of the industry?
– As the honorable senator was good enough to intimate to me that he intended to ask this question, I communicated with the Minister in charge of the Council for Scientific and Industrial Research, who has supplied the following information: -
Kojonup, in’ Western Australia, is the site of a new research station being established by the Council, for Scientific and Industrial Research.
The .6,000 acre property “ Glenlossie “ has just been purchased as a field station for investigations of problems of the sheep industry; with initial emphasis on sheep infertility. This disease causes serious losses in Western Australia, especially in areas where sheep are grazed on pastures composed almost wholly of clover. Recently the disease has appeared in other States, and the council is making a national attack on the problem.
The new station includes areas of top-dressed clover as well as natural unimproved pastures, thus fitting it particularly well for a thorough investigation of all aspects of the causes of the disease. Attention will be given to developing methods of pasture management providing an optimum balance, between clover and grass in the pasture.
Opportunity will be taken as soon as possible to, extend the work of the station to cover general pasture improvement studies and related agricultural and- animal husbandry research- of interest to the southern section of Western Australia-.
Sena Dor BEERWORTH. - Is the Minister for Shipping and Fuel aware that the South Australian Government, which, during the war, reduced the fee for registration of motor vehicles because of reduced opportunities to use private vehicles during the war, ‘has now increased the fee to the pre-war charge? Can the Australian Government do anything to assist motorists in this matter?
– The matter mentioned by the honorable senator is entirely, one for the Government of South Australia. During the war a reduction of the amount of the registration fee was made by some State governments, and [ understand that where the consumption of petrol was less than 25 gallons a month the registration fee was reduced by approximately 25 per cent. I believe that that concession still obtains in Victoria, although I do not know the position in other States. I repeat that any increase of the charge is a matter solely to be determined by State governments.
– Can the Minister representing the Minister for Commerce and Agriculture say whether the Government has decided to guarantee a fixed price for oats to cover this year’s harvest? If so, will the Minister outline the details of the scheme?
– I shall bring the honorable senator’s question to the notice of the Minister for Commerce and Agriculture and obtain an answer for him to-morrow.
– Oan the Minister representing the Minister for Commerce and Agriculture inform me what quantity of f.a.q. wheat of last year’s crop still remains unsold? Does the Government expect any such wheat to be cleared before the next crop is harvested?
– I shall bring die honorable senator’s question to the notice of the Minister for Commerce and Agriculture and. I expect that I shall be able to obtain an answer for him tomorrow.
– On the 10th November, Senator Nash asked me a question concerning the supply of whit,sPirit and methylated spirit for use in Western Australia. In reply I informed the honorable senator that I was nol aware of any shortage of such spirits, but if he would be good enough to give mespecific instances I would have immediateinquiries made. Senator Nash accordingly furnished me with an extract from a letter addressed, to Senator Lamp from Mr. George Lyons, of North Perth, and I am now in a position to inform the honorablesenator that an application has been received for the shipment of SOO drums of methylated spirit and 200 drums of white spirit. The Australian Shipping Boardis making arrangements to provide shipping for the full quantity by the vessel River Burnett, which should leaveSydney not later than the 26th November and arrive at Fremantle by the first week in December.
– Can theMinister representing the Minister for Works and Housing supply answers to the following questions: - 1. “What was the target set by the Government for completion of homes in Australia during 1947-48 and was that target reached?
– The honorable senator was good enough to inform me that he proposed to ask certain questions on this subject. I have conferred with, the Minister for Works and Housing, who has supplied the following information :-
– by leave - On the 11th November, I informed the Senate that I would make a statement concerning the matter of taxation and social services raised by Senator Sandford. In his remarks the honorable senator referred to a statement that appeared in the Melbourne Herald on the 10th November which purported to show that a shift worker with a, wife and three children has to pay £34 16s. social services contribution on an income of £500 a year, whilst a taxpayer who has a family of similar size to maintain on an income of £400 a year has to pay only £4 6s. I have had the statement investigated, and I am now able to inform the Senate that the statement is correct insofar as it affects a taxpayer with a wife and three children who receive an income of £400 is required, as from the 1st July, to pay £4 6s. However, the tax which a taxpayer who receives an income of £500 a year is required to pay is grossly overstated. The amount actually payable on an income of £500 is, at comparable rates, only £161s., which is less than one-half of the amount stated in the Herald. The rate of contribution, spread over the entire income of £500, amounts to approximately only 8d. in the £1 for a married contributor with three children.
It is not out of place to compare the present position with the combined Commonwealth and State taxes payable for the financial year 1938-39, that is, the last pre-war year. Although the taxes imposed in Victoria in the relevant income range were the lowest of those in any State, a man with a wife and three children in that State was required to pay over £5 on an income of £400 a year, and over £10 on an income of £500 a year. At present, he pays less on an income of £400 a year than he did for 1938-39. If his current income is £500 a year, he will pay only about £6 more than he did for 1938-39, notwithstanding the increased commitments of the Government, arising out of the war, and the vast expansion of social services. In the field of social services I need only mention the matter of child endowment to demonstrate how the position tion of a three-child family has improved since 1938-39. After the recent budget proposals have been implemented, the, endowment, which was introduced during the war, will be raised to £52 per annum for a. three-child family. In respect of such a man receiving an income of £500 a year, the endowment payable will exceed his social services contribution by about £36 a year.
– Is the Minister for Health aware that it is possible that the Toosey Memorial Hospital at Longford, Tasmania, may close, owing to its precarious financial position. “Will the Minister confer with the Government of Tasmania and consider whether the Australian Government, or the Government of that State, should purchase this hospital and convert it into a community hospital for the benefit of the residents of Longford and the surrounding districts? I point out that this hospital was erected as a memorial hospital to the men of the 1st Australian Imperial Force.
– I am not aware that the Toosey Memorial Hospital may have to close down because of the state of its finances. In view of the acute shortage of hospital accommodation available in Tasmania, it would indeed be a calamity if that course should become necessary. It is not, at present, within the province of the Commonwealth to embark directly in the hospital field ; primarily, that is a matter for the Tasmanian Government. In a bill that will be introduced into this chamber either late this week, or early next week, power will be sought for the Commonwealth to embark more actively in the hospital field, particularly in assisting and supplementing the efforts of the States. If, as suggested by the honorable senator, there is a danger that that hospital will be compelled to close if financial assistance is not soon forthcoming, I shall be pleased to confer with a representative of the Tasmanian Govt nun eni; to see what can be done, either by State action, or combined Common.wealth and State action, to assist the hospital authorities to overcome their financial difficulties.
– “Will the Minister representing the Minister for Post-war Reconstruction outline briefly the provision that has been made by the Commonwealth for the settlement of exservicemen on the land in South Australia, and the present position in connexion with those provisions? I point out that frequently, conflicting and even misleading statements have been made in South Australia in connexion with this matter.
– - Thanks to the courtesy of the honorable senator, I was afforded a preview of his question, and was thereby enabled to refer the matter to the Minister for Post-war Reconstruction, who has supplied me with the following statement in answer to the matter raised by the honorable senator : -
There are two schemes operating in South Australia for the settlement of ex-servicemen nil the land. The first is the war service land settlement scheme, which is the subject “f an agreement between the Commonwealth and the State. This scheme is administered hy the State on behalf of Hie Commonwealth. Under this scheme, the Commonwealth provides, the funds for the acquisition, development and improvement of land which the Commonwealth and the State agree is suitable for settlement. The selection of the land for consideration by the Commonwealth is the responsibility of the State, as is the classification of applicants for settlement and their selection for the blocks as they are made available. The Commonwealth also provide? the funds for the making of advances to settlers for working capital, stock, plant and equipment, and for paying for effecting improvements to their holdings. The Commonwealth also meets the cost of various benefit? and concessions granted to settlers in the first year after allotment of their holdings, namely, a living allowance up to £5 15s. per week according to the conjugal condition of the settler, and the cost of rent and interest due in the first year which are remitted to the settler.
To the 31st October, 194S, the Commonwealth had approved of the acquisition of 350,000 acres of land for development in South Australia, with a view to settlement of ex servicemen. This acreage included about 12,000 acres for development as an irrigation settlement at Loxton, and the remainder consisted of areas to lie developed to pasture in the south-cast of South Australia, the Eyre Peninsula and Kangaroo Island. Practically the whole of the acreage approved in South Australia will require” development before settlers are established on their holdings, and this work will take several years to complete.
The total amount of funds made available by the Commonwealth to the State under the war service land settlement scheme in South Australia to the 31st October. 1948, va> £l,0SG.O00, of which £1,114,000 was for aquisition of land. £830,000 for the develop ment and improvement of lands, and £32,000 for the making of advances to settlers, while £4,000 has been paid to settlers for living allowances. To the 31st October, 1948, the State had classified 2,062 applicants as suitable for settlement for the following types of farming: Dry lands, 1,910. and irrigation lands, 752. It is not possible, at this stage, to say whether all those classified as suitable foi settlement will apply for holdings as they become available, or whether the number of holdings likely to be made available will be sufficient to meet all demands for settlement, as it is not possible to indicate the maximum number of settlement opportunities which will be available in the State. It is essential to point out that the Commonwealth and the State have agreed, as a basic principle, that the number settled on the land will be determined primarily by opportunities for settlement and not by the number of applicants.
The second scheme operating in South Australia is the re-establishment loans scheme under the Commonwealth Re-establishment and Employment Act 1945. The loan, in any one case, is limited to £1.000 and is supplemented by the payment to eligible ex-servicemen of an allowance up to £5 Hoa. per week, according to the conjugal condition of the settler and the income from his agricultural occupation during the first year of engagement in that occupation. This scheme is administered in South Australia by the State Bank on behalf of the Commonwealth. To the 31st October. 1948. 820 loans had been approved for an amount of £609.000, of which £427.000 had actually been taken up by the borrowers. To the same date, 1,233 allowances had been approved and the amount expended on these allowances was £199.000. Thus, the total amount actually expended by the Commonwealth in the State of South Australia to the list October, 1948, in respect of the two schemes for the settlement of ex-servicemen on the land was approximately £2,612,000.
asked the Minister representing the Minister for Post-war Reconstruction, upon notice -
What progress has been made with soldier settlement on Flinders Island?
– The Minister for Post-war Reconstruction has supplied the following answer: -
The Commonwealth has approved two proposals submitted by the Tasmanian State authority for the settlement of ex-servicemen of Flinders Island under the war service land settlement scheme, namely: - (1) The “Bootjack “ area of 1,730 acres, situated in the south-west portion of the island; (2) “Arthur River Estuary “ of 1,972 acres, situated in the extreme north of the island. The Arthur River Estuary area is considered suitable for the production of fat Iambs, but as there has been no demand for this type of settlement on the island the State authority has taken no action to acquire the property, and, I understand, does not intend to do so unless the demand from settlers warrants ‘such action. The “ Bootjack “ project has been the subject of detailed investigation by the State in regard to the additional drainage necessary and the designing of necessary works which should be undertaken before clearing and development work is commenced, to enable the area to consolidate sufficiently to facilitate the use of heavy mechanical equipment. Pasture experiments have also been initiated to evolve the ‘best technique for satisfactory pasture establishment for dairyfarming on this area: A select parliamentary committee has Been inquiring into matters relating to Flinders Island, including the “Bootjack “ proposal, and the committee’s report was released recently. I have not seen the report, but understand that the State land settlement authority is awaiting a Cabinet decision
– On the 28th October, during the debate on the Defence Estimates, I based certain criticism of the efficiency of the Chief of Air Staff upon a report of a press interview. The report was headed, “ No Pearl Harbour Here “. Since making that criticism, I have had an opportunity to read the transcript of the interview and am convinced thai the report was somewhat inadequate and that my ensuing criticism was nol justified in the light of the complete record of the interview. I should like to place that .fact on record.
– Is the Minister for Health aware that the Director of Public Health in Tasmania has announced that a State-wide immunization campaign, using a new combined diphtheria and whooping cough vaccine which reduces the number of injections needed from seven to three, is to be instituted and carried out through municipal councils, city councils and schools? The scheme is not compulsory, but the Director has urged that it should be generally accepted. “Will the Minister take whatever measures are deemed by him to be necessary to encourage other States to follow that splendid lead of the Tasmanian Department of Health? For the sake of children, I hope that the opportunity offered to the people by the department will have widespread and willing acceptance.
– Dealing with the final question first, I point out that not long ago I announced to the Senate that the Commonwealth Department of Health was prepared to make whooping cough vaccine and diphtheria vaccine available free of charge- to all State governments so that mass immunizations could be undertaken. Therefore, the Commonwealth has already done all that it can do to encourage the .States to take action in those fields. I was not previously aware of the announcement that has been made by the Director of Public Health in Tasmania, but I am pleased to know that that State is to undertake a campaign against whooping cough and diph- theria. I pause for a moment to discuss the announcement that a combined vaccine is to be used, reducing the number of injections required from seven to three. I readily acknowledge the desirability of reducing as much as possible the number of injections to which individuals, particularly young children, should be subjected. However, there is some division of expert opinion about the wisdom of using the combined vaccine. I understand that the most suitable age for immunization against whooping cough is five months, whereas the best age for immunization against diphtheria is from twelve months onwards. In view of the disparity between those two age groups a combination of vaccines obviously can- not suit all classes of patients. Another difficulty is that, although experts of the Commonwealth Serum Laboratories are concerned with the manufacture of vaccine, the mildest batches that they have been able to produce hitherto cause some objectionable reactions of either a local or a general nature. The reactions are not serious, of course, but the experts are somewhat diffident about them because of the fear that they may influence people not to submit to the necessary immunization against diphtheria. The Department of Health and the Commonwealth Serum Laboratories at Royal Park are carrying out a great deal of research in relation to the manufacture of the combined vaccine with a view to eliminating those elements that cause adverse reactions. The serum laboratories have the most expert staffs available for investigations of that kind. One of the experts is Dr. Keogh, a scientist who is well known throughout the world for hiswork in the field of biological products, bacteria and so forth. I am pleased to hear from Senator O’Byrne that my own State is one of the first to embark upon immunization campaigns against both diphtheria and whooping cough.
Senator SHEEHAN (through Senator
Sandford) asked the Minister representing the Minister for the Interior, upon notice -
In order to provide more adequate railway facilities for persons desiring to travel to and from Canberra, via Albury, will the Minister make the necessary representations to have restored the passenger train service between Albury and Canberra on Wednesday nights and between Canberra and Albury on Thursday nights?
– The Minister for the Interior has supplied the following answer to the honorable senator’s question : -
Representations will be made to the New South Wales authorities.
asked the Minister representing the Minister for the Interior, upon notice -
What provision is being made to build,or secure, government offices and Federal Members’ Rooms in Hobart and Launceston?
– The Minister for the Interior has supplied the following answer to the honorable senator’s question : -
In Hobart a site has recently been acquired in Collins and Argyle streets on which it is intended to erect as soon as practicable a block of Commonwealth offices in which provision will be made for the accommodation of federal members. In Launceston accommodation for Commonwealth departments and federal members will be provided in a new postal building to be elected on Commonwealth land adjacent to the General Post Office.
asked the Minister representing the Minister for Civil Aviation, upon notice -
What amount of money is owingto the Commonwealth Government by the private airline companies of Australia as fees for the use of aerodromes, navigation aids, &c?
– The Minister for Civil Aviation has supplied the f ollowing answer to the honorable senator’s question : -
The amount owing to the Commonwealth Government by the private airline companies of Australia in respect of air route charges is £1 81,200 in respect of accounts rendered to date. The Commonwealth has issued High Court writs against certain companies for the recovery of such charges.
asked the Minister representing the Treasurer, upon notice -
Will the Government give favorable consideration to allowing sums of money expended on decorations in honour of the visit to Australia of Their Majesties The King and Queen and the Princess Margaret as deductible amounts from income tax assessments?
– The Treasurer has supplied the following answer to the honorable senator’s question : -
The question asked by the honorable senator has been under consideration by the Government previously on representationsby the honorable member for Perth and by the Premier of Western Australia. The Income Tax Assessment Act provides for the allowance of a deduction in respect of expenditure incurred in gaining or producing assessable income, or necessarily incurred in carrying on a business for the purpose of gaining or producing such income, provided that the expenditure is not of a capital, domestic or private nature. Therefore, expenditure incurred by business people in decorating their business premises for the Royal visit will qualify for deduction under this provision unless it represents expenditure of a capital nature. This question, of course, would tie a question of fact to be determined according to the circumstances of each individual case. Expenditure incurred, however, in the decoration of private premises, for example, a private residence, could not be claimed to be incurred in gaining or producing assessable income, or in carrying on a business tor the purpose of gaining or producing such income, and would therefore not be allowable. An amendment of the law to make private expenditure of this nature deductible for income tax purposes is not contemplated.
asked the Minister representing the Treasurer, upon notice -
– The Treasurer has supplied the following answers: -
asked the Leader of the ‘Senate, upon notice -
In view of the fact that Whyalla is now being excluded from the Royal Visit, will the Government consider making transport available between Whyalla and Port Pirie to enable the residents of Whyalla, especially school children, to have the opportunity of seeing Their Majesties?
– The answer to the honorable senator’s question is as follows : -
The question is one for consideration by the State Government authorities who are responsible for the Royal Tour arrangements in South Australia. I shall ask the Prime Minister to bring the honorable senator’s request under the notice of the Minister in charge of the Royal Visit in South Australia.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motion ‘by Senator Armstrong) read a first time.
– I move -
That the bill be now read a second time.
The purpose of this bill is to obtain parliamentary approval for further advances to the States of capital funds totalling £14,000,000 in accordance with the provisions of the Commonwealth and State Housing Agreement Act 1945. From the commencement of the agreement to the 30th June, 1948, advances totalling £31,115,000 were made to the States. During the same period, parliamentary appropriations amounting to £38,000,000 were approved leaving a balance of £6,885,000 available towards the current year’s expenditure. In August last, the Loan Council approved of a works programme which included £14,130,000 for rental houses under the housing agreement. The provision of £14,000,000 will cover expenditure to the end of the current financial year, and, in addition, enable the building programme to continue in the early months of 1949-50. From the inception of the Commonwealth and State Housing Agreement, in April, 1944, 25,361 dwellings were commenced in the five States operating under the scheme up to the end of June, 1948. Of this total, 15.271 dwellings were completed and 10,090 were under construction at the 30th June, 1948.
More than 25 per cent, of agreement housing is being carried out in country areas, in which nearly 4,000 houses hari been completed and over 2,800 were under construction at the 30th June, 1948. At the same date, 11,304 houses had been completed and 7,261 were under construction in the capital cities. Allocation of houses to tenants by the State housing authorities has been subject to the provision that at least 50 per cent, of tenants shall be ex-servicemen. Each State has adhered to this provision and, in practice, the average proportion in the five States has been over 60 per cent.
