19th Parliament · 1st Session
The President (Senator the Eon. Gordon Brown) took the chair at 3 pm. and read prayers.
Bil] returned from the House of Retire sentatives without amendment. . .
– I preface my question, which is directed to the Minister representing the Postmaster-General with the statement that, owing to the frequent flooding of the Maitland district during the last two years, there is great apprehension among the people who live in the low-lying areas of that district whenever the level of the Hunter River rises substantially. Will the Minister request his colleague to consider askingradio stations in the Maitland district to broadcast, at regular times, announcements stating the height of the river and, when the water reaches a level of 25 feet at Belmore Bridge, to broadcast hourly bulletins until the danger of a flood has passed?
– I can see that broadcasts of the kind mentioned by the honorable senator would be of considerable assistance, and I shall bring, his suggestion to the notice of ‘ the PostmasterGeneral.
– Has the Minister for Trade and Customs read a statement published in the Melbourne Herald of last Saturday on behalf of Australian public opinion polls ? If so,’ has he noted that the statement says that a comprehensive poll, which has just been completed, was taken after the Senate passed a bill for a referendum on prices control? I do not want to go into details, but it is claimed that the poll indicates that three in four of the persons interviewed desire prices control to remain and, notwithstanding that, according to the results of the poll, ‘ South Australia, Western Australia and Tasmania show a slight preference for State control of prices rather than for Federal control, a referendum to alter the Constitution to give the Commonwealth power over prices would be carried in each of the six States. I ask the Minister whether it is the intention of the Government to proceed :with the referendum for which’ provision is made in the Constitution Alteration (Prices) Bill?
– I was in Brisbane during the week-end and did not have an opportunity to read in the Melbourne Herald the statement to which the* honorable senator has referred. With all respect to the honorable senator, I point out that it would be quite impracticable to draw any sound conclusion from the poll unless one knew the nature of the questions that were asked of the persons interviewed. I am certain that everybody is in favour of lower prices, but if people were asked whether they were in favour of wage pegging, man-power direction and control and other controls that would be inherent in an effective system of prices control, their answers might be somewhat different from the answers that they would give to an inquiry whether they were in favour of prices control. Not having had an opportunity to read the report and not knowing the nature of the questions asked of the persons interviewed, I have no further comment to make.
– I preface my . question to the Minister representing the Postmaster-General with the statement that the Postmaster-General’s Department is being caused much embarrassment by the fact that, having trained its technical and engineering staff, members of that staff are leaving the department because there are better opportunities for them outside. Can he inform me whether the re-organization and enlargement of the Engineering Branch is contemplated ? If so, why was not this urgent matter concerning telephone and telegraph facilities not carried out simultaneously with the re-organization of similar branches in other States? Can the Minister inform me what is the earliest, date on which such a re-organization could take place?
– I- am unable immediately to answer the honorable senator’s questions. However, I shall refer the matter to my colleague, the POstmasterGeneral, and obtain a considered reply for the . honorable senator at an early date.
– Will the Minister representing the Postmaster-General direct the attention of the postal authorities at Canberra to the fact that there is a township of Perth in Tasmania? Will he ask them to refrain from sending letters clearly addressed to Perth, Tasmania, via Western Australia, where, I understand, there is another township of the name of Perth?
– I shall .bring the honorable senator’s complaint to the notice of the Postmaster-General, and a reply will be furnished in due course.
– Is the AttorneyGeneral aware that 49 peace officers in Brisbane - all ex-servicemen - who have had up to nine years’ service in his department, have received written notice of dismissal, operative in some instances from the 6th December, 1950? In view of the fact that these men, some of whom are over fifty years of age, have rendered faithful service to the department, will the Minister endeavour to have them placed in suitable employment in other branches of the Public Service?
– I am aware that dismissals from the Peace Officer Guard have taken place, and I think that the number that the honorable senator has mentioned in respect of Queensland would he correct. I shall make inquiries to see whether anything can be done in the direction that he has indicated, and I will inform him of the result of my inquiries in due course.
” Senator CRITCHLEY. - Some time ago the Minister representing the Minister for Commerce and Agriculture informed the Senate that it was expected that 70,000 tons of jute would arrive from India by the end of this year. Can the Minister inform me what proportion of that quantity has already arrived, the conditions of the relevant agreement, and whether conditions are being carried out satisfactorily. Can the Minister assure the Senate that there will be available for primary producers a sufficient quantity of jute and cornsacks for this season’s harvest?
– Whilst the Minister for Commerce and Agriculture was abroad, an officer of his department was sent to India to make inquiries in connexion with this matter. If the honorable senator will place his question on the notice-paper I shall obtain a reply for him.
– Oan the Minister representing the Minister for Supply say whether that Minister has been negotiating for the sale to private interests of the Australian Aluminium Production Commission’s plant at Bell Bay, near Launceston? Can the Minister say what stage the negotiations have reached, and why such an important national project should be allowed to get into the hands of an international metal combine?
– I shall confer with the Minister for Supply and the honorable senator will receive a reply to his question as soon as possible.
– In view of the constantly rising freight charges between Tasmania and the mainland which place Tasmanian industries at a disadvantage compared with those on the mainland, will the Minister for Fuel, Shipping and Transport consider granting a subsidy to enable Tasmanian industries to market their products on the same basis as industries in other States? On some articles the freight between the mainland and Tasmania is twice as high as that between Queensland and Melbourne. As an alternative to subsidizing Tasmanian shipping services, will the Minister consider proposals for establishing a Commonwealth line of steamers to operate between the mainland and Tasmania, i
– Already, the Com’;monwealth is paying a subsidy to- keep Taroona on the run between Tasmania and the mainland. Recently the Minister for Commerce and Agriculture announced that the Commonwealth would pay all freight charges on wheat shipped to Ta.s. mania. In addition, the Commonwealth makes regular grants to the Government of Tasmania. . If the honorable senator thinks that some further help, is necessary
I suggest that he make representations in the form of a question on the noticepaper, and they will be examined with a new to what can be done. If the honorable senator will help me to get the ships turned round more quickly in port it would not be necessary to charge such high freights.
asked the Minister for Fuel, Shipping and Transport, upon notice -
– The answers to the honorable senator’s questions are as follows : -
– According to a report in the Melbourne Age of Friday last, 30 Australians havebeen killed in Korea, and 120 wounded. Can the Minister for Trade and Customs say whether it is the policy of the Government to supply the newspapers with such information, and with general information about the Australians in Korea, while withholding it from members of the Senate? If that is not the policy of the Government, when may we expect a statement to be made in the Parliament regarding the situation in Korea ?
– I understand that the procedure adopted by this Government differs in no way from the traditional procedure followed by all governments in regard to such matters. When casualties occur, the next of kin are notified first. A statement on foreign affairs is to be made in the Parliament this evening, but I do not know whether specific reference will be made to Korea.
– On the 14th November, Senator Amour asked the following question, without notice: -
Can the Minister representing the PostmasterGeneral state whether it is a fact that the general manager of the Australian Broadcasting Commission in December, 1949, recommended the week-end penalty rates paid to journalists, typists and announcers, employed by the Australian Broadcasting Commission. Is the Minister also able to say whether it is a fact that the general manager of the Australian Broadcasting Commission has recommended that the payment of week-end penalty rates be discontinued. Is it a fact that the Australian Broadcasting Commission Staff Association is incensed by the action of the general manager in this matter, and intends to take a vote on the holding of a strike on the 2nd December. If the matters I have mentioned are facts, will the Minister take action to restore the payment of week-end penalty rates in order that industrial pence within the Australian Broadcasting Commission may be maintained.