The main aim of the agreement is the provision of good standard housing for the lower income groups. A feature of the rental arrangements is the system of rebates, the basic principle of which is that families whose income equals the basic wage need not pay more than onefifth of that income in rent, regardless of the economic rent of the dwelling. As the family income rises above, or falls below the basic wage, the rebate diminishes or increases. The total amount of rental rebates granted to tenants from the inception of the scheme to the 30th June, 1948, was £87,098. Although the agreement is primarily intended to make provision for rental housing, it is also provided in the agreement that the houses may be sold subject to certain conditions, and negotiations with the States to settle the administrative procedure in this connexion are now in train.
Debate (on motion by Senator O’Sullivan) adjourned.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motionby Senator Courtice) read a first time.
.- I move-
That the bill be now read a second time.
The purpose of this bill is to provide that, as from the date of the next general elections, the people of the Australian Capital Territory, which, of course, in cludes the Commonwealth Territory at Jervis Bay, shall be directly represented in the Parliament of the Commonwealth by a member of the House of Representatives elected from time to time by the electors of the Territory. The principle of representation in the Parliament and the right of the people of a territory to choose their representative by vote will be endorsed by all honorable senators. Section 122 of the Constitution provides that the Parliament may allow the representation of any territory of the Commonwealth in either House of the Parliament to the extent and on the terms which it thinks fit. However, there is no alternative to the direct representation of such a territory, insomuch as the Constitution does not. permit of a territory being included with a State or any part thereof for the purpose of forming an electoral division.
At present, there are approximately 9,750 electors enrolled for the Australian Capital Territory, and honorable senators will readily agree that the number will rapidly increase as a consequence of the extensive development of the Federal Capital planned to take effect within the next few years. As the result of legislation passed by the Parliament recently, Tasmania will, immediately following the next general elections, be represented in the Federal Parliament by fifteen representatives, namely, ten senators and five members of the House of Representatives. The number of electors now enrolled for Tasmania is approximately 158,000, and assuming that the number rises to 165,000 by the end of 1949, Tasmania will have in the next Parliament, including both the Senate and House of Representatives, one representative for each 11,000 of its electors.
It may be claimed that the population of the Australian Capital Territory is not yet equal to that of a normal federal division. The absolue equality of vote value is an academic ideal that never has been and never can be realized exactly. Such a quality is secondary to the fundamental principle that every substantial section of the people should have some representation. The Australian Capital Territory is a distinct community and the Constitution recognizes that the smaller States, being distinct communities, are entitled to a minimum of five representatives, regardless of their population. The power given to the Parliament to allow representation of a territory is coupled with a duty to exercise it as soon as circumstances warrant such action. It is confidently expected that before long the number pf electors in the Australian Capital Territory will reach at least 11,000, and, therefore, on the basis of comparison with the State of Tasmania alone, it is considered that it would be most unfair to continue to deny to the electors of the Territory the right to choose a parliamentary representative who could directly voice their views and air any grievances they may have.
However, because the number of the electors resident in the Australian Capital Territory falls far short of the average number of electors represented by members of the House of Representatives for the States, the bill provides that, as in the case of the Northern Territory, the member for the Australian Capital Territory will not be entitled to vote in the House except on a motion for the disallowance of any ordinance of the Territory and on any amendment of any such motion. The bill further provides, in terms similar to those contained in the Northern Territory Representation Act, that the member for the Australian Capital Territory shall not be included in the count for the purposes of determining a quorum ; that he shall not be capable of being chosen as, or of performing the duties of, the Speaker or the Chairman of Committees of the House; and that he shall not be counted for the purpose of determining an absolute majority in the event of a joint sitting of the members of the Senate and House of Representatives or in connexion with any proposed law for the alteration of the Constitution. The qualifications of a member representing the Australian Capital Territory as set out in the bill are precisely those of a member for an electoral division of a State and, except for the specific limitations to which I have already referred, the member elected for the Territory shall have the same powers, immunities and privileges as have other members of the House of Representatives.
Debate (on motion by Senator O’Sullivan) adjourned.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motion by Senator Ashley) read a first time.
.- I move-
That the bill bc now read a second time.
This bill seeks to appropriate £10,000,000 for a grant to the’ United Kingdom Government. In my statement on the 194S-49 budget which I delivered in the Senate on the 8th September, ] outlined briefly the considerations which led up to the Government’s decision to seek the approval of the Parliament to make this gift and referred to the trade and payments difficulties which have hampered European economic recovery. The most obvious of these difficulties has been the dollar shortage. War-devastated Europe has needed vast quantities of goods of all kinds from the United States of America and other dollar countries for economic reconstruction. It has been quite beyond the capacity of the European countries to meet from their own dollar earnings the dollar cost of this vast flow of supplies and, since the war ended, the United States of America has given aid to Europe on a generous scale. Through Unrra, and in other ways, the United States of America has provided large dollar grants, and these have been supplemented by substantial credits.
Through the European recovery programme launched on the initiative of the United States Government, large-scale American aid is being continued as a pari of a general scheme directed towards enabling the participating European countries to achieve over a four-year period a position in which they will be able to maintain their own economies at a reasonable level without extraordinary outside assistance. Funds totalling 4,8’7o,000,000 dollars have been made available by the United States of America to cover the essential dollar needs of the participating countries during the first year of the Marshall aid programme. In this way, the European countries concerned have been enabled to proceed with their economic recovery programmes with the assurance that means existed for financing their minimum requirements of dollar imports. The dollar shortage is, however, only one aspect of the currency difficulties with which Europe is confronted. There is also a sterling shortage. Trade between the European countries themselves has been obstructed because of payments difficulties, which have been only partly met by the various intra-European trade and payments arrangements which have been negotiated *ince the war ended. The most important of these difficulties is the critical shortage of sterling with which many of the European countries are faced.
I mentioned in my statement on the budget that discussions with which we had been kept closely in touch had been proceeding in Paris and elsewhere between representatives of the United States, the United Kingdom and the participating European countries on both the allocation of dollar aid and the intra-European payments problem. Agreement has since been reached in Paris between the participating countries of the Organization for European Economic Co-operation on both issues. The proposed division of aid, together with the European recovery programme of each country concerned, based on the agreed amount of dollar aid it should be given, has been passed on to the Economic Co-operation Administrator in Washington for his approval and action. On the 16th October, an agreement for intra-European payments and compensations was signed in Paris, Its aim is to provide both the necessary funds and a payments mechanism to keep trade moving at as high a level as possible among the Organization foi European Economic Co-operation countries and the monetary areas of which they form the centre, during the year 194S-49.
Agreed estimates were drawn up as to the likely net creditor and debtor positions of the participating countries ns-a-via each other, resulting from their current transactions during 1948-49. Grants of local currency are to be made available to the debtor countries by the creditors to cover the likely deficits of the former, provided certain conditions are fulfilled. Certain trade rules were also agreed by the Organization for European Economic Co-operation. They are designed to bring about & gradual correction of the debtor-creditor gap by an expansion of the exports of debtors to creditors and by promoting their recovery through the supply of essential goods. It was estimated that the net surplus of the sterling area as a whole, for which the United Kingdom is responsible in this context, with the non-sterling participating countries, was likely to amount to about £123,000,000 sterling in 194S-49. To meet this the United Kingdom has agreed to make net grants of just over £70,000,000 sterling to debtor countries, and to allow a further £52,000,000 sterling to be withdrawn from the existing sterling balances of these countries. These balances have hitherto been “ frozen “ This contribution of sterling is necessary to keep the trade of the sterling area as a whole flowing with the Organization for European Economic Co-operation non-sterling countries.
Under the division of dollar aid recommended by the Organization for European Economic Co-operation the United Kingdom will receive a dollar allocation in the form of grants or credits of 1,263,000 dollars from the Economic Co-operation Arbitrator, a larger amount than that allocated to any other country. This provisional dollar allocation to the United Kingdom will not of itself permit of any improvement in the consumption standards of the British people. However, the large sterling contribution which the United Kingdom has agreed to make will represent a further call on its resources. Australia’s interests in this matter are clear. Our exports of wool, grain, metals and other products to the European countries .participating in the European recovery programme in 1947-4S totalled £A.88,S00,000, and our favorable trade balance with these countries was £A.63,700,000. If no solution of the sterling difficulties of the countries concerned had been found, a large part of this trade would inevitably have been imperilled. The countries concerned could not have continued buying from us on the previous scale. We, therefore, stand to gain in a very direct and immediate way from the sterling contribution by the United Kingdom. Moreover, this latest contribution by the United Kingdom follows the substantial aid which it has already given to European recovery. Its contribution began even before hostilities ceased and has been second only to that of the United States. Urgently needed food, medical supplies and clothing were shipped to Europe by the United Kingdom in the wake of the liberating armies. Its contribution to Unrra totalled £stg.l55,000,000, and it has spent an additional £stg.l30,000,000 in maintaining refugees and displaced persons. It has spent about £stg.240,000,000 on the non-military costs of the occupation of Germany and Austria. Other forms of British postliberation aid to Europe, including grants and credits, have been estimated at £stg.393,000,000. Those contributions, made at a time when Britain was itself suffering from the effects of war and could ill-afford the cost, need to be taken into account in assessing the significance of the further financial burdens which the United Kingdom Government has agreed to shoulder in the cause of European economic recovery.
Australia’s interest in the post-war recovery of the United Kingdom and of Europe has, of course, already been recognized by the Government in a practical way. Apart from the £A.25,000,000 gift to the United Kingdom made last year, Australia has contributed other substantial sums to assist^ in the post-war relief and rehabilitation of Europe. Australia was the fourth largest contributor to Unrra. The total Australian aid to Unrra programmes was £A.24,000,000. A large proportion of that amount was given in the form of raw wool, and those free shipments of wool did much to assist in replenishing the depleted stocks of European wool processors. Since Unrra was terminated, Australia has approved a post-Unrra relief programme totalling about £A..6,000,000. Of this amount more than £A.1,000,000 will be supplied in the form of wool to be shipped without charge under special agreements to the European countries which need it most. The wool is being shipped to countries nominated by the United Nations Secretariat. The balance of the post-Unrra relief fund will be used largely to support internationally sponsored programmes of aid to Europe, such as the International Children’s Emergency Fund and the International Refugee Organization. Australia is at present the second largest contributor to the International Children’s Emergency Fund and the third largest to the International Refugee Organization. Apart from those Government contributions, the Australian public has responded generously to voluntary appeals, such as the Food for Britain Fund and the United Nations Appeal for the International Children’s Emergency Fund. The volume of food parcels privately despatched by Australians to Britain and other countries has also been maintained at a high level. In relation to our resources, the- contributions Australia has made, and is continuing to make, to European recovery are substantial. Nevertheless, I am sure that all honorable senators will support the Government’s decision to make a further gift to the United Kingdom commensurate with our resources, in support of what it has done and is continuing to do, despite Great. Britain’s own war-time losses, to assist the European recovery programme.
Apart from budgetary considerations. Australia’s ability to make a further grant to the United Kingdom is governed by the position of our total balance of payments and of our international reserves. In considering the position of those reserves, we must bear in mind, a* announced in the Treasurer’s budget speech, in September, 1947, that Mr. Attlee, the British Prime Minister, hainformed us that we can help most with the United Kingdom sterling balancesproblem if we accept as a broad objective the obligation to live within our external income. If it should become necessary to restrict imports from all sources, the United Kingdom Government would prefer that we imposed such restriction? rather than call on the London funds which we had accumulated up to the 30th
June, 1947. Furthermore, much of the increase of London funds which has taken place since June, 1947, is only temporary. During the past year, there has been a strong tendency for payments for British exports to Australia to be accelerated and for the payment of imports into Australia to be deferred. That procedure will be reversed in due course. Finally, we must ensure that Australia shall maintain, as far as possible, adequate liquid reserves to meet the possibilities of adverse seasons or a fall in export prices. Before the decision was reached, the United Kingdom Government was fully consulted, and, after the Treasurer announced the
Government’s intention to make the grant, he received a telegram from Mr. Attlee in the following terms: -
T learn with deep gratitude of the renewed proof of Australia’s generosity and farsightedness given by your proposal to make a grant of £10,000,000 to this country. At the present time, when the needs of Europe are so pressing, this contribution towards the means available for her reconstruction is a great symbol of the spirit of common endeavour and an encouragement to us all to believe that, by the exorcise of that spirit, we <hall succeed in our task.
I am sure all honorable senators will approve the bill, not only because of the practical assistance that it will afford to the United Kingdom at this time, but also as an expression of our goodwill and of our confidence in the ability of the British people to overcome the many difficulties with which they are confronted in this post-war period.
Debate (on motion by Senator O’Sullivan) adjourned.
Debate resumed from the 10th November (vide page 2695), on motion by Senator Ashley -
That the bill be now read a second time.
– If consideration of any matter should be approached by honorable senators from a non-party stand-point it is the subject of taxation. We all appreciate that any government, regardless of its political complexion, must have money to carry on the administration. We also appreciate that taxation is unpopular, irrespective of the political party which happens to occupy the treasury bench, and for that reason I suggest that honorable senators of all political parties should get together to discover some painless method of extracting taxes.
– Is there any painless method ?
– Whilst I am not aware of any method that is entirely painless, 1 know that some methods are more painful than are others. I shall refer to that consideration later, because I consider that the Government has not even attempted to use an anaesthetic to effect its extractions from the people. Most people realize that the Government must have money to discharge its functions, and they do not object to paying what they consider a reasonable amount, although, admittedly, in their opinion, no amount is ever regarded as reasonable. As I have said, taxation is not popular and never has been popular, but when the Opposition parties occupy the treasury bench next year they will require money to administer the affairs of government and we are certainly being shown new ways and means of collecting money by the present Government. However, when we are in power we hope .to collect taxes in a less painful and more considerate manner.
I agree that the present Income Tax Assessment Act leaves much to be desired, particularly in regard to the assessment of the income of members of private companies. The present act contains a number of anomalies and inflicts some injustices on taxpayers, but it is unfortunate that the present measure should have been introduced so hastily. The provisions of the bill affect not only the Government but also the people, Because of the complex nature of the matters with which it deals, the measure before being introduced into the Parliament should have been reviewed by experts skilled in the complexities of taxation law and procedure so that an equitable method of taxation could have been devised. The collection of taxes on an equitable basis has created difficulties not only in Australia but also in all other civilized countries, and many practical difficulties have to be overcome. I admit that the representatives of the Sydney Chamber of Commerce, the Associated Chambers of Manufactures, the Institute of Chartered Accountants in Australia and other bodies who interviewed the Treasurer were given a most courteous reception. However, in the result it appears that very little heed was paid to their recommendations. I consider that the reports and recommendations prepared by those bodies, whose members are skilled in the application of the taxation laws, should have been laid before the Parliament for consideration. In saying that I have in mind that next year the Opposition parties will occupy the treasury bench and will have the responsibility of collecting taxes.
A lot of loose talk is indulged in by some people who have not a sound grasp of the incidence and the implications of heavy taxes. Such phrases as “ The burden should fall heaviest on the shoulders of the strongest”, and “it is not what you pay in taxes but what you have left after you pay the taxes that matters are quite misleading. Like other . platitudinous generalities, they contain some sound principles, but a literal application of those maxims contains serious dangers. If incentive is destroyed and the wells from which taxes are paid become dry, or earners of substantial incomes find that the incidence of heavy taxes does not leave them sufficient money to warrant a continuance of the risks and exertions involved in making those incomes, the whole community will suffer.
– Large profits are still being made by many companies.
– The remark of Senator Nash is typical of the loose generalities uttered by advocates of heavy taxation. When I referred to the large incomes received by some members of the community, I was not referring to those who derive their income from real property. During the war the extraordinary anomaly arose that some people were called upon to pay more than 20s. for each £1 of . their income, and it was quite common for people to be required to pay 18s. 6d. from every £1 of income. Senator Nash apparently thinks that is an excellent idea. That was done during a state of emergency when we were fighting a war for our very existence. 3 defy any man who claims to have a full conception of the functions of government, to declare that we could, for an indefinite period, continue to tax the people at the rate of 18s. 6d. in the £1. I do not for a moment think any member of the Government thinks that we could do so.
– That is not the rat, that is imposed now.
– No. I am merely arguing the proposition. It has been said by experts such as Mr. Colin Clark, the well-known economist, that it is unsafe to extract from the taxpayer for any length of time more than 6s. in the £1 oh his earnings. The existing rates are considerably above that figure. We cannot continue to tax at a rate which, in the final analysis, has a deterring effect on private enterprise. 1 point out that the overwhelming majority of people in this country are dependent on private enterprise. If those people are to seek permanence in their employment with private enterprises, I contend that every encouragement must be given to private enterprise to expand. So long as private enterprise remains on a sound, solid, progressive footing, the security of those people who are employed in such enterprise will be guaranteed.
I agree that the incidence of taxation on private companies is a very difficult matter. Unlike Mandrake, I cannot pull a formula out of my hat and say to the Government, “Follow this, and all will be well “, but I should like to see this problem investigated by experts. I believe that at the present time 20,000 private companies are operating in Australia, compared with 7,000 public companies, and a large number of individuals and firms. Conjointly, they are responsible for the provision of a substantial amount of employment. In analysing this matter it will be found that the development of our industries, with a consequential increase of our prosperity, has been based on the gradual, sound, solid expansion and ramification? of companies, not necessarily large concerns. Many of them have grown from very small beginnings into considerable proportions. Had the rates at which private companies are to be taxed under this measure been applied to those concerns in their early days,. I venture to suggest that they could not have developed to the extent that they have. In the committee stage I hall have an opportunity to deal more fully with that aspect. I shall now mention two instances of the effect of the proposed taxation. This problem concerns the tax-gatherers in England as much as it does the taxing authorities in this country. Lord Nuffield started operations in England some years ago in a very humble way. Had he then met with crushing taxation, and had difficulties been placed in the way of his putting funds into reserve for the subsequent expansion of his business, I do not think that he could have developed into the powerful industrial figure who graces Great Britain to-day. Tn this country, an Australian named Mr. Henry Jones, who is associated with jam manufacturing and associated industries in Tasmania, commenced business in a very small way. That business grew into a very successful enterprise, which redounds great credit, not only to Mr. Henry Jones and those associated with him, but also to Australians generally. Had the heavy rates of tax in relation to private companies that are envisaged by this measure been applied to that concern in its early days it would not have been possible for it to expand into the important industrial enterprise that exists to-day.
I do not propose to go into much detail, because no doubt most honorable senators have already read the Hansard report of the able speech on this bill that was delivered in the House of. Representatives by the Leader of the Australian Country party (Mr. Fadden), who is not only a public accountant of note, but is also well versed in matters of general business finance and taxation law. The right honorable gentleman understands, completely, the difficulties and intricacies of governmental finance, and has a reputation in that field unequalled by any other member of the House of Representatives *ince it has existed in this country. Many members of the Parliament have a great .respect for the right honorable gentleman’s ability in connexion with these matters. In the course of his speech he cited several instances of the operation of the tax laws to illustrate points that he was making. I am indebted to bini for the following examples showing how the proposed legislation would operate unduly harshly. They indicate clearly the unfair anomaly created by these provisions, which will react to the detriment of private companies when this contemplated basis of assessment operates. These instances show that, by virtue of their very nature, private companies will suffer considerably. Their prospect of building up reserves for a rainy day will be very seriously hindered, as will be also their prospects of development and ultimate absorption of greater numbers of employees. The first illustration concerns the relative position where a profit of £100,000 is made.. If no dividends were paid, the income tax payable on that profit by a private company would be £76,420. If that profit were made by a public company, and a dividend was not declared, the amount of tax payable would be £41,050. In that instance, the difference in the amounts of tax payable would be over £35,000, to the prejudice of the private company.
– The honorable senator is citing a purely hypothetical case.
– Yes. I do not know of any private company making a profit of £100,000 at present, but as honorable senators will no doubt agree, when the present Opposition is elected t<-> office - as is quite likely next year - greater prosperity will attend the efforts of such enterprises. If dividends amounting to £35,000 were paid, the private company would be liable to pay taxes amounting to £50,170 compared with £37,550 by a public company. That is, the public company pays nearly £13,000 less than the private company, based on a similar dividend distribution and similar profits. If dividends amounting to £56.000 were paid out. of a profit of £100,000, the private company would be liable to pay £34,420 in taxes whilst the public company would pay £35,450. That is the stage which, the distribution of profits would have to reach in order to achieve and degree of equality between the taxes payable by public and private companies. Those illustrations refer to a profit of £100,000.
I shall now go to the other end of the scale, and assume that a company, comprising six equal shareholders, derives an income of £6,000. I shall also assume that those shareholders are “little people “, and do not receive income from any other source. I shall assume, further, that each is married, and has one child. The company would pay £1,550 in primary tax, and, to avoid undistributed profits tax, it would have to distribute £3,260 as dividends, upon which the shareholders would pay a further tax of £384, with a future lability, either as a later dividend or on liquidation. Taxes amounting to £1,934 are paid at the present juncture, and an unknown amount some time in the future. If the shareholders decided to leave the year’s profits in the business for the purpose of expansion, or to meet future contingencies, an amount of £613 would be payable as undistributed profits tax, in addition to the primary tax of £1,550, making a total of £2,163. If, instead of incorporating as a private company, the six parties carried on the business as a partnership, with all the consequential disabilities as to the
Stability of business, each partner would pay personal tax on his share of the income amounting to £171, or £1,026 for that group of six partners. If the example is taken further, by assuming that there are twelve partners instead of six partners-
– The honorable senator is now getting away from the realm of a private company.
– Even under the law as it is proposed to be amended, there will be nothing to prevent a group of up to twenty persons from operating as a private company. So long as there will not be more than twenty shareholders, regardless of the number of people in control of the business, the concern will be regarded as a private company for the purposes of income tax assessments. Previously, the control of a private company had to be vested in the hands of seven or fewer persons. In an attempt to bring those- concerns into closer alinement with partnerships, the number of shareholders is limited to twenty. If there are to btmore than’ that number of partners, the concern must be formed into a company. The number cannot rise beyond twenty, because then it would no longer be a lawful partnership. However, the analogy is clear as long as I keep the number within that limit. As an example, let us assume that twelve persons, instead of six, group themselves together to earn an income of £6,000. The discrimination is even more marked in this instance. The partners will pay an aggregate of £431. The company and the shareholders, if dividends of £3,260 are distributed, will pay £1,283. If no dividends are distributed, the company will pay £1,534. Thus, the private company will be unfavorably treated whatever it does. In some respects, it is to be taxed more severely than a public company, particularly because of the discriminatory punitive levy on its reserve allocations. In other respects, it is to he taxed more harshly than partnerships or private traders, because, unlike them, it will have to meet ordinary company taxes at property rates instead of the lower personal exertion rates and will derive no benefitfrom concessional rebates.
I shall be delighted if the Minister can show in his reply that the fears which I entertain are unfounded. However, that is how I interpret the bill in its present form. It is full of anomalies, and, although I think that it will improve the existing law in some respects, there is still room for substantial improvement. In my humble opinion, that scope for improvement can be fully appreciated by us only as the result of a thorough independent investigation of the whole vexed matter of taxation by experts. Before World 1 War II., private companies in recognized production and trading were allowed to set aside one- third of their distributable income-
– The gentleman whom the honorable senator described as being very efficient in taxation matters put ‘an end to that, did he not?
– The Minister is very unfair. Perhaps he does not know, as most of us do, that between
L939 and 1945 Australia was engaged in a war and that in 1940, when things were very difficult, certain amendments were made to the taxation law as a war measure. There is no reason why measures which were introduced for the purpose of meeting a crisis which threatened to overwhelm the country should be perpetuated in what has been described, most falsely, of course, as the golden age. If our golden age is to be hemmed in by emergency measures which were introduced in the direst days of war, it will be an age of tinsel and brass, as the people are beginning to find out. Events at Geelong, in Victoria, only a few days ago indicated an awakening of the people.
As I was saying, private companies in recognized production and trading were allowed to set aside the one-third of their distributable income without incurring liability for undistributed profits tax. The proposal now is to allow only . 30 per cent, of the first £2,000 to be set aside. The proportion will be reduced to 15 per cent, beyond £20,000 and to 12 per cent, beyond £40,000. But full rates of tax will be charged when the profits are distributed. That is entirely out of alinement with the legitimate requirements of companies, because present costs of replacement of plant, machinery and general equipment are considerably higher than the small amount allowed as a proportion of initial costs. It appears to me that a factual approach has not been made to the problem of allowing private companies the wherewithal to build up funds from which their new commitments for replacements may be met. I conclude my initial remarks on the measure by referring to an extract from a report by the Taxation Standing Committee of Queensland. The committee has given thorough consideration to these matters, and I believe that it has made representations to the Treasurer in detail. The committee’s summary of the situation, I think, echoes the sentiments of people throughout the length and breadth of the Commonwealth who have given earnest consideration to this vexed subject. The committee is representative of almost every phase of business undertaking, including employers and employees. It did not approach this subject with the object of embarrassing the Government, lt realizes that this very difficult problem requires our cooperation to the utmost degree. That is why, as we are not experts, I should like the matter to be referred to a body of experts.
– Where would the honorable senator find his experts?
– There are experts outside the Parliament and outside the Labour Government. The committee reported -
With reference to the system of private company taxation generally, the committee feels that the method of assessment as proposed in the terms of the bill is iii some respects an improvement on the most unsatisfactory provisions of the present law. At the same time we feel there will be no complete and satisfactory solution of this problem until provision is made for investigation of the matter by a royal commission with wide powers appointed for the purpose.
The committee pointed out three anomalies that are notably unjust and awkward and should receive the attention of the Government. The first is the comparatively high rate of the primary tax. Incidentally, primary tax is paid regardless of the tax which is subsequently paid by the shareholders when they receive their dividends.
– Does the honorable senator think that the shareholders should get their dividends free of tax?
– As an elementary matter of justice, and as a law against avarice, tax should not be demanded twice in respect of the same income.
Honorable senators opposite may say that. I am wrong because a company i<s an entirely different legal entity from the shareholders who comprise it. I cannot argue against that, but I am considering the money itself. If three or four of us should join together as a private company and make money by our operations as a company, the company would have to pay a primary tax on its profits which, when they were eventually divided between us as though we were partners, would be taxed again in our hands. Although, according to a strict legal interpretation, we as individuals would be separate legal entities from the company which we constituted, the profits of the company and our dividends would be identical. It would be unfair to levy a primary tax and then, without concession or allowance having been made for that tax, to levy tax again upon the same money in the hands of individual members of the company.
– Then what are undistributed profits?
– I shall deal with that later. I am not dealing with that point now, and we shall have plenty of time to discuss it at the committee stage. The second anomaly to which the Standing Taxation Committee directed attention relates to the determination of the quantum of the undistributed profits tax by reference to the amount which shareholders would have paid if there had been a distribution. That has the result that the tax is borne by the shareholders pro rata, that is, in the proportion in which they hold the company’s shares, not in the proportions in which they were responsible. The third anomaly is the inability of a company to check the assessment it is required to pay. I shall deal with those two anomalies in some detail.
Let us assume once more that four of us form a company, that one of the four receives a personal income of £5,000 independently of his income from the company, and that the other three have no independent income. The company would be taxed after taking into consideration the income of £5,000 a year drawn independently by one of the shareholders. That is grossly unfair.
– The £5,000 would noi be included in the company’s assets.
– It would have nothing to do with the company’s assets. 1 am glad that the honorable senator appreciates the injustice of the provision that the amount should be taken into account in determining the rate of tax that the company must pay on its undistributed profits.
– Show me that provision.
– It is in the bill. I can understand the honorable senator’s annoyance at the injustice of it. I notice that he is speechless about it, and rightly so. The Commissioner of Taxation would be in a position to know the outside income, if any, of all members of the company. That is proper. I do not object to it. However, the information would not be available to the individual members of the company and therefore the company could not check its own assessments properly. The determining factor in the assessment of the rate of tax would be the outside income of the men who are entitled to receive the dividends. Therefore, the company could not adequately check the accuracy or otherwise of its assessments, unless, of course, members of the company made a voluntary disclosure to its secretary of the amounts of their independent incomes. That, in my opinion, will cause a grave injustice. I realize that my protests will be of no avail because this Government is not famous for its willingness to accept amendments. In the past seven years, scores of measures containing many thousands of clauses have been passed through this Parliament; yet, only two or three amendments moved by the Opposition have been accepted, and they have, been non-contentious. In the face of that record, it is rather futile for members of the Opposition to offer suggestion* earnestly, seriously, courteously and cot)siderately
– Has the honorable senator given up hope ?
– Yes. I have lost all hope of this Government ever accepting any reasonable proposal from this side of the chamber. However, at the end of next year, when we are in power, we shall show honorable senators opposite just how a government should behave. If they come forward with a wise, constructive suggestion that has not occurred to us, we shall give it every consideration, and, if we believe it to bcworthy of incorporation in the relevant legislation we shall have it incorporated. Surely it is more than a coincidence that, in the last seven years, proposals that have been advanced by representatives of nearly half of the people of the Commonwealth in this Parliament, have been considered unworthy of incorporation in Labour’s legislation. Obviously, that is more than a coincidence. It indicate.6 that the Government has decided that. regardless of the merits of any amendment that may he moved by a member of the Opposition, it shall not be accepted. That has been the attitude of the Government for the last seven years. I say to honorable senators opposite, “ Make the most of it, for you will not be in office for very long “.
– The Deputy Leader of the Opposition (Senator O’Sullivan) has laid stress upon the incidence of taxes levied on private companies. I agree with the honorable senator th,at company taxation, is most intricate and that, in some in- stances, the company tax appears to be harsh. I was pleased to note his admission that the Prime Minister (Mr. Chifley) and other members of the Government, had received deputations courteously, had given full consideration to proposals put up by private companies, and has gone so far as to say that, when finances permitted, further consideration would be given to various phases of private company taxation, including the primary tax, the distribution of profits, the holding of reserves, and, finally the income tax imposed upon individuals associated with those companies. I remind the honorable senator however, that when the primary tax is heavy, distributed profits are lower, and, therefore, the individual shareholder finds himself in a lower income tax range. It is to people in the lower income groups,, say up to £1,000 a year, that the Government has given most consideration. The
Deputy Leader of the Opposition said that the Government could not continue to levy income tax at the rate of 18s. 6d. in the £1. The honorable senator’s information is quite out of date.- Income tax has not approached that rate in recent years. The story of the Government’s income tax reductions is most interesting, and very creditable in view of the substantial national debt that accumulated during the war. The Deputy Leader of the Opposition is always stressing that the war has finished, but the Government still has a heavy financial duty to discharge. It is providing repatriation benefits for ex-servicemen and their dependants, and, while Labour remains in office, social services generally will be maintained at a high standard. What a paradox it is that, when social services measures are before this chamber, the Deputy Leader of the Opposition appeals to the Government to be more generous than governments formed by the party of which he is a member ever contemplated being and, then, when legislation providing for the raising of funds is under consideration, he reveals himself in another role by urging that companies should not be taxed so heavily, and that they should be permitted to accumulate substantial reserves ! He admits that revenue must be obtained from somewhere. That task would confront even a government of which he was a supporter. The obvious conclusion is that should the anti-Labour forces assume office in this Parliament, they would obtain the bulk of their revenue from the man who has only his weekly pay on which to live, and cannot seek the protection of company legislation. That, of course, would be a retrograde step. Since the maximum rate of 18s. 6d. in the £1 applied to income tax, three substantial reductions have .been granted by this Government. In 1946, there was a sliding scale reduction which, in total, represented 124 per cent. The reduction ranged down to approximately 3 pei cent, on the higher incomes, and its total cost to the revenue was £20,000,000. In July, 1946, there was another reduction of £17,500,000, thus demonstrating the intention of the Government to reduce taxes as the finances of this country permitted, and to give relief to those section.of the community which most needed it. In July, 1947, a further reduction of £33,000,000 or 26 per cent. wa.» announced. Not only has income tax been reduced by £74,300,000, but also sales tax has been ‘reduced by £28,350,000. Yet. the Opposition harks back to the 1942 figures. Customs and excise duties have been reduced by £4,000,000, and estate duty by £100,000. There has also been an easing of the gift duty which, in some instances might have . operated harshly at one time. However, since pensioners have been permitted to hold property without prejudicing their pension, they are no longer obliged to give a lien on that property to the Government, as was required by previous ami-Labour governments. Gifts may be made by grateful children to parents and vice versa, and on small gifts such as small homes, furniture, &c, gift duty has been removed or eased. Previously, very often when a pensioner died his entire estate was appropriated to refund his pension payments to the Government. Relief amounting to £50,000 has been given, mainly to holders of smaller estates. The gold tax, too, has been eliminated, the value of the concession in this instance being £550,000, but the Deputy Leader of the Opposition did not mention that. Then there is the war-time company tax in respect of which concessions amounting to £3,500,000 have been granted. The total tax remissions to the Australian people amount to £110,850,000. Side by side with those reductions, of course, social services have been increased, and the fund from which they are paid is buoyant. The balance in the National “Welfare Fund, I understand, is £74,000,000. The Government ii meeting in full its commitments to exservice men and women.
Much has been said about company taxation. I concede that in some instances, small private companies have had a pretty hard row to hoe. The Deputy Leader of the Opposition said that he could not understand why a member of a company should have his income from any other company, or from a private source, taken into consideration when assessing his company tax. I recall that in Western Australia a certain private building company was floated. It paid fairly well, but its promoter thought that an associated joinery company would be a payable proposition, at least for thi time being, so he collected a few more people around him, and floated a joinery company, which provided him with an independent source of revenue. He gave the business from his building company to the joinery company, and, when he had accumulated joinery stocks, he transferred the profits from the joinery company to the building company, and liquidated the joinery company. Subsequently he re-established the joinery company. He employed a similar manoeuvre with a company formed to supply lime and sand to his building company. ‘ After the lime and sand company had paid dividends to him for some time and he had taken more out of that organization than he had ever invested in it, he transferred profits by selling lime and sand at low prices to his building company. Naturally, because of those prices, the lime and sand company was forced into liquidation without any liability on the part of its promoter or of the building company. He wound up the lime and sand company and left the shareholders to fend for themselves. 1 quote that illustration to show that when dealing with company tax we must take a wide view of the field. I do not doubt the authenticity of the illustrations given by Senator O’sullivan, but I remind him that the rates have been examined by experts and that the benefits accruing to the nation from this form of tax are better to-day than they were under any previous administration. Let us consider the tax reductions that this Government hat effected. Since the days when the maximum rate of income tax was 18s. 6d. in the £1, income earners in the low income groups have had progressive tax remissions amounting to 64 per cent.
– Yet the Govern-, ment will collect this year £35,000,000 more than it has ever collected.
– Yes, because there is full employment. Do not make any error .about that. The national income in 1946-47 was £1,265,000,000. In 1947, it was £1,571,000,000, an increase of £306,000,000, brought about by full employment. At one time many men were proud to be earning incomes that rendered them liable for income tax. Nowadays the average worker employed in a factory is not only enabling the employing organization to pay company tax. thus benefiting the finances of the nation, but also is himself earning a taxable income.’ Yet the taxation exemption is higher than it has ever been. During the twenty years that I have been associated with the Labour party, there has been a continuous fight to have the basie wage-earner exempted from tax. On many occasions, the Labour movement has urged various governments to grant this exemption, but without success. Fortunately, we have reached that stage now. In addition, the basic wage-earner with a statistical family of two and a half children, does not pay any social services tax. At the same time, of course, he is eligible for liberal social services benefits, In that way Labour is fostering the home unit. The most effective answer to communism, about which some members of the Opposition have .been howling in the Parliament but doing nothing outside it, is to maintain a state of society in which the person who contributes to the national wealth by the sweat of his brow, and to the future of the race by raising a family, shall, if he is in receipt of a low income, be exempt from taxes, and be assisted by the Government to maintain an Australian standard of living which, [ say without hesitation, is superior to that of any other country. As I was saying when Senator O’.Sullivan interjected, tax remissions to single people earning £150 a year represent 64 per cent, since the peak taxation period. To-day, a man with a wife and two children is free of income tax if he receives not more than £350 a year. The position of a taxpayer with an income of £300 a year, or, virtually the basic wage earner, is that he does not pay either social service contribution or income tax. The tax previously payable by a man with an income of £350 a year has been reduced by 87.9 per cent., and taxpayers in that category will be given still further relief. The Opposition parties want the Government to effect all reductions of tax on a flat rate basis, that is, to reduce the tax payable by a person with an income of £15,000 by the same percentage as that applicable to tax payable by persons on the lower range of income.
– - Do not talk rot.