The Postmaster-General has supplied the following answer: -
A reduction was recently made by the commission to the penalty rates in order to overcome anomalies existing between those enjoying such rates and other staff. The alteration brought the penalty rates into line with a determination of the Public Service Arbitrator with respect to announcers and other awards of the Arbitrator and Arbitration Court covering week-end penalty rates for shift workers. The Commission has suggested to the Staff Association that if an amendment of the new conditions is desired an approach should be made to the Public Service Arbitrator for a variation, as he is the appropriate authority to determine any dispute between the commission and its staff. The Staff Association was previously under the impression that the Public Service Arbitrator was not empowered to deal with the matter but they have now been assured by him that he can do so. The association has, however, indicated that it prefers at this stage to continue discussions with the commission.
– Can the Minister for Trade and Customs say whether any assessment has been made of the increase that will be necessary in Public Service staffs to provide for the release of officers who will be called up under the Governments compulsory military training scheme, provision for which is made in a measure now before the House of Representatives? If no such assessment has yet been made, will the Minister give consideration to having that information obtained, and making it available to the Senate before the debate on the National Service Bill commences in this Chamber ?
– The subjectmatter of the honorable senator’s question does not come within the province of my department, and I personally am not in a position to provide the information that he seeks. I suggest that he should raise the matter again when the National Service Bill has reached the second reading or committee stage in this chamber.
– Will the Minister arrange for a survey to be made of the requirements of Commonwealth departments to fill the positions of those who may be called up compulsorily for national, training in the event of the National Service Bill becoming law?.
– I appreciate the honorable senator’s earnestness in pursuing this subject. I assure him and the Senate that the Government will take proper action incidental to and consequential upon the passing of the National Service Bill.
– I ask the Minister for Repatriation whether, in the event of the medical adviser of a totally and permanently incapacitated pensioner, informing him that his health would benefit substantially by living in the country, provision is made for governmental assistance to enable the pensioner and his family to take up farming?
– It is unusual for a totally and permanently incapacitated ex-member of the forces to seek what would be the equivalent of a rehabilitation loan. Before I could make a statement on this matter, I should have to obtain further particulars of the case. If, as the honorable senator has indicated the grant of such a loan would assist in the restoration of the health of the man concerned, the matter appears to come within the province of the Repatriation Department as the restoration of the health of former members of the forces is its main function. If the honorable senator will give me full particulars of the case concerned I shall examine it on its merits and give him a considered reply as early as possible.
– I direct the attention of the Minister for Trade and Customs to a statement which was published in the daily press on Friday last that Labour had used its majority in the Senate to delay the passage of the Commonwealth Aid Roads Bill. No divisions were called for during the debate on that legislation, and as little debate has yet taken place on the measure, will the Minister indicate whether he or any of his colleagues made such a statement to the press or whether this is just another concoction of biased reporters or editors of the daily press ?
– I have not seen the statement to which the honorable senator has referred. I can, however, appreciate his sensitiveness about any suggestions or allegations that Government measures have been delayed in this chamber. I was not responsible for the publication of the report or for having made a statement of that kind and I do not think that any of my colleagues has made such a statement.
– I address a series of questions to the Minister representing the Minister acting for the Minister for the Interior. Is it a fact that at the cessation of hostilities in World War II. licences had been issued to only eight persons in Canberra to operate hire cars and that 26 hire cars are now in operation? ls it a fact that many of the holders of such licences are standing about the streets at the shopping centres of Canberra for hours each day while awaiting calls for the use of their vehicles and that many of them have engaged in other forms of employment in order to supplement their incomes? Does one of the holders of a hire car licence also work as a milk vendor to supplement his insufficient earnings from the operation of his hire car so that he may be able to enjoy what is regarded as the Australian standard of living? Were additional hire car licences issued in order to prevent those who have held such licences for many years from disposing of their hire car plates in the normal way of business? As the Government has consistently stated that it favours private enterprise, will the Minister ascertain whether hire car operators who have built up goodwill by rendering services to the people of the National Capital may now sell their plates as freely as taxi plates are sold in other parts of Australia?