– The Leader of the honorable senator’s party enunciated that policy at the last general elections, but the people woke up to it. A taxpayer with an income of £600 a year, who would be representative of the middle income groups, has enjoyed a reduction of tax of 67.5 per cent., whilst a person with an income of £1,000 a year has enjoyed a 54.7 per cent, reduction of tax. On the other hand, a person with an income of £15,000 has been given a reduction of only 23.3 per cent. Thus, the burden of taxation has been lifted from the lower and middle income groups. However, whilst it still rests rather heavily upon persons in the higher ranges of income they have considerably more than the basic wage on which to live after they pay tax. They have not been treated unfairly. Much of the Government’s liability arises from its policy of protecting the assets from which persons in the higher ranges of income derive their wealth, which is created as the result of the labour of persons in the lower ranges of income. The Government has given to the latter the greatest, measure of tax relief, and will continue to do so as the national economy permits. The Deputy Leader of the Opposition said that if private companies could not make greater profits there would be no employment in the community. However, to-day, all industries are screaming out for employees and company balancesheets continue to disclose increasing profits. Companies as a whole have considerably improved upon their pre-war position. The number’ of factories is greater and the output of industry, generally, has increased. This has been due mainly to the fact that the demand for goods has so greatly increased, because the Government is giving to the great mass of the workers a decent standard of living. Indeed, the trend to-day, in that respect, is the reverse of conditions which existed from 1930 up to the outbreak of the recent war. During that period persons on the lower ranges of income could not afford to buy many of the necessaries of life. At that time companies were not paying anything like the dividends they are paying to-day, because the demand for goods was not so great as it is at present. These facts are reflected in the Australian economy today. There is no unemployment, and the Government is gradually relieving the burden of taxation giving relief first to those sections of the community who are least able to pay taxes. The Deputy Leader of the Opposition had much to say about the incidence of taxation upon companies. Some companies may be harshly affected. However, 75 per cent, of tax remissions is being returned to sections of the community who must of necessity expend that money immediately on essentials, and thus it is again placed in circulation. The bulk of these remissions is being returned to pensioners, farmers and workers in industry, anc! the honest investor is getting 11 “ cut “ out of them also.
– The ho senator has had a nightmare.
– As the Deputy Leader of the Opposition is doing the “ squealing “ I should say that he has had a nightmare. This measure represents another instalment of the Governments5 policy to reduce taxation as the national economy permits.
. - in reply - The object of this measure, which applies particularly to private companies, is to spread taxation more equitably over companies as a -whole. As the Deputy Leader of the Opposition (Senator O’sullivan) has said, there are approximately 20,000 private companies in Australia. Of that number 8,000 are not affected at all by this measure because their profits are paid as remuneration directly to their principals. Of the remainder, 10,000 companies have an income up to £10,000 a year and to some degree they will benefit from this legislation, whilst a further 1,250 companies will not be affected materially. That leaves approximately 750 private companies and it is from them that the protest against this legislation has emanated. Their protest is not unexpected because under this measure they will, be obliged to pay more taxes. The object of the measure is to bring the private company into Une with partnerships and single traders. As honorable senators are aware shareholders in a public company can exercise some influence upon the policy of their company and have some say in the distribution of its profits. However, some private companies with large aggregations of capital are entirely controlled by two, or three, persons and, in some instances,, by only one person. At the same time, all private companies enjoy the advantage of limiting their liability. It cannot be conceded that those who control and operate enterprises under such conditions should be treated in the same way as are public companies.
The Deputy Leader of the Opposition hn« urged that nil taxation proposals should be considered by the Parliament on a non-party political basis. That suggestion has some merit, but I remind him that the Government’s taxation policy is based on the findings of royal commissions and - parliamentary committees which have inquired into the subject. The Government has also had the benefit of the representations made by chambers of commerce and other bodies which can claim to speak in the interests of companies as a whole. In this instance, the Prime Minister (Mr. Chifley) has considered the representations made on behalf of private companies who have protested against this legislation. The Deputy Leader of the Opposition said that taxation should be placed upon the broad shoulders. 1 agree with that statement but with certain qualifications. It is a cardinal principle of taxation that the heaviest hurden should be placed upon the shoulders- of those best able to bear it. The Government has always observed that principle. Indeed, it is applying that principle under this measure. The Deputy Leader of the Opposition referred to the taxation of companies which earn profits up to £1,000 a year. However, he cited only hypothetical, cases in that respect, whereas the Government must deal with factual problems. He also referred to the replacement of equipment but in doing so he ignored the taxation concessions allowed in respect of the depreciation of equipment. A concession of 10 per cent, is allowed annually under that heading. For instance, in respect of equipment costing £100, this concession would amount to the total purchase price within a period of ten years. Th, honorable senator said that when the time comes to replace equipment the new equipment will necessarily -be much more costly, but he omitted to mention the taxation concession of 20 per cent, immediately allowable in respect of the cost of replacement which is in addition to the annual taxation concession of 10 per cont. in respect of depreciation. Thu9, a concession of 30 per cent, is allowable within the twelve months in which the equipment is purchased.
The honorable senator also urged that dividends drawn from private companies should be exempt from tax. He objected to what he claimed to he double taxation. That is the usual cry raised by the Opposition parties. Whatever business a private company may carry on, it must be taxed as a separate entity; and, at the same time, it is equitable to levy tax on dividends payable to individuals. I do not think that the honorable senator is serious when he says that dividends should be exempt from tax. At the committee stage I shall be pleased to answer any other point raised by the Deputy Leader of the Opposition.
Question resolved in the affirmative.
Bill read a second time. [n committee:
Clause 1 agreed to.
Clause 2 -
Section six of the Principal Act is amended by omitting from sub-section (1.) the definition of “ relative “ and inserting in its stead the following definition : - “ ‘ relative ‘, in relation to any person, means any of the following, namely: -
. -I see no reason to amend the principal act by incorporating such an elaborate definition as that proposed in the bill. I propose to move -
That, in the proposed definition of “ relative “, it II the words after the word “ namely” be left out, with a view to insert in lieu thereof the following words: - “, a spouse, parent, child or adopted child of the taxpayer “.
– Has. the honorable senator prepared in writing the terms of the proposed amendment?
– No. I was not aware that it was necessary for me to do so.
The TEMPORARY CHAIRMAN.Standing Order 138 states ; An Amendment to any Motion before the Senate must, for purposes of record, be in writing and be signed by the proposer. My recollection of the procedure of this chamber is that honorable senators always comply with the standing order.
– With respect, K point cut that we are now meeting not us the Senate, but merely as a committee nf the Senate.
The TEMPORARY CHAIRMAN.For the purposes of the standing order the procedure followed in committee is the same as that followed by the Senate, and I rule that the standing order must apply to the present occasion.
– From the terms of the standing order it would appear that I am entitled to submit in writing the terms of a proposed amendment at any time before the debate is concluded. The standing order states that a written copy of a proposed amendment is required only for purposes of record.
The TEMPORARY CHAIRMAN.A proposed amendment by a Minister is always submitted in writing, and is usually circulated . to honorable senators.
– But a Minister who formally submits an amendment is supposed to know what he is doing.
The TEMPORARY CHAIRMAN.I presume that the Deputy Leader of the Opposition knows what he is doing, and I insist that he comply with the standing order.
– I shall do so, but I point out that it is not practicable for me to hand to the Chair notice in writing of the several amendments which I propose to move. I think that the spirit of the standing order will be observed if I hand to the Chair notice in writing of the amendments which I propose to move to the bill before- the debate is concluded.
The TEMPORARY CHAIRMAN.The invariable practice of this chamber is that notice of proposed amendments i* given in writing, but the Deputy leader of the Opposition apparently now seeks to make a departure from it. In the circumstances, the Chair will allow him to move an amendment to the clause under discussion without submitting in writing details of his proposed amendment, but in respect of any further proposed amendments which he may desire to move, the Chair rules that he must submit notice in writing before moving them, in accordance with Standing Order 138.
– Is the effect of the Chair’s interpretation of the standing order that I must prepare proposed amendments before I have had the opportunity to hear replies by Ministers to second reading debates?
– All honorable senators have an opportunity to examine bills before they are discussed in the chamber, and honorable senators must make up their minds whether they desire to move any amendments, and prepare in writing the text of the proposed amendments.
– The effect of the Chair’s ruling is that honorable senators must prepare their amendments before they have had an opportunity to hear the debate on any particular measure?
The TEMPORARY CHAIRMAN.Deba’te has nothing to do with the matter. If after the debate on the second reading of a bill has taken place the Deputy Leader of the Opposition desires to move an amendment he must prepare and submit his proposed amendment in accordance with Standing Order 138.
– Standing Order 138 is not explicit as to any limitation of time for notice to be given in writing of a proposed amendment.
The TEMPORARY CHAIRMAN.I shall not continue to argue the matter with the Deputy Leader of the Opposition. I have already stated that over the years the practice of this chamber has been for honorable senators to comply with Standing Order 138.
– I shall do so. I now move -
That, in the proposed definition of “ relative “, all the words after “ namely “ he left out, with a view to insert in lieu thereof the following words: - “, a spouse, parent, child or adopted child of the taxpayer “.
The definition is important because of its application to the relevant portion of the principal act, and it also concerns section 65, which relates to the payment to relatives. The amendment of the principal act contemplated in clause 2 of the bill will particularly affect “in-laws”. There is no apparent reason for the scope of the present act to be extended by widening the definition of “ relative “.
Senator ASHLEY (New South Wales- - The proposed amendment is not acceptable to the Government. As explained in the judgment of the full bench of the High Court in 1942 in the case Adelaide Motors Limited v. Federal Commissioner of Taxation, the definition of “ relative “ is lacking in the precision necessary to itf effectiveness in the Income Tax Assessment Act. It is accordingly proposed to omit the present definition of “ relative ,;. and to insert a hew definition to specify precisely the limits within which the relationship of one person to another shall he recognized for the purposes of the act.
Clause agreed to.
Clauses 3 to 5 agreed to.
Clause 6 (Rebate on dividends).
– The clause reads -
Section forty-six of the Principal Act if amended by omitting sub-sections (1.) and (2.1 and inserting in their stead the following subsections : - “ (1.) Subject to this section, a shareholder, being a company which is a resident, shall be entitled to a rebate in its assessment of the amount obtained by applying to that part of the dividends included in its taxable income the average rate of tax payable by the company.
Is the company contemplated in the clause a company which receives payment of a dividend or a company which pays a dividend?
– A company which receives payment of a dividend.
– The proposed amendment of section 46 of the act contained in the clause seems to me to be a retrograde step. If the principle is to be extended to other taxation legislation a similar situation will arise to that which prevailed prior to the appointment of the last Royal Commission on Taxation in 1932. That commission made valuable recommendations, in the course of which it suggested that a system of rebates be instituted in respect of taxes payable in any one year, and the adoption of such a system would obviate the need for making a number of tedious calculations. If it is considered that some form of graduated rate is necessary in connexion with the income of a company, [ urge that the rebate should be paid at the rate of 5s. or 6s. in the £1.
– The effect of sub-section 1 of section 46 of the principal act is to allow a rebate in respect of dividends received by resident companies from other companies. The rebate is calculated by applying the company primary rate of tax to the part of the dividend included in the taxable income of the company. The section was designed for application when only one rate of primary tax was applicable to the taxable income of companies. By the income .tax resolution it is proposed that, for so much of the taxable income of a company as does not exceed £5,000, the rate of tax shall be 5s. in the £1, and that the rate of tax on the balance of the taxable income shall he 6s. in the £1- As a consequence of the proposed alteration in the company rate >f tax, it is necessary to adjust the rate at which the rebate of tax shall be allowed in respect of dividends included in the taxable income of a company. The present clause proposes that the average rate >f tax payable by a company shall be that at which the rebate of tax shall be calculated. This average rate will be ascertained by dividing by the taxable income the tax payable by the company for the relevant year ‘ of tax, excluding any rebate to which the company is untitled and any undistributed profits tax or super tax that the company may be liable to pay.
Clause agreed to.
Clause 7 agreed to.
Clause 8 (Gifts and Contributions).
– The clause relates to allowable deductions from income tax, and I know that assistance has been given to various organizations by treating donations to those organizations as deductable allowances. I ask that similar consideration be extended to the Queensland branch of the Boy Scouts Association, and its sister organization, the Girl Guides Association which -have done and are still doing such splendid work.
.- The Treasurer (Mr. Chifley) has given consideration to the matter mentioned by the honorable senator, but he has pointed out that a number of other deserving organizations are similarly affected. The concessional allowances granted by the Income Tax Assessment Act within the field of education are restricted to a public university or a public fund for the establishment of a public university or to a residential educational institution affiliated under statutory provisions with a public university. Whilst there is no doubt as to the educational value of the Boy Scouts’ Association in character training and in promoting good citizenship amongst members of boy scouts’ organizations, there are good reasons why the concessional allowances for gifts should not be further extended so as to include gifts or donations to the Boy Scouts Association. An amendment of the law so as to permit of concessional allowances being granted in respect of gifts to the Boy Scouts Association would introduce into the field of concessional allowances an entirely new class of institution and would greatly extend the scope of the concessional allowances.
– I urge the Government to enlarge the measure so far as it affects educational authorities because the present act restricts concessional deductions to gifts to university colleges, institutions or organizations which have a number of research institutes, and other similar institutions. Many great public schools, and denominational schools, are being carried on mainly as a result of the sacrifices of the parents of the children attending those schools, and by “ old boys “ of those schools, who make donations to them from time to time. I point out that the work that those schools are doing results in a considerable monetary saving to the States. Many of the denominational schools are finding it increasingly difficult to carry on their work of Christian education, particularly in view of the feeling that is now abroad that attempts are being made to de-Christianize this country. Those schools are not conducted for profit.
They are purely Christian, humanitarian, and utilitarian in their activities. Nobody derives and dividends from them. I consider that the donations that are made to those schools from time to time by “ old boys “ and other admirers would be considerably increased in volume and value if extra inducement were offered by way of such donations being allowed as deductions for income tax purposes.
. -Two royal commissions have made exhaustive inquiries into the subject of income tax and submitted many recommendations to the Government for the alteration of income tax provisions. Neither of those royal commissions recommended an extension of concessional allowances for gifts. On the contrary, one of the commissions considered that such concessions are not in the public interest and should be withdrawn. The view expressed by that commission was that the effect of allowing deductions in respect of donations is to make the general body of taxpayers contribute a portion of each donation. If the Government were to provide concessional allowances in respect of donations to schools or other organizations of that character, logically it could not decline to grant a similar concession to other equally meritorious bodies. The suggestion made by the Deputy Leader of the Opposition (Senator O’Sullivan) will be conveyed to the Prime Minister, with a request that consideration shall be given to it when taxation measures are again being reviewed.
Clause agreed to.
Clause 9 - (1.) Sections one hundred and three and one hundred and four of the Principal Act are repealed and the following sections inserted in their stead: - “103. - (1.) In this Act, unless the contrary intention appears - distributable income ‘ means the amount obtained by deducting from the taxable income of a company - (d). . . the prescribed period’ means -
– I move -
That, in the definition of “ distributable income”, proposed new section103, subsection (1.), after paragraph (d), the following paragraphs be inserted : - ” (e) any expenditure incurred by the com pany in the course of gaining or producing any income or profit derived during the year of income, not being expenditure of capital or of a capital, private or domestic nature, and not being expenditure which is an allowable deduction, or. where the income or profit is not included in the assessable income, which would have been an allowable deduction if that income or profit had been assessable income: and “ (f) the amount necessary to restoreunrecouped losses of paid-up capital :
Provided that where the Commissioner is satisfied that it was necessary for a company to retain profit of the year of income to meet losses which,’ at the expiration of six months after theclose of that year, appeared certain to arise, he may make such allowance from the distributable income of that year as he considers just having regard to the total profit of the company for the year of income and to the undistributed profits of the company.”. [n arriving at the distributable income of the company for the purpose of Division 7, the starting point is the company’s taxable income. Where a company incurs expenditure which reduces its accounting profits, but which is not allowable in calculating the income, such as donations to charities, and superannuation benefits in excess of the statutory maximum, that expenditure automatically reduces by an additional amount the sum available for distribution as dividends. Similarly, when the profits of a year are under consideration for the purpose of declaring a dividend, if it appears that after the close of the financial year’ losses are certain to arise, such anticipated losses should, logically, be taken into account. That applies particularly to companies engaged in primary production, where seasonal variations may occur. The amendment is based on sections 141 and 145 of the Vew South Wales Income Tax (Management) Act 1941.
. -The amendment is not acceptable to the Government. The proposal has been made that in calculating the distributable income of a private company, allowances should be made for : (a) business expenses (other than capital expenses) not allowed as deductions in arriving at the taxable income; (6) amounts necessary to restore losses of paid-up capital; (c) amounts to meet f future losses that appear certain to arise. These propositions were considered by the royal commission of 1932-34 of which Mr. Justice Ferguson and Mr. E. “V. Nixon were members. At paragraphs 217-218 the royal commissioners observed - 217. At first sight it might seem unreasonable that the section should be applied to a company, if it can be proved either that cash was not available for distribution, or that it was in the circumstances inadvisable or even imprudent to make a distribution, because the amount was required to meet liabilities, recoup past losses, or provide for losses certain to arise in the future. But if the liability to tax of an individual is compared with that of a shareholder, this argument is found to be somewhat difficult to maintain. 218. The whole income of an individual, whether derived by bini solely or from a partnership, is taxed at the rate applicable to its amount. No regard is had to hi> liabilities, capital losses, or possible losses in the future. The law does not inquire whause he- makes of his income, what amount he draws from his business, whether he receive it in money, or whether it is capitalized oi otherwise applied for his benefit. It is the amount of the income and not its distribution that is material.
I do not think that it is necessary for me to enlarge on that report.
– I draw attention to the wording of paragraph c in the definition of ‘ private company “, sub-section 1 of proposed nev. section 103, which reads -
A company the voting power in which is. to the extent of not less than seventy-five per centum, capable (having regard to the opera tion of paragraph (d) of the next succeeding sub-section) of being exercised by one person or by persons not more than seven in number . . .
Sometimes the articles of a company provide that preference shareholders shall not have the right to vote or receive notices of general meetings unless dividend payments to them have fallen into arrears for a stated period. In that event there would be a certain fluctuation. Sometimes those concerns would be “ private companies “ within the meaning of the act, and at other times they would not be “ private companies “ under the act. I suggest that the definition should be amended to provide against such a contingency because, as I have indicated, in some years preference shareholders would have a right to vote, and other years they would not enjoy such a right. The acceptance of the amendment proposed would result in everybody knowing the precise provision in this matter.
– Whilst I agree that that could, conceivably, occur, I do not think thai it is happening at present. If it is found that that is happening in any specific case, consideration will be given to the matter.
– I move -
That, in the definition of “the prescribed period “. proposed now section 1 03. sub-section (1.), at the end of paragraph (b), the following provisobe inserted: - “ Provided that in respect of a company which has adopted, with the leave of the Commissioner, a substituted accounting period ending on a date prior to 30th June the prescribed period of the first year of income to which this Act applies shall terminate on a date not earlier than 31st December, 1948.”.
As the clause now stands, some hardship may be inflicted on private companies which have adopted a substituted accounting period ending on a date prior to the 30th June. In the case of a resident company, the prescribed period, out of which a dividend may be declared to avoid additional tax, terminates six months after the close of the year of income. In the majority of cases, this date will be, for the past financial year, the 31st December, 1948. In view of the alteration of Division 7, companies may desire to reconsider the amount of dividends to be paid out of profits in the year 1947-48. In respect of companies balancing on the 30th June or later, there will be ample time for such reconsideration, but if a company balances on a preceding date the opportunity to make a further distribution may be lost. I suggest, therefore, that clause 9 be amended to provide that, in respect of companies which have adopted a substituted accounting period ending on a date prior to the 30th June, the terminating date for distributions be extended to the 31st December, 1948.
– The amendment is not acceptable to the Government, but, if the Deputy Leader of the Opposition (Senator O’Sullivan) has any specific cases in mind, consideration will be given to them.
– I move -
That, in proposed new section 103, subsection (2.), paragraph (e), all the words after “ year “, second occurring, be left out, with a view to insert in lieu thereof the following words: - “ - (i) where it is an investment company - the whole of its distributable income; or
where it is not an investment company -
if the whole or part of its distributable income con sists of dividends received from other privatecompanies - that whole or part, together with twothirds of the remainder, if any, of the distributableincome; and
in any other case - two thirds of its distributableincome.”.
The effect of the allowance of payments of tax under Division 7 in calculating a sufficient distribution under the principal act was to allow a private company to accumulate reserves out of current profits. The proposed graduated reduction in paragraph e of sub-section 2 of proposed new section 103 will only partially compensate for the loss of the tax deduction. It is unnecessary to emphasize the desirability of encouraging companies to place to reserve a reasonable proportion of their profits. The policy of the British Government is to restrict the rate of permissible dividends so as to compel the re-investment of a proportion of current profits. I suggest that the comparable percentages of profits which may be retained in a company’s business under the present proposals are entirely inadequate and, therefore, I submit that the position that existed prior to 1940 should be reverted to, namely, that a sufficient distribution should be two-thirds of the taxable income as reduced by tax allowances.
– The proposal that one-third of the profits of a private company should be allowed to be free from undistributed profits tax is undoubtedly suggested by the fact that, prior to the war period, a sufficient distribution of the income from trading by a private company, for purposes of ascertaining its liability to undistributed profits tax, was a distribution equal to two-thirds of that income. Prior to the war period, dividend income derived by a private company from investments in other private companies was required to be wholly distributed in order that the company might avoid a liability to undistributed profits tax in respect of that income, while investment companies were required to distribute the whole of their income in order to avoid a similar liability. The suggestion that a reversion should be made to the pre-war basis of taxation in that regard is unacceptable in principle to the Government. It is sufficient to state that, if this proposition were accepted and the one-third allowance were granted, it would result in unequal benefits being conferred upon different companies. In commenting upon the allowance, the royal commission cf 1932-34 remarked that is was a concession and a privilege not conferred on other taxpayers.
– I move -
That, in sub-clause (2.), all the words after “income”, second occurring, be left out, with a view to insert in lieu thereof the following words: - “the company would not have been deemed to be a private company within the meaning of sub-section (1.) of section one hundred and three of the Principal Act, if this Act had not been passed.”.
Apparently the Government recognizes that it would be unfair to some companies to have their status as non-private companies changed retrospectively for the year of income ended the 30th June, 1.948. The amendment, therefore, proposes that companies in which the public are substantially interested shall have their status determined by the existing law for the income year ended the 30th June, 1948. I suggest that the same privilege be conceded to all companies which, under the present law, are deemed to be non-private companies. The proposed amendment would avoid the sting of the retrospective application, and, therefore, I commend it to the Government.
Sitting suspended from 5.58 to 8 p.m.
– The clause which the Deputy Leader of the Opposition (Senator O’sullivan) seeks to amend was inserted in the bill in the House of Representatives as an amendment to the original measure. It was introduced as the result of representations from various quarters including stock exchange authorities. Its terms were communicated to those who made the representations and are considered satisfactory by them. The pur pose of sub-section 2 of proposed new section 104 is to preserve to companies the ordinary shares of which were, in the course of the year of income ended the 30th June, 1948, quoted in the official lists of stock exchanges, all the rights to be taxed as non-private companies in respect of that year_that those companies would have had if the amendments proposed by the bill were not enacted. In respect of the year ending the 30th June, 1949, and subsequent years, however, it is proposed that the question whether the company is a company in which the public are substantially interested will be determined according to the defined meaning of that expression in proposed new section 103. The clause is considered satisfactory, and the amendment is not acceptable.
Clause agreed to.
Clause 10 agreed to.
Clause 11 (Further additional tax).
– 1 do not wish to move a formal amendment to this clause but I shall make a suggestion to the Minister for Shipping and Fuel (Senator Ashley). I submit that great confusion will be caused by sub-section 2 of proposed new section 105a. It would be better if a limit were placed upon the amount to be received before the Commissioner was put to the bother of chasing it up. Otherwise, considerable public money might be expended, and much time wasted in retrieving inconsiderable amounts. I should like to see inserted after subsection 2 the following new sub-section: - (3.) Provided that this section shall not apply except where the supposed receipt of income by the same person from any company exceeds £300.
Apparently proposed new section 105a is designed to meet the device adopted in certain quartei’3 of forming multiple companies to minimise tax liability. Whilst no objection is expressed to this loophole being closed, the provision will apply to all companies and all shareholders, and the clause, as drafted, raises certain objections. The first is that the procedure will seriously aggravate the complexity of Division 7 calculations. In fact, it is thought that the provisions will prove to be totally unworkable. Secondly, it is considered wrong that the interests of one shareholder in a private company should be adversely affected because another shareholder may happen to have substantial interests in another company. Thirdly, it will be very difficult, if not quite impossible, for the Taxation Branch to advise a company on the calculation of Division 7 tax, and likewise, it will be impossible for a company to verify its assessments. It is considered wrong that, riven with the consent of its shareholder*, a company should not be able to check its Division 7 assessment. The object of preventing avoidance of tax would bc achieved without extending those complex provisions to the normally constituted company by inserting the proviso which T have mentioned.
Senator ASHLEY (New South Wales -Minister for Shipping and Fuel) [8.7J. -The Deputy Leader of the Opposition (Senator O’sullivan) is asking for a concession of £500 which is not available to other taxpayers. The Government cannot accept that suggestion. The suggestion has been made that the application of proposed new section 105a, which provides for an aggregation for taxation purposes of the interests of a taxpayer in several private companies, should be made to depend on the opinion being formed by the Commissioner of Taxation that the incorporation of the group of companies was undertaken for the purpose of avoiding or altering the incidence of taxation. Proposed new section 105a is being enacted to counteract a device that has been employed for the avoidance of taxation. It is true that initial difficulties may be encountered by the Commissioner in applying the section, but administrative difficulty is no reason why the section should be modified.
– I ask the Minister for Shipping and Fuel (Senator Ashley) to give still further consideration to this matter, because sub-section 2 of proposed section 105b proposes that the calculation of Division 7 tax shall be made on the assumption (a) that the actual income of shareholders is derived wholly from property and, (b) that the shareholder is not entitled to any dependant or concessional rebates. The apparent purpose is to simplify the calculation of tax, but in operation the provision will impose grave injustices particularly upon people in the lower income ranges. We all hope that taxation is being reduced and not increased. The effect of the incorporation of this provision will be to increase the amount, of tax payable in certain instances. The clause is objected to on the ground that it will increase the burden of tax on companies whose shareholders are in the lower income groups, and that it will diminish the value to taxpayers of the concessional allowances. The clause is contrary to the avowed purpose of bringing the taxation of private companies closer into line with that of partnerships. The increase of tax consequent upon this amendment may be illustrated by a simple example. A shareholder, supporting a wife, has an income of £S00 a year from personal exertion. The share of a company’s undistributed income attributable to this shareholder is £300. Adopting the rates of tax for the income year ended the 30th June, 194S, the additional tax payable under the present law referable to that £300 would be £110 3s. By adopting the procedure contemplated the additional tax would be increased to ‘ £134 3s., an increase of 21.8 per cent. This is one of the anomalies to which I referred in raj second-reading speech where shareholders in companies are called upon to pay an unfair proportion of the company tax, and that tax itself is increased by virtue of some of the shareholders having income independent of what they receive from the company, the assessment of which is under review. I ask that this anomaly be rectified.
.- The Deputy Leader of the Opposition (Senator O’sullivan) has criticized the proposal in clause 11 of the bill to include in the principal act new section 105 b. the purpose and effect of which is to alter the method of calculating undistributed profits tax on private companies. Before this provision was adopted, extensive tests were arranged in actual cases covering a wide range of private companies. These tests revealed that the adoption of the provision would have a negligible effect upon the amount of undistributed profits tax payable by private companies. Those actual tests resulted in a difference of only . 1 per cent, between (a) the calculation under the present methods by taking into account the personal exertion income of a shareholder in a private company and the concessional rebates to which he was entitled, and (b) thetaxcalculated after disregarding these two factors. These results, which it is again emphasized are based on actual cases, are of greater significance than hypothetical exampleswhich may be prepared showing, in circumstances which do not occur in practice, any wider difference between the tax calculated under the two methods. The amendment will go a long way towards simplification and it is felt that this benefit outweighs the small difference in tax which is expected to result as a consequence of adopting the proposals contained in proposed new section 105b.
Clause agreed to.
Clause 12 agreed to.
Section one hundred and seven of the principal act is repealed and the following section inserted in its stead: - “107. - (1.) A person shall be entitled to a rebate ofthe amount by which his income tax is increased by the inclusion in his assessable income of - where the dividends are paid wholly and exclusively out of one or more of the following amounts: -
– I do not wish to move a formal amendment to this clause, but once again I shall make a suggestion. I ask that consideration be given to the deletion from subsection 1 of proposed new section 107 of the words “ where the dividends are paid wholly and exclusively “ with a view to. inserting in their stead the words “ to the extent that the dividends are paid “. Paragraph e of proposed new sub-section 1 is designed to limit the profits available for rebatable distribution. The past practice of enabling a company to distri bute as a rebatable dividend the whole of its taxed profits, may not have been completely logical but it had the effect of counter-balancing to some degree the otherwise heavy burden of tax on a company and its shareholders. As it is now proposed to restrict severely this privilege, I suggest that a small but important concession be granted. The condition of proposed new section 107 of the principal act that dividends must be paid wholly and exclusively out of taxed profits con stitutes an onerous burden on companies in identifying profits available for rebatable distribution. Many cases have come under my notice in which, because of differing opinions on the analysis of accumulated profits, the whole of a dividend drawn principally from taxed profits has been taxed without rebate. I suggest therefore that the clause be amended to read -
– This provision was incorporated in the law in 1934 to implement a recommendation of theRoyal Commission on Taxation of which Mr. Justice Ferguson and Mr. E. V. Nixon were members. The purpose of the provision was to avoid the complication of rebate calculation where dividends were paid out of mixed funds which had borne tax at varying rates and some of which were free from tax. If any departure from this provision were made, the result would be that the law would partly revert to the position as it was prior to 1934, under which complicated calculations were necessary in order to ascertain the rebates to which taxpayers were entitled in respect of their dividends. In the interests of simplicity this provision should be retained.It is the earnest desire of all concerned that a reversion to any complicated rebate system should be avoided at all costs, and the Government is unable to accept any amendment which would have the effect of adding unnecessarily to the complications inherent in the Income Tax Assessment Act.
– Sub-section 2 of proposed new Section 107 reads- (2.) Where a dividend is paid either wholly or in part out of an amount specified in paragraph (e) of sub-section (1.) of this section, a person in whose assessable income that dividend, or an amount in respect of that dividend, is included shall not be entitled to the rebate provided by that sub-section unless -
any shares in an interposed company the payment of a dividend on which has resulted directly or indirectly in the inclusion of the amount in the person’s assessable income, are shares in respect of which a distribution was supposed to be made for purposes of the assessment of the tax or contribution referred to in that paragraph.
.- The Deputy Leader of the Opposition (Senator O’Sullivan) has suggested that a rebate under proposed new section 107 should be allowed in respect of any dividend declared on a class of shares, instead of the particular shares in respect of which a distribution was supposed to have been made for the purposes of assessing the dividend-paying company to undistributed profits tax. This restriction on the rebates under proposed new section 107 has been found necessary in order to nullify a method that had been employed for the avoidance of taxation. In the course of the drafting of the particular sub-section - section 107 (2) - consideration was given by the draftsmen to the proposal which is now suggested. The provision was not expressed in that form, however, as upon examination it was considered that such a provision would enable the avoidance of taxation to be continued. It would be open to a company to attach special rights and privileges to shares which were not attached to other shares of the same class. It has been suggested that the provision will create injustices where a company issues fresh capital in the form of an issue of shares of a class which is entitled to a. rebate under the section. In every such case it is open to the company to avoid any loss of rebatable amounts by crediting the shareholders with a dividend, utilizing the taxfree reserves prior to the calling for fresh capital. The point has been specifically examined by the Government, and the conclusion has been reached that injustice is unlikely to be inflicted upon bona fide companies.
– I thank the Minister for Shipping and Fuel (Senator Ashley) for his reply, but he has not answered the point I raised. He concentrated upon the possibility of shares being issued with different rights under articles of association. That could possibly lead to an evasion of the kind which the Government is trying to prevent. However, my point relates to shares which are of the identical class and where there is no discriminatory right under the Companies Act. To cover that point I urge the Government to specify shares carrying similar rights or shares of a similar class. I admit that a loophole could be left if the shares carried different rights, but I have in mind instances in which new shares come in with the same rights as existing shares. Under the new section as drafted it will be difficult to deal with such cases, although all that will be involved will be an increase of capital in respect of shares of a similar class.
– The remarks I made previously would apply also in instances in which shares were of a similar class. However, there is no reason why a new shareholder should be allowed to come in and obtain a tax concession.
Clause agreed to.
Clause 14 (Concessional rebates).
. -I should like to know whether under this clause persons resident in New Guinea will continue to qualify for the concessional rebates which they have received up to date. I point out that when companies advertise for employees to proceed to the territory they emphasize the fact that residents of the territory enjoy concessional rebates with regard to income tax. Does this provision affect such concessional rebates?
Clause agreed to.
Clauses 15 to 17 agreed to.
Clause 18 (Undistributed income of company).
– This clause provides -
Section one hundred and sixtyc of the Principal Act is amended -
by omitting sub-section (1.) and inserting in its stead the following sub-section: - “(1.) For the purpose of the further tax. imposed on that portion of the taxable income of a company which has not been distributed as dividends, that portion shall be ascertained by deducting from the taxable income of the company -
taxes which are paid in the year of income being -
tax paid under this Part;
L suggest that after the word “ Part ‘” in paragraph b the following words be inserted : - “ or tax paid under Division 7 of Part III. in respect of a year of income prior to the year of income which commenced on the first day of July, 1947 “. In cases in which a company is converted from a private company to a public company the present law provides that payments of Division 7 tax, assessed after conversion but in respect of a year prior to conversion, are deductible under section 160c of the act. Under the clause this deduction is not provided for, and such a company may be seriously prejudiced because of delayed issue of Division 7 assessments. The clause should be amended in order to allow as a deduction payment of Division 7 assessments to the extent provided by paragraph b i of the proposed new sub-section.
– When this legislation was being prepared, the position of a private company which is converted to a public company was given particular consideration. The conclusion was reached that no special provisions were necessary for application to the case in which a company liable to tax under Division 7 in respect of income of the year of income ended the 30th June, 1947, and prior years becomes liable to tax under Part IIIa. of the act. because of a change in its status to that of a non-private company. Such a company may, under the proposed legislation, in respect of the year ended the 30th June. 1948, and each subsequent year, exercise the election provided by section 160c (5) as proposed by clause 18 of the bill. The exercise of that election will be within the power of the company as it will not previously have exercised the election under Part IIIa. and as it was incorporated prior to the 1st July, 1947.
Upon exercising the election under section 160c (5), the company will become entitled to the deduction of any tax paid in the year of income under the act, other than further tax paid under Part IIIa. This deduction will include the amount of tax paid by the company under Division 7 of the act. A company previously assessed as a non-private company, but becoming a private company under the proposed new definition of private company, will be in a comparable position by reason of the election exercisable under new section 103 (3) as proposed by clause 9. In the circumstances, it is clear that it is in the hands of any company to obtain the. deduction of .Division 7 or Part IIIa. tax, as the case may be, paid in respect of income derived up to the conclusion of the year of income ended on the 30th June, 1947, on the basis of taxes paid, if that basis is regarded by the company as being more suitable than the basis cf taxes payable. It is believed that an amendment to deal with the position of a company changing its status is, in this connexion, unnecessary.
Clause agreed to.
Clauses 19 to 22 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Debate resumed from the 10th November (vide page 2C97), on motion by Senator Ashley -
That the bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from the 11th November (vide page 2S51), on motion by Senator Ashley -
That the bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without, amendment or debate.
Debate resumed from the 11th November (vide page 2852), on motion by Senator Ashley -
That the bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from the 11th November (vide page 2S48), on motion by Senator Courtice -
That the bill be now read a second time.
– Consideration of a measure which will affect an industry that is so vital to Australia as the wheat industry demands that we should eschew party political considerations. Whilst the wheat industry is important to Queensland, it is not so vital to that State as it is to the economy of certain other States. Furthermore, the wheat industry has played a most important part in the general economy of Australia. In the years which immediately preceded the recent war, Australia, although it produced only about 3 per cent, of the total quantity of wheat grown throughout the world, supplied approximately 18 per cent, of the world’s export. If primary industries are to function on a sound basis it is essential that those engaged in them shall enjoy economic security, and irrespective of fluctuations in the overseas price of the commodity which they produce they should be guaranteed a price which is more than sufficient to meet the costs of production. The sugar industry of Queensland, which is probably the most efficient primary industry in Australia, was permitted with the blessing of the Government to organize itself and it ha? been conducted with great satisfaction to the people of Australia and not without reward for the hard labour of those engaged in the industry. I have no doubt that the security enjoyed by those engaged in that industry has a great deal to do with its successful operation. There is no reason why similar security should not be extended to those engaged in other primary industries. Whilst I am a keen supporter of the orderly marketing of primary produce, I think that it is essential that government control should be restricted to orderly marketing, and that those engaged in the industry should not be ordered about by officials who are, in many instances, ill-informed as to the vagaries of the particular industry with which they are concerned, and sometimes unsympathetic to those engaged in it. However, where primary industries are assisted by competent officials, whose ears are always open to those engaged in the industry, I think that the industry concerned and the economy of Australia must benefit from the security afforded by schemes of stabilization. So far as the wheat industry is concerned, no more favorable time than the present could be chosen to introduce a scheme of stabilization. At the moment wheat-growers are reaping the benefit of high prices overseas, but it is generally considered that overseas prices will not continue for long at their present level. For one thing, no one can foresee exactly the effect on world economy of the large scale marketing of Russian wheat. Before the war Russia was a large producer of wheat, and statistics indicate that that country produced approximately 1,000,000,000 bushels annually. I do not know what quantity of wheat is produced by Russia at the present time, and only very few people would possess that information. Although Russia was one of the world’s greatest wheat growing countries before the war, I point c-ut that its exports amounted to approximately only 8 per cent, of the total exports of the wheatgrowing countries. By contrast, I understand that the United States of America exported last year approximately 300,000,000 bushels, of which a substantial portion was used for the alleviation of the plight of the starving millions of
Europe and in the implementation of the Marhall aid plan.