– I shall discuss the matter with the Minister acting for the Minister for the .Interior and obtain a reply to the honorable senator’s question.
asked the AttorneyGeneral, upon notice -
– The answers to thehonorable senator’s questions are asfollows : -
asked the Minister representing the Minister for Health, upon notice -
Is it a fact that doctors have been instructed, undo” the free medicine scheme proposed by the Government for age and invalid pensioners, that if a call is made by a pensioner after (i p.m. he will have to make a payment to the doctor of 5s. per call?
– No instructions of any sort have been issued by the Government regarding the pensioners’ medical service. Pull details of the scheme will be given at the appropriate time and place.
asked the Minister representing the Minister acting for the Minister for the Interior, upon notice -
Is it the policy of the Government, in order to fulfil its obligations and meet the desires to returned servicemen, to extend the closing date for all agricultural loans and allowances, which expired on the 2nd September, 1950, for a further five years to the 2nd September, 1955?
– The Minister acting for the Minister for the Interior has supplied the following answer: -
The question of the extension of the closing date for applications for agricultural loans and allowances under the Re-establishment and Employment Act 1945, was reviewed recently, but it was decided that the period allowed gave ample opportunity for ex-servicemen to avail themselves of the benefits under the act. It is not proposed, therefore, to vary the existing limitations, which were imposed by the previous Government.
asked the Minister representing the Minister acting for the Minister for the Interior, upon notice -
– The Minister acting for the Minister for the Interior is not aware of the facts, hut he has called for a report from the Administrator of the Northern Territory. As soon as he receives it, he will go into the matter and also investigate the possibility of the remission of the charges.
asked the Minister for Trade and Customs, upon notice - 1.Is it a fact that, when the retail price of sugar was last fixed in Australia in 1949 at 5d. per lb., the net return to sugar-growers was much higher than it is at the present time?
– The answers to the honorable senator’s questions are as follows: -
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
– The Minister for Commerce and Agriculture has furnished the following answer : -
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
– The Minister for Commerce and Agriculture has supplied the following answer: -
Reports have been seen which suggest that in sonic instances bakers are not entirely satisfied with the flour made in New Zealand from Australian wheat. Australian flour is not involved. Steps are taken to ensure satisfactory standards for Australian flour exports.
asked the Minister representing the Prime Minister the following questions, upon notice: -
– The Prime Minister has supplied the following answer : -
The matter of payment of a special subsistence allowance to Australian prisoners of war was recently investigated by a special committee, the majority of members of which expressed the opinion that if a captor power failed to fulfil its obligations to its prisoners, thus causing them extreme hardship and it was intended to grant some compensation, such compensation should be made by the defaulting power. The question of obtaining reparations will be examined when the peace treaties with the respective captor powers are under consideration.
asked the Minister representing the Prime Minister the following questions, upon notice: -
– The Prime Minister has supplied the following answers : -
Report of Set-ect Committee.
– I bring up the report of the select committee that was appointed to consider and report upon the Constitution Alteration (Avoidance of Double Dissolution Deadlocks) Bill 1950, together with minutes of proceedings and minutes of evidence.
Printed copies of the report, together with minutes of proceedings, are at present being circulated. Printed copies of the minutes of evidence will not be available for some time, but they will be circulated as soon as they come to hand.
Ordered to be printed.
Debate resumed from the 23rd November (vide page 3006), on motion by Senator Spooner -
That the bill be now read a second time.
– I consider that the three measures before the chamber in connexion with wool, namely the Wool Sales Deduction (Administration) Bill 1950, the Wool Sales Deduction Bill (No. 1) 1950, and the Wool Sales Deduction Bill (No. 2), have been wrongly named, because their titles suggest that provision is to be made merely for deductions. They are, in fact, taxation measures. If the Government were honest in this matter it should have called the bills wool sales taxation bills, or “The Wool Grab”. In his budget speech on the 12th October, the Treasurer (Mr. Fadden) said -
By requiring wool-growers to make certain pro-payments of taxation in this financial year, it will hold off a substantial part of the excess purchasing power to which the increase in wool prices has given rise.
The Treasurer made no bones about the matter, because he referred to “ prepayments of taxation “. By introducing these bills which are sectional in their application, the Government has perpetrated a trick on a section of the Australian people. Because of the prosperity of the wool industry the Government has, in effect, said to the wool-growers that it proposes to take positive action to reduce their spending power, in the interests of the national economy. The proposal is immoral when we bear in mind that the Treasurer proposes to utilize the deductions which are expected te yield £103,000,000, to balance the budget. In other words, the right honorable gentleman proposes to balance the budget by a new method that has not been heard of before in this chamber. Instead of obtaining revenue for governmental purposes in the recognized manner, that is by direct and indirect taxation, the Treasurer proposes to tell the wool-growers of this country bluntly that although it is pleased that they are enjoying prosperous conditions, the Government is experienc ing difficulty in redeeming its promise to reduce taxation and that, in effect, it proposes to increase taxation in order to balance the budget. The Treasurer intends to deduct from the wool-growers 20 per cent, of the proceeds of wool sold both in Australia and overseas. He has admitted that this is a pre-payment method of taxation. It is an onslaught on a section of the Australian community. I am not aware of any provision in our taxation laws requiring taxpayers to pay tax prior to earning the relevant income. Under the “ Pay-as-you-earn “ method, instalments of tax are deducted from workers and other people weekly or fortnightly. As a result of excessive deductions based on overtime payments, in accordance with the formula, a taxpayer may pay a greater amount of tax during a year than is subsequently found to be due by him. Accordingly, when his assessment is completed he receives a refund from the Taxation Branch. In other cases a taxpayer may have to make up the leeway of tax. There is a vast difference between the system under which instalments of tax are deducted from the source of .income weekly or fortnightly, and the intended method under the proposed law. The measure before the chamber provides that after the 28th August, 1950, certain amounts shall be deducted willy nilly from the woolgrowers, as the result of the profits that, they have received from the sale of their wool after that date. This is a retrospective application of taxation. The wool-growers have been let down badly by their representatives in the Parliament. This is an issue upon which members of the Australian Country party should have stood for the interests of the woolgrowers, instead of supporting the Government.
I cannot understand why there should be discrimination against one section of the community. We have been told that the Government intends to introduce legislation to- tax excess profits. There are several industries in Australia, apart from wool-raising, in which high profits are being made at the present time. An excess profits tax would be the fairest way of drawing off surplus income from those industries, as well as from the woolgrowers, and there would be no unfair
Wool Sales Deduction
(Administration) Bill 1950. discrimination. The Government prefers, however, to impose a special tax on the wool-growers in order to raise £103,000,000 in an attempt to balance its budget. I can imagine what an outcry there would have been from the newspapers had such a proposal emanated from a Labour government. We would have been told that it was another attempt by bureaucracy to impose socialism on the community at the expense of a particular section.
I have been informed that the legality of this legislation is open to challenge. The Constitution provides that there shall be no. discrimination in taxation. No person should be taxed until he has acquired the asset which, in law, is taxable. The financial year begins on the 1st July and ends on the 30th June. However, the Government does not intend to wait until the end of the year before grabbing the income of the woolgrowers. It proposes to take 20 per cent, of the proceeds of the sale of wool, whether that deduction represents more or less than the amount which the grower will be ultimately liable to pay in income tax. The wool-growers are not a’ large section of the community, and most of them produce only small quantities of wool. While there may be some justification for applying this proposal to bigpastoral interests, it is certainly unfair to apply it to the small wool-growers. Over the years, the wool-growers have had to take the good with the bad. They have had to accept world parity price for their product, whether that price was high or low, and they have received very little assistance from governments. During the war, it was practically impossible to do ordinary maintenance and developmental work on grazing properties because of shortages of labour and material. In this Senate, there have been frequent references to the scarcity of barbed wire and wire netting which graziers needed to protect their properties against rabbits and wild dogs. The Labour Government made allowance for that fact by permitting primary producers to set aside, tax-free, certain reserves with which to finance works when it became possible to carry them out. This legislation includes a hardship clause which, it is claimed, can be applied to particular cases, but apart from that, the Government proposes’ to grab its percentage of the proceeds of all wool sales. The proposal is discriminatory and immoral. If the Government had been honest it would have admitted that, although it had promised to reduce taxation, it now found itself unable to do so; and that, in fact, it was necessary to increase taxation so as to raise an additional £103,000,000.