The appropriate time to introduce a scheme of stabilization for primary produce is when prices are high. Should a recession occur I trust that the scheme will have been operating for a sufficient period to enable the stabilization fund to accumulate sufficient fat and substance to sustain the industry in the lean, years. T have consistently maintained that the present high prices cannot continue indefinitely, and time and again ] have urged the Government to exercise more economy in place of its present extravagance. The time may come when we shall again have to face an almost intolerable strain upon our people, and if they are to respond to the demands of emergencies the elasticity of the nationalfibre must not be weakened by keeping the fibre at full stretch all the time. Now is the time to relax the pressure, becausewe must conserve the resiliency of our people and the material resources of the nation.
The present scheme for stabilization of the industry, including price fixation,, has been approved by a majority of thewheatgrowers in a majority of the States. As I said previously, it is essential to the smooth working of any scheme that those engaged in it should approve of it. The vagaries of the Commonwealth Constitution require that the National and State governments must cooperate in any stabilization scheme which is to operate effectively. According to my understanding of the Constitution, .the National Parliament is empowered only to fix the export price of primary produce, and not to regulate its distribution between the States. The implementation of the present scheme has therefore required the State Parliaments to enact complementary legislation. While high prices are ruling overseas for wheat it is advisable to enter into international agreements so that Australia will be afforded some protection in the event of Russia Argentina or some other wheat-growing country deciding to dump its surplus wheat on the world’s markets. Indeed, the effect on the Australian economy of any such action by Russia, Bulgaria or any cf the Russian satellite states is unpredictable, and therefore it is essential that at the present time we should endeavour to capture as many of the world’s markets as possible. Whilst I am not in complete agreement with the details of the measure I agree with the proposals to stabilize the industry upon a sound basis. The scheme is based upon a period .of five years, but I consider that that period is too short for the successful operation of any such scheme. There are many people who buy properties on terms of purchase considerably longer than five years. Prices of farm properties . are generally determined by the return which the purchaser may reasonably expect to’ obtain from those properties. For some time I lived in a farming area where wheat was produced. The farmers in that area regarded five years as a very short period in which a farm should be paid off. I should like to see the term of this plan extended beyond that period. Absolute security for a longer period would then be enjoyed by the farmers. Et is essential that all people engaged in primary industry be established on a solid foundation, if the whole of our economy is to be protected. Those engaged in the industry must know that the result of their hard work will not he lost entirely, and that there will be some profit left for them after meeting expenses.
– I wholeheartedly support the bill. I listened with interest to the remarks of the Deputy Leader of the Opposition (Senator O’sullivan) and am pleased to know that, in the main, he supports the bill and gives it his benediction. I cannot understand why, for so many years this commodity, which is of such importance to Australia, has remained the play-thing of politicians, particularly those opposed to the principles of the Australian Labour party. It is a matter of amazement to me that the producers have stood it. The matter of ensuring a payable price for wheat has been regarded as a political football for years. When this bill was introduced I referred to what happened in by-gone days regarding the efforts, mainly by anti-Labour governments, to stabilize the wheat industry. With one exception their efforts were not genuine. I think that the producers will agree that the only genuine effort that was made by any antiLabour government in the past was that made when the right honorable member for Cowper (Sir Earle Page) was in office some years ago. In the midst of the depression in 1930, when the Scullin Government was in office, a scheme was introduced by the then Minister for Markets and Transport, Mr. Parker Moloney, to pay a guaranteed price of 4s. a bushel to the wheat producers. The Leader of the Opposition in this chamber (Senator Cooper) who, it is hoped by all, will soon return from his trip abroad, gave that measure his support. The honorable senator was then a private member of the Australian Country party. The happenings in another place regarding that legislation were not so satisfactory. A similar set of conditions arises out of the efforts of the Australian Government to implement the legislation required in the International Wheat Agreement, which did not succeed because the United States of America did not ratify the agreement. Honorable senators will recollect that ratification had to be universal. The same arguments were advanced by the so-called champions of the wheat-growing industry as in the days when they occupied the treasury bench. I shall, in due course, refresh the minds of honorable senators as to the happenings in connexion with this and similar measures designed to establish the wheat-growing industry on a sound basis from the producer’s point of view. The same arguments that have been used over the years by those who profess to champion the interests of the wheat-growers, have again been advanced by them.
I realize that it is impossible to predict what the future holds in respect of the market price of wheat. There are many factors operating in that connexion, both within this country and abroad, which would make such a prediction difficult. I consider that both the Australian Government and the State Governments will in the near future be called upon to face recurring demands to produce wheat from marginal land, that is, land which is not suitable for wheat-growing. For many years there have been attempts to send farmers further afield, away from the recognized wheat-growing country, which enjoys a reasonable rainfall, to areas beyond what is known as Goyder’s line of rainfall in South Australia, and to put men on land which has not a “ snowball’s “ chance of success. When the price of wheat was so low that it was well-nigh impossible for the growers to succeed, assistance in some form or another was granted by both the Australian Government and the State Governments. A similar set of circumstances will doubtless again present itself, according to the cycle of seasonal conditions and spasmodic rainfall. That cycle recurs with remarkable regularity. Because of the present position in the world regarding the food supply, the price of wheat has reached heights never before known. Millions of people are starving as a result of restricted crops, because of the war. At times, when I read appeals published in the various journals for help to feed the starving humanity of Europe, I. wonder if we are really Christians. On the one hand we make those appeals - quite rightly - and on the other hand we exact the maximum payment from the suffering peoples who are seeking to feed themselves. There are no Chistian ethics in that practice. An overwhelming majority of primary producers does not wish the practice to continue. Although wheat is part and parcel of the staff of life, the people handling it, in the main, are not concerned with who finally gets it, so long as they receive the highest prices possible for it. That the wheat is required to feed people who are starving in the devastated countries of Europe is of no concern to them. I maintain that whether the seasons be good or bad, we should ensure the payment of a reasonable price to the grower. If we believe that the producer is entitled to a just reward for his labour, it is beyond comprehension that for so many years the socalled champions of the primary producers have denied it to them. It is generally conceded that there should be ministerial control of this industry. 1 was pleased to learn from a South Australian member of the House of
Representatives who was a colleague of mine years ago in the South Australian Parliament, that, despite the passage of years, and his experiences amongst his anti-Labour friends, he has not altered his opinion in regard to this industry. I say without fear of contradiction that, having regardto the position of land-settlement in the various State, and the subsidies and ether monetary assistance paid by all governments to assist the land-holders to carry on, whether the land be good, medium or otherwise, there is no hope for the success of this stabilization scheme unless it is positively placed under ministerial control. I believe that the State Governments have a responsibility to counter the tendency for farmers to cultivate country which is unfitted to be used for the growing of wheat. “We have ample evidence of what has happened in* such districts in South Austrlia, and, 1 believe, in other States also. The price of wheat eighteen to twenty years ago was so low that it was impossible for the farmers to carry on without the assistance of both the Australian and the State Governments. That assistance was forthcoming. That was during the depression.. In spite of the assistance that was given to over 3,000 farmers in South Australia in the matter of debt adjustments by the introduction of measures for the relief of farmers, many of the struggling’ country store-keepers who- had “ carried ‘” them year in and year out, hadonly a small percentage of their book debts honoured, because of prior claims on the proceeds of the farmers’ crops. Those store-keepers aredeserving of some recognition by the fair-thinking citizens of Australia, for the part that they played in carryingthe farmers who, because of low prices, bad seasons, and frequently bad dealswhen taking up the land, had no incomeat all. Those facts should not be lost sight of, because, whilst we hope that such conditions will not recur, a perusal of history shows conclusively that those things happen in cycles. I venture tosuggest that the position in other States of the Commonwealth was similar to that in South Australia in respect of the relief provided during those years by the various governments. The position was that only 39 farmers in South Australia, of approximately . 3,000 farmers in that State, were able to meet their commitments for loan3 under the various agreements entered into as the result of the farmers debt - adjustment legislation and other assistance. Apart from the varying seasonal conditions that I have mentioned, and the operation of the law of supply and demand in respect of wheat for human consumption, one of the reasons that I subscribe for that state of affairs is the failure of land settlement schemes, in most of the States. An investigation will reveal that until comparatively recently we were working on a replica of the system of the English landlords. The profit motive was uppermost in the minds of speculators. Those who had the most capital or could secure the greatest backing from banks and other financial institutions were able to “ pick the eyes “ of the land that was available. The battlers, the financially poor farmers and their sons, were forced te take less productive land. I recall two brothers farming on properties in South Australia that were allotted to them by the State government of the day. One, who had land of doubtful quality, was the better farmer of the two. The other had fairly rich land. Under the bushel bounty scheme which was introduced at that time by arrangement between the Australian Government and the State Government, the less capable farmer, whose land produced about 21 bushels of wheat to the acre, benefited much more than did his brother, whose poor land could produce only about five bushels to the acre. The anti-Labour goevrnments that were responsible for that inequitable bounty scheme are te be blamed for their failure to encourage good farmers who were working under adverse conditions. It was ridiculous that certain farmers who, because of their good fortune in occupying productive farms, were the least likely to be forced to seek help under any moratorium, debt adjustment or relief scheme, could reap greater rewards in the form of bounty than could better farmers who were not able to contend successfully against natural handicaps, even though they tilled and worked their properties to the best advantage. Sooner or later. governments will be obliged to consider the wisdom of allowing land in marginal areas to continue to be farmed solely for wheat production.
The Wheat Costs of Production Committee decreed that the cost of producing a bushel of wheat was approximately 6s. 3d. For the life of me I cannot understand how it reached “ that decision. Nevertheless, a majority of growers in the four chief wheat-growing States in which the poll was conducted accepted that verdict. Methods of farming have a great deal to do with costs of production. I again emphasize that costs must be considerably loss on good average land than on poor land, provided that farming methods are efficient. On unproductive farms, a man may “work his eyeball? out” but have little or no chance of success. That is why I am at a loss to understand how the committee established a figure of 6s. 3d. a bushel as the cost of’ production. The committee also concluded that a profit of £6 10s. a week was the bedrock minimum to which a farmer was entitled. That amount is little enough, but it is not so bad as it seems. I have heard farmers criticize that figure. They claim that an ordinary journeyman in any trade can earn £8 or £9 a week. The answer to their criticism is clear. Leaving out of account rent and the payments which a tradesman may be called upon to make from his weekly income in order to cover instalments on his home or other obligations involved in providing himself and his family with security, I point out that farmers are able to engage in various productive sidelines and augment their incomes in ways which are not available to industrial workers. Members of the Australian Country party have been “ led up to the noose “ by the Government’s action in introducing this bill They have had no chance of burking the issue and have had to support the measure, however ruefully. As I have said, farmer? are usually able to add to their incomes. Sideline production frequently provides more than half of a farming family’s income. Tradesmen are not in such a happy position. They receive only such wages as are laid down by arbitration courts. I consider that, taking all factors into consideration, the minimum income of £6 10s. a week specified by tho committee is fair and reasonable.
I well remember what happened to many of my lifelong friends during the days of low prices and starvation which affected the whole of our society. Workers in industry were thrown out of employment and frequently had to eke out an existence on rations and a handout of five “ bob “ a week, with which they could not purchase enough wheat from the farmers to fill the stomachs of their wives and children. Any farmer in the northern part of South Australia, where there are large areas of marginal land, would count himself extremely fortunate if he could be assured of an income of £6 10s. a week year after year from wheat only. My colleagues, particularly those who know that region of South Australia, will agree with me. During the days of low prices, when foreclosures were forced by wheat merchants and mil] owners, as happened in the famous Verco case, many young men who were farmers by tradition were forced off the land. South Australia was not singular in that respect. The population of every city and large town in the Commonwealth must have been materially increased at that period by an influx of young farmers who had been forced off the land as the, result of the inactivity of anti-Labour Governments. That tragic drift, incidentally, has added considerably to the difficulties of providing adequate housing in our cities. Square mile after square mile of country in the northern part of South Australia which, in my youth, was used for wheat production, has reverted to big holdings on which sheep are now being raised. The simple reason for that is that all the assistance that has been granted to wheat-farmers by various governments has not been sufficient to keep them on the land. The Labour party realizes the seriousness of this state of affairs. Whenever Labour has been in power its efforts have indicated the honesty of its declarations of interest in the primary producers. The first real effort to give an adequate measure of assistance to the wheat-farmers was made by the Scullin Government when it attempted to introduce the Parker
Moloney scheme, which provided for a price of 4s. a bushel. That plan was defeated by three votes in this chamber. One of the pleasing facts in connexion with that legislation was that the present Leader of the Opposition (Senator Cooper), who was a member of the Senate at the time, supported the Scullin Government on that issue.
I have here an informative article dealing with wheat production in the United States of America. It states -
Just as California is frequently termed the “ Salad Bowl “, so are the Great Plains known colloquially as the “ Bread Basket “ of America. In this vast wheat-growing district even the so-called “ small “ holder farms 1,000 acres and more, and the magnitude and importance of the area are realized when one recalls that last year the ten Plains States raised 074,000,000 bushels, or almost 70 per cent, of the total wheat crop of the United States.
This success, I found, is attributed to three main factors: (1) complete mechanization: (2) improved varieties’ of wheat; and (3) better farming methods.
In the State of Kansas, for example, statistics show that with the aid of new types of farming implements, up to 751 acres can he handled by one man, whereas his forefathers spent probably a week of back-breaking labour in growing and harvesting a single acre of wheat. The present big farmers on the Western Plains can handle an acre of grain, from soil tillage to market, with about two to three hours’ actual labour.
That is very interesting. Methods of production were constantly being improved up to the outbreak of World War TI., and fresh advances are being made in America now. What has been done there can also be done in Australia. The article continues -
A harvesting team of to-day consists of one man driving a fast-moving reaping and threshing machine and another driving a truck. Together they can cut, thresh and haul into storage as many acres of grain as 12 to 15 men could do a generation ago.
Those figures are remarkable. They are of special importance to the wheatgrowers of Australia, to the present Government, and to future governments which Will be called upon to solve the problems that arise from time to time in relation to this very important industry. Although I am inclined to believe that the period of five years provided in this bill for the stabilization scheme will be too brief, an examination of trends in our own wheatgrowing areas and in the United States of
America suggests that the Government’s decision in this respect was wise. It is better to be sure than sorry. The Deputy Leader of the Opposition spoke of wheat production in Russia. I agree with him that it is impossible for anybody to know exactly what is happening in that country. However, information which is contained in an article published in The Wheatgrower of Western Australia of the 4th November gives us a fairly sound indication of what is being done by Russia. That article states -
Tin; current issue of “Overseas Trading” announces a 5-year trade pact between Russia and the Netherlands involving 38 million bushels of wheat per year.
Following the recent announcement of a similar pact with France to deliver 60 million bushels, there are grave fears in America that Russia is attempting to tie up European wheat markets before the marketing of United’ States, Canada and Australian wheat can be organized.
That shows that Russia’s wheat production must be increasing. The tying up of the European market would be merely a repetition of what happened years ago. 1 have not forgotten how the merchants of Great Britain, who were cornering the world’s food supply, were so “loyal” to Australian growers that they bought Russian wheat for ls. a quarter less than the price that was demanded for Australian, Canadian and United States wheat. There the profit motive of hardheaded businessmen stands revealed in all its misery. Foi the sake of a mere ls. a quarter they were prepared to dump an Empire product in favour of Russian wheat. In any country in which the profit motive is predominant, the needs of humanity take second place. We all hope that such conditions will not recur, and that the farmers of Australia will be able to continue in the satisfactory financial position in which they now find themselves as the result of the persistent efforts of this Government. In France, too, wheat-growers are reported to have received a guaranteed price, subject to a cost index figure, for next season’s wheat, that is, wheat harvested in June of next year. The article states -
The price of wheat in France has been fixed in conformity with an official computation of the costs of production. The scheme, which was carefully prepared by a number of joint government and farmers’ organizations committees during the last few years, ia om similar lines to that operating in the case of sugar beet.
We are not much ahead of other countries, although perhaps our standards aresomewhat higher. It is evident that wheat-producing countries all over theworld have not been caught napping onthis occasion. If the report that Russia is to supply 9S,000,000 bushels of wheat to neighbouring countries is true, it isa clear indication of the trend. We could not hope, of course, to compete with. Russian wheat in Europe because of our geographical position.
It is pleasing to note that at long last., the Australian wheat growers, afterhaving been hoodwinked, not for a year but for a generation, by the supposed’ champions of their industry are alive tothe situation. It is interesting to compare the attitude of Labour’s political’ opponents to-day with their actions whenthey held office and the primary producing community of this country needed assistance most. The only three attempt?to stabilize the wheat industry in thiscountry have been made by Labour governments. The first was the Parker Moloney scheme introduced during theScullin Government’s administration, and’ the other two have -been made during thelife of the present Labour Government. The first was in relation to the International Wheat Agreement and the otheris the bill now before us. Although a majority of growers favour this legislation, in the course of the debate upon itin the House of Representatives, thehonorable member for Indi (Mr. McEwen) said-
We shall make the Australian Wheat Board a body of principles instead a body of puppets.
However, his South Australian colleague., the honorable member for Barker (Mr. Archie Cameron) said that he believed in ministerial control, and that when theOpposition parties were returned tooffice they would not forgo it. He added -
I cannot visualize any government sur rendering its obligation under the Constitution.
Obviously, the Opposition speaks withtwo voices. Although it is the duty of agovernment to legislate for the successful-1 operation of the wheat industry, no other legislation ever introduced into this Parliament has been subjected, to so much hypocrisy, cant and humbug, by the antiLabour parties over the years. No doubt the Deputy Leader of the Opposition (Senator O’sullivan) would like to contradict that statement. I realize that he is a busy man but if he will give me an assurance that in his leisure moments luring the long vacation that is to come, he will study the ramifications of the wheat industry, and the sordid attempts of anti-Labour governments to legislate for its assistance during the last twenty years, I shall undertake to provide him with cigars and whatever other comforts he may require during his research. The task will give him a headache, but I am sure that he will not return to this chamber so full of enthusiasm for his party’s record of assistance to primary producers. In the Victorian Wheatgrower of August last - a magazine which cannot by any stretch of the imagination be said to have very much in common with Labour’s policy - the following statement was made in a leading article: -
Only one course lies open to wheatgrowers. They must ignore the move of the Country party for marketing through State legislating which supposes defeat of stabilization. This supposition is futile. . . .