The Government says that it proposes to skim off £103,000,000 from the incomes of the wool-growers in order to check inflation, but I very much doubt whether, that result will be achieved. The money is to go into Consolidated Revenue, and will be expended during the year. Indeed, the Government is budgeting for a deficit. So far as the effect on inflation is concerned, it does not matter whether the money is expended by the woolgrowers or by the Government. The record of this Government during the last eleven months does not encourage the belief that it is likely to expend revenue in such a way as to check inflation. At the moment, the outlook appears blacker than ever, particularly when we remember that, next year, the Government will have to put into circulation an additional £70,000,000 in the form of war gratuities. Therefore, not only will the Government be expending the £103,000,000 that it proposes to take from the wool-grower under this legislation, but also it will have to provide more than £70,000,000 for the payment of the war gratuity. Obviously, the position instead of improving will become worse. With all that additional money in circulation, serious thought and action by this Government will be required to save our economy from going on the rocks. During the depression years, our economy was wrecked by deflation. This time, unless remedial action is taken, it will be wrecked by excessive inflation. It is necessary that the National Government should at all times have absolute control over the currency so that it may issue or withdraw notes according to needs. The interests of the people generally must be the primary consideration.
Whichever way we look at this proposal, it is a sectional tax, and I am convinced that if the validity of this legislation were to ,be challenged by the wool-growers, there is every possibility that it would be declared unconstitutional. In the interests of equity, I believe that some’ such action should be taken. Despite all that honorable senators opposite may say about the Curtin and Chifley governments, those administrations did, at least, levy taxes in accordance with ability to pay them. This Government seems to be returning to the old system under which people in the lower income groups had to pay relatively high taxes so that their more fortunate fellow citizens could have their commitments reduced. If that is to be the policy of the Government, this country will never get out of the financial morass into which it is drifting.
This legislation is contrary to the wishes of a majority of those whom it will affect, and were I a wool-grower, I should not hesitate to go out into the streets, and denounce this action by a government which professes to be particularly interested in the welfare of country people. Members of the Liberal party are so “ liberal “ that they are prepared to say to one section of the community, “ Your income is too high. We propose to take some of it away from you. Next year, if what we have taken is more than you owe us in taxes, we shall make a refund to you “. That is bad enough, but I .believe that the Government has no intention to implement this scheme for one year only. The Minister for Social Services (Senator Spooner) said in his second-reading speech that, each year, the Parliamentwould determine the deduction for the subsequent year. This year, 20 per cent, is to be withheld. Next year it may be IS per cent., 10 per cent., or any other figure that the Parliament may determine. Clearly this tax is not being imposed to meet a specific non-recurring situation. The situation is expected to recur year after year, and the purpose of this legislation is to help the Treasurer (Mr. Fadden) to balance his budgets.
As I have said, this is a sectional tax to be levied on the wool-growers; but to what section of the community will the principle be extended next?
What other source of revenue will the Commonwealth tap at its convenience? So far, only one section of the community is to be penalized, but there is no guarantee that a similar imposition will not be placed on some other unfortunate group of individuals at a later date.
On the 23rd October, I, and many of my colleagues in the Parliament, received a communication, signed by Mr. Chapman, of the United- Farmers Association, Sydney. I admit that I do not know very much about wool-growers or their organizations. I am dealing with this matter on the principles involved. What I have to say in defence of the wool-growers, I should also say in defence of any other section of the Australian community, similarly circumstanced. The telegram from Mr. Chapman stated -
United Farmer*-‘ Association deeply incensed Treasurer’s failure to place time limit on wool tax grab.