It took that journal a long time to come to that conclusion -and to inform the wheat-growers of it. The article continued : -
In view of this the Country party move will have a tendency to make growers stand over Against each other as antagonists in the vague and melancholy notion that they are gaining the .same end,
In September, 194S, when the ballot, was being taken, the New South Wales Wheatgrower, in a leading article, stated -
In spite of all the misleading propaganda to the contrary the wheat-growers of Australia are rapidly realizing that this is far too valuable to lose. . . . Who will gain by the “no” vote? Those with a political axe to grind perhaps. A few rapacious city interests, the dealers, and open marketeers; a’ few wealthy farmers who are in a position to get rich quick and then go out of wheat farming when the slump comes. These possibly will gain by a “ No “ vote.
That is very true. They have been the chief advocates of a “ No “ vote right -down the years. Producers now realize that the days of top prices will soon go. if they are not going already. They are thinking for themselves for the first time and are prepared to give the Labour Government an opportunity to do . what it has been trying to do for some years. Mr. G. C. Marcham, past president of the the Victorian Wheat Growers Association, said on the 19th June, 1946 -
At the last Country party Conference I listened to the debate on the Wheat Stabilization Flan.
My mind went back to a visit to Canberra when’ we requested the Menzies-Country Party Government to make a payment of 3d. a bushel to growers on 1930-40 pool.
We met Mr. McEwen in Parliament and made known the purpose of our visit and requested his support.
The reply was - I refuse to embarrass the Government on such a matter at such a time. . . . Now Air. McEwen poses as the wheat-growers’ champion.
Mr. T. W. Lilley, president of the Australian Wheat Growers Federation, said, in February, 1945 -
Mr. McEwen now desires to relate prices for stock feed to the present high export price. This is in distinct contrast to his attitude as a Minister. When a Minister, he said Australia could not afford to guarantee more than 3s. lOd. a bushel f.o.b. equal to approximately 3s. at sidings. War expenditure of £70 millions would not permit it. War expenditure to-day is over £400 millions a year.
Then, he voted for half of any return over 3s. lOd. for export wheat into a stabilization fund. Now he advocates an open purse.
Mr. McEwen is first at one extreme and no« at another.
Those statements reveal to members of the Senate, and to any one who may be listening to this debate, the attempt that is being made by Labour’s opponents to prevent this Government from doing something in the interests of the wheatgrowers, and of the primary producers generally. The following report appeared in the Ouyen and North-west Express in February, 1945: -
Over a number of years we have seen what portfolio-seeking politicians have done to the wheat industry. The grower has . been used asa “ political football “ especially by such men as Mr. McEwen, J.P.. and other Country party members.
The game is on again. God help the grower if he takes notice of the propaganda being poured out by these mcn who in the past have sold the industry again and again.
In September of this year, Mr. Evans, president of the Australian Wheat Growers Federation, said -
In what may be my last appeal to growers who have not yet voted I earnestly ask them not to be misled by a purely negative pamphlet. I strongly urge them to vote “ Yes “ and show their approval of a plan which will at least lay a “ foundation “ for a degree of future -security hitherto unknown to the wheat industry. Let us win it.
I do not propose to comment upon the various aspects of the hill that were dealt with by the Minister in his second-reading speech but at the committee stage I shall seek information on various clauses. I notice with interest that during the passage of complementary legislation through the South Australian Parliament, fears were expressed in some quarters about the differing prices for bagged and silo wheat. In South Australia the whole of the crop is handled on a bag basis. Incidentally, I cannot understand why the growers in that State have not taken advantage of the assistance which governments have been prepared to afford in order to enable them to handle some of the crop in bulk. I understand that in Western Australia only 25 per cent, of the crop is handled in bags. I am informed that three years ago the cost of cornsacks and handling of wheat in bags worked out at approximately Sci. a bushel. I shall be interested to learn whether some provision is being made to off-set that additional cost in States where the crop is handled mainly in bags. One can readily appreciate the anxiety which exists among wheatgrowers in that respect. I ask the Minister, when he is replying to the debate, to state the exact position. I am confident that this scheme will be a success. As it has the blessing of the wheatgrowers, I can see no reason why it should not provide a firm foundation for the future prosperity of the industry. No doubt the Government will take the earliest opportunity to adjust any anomalies that may arise as the scheme is developed. Probably, owing to differing conditions in the various States, including differences between soils, some anomalies will arise. I see in this plan an effective means of combating soil erosion. In the past, owing to the uncertainty of prices, growers have been more or less obliged to overcrop, but with the guarantee of a payable price for the next five years that tendency should be arrested. I do not believe that serious objection will be taken by the growers to the composition of the Australian Wheat Board whatever its personnel may be. Indeed, the personnel of the board has never really been a cause of discontent among the growers. I believe that all wheat-growers will welcome thi? legislation.
– This legislation will benefit not only the wheat industry but also the Australian economy generally. Most wheat-growers admit that a scheme of this kind is long overdue. The Opposition parties, particularly the Australian Country party which claims to represent the wheat-growers, have talked about stabilization of the wheat industry for many years. During the last election campaign many promises were made on behalf of the Australian Country party that it would stabilize^ the industry if the anti-Labour parties “were returned to office. However, the Opposition parties have never done anything tangible for the industry. Their interest in the growers has been confined merely to the making of promises. It is significant that whilst anti-Labour governments have talked about this problem for nearly twenty years, it remained for the Scullin Government in 1930 to take definite action in the interests of the wheatgrowers and provide a guaranteed price of 4s. a bushel at country sidings. However, the scheme evolved by that Government was defeated by the anti-Labour parties which had a majority in the Senate at that time. Subsequently, the Scullin Government proposed another scheme under which it undertook to guarantee a price of 3s. a bushel when the ruling price of wheat was considerably below that figure. However, that scheme was frustrated by the Commonwealth Bank which was then under the control of a board representative of vested interests. The bank refused to provide the funds necessary to finance that scheme which, therefore, had to .be abandoned. During the last five years every scheme proposed by the present Government to aid the industry has been vigorously opposed by the anti-Labour parties. Those parties cannot justify their claim to have the interests of the wheat-growers at heart. They vigorously opposed the wheat stabilization legislation introduced in 1946. During the general election campaign in that year, r.hey urged the growers to reject that scheme.
Now, at last, the Government has surmounted the difficulties and opposition which hitherto prevented it from helping the growers. The growers have wholeheartedly approved of this scheme at a ballot taken in the four principal wheatgrowing States. They have endorsed it despite the oppositon of anti-Labour governments in three of those States. In “Western Australia, for instance, the State Government endeavoured to sabotage this scheme by proposing a scheme of its own. I recall that the Minister for Agriculture in Western Australia, Mr. Wood, sought to draw the Minister for Commerce and Agriculture (Mr. Pollard) into a controversy, but the latter simply replied that it was for the wheat-growers themselves to say whether they wanted the scheme. As we know an overwhelming majority of the growers voted to accept it. They will be guaranteed a price of 6s. 3d. a bushel for the next five years. I have had some experience among the wheat-growers. E know of hundreds of growers who simply walked off their farms rather than face starvation under chaotic conditions due to the uncertainty of prices. I have no doubt that the growers themselves really did not expect to be guaranteed so favorable a price as 6s. 3d. a bushel for the next five years with the proviso that within three years the possibility of extending the scheme for an additional period of five years would be examined. [ sincerely trust that the growers will not forget that they owe this scheme to a Labour government which has assisted them, in every way in its power. The Prime Minister (Mr. Chifley) in one of his “ Talks to the Nation “ stated that his Government had provided assistance to primary producers in the form of subsidies exceeding £70,000,000. The record of anti-Labour governments will not bear comparison with the record of this Government in helping the primary producers who form the backbone of this country. I trust that further consideration will be given to the interests of people in the remote areas of. Australia. The measure is intended to improve the lot of the working farmers, and when I use the word “ working farmers “ I do not. mean the “ farmers “ of St. George’sterrace or Flinders-street. The real primary producers of this country are given the assurance that they can plan for the next five years I have no fear that primary producers will allow themselves to be influenced by the suggestion made by the Opposition that the operation of the scheme should be extended to ten years. Although the present measure provides for a term of five years, primary producers can rely on the present Government to honour its undertaking to review the scheme after three years’ experience of its operation. I particularly desire to point out the benefits which will accrue to the wives and families of the farmers, who have, in the past suffered particularly because of economic uncertainties. In many instances the children of farmers have been deprived even of ordinary educational facilities. However, most of the hardships experienced by wheat-farmers up to the present time will be removed because of the guarantee of security associated with a fixed price of 6s. 3d. a bushel. Furthermore, that guarantee will not be affected by fluctuations overseas in the price of wheat. Some years ago when the price of wheat was depressed to a record low level because of the collapse of prices overseas, wheatfarmers in Western Australia could not obtain even ls. a bushel for their wheat. Many of the farmers in the industry today remember that dreadful period and other vicissitudes occasioned by violent fluctuations of the price of wheat, and I have no doubt that they are grateful for the security given to them by the present scheme.
– Their appreciation should be reflected in their votes at the next general elections.
– I trust that it will, and I hope that when the scheme comes into operation the farmers will give to it the support which it deserves.
Members of the Opposition have offered no substantial criticism of the measure but have contented themselves with finding minor faults in it.
They have suggested that the operation of the scheme should be extended to ten years. However, I remind them that prior to the general elections in 1946, when Labour advanced a similar plan for the wheat-growers, members of the Opposition criticized the principles of the scheme and stated that it contained practically no merits whatever. However, when their contact with primary producers convinced them that the scheme appealed very strongly to the farmers, they changed their tactics and urged that the scheme should operate for a period of ten years. If the principles of the scheme were fundamentally unsound, then, of course, it would be wrong to implement the scheme, irrespective of whether it was to operate for five years or ten years. In any event, their criticisms were more than answered by the result of the general elections, when the anti-Labour parties were ignominously defeated. The farmers have now realized the need for security, as is evident from the result of the recent ballot of wheatgrowers held in all States. Incidentally, 1 compliment the farmers on the. sound judgment which they displayed in approving the scheme at that ballot. I do not intend to delay the passage of the bill by saying anything further. However, I sincerely compliment the Government on having introduced it, and I commend the measure most heartily to the support of honorable senators.
– The people of Australia have been awaiting for many years the introduction of such a measure. Ever since I have been a member of the Parliament I have advocated that the return received by farmers should be commensurate with their labours. Those who have been associated with the industry for some years and realize the difficulties which have confronted wheat-growers in the past realize the remarkable change which has been brought about in the lot of wheat-farmers by the plan embodied in the present measure. Because of the guarantee of 6s. 3d. a bushel, which means 18s. 9d. a bag for wheat, the farmers of this country are now in a wonderful position. Formerly they worked very hard, and in some years received virtually noth ing. I remember that only a few years ago the ‘wheat-farmers of Western Australia received only from ls. 9d. to 2s. 9d. a bushel. Those who have survived in the industry will not forget those times, and they are not likely to be hoodwinked by the pretensions of the Opposition that they are in sympathy with the farmers. The only “ farmers “ with whom the opposition are in sympathy are the farmers of St. George’s-terrace. Perth, King William-street, Adelaide, Collins-street. Melbourne, and Sussexstreet, Sydney. The interests which formerly manipulated primary produce from those centres are represented in the National and the State Parliaments of this country by the Australian Country party. At election time the members of that party have a great deal to say about their concern for the man on the land, but as soon as they are elected to the. Parliament they promptly forget about the primary producers. As an example of the lack of concern of the Australian Country party for the farmers of this country, I point out that although members of that party participated in antiLabour governments intermittently for a period of 25 years, the farmers have had to wait until now for the introduction of a practical scheme of stabilization. They will not easily forget that a Labour Government introduced that scheme.
Not the least of the substantial benefits that will be conferred on wheatfarmers by the introduction of stabilization is that farmers will be enabled to calculate exactly how much they should receive for the sale of their wheat even before the seed is sown. Because of the development of scientific farming it is now possible for a wheat-grower to forecast with remarkable accuracy the yield per acre from his crop. Since farmers know that they will receive 6s. 3d. a bushel for all wheat harvested, they can calculate, subject to the usual hazards associated with farming of any kind, exactly how much they should receive for their efforts. That certainly contrasts with the grave uncertainty formerly associated with wheat-growing. Many wheat-farmers who had harvested excellent crops sometimes imagined that they could afford to purchase amenities for their families. Some of them who pin-chased motor cars after their crop had been harvested in anticipation of being able to pay for them when their wheat was sold, had the disheartening experience of finding that they were virtually insolvent. I remind the primary producers of this country that the Australian Country party was never greatly concerned about occurrences of that kind.
The Wheat Growers Federation of Australia represents the small wheatgrowers of this country, who have heartily supported the stabilization scheme. However, other organizations which are in league with the Australian Country party endeavoured to persuade the wheat-farmers that they were being, led into a trap and that the scheme was a trick. Fortunately, Mr. Cullen, who is a member of the executive of the Wheat Growers Federation and is well known in the industry throughout Australia, visited the wheat-growing areas in all States prior to the recent ballot being taken and explained to the farmers the proposals of the Government and the probable effects of the scheme upon farmers. The result of his efforts, and those of members of the Australian Labour party who introduced and supported the scheme, was that the farmers in all States approved the introduction of the scheme by substantial majorities. The result of the recent ballot was: Victoria, Yes 11,275, No 3,495. majority 7,780; Western Australia, Yes 3,957, No 2,426, majority 1,531; New South Wales,’ Yes 8,951, No 6,360, majority 2,591; South Australia, Yes 5,729, No 4,090, majority 1,639. In the aggregate 46,283 growers voted on the proposal, and a majority of 13,541 approved the plan.
Of course, farming has always been a gamble, and farmers have been subjected to the caprice of the elements, the occurrence of drought, fire, floods, and disease, and the activity of pests of all kinds. Whilst it is impossible to eliminate the operations of those unpredictable influences, I have always advocated that farmers should, as far as possible, be placed on a similar basis to wage earners in metropolitan areas, who know from week to week and month to month exactly what their incomes will be. I am sure that the people who live in the capital cities of this country will welcome the proposal to confer on the farmers of this country a sense of security because they know the disastrous consequences to the price of foodstuffs which are caused by violent fluctuations in the price of wheat. Many small suburban householders are dependent in some degree on their poultry for food, and sudden fluctuations of the price of wheat mean that they cannot always obtain sufficient feed wheat for their fowls. Producers of other kinds of primary produce are also dependent on the wheatgrowers. As an instance of the tremendous improvement which has taken phi e in the lot of wheat-farmers by the increases of price which have occurred in recent years, I mention that a storekeeper whom I know in a small town in Western Australia was unable to meet his obligations some years ago because of the low price nf wheat which then prevailed. He was dependent on the wheat-farmers of the. district for his income, and because those farmers were struggling to keep themselves and their families -alive they could not afford to pay him the money which they owed him or to buy further goods from him. However, the small store.keeped determined to stand by them. Later the wheat-farmers of this country were given a guarantee of 4s. a bushel for the first 3,000 bushels which they sold. To-day that storekeeper has recovered all the money owed to him, with the exception of the debts owed by a few local ‘ farmers. In 1939 wheat cost 3s. 6d. a bushel to produce. Despite the recommendations of the royal commission on the wheat industry the government of that time decided to acquire wheat at a price of only ls. fid. a. bushel. Unfortunately for the wheat-growers of this country three members of the Australian Country party voted in favour of that proposal. Nevertheless, members of that party have no hesitation to-day in asserting that the present price of 6s. 3d. a bushel is not high enough, and that the stabilization scheme which guarantees the payment of that price to farmers should operate, not for a period of five years, but for a longer term. They do not like to be reminded that when their party was. in office ls. 6d. a bushel was the ruling price. During the war, and since, when small farmers were confronted, with all kinds of difficulties, Labour offered special inducements to them to remain on their farms. Labour’s purpose in inducing them to do so was not only to benefit them but also to safeguard the economy of the country so that ample stocks of wheat for human consumption and stock feed would be available. I have always contended that the farmers are the backbone of the country, and that Labour is the only political party to recognize that fact. In this chamber five years ago, when those now on the government side were in opposition, I was told that if I did not behave myself I would be named. I was also told, when speaking about the conditions of the wheatgrowing industry, that I did not know what
I was talking about. The debate, at that time, concerned weevils. If ever there was a weevil it was the honorable senator who said that I did not know what I was talking about. When I mentioned the word “ fight “ I was told to withdraw it.
We all depend on the people on the land who produce wool, wheat, fruit, and other essential commodities. They are the hack-bone of this country. As I have said before, most of the breakfast foods manufactured in this country depend on wheat as a basis. When I was a member of the Western Australian Parliament some years ago, the farmers were always made political footballs. They were kicked from all directions, and when they had bad seasons and could not meet their commitments, the banks frequently ordered them off their farms. Never before have the farmers been so unanimous, as they were when the ballot was taken, for a stabilized price of fis. 3d. a bushel for wheat. I believe that State control of the wheat-growing industry has never been wanted by the farmers. The farmers showed sound judgment by voting in favour of a safe plan, supported by a guaranteed price, backed by both growers’ funds and Commonwealth funds. When prices are high the farmers will protect themselves, whereas under State control there is no guarantee of any financial support. The guarantee is to be for a term of five years.
The Deputy Leader of the Opposition (Senator O’Sullivan) says that that term is not long enough. I point out thai when anti-Labour parties were in office, prices were not guaranteed’ for any period, although the members of the Liberal party were more generous in that regard than were those of the Australian Country party, who did not assist the farmers. It is obvious that all the members of the Australian Country party think about is how to get into Parliament, and having secured election, they forget the farmers.
– They “ farm the farmers “.
– They have done so in the places that I have mentioned. In that connexion I refer particularly to Mr. Teesdale, of Western Australia. He has never been of any help to the farmers. I have often crossed swords with him. On one occasion he opposed me at an election, but he is in his right place now. He knows as much about farming as do many others who profess to have the interests of the farmers at heart. His goal was to become established in an office on Saint George’s-terrace, Perth, where he could protect his commercial interests. He has a political bias which affects all of his public statements. I hope that he .is listening to the broadcast of these proceedings to-night, because whenever we meet he gives me a very black look. He represents the financial interests of various towns rather than the farmers. I appeal to the wheat-growers to support this Government, which has done more for the primary producers, particularly, the wheat-growers, than has ever been done for them before. The Vice-President of the Executive Council (Mr. Scully), when Minister for Commerce and Agriculture, successfully laid the foundation of what is now being achieved in this measure. 1 believe that whenever a man does good work he should be praised for it while he is alive, so that, he will know that ti? work is appreciated, and shall continue to work for the benefit, not only of himself, but also of those that he represents.
In 193S and the years immediately following, the local price for wheat was higher than the export price. The ballot taken in connexion with the proposed plan indicates that both the public and the wheat-growers favour the payment of a fair price for wheat in Australia. The price of wheat for home consumption should not follow export prices, which move erratically up and down the scale. The old system was ruinous to the farmers. To-day the farmer is assured of a steady price. Violent fluctuations in price will be overcome by means of this plan. No matter what the state of the market may be, it will be a great satisfaction to the farmer to know that he shall receive 6s. 3d. a bushel for all of his crops. The system that operated in the past tended to ruin growers, and resulted in no benefit whatever to the consumers. [ contend that a reasonable stabilized price over a long term will prove more satisfactory to both the growers and the consumers.
When the Minister for Commerce and Agriculture (Mr. Pollard) was concluding the second-reading debate on this matter in another place, he said that the proposed scheme would have a stabilizing effect on wheat prices, and that although it was easy to say that a collapse of overseas prices was unlikely during the next few years, sometimes prices collapsed quickly. The Minister stressed that when that had occurred in the past it had resulted disastrously to the people of Australia. It is true that in the past prices have collapsed and that only very low prices were obtained for wheat that was exported from this country. Following the introduction of this plan, the farmer will not have to worry whether prices collapse or not, because the Government will guarantee his returns. A farmer who understands his business will be able to review his prospective crop, and will then be in a position to estimate, fairly accurately, what the result will mean to him financially. Wheat-growers are entitled to a fair deal, and they should not be exploited. T. feel confident that they will not be exploited whilst the present Minister for Commerce and Agriculture remains in office. In the past, approximately 70,000 wheat-growers in this country have been responsible for a production of 160,000,000 bushels of wheat a year, more than one half of which was exported. I contend that the price payable to the farmer should be fixed, so that he will be assured of a fair deal irrespective of the prices received for wheat that is exported. Whilst it is true that prices overseas may remain high for the next few years, I point out that overseas countries are now increasing their acreage, with the result that, in time, overseas prices for our wheat must become lower. If and when that happens, the farmers who will benefit under the proposed plan will realize that this Government has done them a good turn by introducing this measure.
At all times farmers have numerous trials and tribulations with which to contend. They do not know from day to day how their crop will progress. They do not know, after sowing the seed, whether sufficient rain will fall on that area to give the crop a start. Bain plays a big part in wheat-growing. At times I have heard farmers remark, when one inch of rain has fallen overnight, that that will result in so many more bushels to the acre when the crop is harvested. The Government wants the farmers to be as happy as possible, and the fact that they will be guaranteed a reasonable price for their crops will tend to increase their happiness. Provided that this plan proves satisfactory over the next five years, the Government will consider extending its term for a further period.
For the past, twenty years the life of the wheat-farmers of this country has been one long struggle. As a result of the introduction of this plan, that struggle for the farmers will be terminated. They had their opportunity to vote on this matter by means of a ballot, and it will be pleasing to the majority who voted in favor of the introduction of this plan to know that for many years to come they will be protected from the insecurity of overseas economic fluctuations, and that they will receive a fair deal. In commenting on the result of the ballot, Mr. T. C. Scott, a well-known person in the wheat industry, is reported to have said -
It is a momentous decision in the wheat industry. Growers can look ahead and plan for improvements. They need not fear in future that they will produce wheat at a loss.
– T years’ term is altogether too short.
– I shall support an extension of the period, if the operation of the plan proves satisfactory.
– Whilst we know that in recent years Australian secondary industries have developed very extensively it must be admitted that this is still, in the main, a primary-producing country, and that that situation will continue for some years to come. It is essential that any Government, irrespective of its political character, shall realize that the best possible attention should be given to the people engaged in primary industries. I was very pleased to notice the attitude of the Deputy Leader of the Opposition (Senator O’sullivan) towards this bill. He pointed out in the first few words of his speech, that this is a matter on which we should all get together.
I whole-heartedly support the honorable senator’s suggestion that we should co-operate.
– He is not a bad fellow when he gets his own way.
– A lot of the trouble associated with wheat in Australia has been caused by the conflicting political views associated with that commodity. I have a vivid recollection of the conditions that have applied to wheat-farmers over the years, and what they have had to contend with. I know that in years gone by they had to rely entirely on the overseas prices. The history of wheat in this country shows that there were periods when there was a reasonable price for wheat exported from Australia, [f my memory serves mo correctly, just subsequent to World War I. the price approximated the proposed guarantee under this bill. It was about 6s. 2d. a bushel. At that time, many wheatfarmers felt that they were “on top of the world “. They were having reasonably good harvests, disposing of their crops readily, and living fairly well. They became easy targets for people who were selling new motor cars and expensive machinery for utilization on the land. Those items cost the farmers a lot of money. In addition they were pestered with proposals that, as they were doing very well, they should accept advances to improve their properties. They were told that everything in the garden would be lovely, and that in the end they would come out all right. The result was that many hundreds of wheat-farmers in this country bought motor cars and expensive machinery at high prices on time-payment. “Not long afterwards a depression occurred. Many farmers were committed to liabilities which they had no prospect of discharging on the incomes which they could obtain from the depressed .prices. As the result, many of them had to walk off the land. Many of them lost equity in their properties. For a. long time after that, scores of them were still paying for the financial accommodation that they had secured from commercial interests, frequently in order to purchase goods and equipment which were not absolutely necessary to them. I cite these facts because certain political parties are always endeavouring to convince the primary producers that they are prepared to do great things for men on the land. I have always been curious about the true objects of the Australian Country party. We are led to understand that the party was formed essentially to look after the interest of primary producers. But what has it done? It has proved itself to be a primary producers’ party in name only. Throughout its history it has alined itself with what to-day is the Liberal party, having already used and cast off the names of the United Australia party and the Nationalist party, under which it masqueraded for many years.
No real efforts were made to stabilize the wheat industry until after the outbreak of World War II. I travelled extensively around Western Australia in 1943, after the then Minister for Commerce and Agriculture, Mr. Scully, had announced his scheme for the payment of 4s. Id. a bushel for the first 3,000 bushels of the crop produced on any farm, and I had many friendly arguments with farmers. Most of them considered that the price of 4s. Id. a bushel was inadequate and held the view that the scheme should operate for a longer period than was proposed. However, as time passed, whether they, agreed with it or not, they accepted the system of stabilization that was adopted by successive Labour Governments. As the result of that acceptance, the wheat industry has been in a much sounder position in recent years than ever before in Australia’s history. That statement is borne’ out by evidence that can be obtained in country districts throughout the Commonwealth. One can obtain a clear index of the economic situation in any rural area by visiting the local storekeepers. I have found that, as Senator Clothier has pointed out, country storekeepers have virtually cleared their books of debts since the application of stabilization to the wheat industry. The reason for that is that the farmers have been able to discharge their liabilities. In the light of that evidence, it must be admitted that the stabilization plan has been of direct benefit to the wheat-growers.
The Deputy Leader of the Opposition said that it was unlikely that high prices would endure forever. That is a very sound statement, and one which I have used frequently when discussing stabilization with farmers. Nobody can foretell when the prices of wheat and other staple commodities will fall. All sorts of things may happen. There is a possibility of over-production, if I may use the term, in some wheat-growing countries.
– Not while the world is starving, surely!
– I have not overlooked the world food situation. As the result of the ravages of war, there is still a definite shortage of food in Europe and other parts of the world, and until that shortage is overtaken there is every possibility that the high price of wheat will he maintained. However, in view of the great demand, there is a strong likelihood that wheat production will be tremendously increased. I understand that some European countries are capable of producing large crops when the industry is properly established. France, for instance, may be able to produce much larger quantities than it has been able to grow for a long time. Hitherto the United States of America has provided a market for an almost unlimited quantity of wheat, and therefore, in relation to its population, it has not been regarded as a great wheat producer.
– It is a great producer but not a great exporter.
– It is possible now that it may seek large export markets for its wheat. Canada and Argentina are also great producers. We do not know how much wheat Russia may be able to grow. I understand that it is capable of providing for the needs of its own people, but it may already be in a position to export tremendous quantities. All of these factors have to be considered in planning for the future of the Australian wheat industry. Therefore, I agree with the Deputy Leader of the Opposition that we cannot expect present high prices to endure for ever.
I also agree with him that the proposed term of five years for the stabilization plan provided in this bill is rather short. Of course, results will determine whether that prognostication is correct. In any event, the bill provides that the period of the scheme may be reviewed within three years of its commencement. Thus, the door is not closed to an extension. We have had considerable experience of land settlement schemes in Australia. We frequently hear honorable senators ask Ministers, “ What is happening in- connexion with the land settlement of ex-servicemen?” Critics declare that the Government is not doing enough to facilitate the settlement of exservicemen. However, I have very vivid recollections of disastrous land settlement schemes which were introduced in Western Australia not many years ago. One scheme was initiated because it offered the State an opportunity to get money cheaply from the Mother Country, but the taxpayers of Western Australia are still paying off millions of pounds of expenses that it incurred. That was the Peel Estate scheme, which has almost gone out of existence because the people who were settled under it have gone to other occupations. In the light of such experiences, governments must be careful how they expend public money in connexion with the development of primary production.
By means of this stabilization scheme, the Government is doing something of great value in the interests of a large section of the people of Australia. I am greatly impressed by the fact that most of the wheat-growers in the main States have agreed that the plan is worth while. That was not so in relation to other plans that were introduced years ago. I have become nauseated by repeated declarations that this Government is anxious to take what it can from the people without giving anything in return, and that it is concerned only with directing the lives of the people and establishing a bureaucracy. Its critics have spoken of “ power-hungry Canberra “. Therefore, it is more than pleasing to note that a majority of the wheat-growers are satisfied that the Government is doing something worth while on their’ behalf . “What is involved in the plan? The bill proposes to stabilize the wheat industry and to assure profitable returns to the growers for wheat grown until the end of the financial year 1952-53. It will guarantee to the producers a price of 6s. 3d. a bushel f.o.r. ports on a bulk basis for all wheat that they deliver. That is definite. There is no “ perhaps “ in the scheme. There is no suggestion that the plan may be altered within the period stipulated by the bill. A price of 6s. 3d. a bushel is guaranteed^ but that figure may be increased according to variations of the cost of production. A special committee associated with the Department of Commerce and Agriculture will determine from time to time the actual level of the cost of production. Any increase of the index figure will be reflected in an addition to the guaranteed price of 6s. 3d. a bushel. I have always believed that the man on the land is entitled to the wage standards and amenities enjoyed by workers in other industries. By organizing, workers in industry can obtain improved working conditions and rates of pay through the Arbitration Court; but although farmers do have- a system of organization, I do not think they have ever made much progress towards securing an improvement of their conditions or living standards which are governed largely by the price that they obtain for their products. This measure will guarantee a certain degree of security to wheatfarmers. I understand that the cost of production in this industry was determined after a thorough investigation. The payment of a guaranteed price for the next five years will give to wheatgrowers an opportunity to plan ahead. They will know that regardless of the price of wheat in coming seasons, provided they have bountiful harvests they will receive a stable income. That in itself must appeal strongly to wheatgrowers. I understand that the State governments have agreed to pass the necessary complementary legislation to implement the Government’s stabilization plan. The co-operation of the States is necessary to ensure a home consumption price equal to the guaranteed price. 1 have heard quite a lot of criticism of the relationship between the price of wheat for home consumption and the price of export wheat. There has been a suggestion that wheat-farmers have been saddled with the task of stabilizing the economy of this country by providing wheat at an unjustifiable home consumption price. Naturally it is the desire of the Government to stabilize the Australian economy. Flour is a basic foodstuff, and its price should be stabilized so far as possible. Invariably, an increase of a half-penny in the price of a loaf of bread is strongly resisted by housewives, and rightly so, because even that increase can have a severe effect upon a family budget. To a family which uses four loaves of bread a day - not an unreasonable quantity for some families - an extra one half-penny a loaf can be a severe imposition. Under the Government’s plan wheat sold for home consumption must bring the guaranteed price. I do not know exactly what quantity of wheat is required for home consumption in this country, but I do know that our export trade is substantial, and that the Government’s guarantee will apply to all export wheat up to 100,000,000 bushels, but not to any excess over that quantity. Therefore if the price of wheat exported in excess of 100,000,000 bushels brings more than 6s. 3d”, a bushel, the growers will reap the benefit. On the other hand, if the overseas price for non-guaranteed wheat is lower than 6s. 3d. they will not be so well off. The State parliaments will be called upon to approve certain organizations to receive wheat from the growers voluntarily delivered for sale. I ask honorable senators to note the word “ voluntarily”. As I understand the proposal, if a wheat-grower does not wish to be associated with the Australian Wheat Board or with the organizations set up by the various State governments to dispose of wheat, he may, if he so desires, deal direct with the firms with which he has transacted business in the past. 1 do not wish to be uncharitable, but I believe that, in years gone by, many wheatgrowers sold their wheat to middlemen at rather poor prices and that middle-men were able to skim the cream off the trade. That is something that the wheat-grower should keep well in mind when considering this proposal. There is no possibility of middle-men entering into wheat transactions carried out under the Government’s stabilization plan. The middle man in this case is the Australian Wheat Board, which will arrange the sale’ overseas of Australian wheat, and the proceeds from that sale will be returned direct -to the growers, without the deduction of any “ cut “. ‘ That is important. The State Governments are required to make provision for the direction of wheat by .the Australian Wheat Board at any time to an approved organization. That means, according to my interpretation, that it will be competent for the State governments to direct any organization that they may establish, or whic hmay exist, to receive wheat for, and on behalf of the Australian Wheat Board-.
The State governments will have to pass legislation to regulate wheat growing on marginal areas to eliminate uneconomic production. A committee will advise on this matter. . That, too, is most important because there are some people who, if they thought they could get away with it, would sell to a prospective wheatgrower land which was not capable of growing an ear of wheat. In Western Australia, there is a large area of country which is described as marginal wheat land. Should rain fall at the right timeof the year,. that land can produce heavy crops, but if rain does not fall at the right time, farmers may receive no return at all for their labour. So, from the point of economic farming, growers in marginal areas are taking great risks indeed. T have a recollection of a scheme known as the “Three Thousand Farms Scheme”, which, operated largely on marginal areas in Western Australia. Not very many of those 3000 farms are left to-day because they were uneconomic due to the vagaries, of nature, and were unable to withstand adverse seasons. It is all to the good, therefore, that . there should be an authority to advise people who wish to take up farming in marginal areas. The Minister, in his second reading speech, pointed out that the States had agreed that, where desirable, State wheat boards should be constituted with a majority of grower representatives elected by ballot. That, to my mind, is fundamental to any wheat stabilization scheme. Until now, although growers have been represented, they have not had majority representation. I believe I am quite safe in asserting that only under Labour have growers had majority representation. Therefore, to that degree at least, the Government is being democratic. In the past, under anti-Labour governments, growers have been in the minority, and have been outvoted by others who have had no association’ with production at all. This measure represents a substantial improvement on that state of affairs. *
There is . much more that I could say about this bill, but I shall conclude by again expressing the opinion that the proposals that it contains are worth while. I am pleased indeed that a majority of wheatgrowers in Australia have agreed with the Government’s proposals. I understand that it is expected that the tax on wheat will yield £15,000,000 in the 1947- 48 season for stabilization purposes. In no circumstances will the tax be more than 2s. 2d. a bushel. That will be computed on the basis of 50 per cent. Viewed from any standpoint, this legislation is progressive. It conforms to the ideas of the Government. My only regret is it has taken so long to secure the co-operation of the growers. .
– in reply - I listened with a great deal of pleasure to the discussion of this measure and am pleased with the manner in which it has been received by the Senate. The Deputy
Leader of the Opposition (Senator O’Sullivan) was particularly generous in his support of the measure, and all honorable senators who have spoken have given it their blessing. Apparently, it will be passed without opposition, as was the case in the House of Representatives, where it was received most favorably by all honorable members and was passed without a division. I ask for leave to continue my remarks at a later stage.
Leave granted; debate adjourned.
The following papers were presented : -
Science and Industry Research Act - Twenty-second Annual Report of the Council for Scientific and Industrial Research, for year 1947-48.
Ordered to be printed.
Arbitration (Public Service) Act - Determinations by the Arbitrator,. &c. - 1948 -
No. 70 - Amalgamated Postal Workers’ Union of Australia.
No. 71 - Peace Officer Guard Association.
No. 72 - Postal Telecommunications Technicians’ Association (Australia) and others.
Nos. 73-75 - Federated Clerks’ Onion of Australia.
No. 76 - Postal Telecommunications Technicians’ Association (Australia).
No. 77 - Amalgamated Engineering Union and others.
No. 78 - Commonwealth Public Service Artisans’ Association.
No. 79 - Printing Industry Employees’ Union of Australia.
No. 80 - North Australian Workers’ Union.
Commonwealth Conciliation and Arbitration Act - Regulations - Statutory Rules 1948, No. 143.
Commonwealth Public . Service Act - Appointments - Department -
Defence - R. O. D. Noone, A. T. Smith, N. A. Vickery.
Interior - A. G. W. Greatorex.
Post-war Reconstruction - A. Y. Montgomery.
Prime Minister - J. E. Richardson.
Repatriation - M. E. Coe.
Customs Act - Regulations- Statutory Rules 1948, No. 145.
Defence Act - Regulations - Statutory Rules 1948, No. 144.
Lands Acquisition Act- Land acquired for - Department of Social Services purposes - Toorak, Victoria.
Postal purposes -
Colonel Light Gardens, South Australia.
Kapunda, South Australia.
Mannum, South Australia.
Waroona, Western Australia.
Overseas Telecommunications Act- Second Annual Report, including Financial Accounts,- of the Overseas Telecommunications Commission (Australia), for year 1947-48.
Papua-New Guinea Provisional Administration Act - Ordinances - 1948 -
No. 9 - Co-operative Societies.
No. 10 - Customs Tariff (Papua).
No. 11 - Customs Tariff (New Guinea).
Superannuation Act - Regulations - Statutory Rules 1948, No. 142.
Senate adjourned at 10.47 p.m.
Cite as: Australia, Senate, Debates, 17 November 1948, viewed 22 October 2017, <http://historichansard.net/senate/1948/19481117_senate_18_199/>.