Apparently, this organization believes that the wool deduction scheme might be all right for a specific period, but that it should not be a permanent feature of our taxation system. Other organizations, however, particularly in Western Australia, are entirely opposed to the proposal. They do not agree with it whether it is to apply for one year or twenty years. They do not want it and they have announced their intention to take action against members of Parliament who defy their wishes. The telegram continued -
Copland’s influence seen in thinly veiled proposal to get planner’s hands on wool tax money permanently.
That is a rather astonishing statement. I never thought for a moment that the Menzies-Fadden Government would be regarded as one of those “ planning “ organizations. Honorable senators opposite have always told us that they are liberal not only in name, but also in outlook, that they do not believe in socialism, and have no desire to encourage bureaucracy; but now they are being accused of being under the influence of a planner, Professor Copland. Members of the present Government parties were always ready to accuse the Curtin and Chifley Labour administrations of .being under the influence of planners. Apparently, the wool-grower believes that the present Administration also is listening to the advice of such men. The telegram continues -
This Association will support coming elections party which will pledge itself to withdraw this discriminatory impost.
Members of the Australian Country party in this Parliament know the possibilities of that threat, if in fact it is a threat. I prefer to judge this proposal from the stand-point of the principle involved. The telegram continues -
Treasurers inflationary pretext completely unjustified in view politically immoral budget. Wool money left with growers after normal taxation kept by - them for rainy days but spent by government recklessly as soon as it goes into revenue. We propose in event this tax being continued to recommend to all growers that they submit for sale only sufficient wool to cover their current expenses. Balance will be withheld in woolsheds until government assumes some sense of moral responsibility.
If I were a member of a government I should not like to receive a telegram which was couched in such terms, particularly from an organization the members of which I professed to represent. However, the members of the Australian Country party in . this Parliament appear to be satisfied with this proposal and will give effect to it in spite of threats of that kind.
In his speech on this hill Senator Eraser gave us some very interesting information concerning its effect on a cross section of the wool-growers of Western Australia. If honorable senators opposite had listened to his words they could not have failed to reach the conclusion that if this bill becomes law many thousands of woolgrowers will be placed in a very difficult economic position. In a letter on this subject the Western Australian Branch of the Farmers Union states -
To many growers the deduction of the 20 per cent, special wool tax, plus ordinary taxation, plus the 7-J per cent, levy for our Post J. 0. Plan, will mean the deprivation of almost the whole of their net income for this year. It is feared that sufficient of them may be so hard pressed in respect of commitments already made that they will take the short view and decide against the Post J. 0. Plan in an effort to retain the sum - of itself quite a considerable proportion of their net income - represented by the levy.
The Government might very well be able to justify the taking of 20 per cent, of the wool earnings of the big pastoralists, but it cannot justify taking such a percentage of the earnings of the small woolgrowers. Even at this late stage it would do well to reconsider this proposal. I have also received the following telegram from the Yorkrakine branch of the Farmers Union: -
We deplore attitude being adopted by our alleged representatives in Canberra towards wool tax plan. This is creating precedent. Their attitude will place them in jeopardy on election day.
Honorable senators opposite cannot fail to take notice of such a plain and definite statement. Another telegram which was sent to me on this subject on the 24th October reads as follows : -
Meeting of delegates representing fifteen branches Merriden Zone Council Farmers Union Saturday last instructed me telegraph all Western Australian federal members to vote against wool tax proposal in budget and will do utmost defeat next election any member supporting the proposal.
Surely honorable senators opposite cannot fail to take notice of these protests. In a letter dated the 14th November, the Western Australian branch of the Farmers Union had this to say on the subject -
On Tuesday last the wool section of this union held a special meeting to further discuss the 20 per cent, wool tax. At this meeting Messrs. Hamilton and Leslie, members H.R., were in attendance and explained the Government’s point of view in connexion with the matter.
Both of those gentlemen represent Western Australian constituencies in this Parliament but neither of them is a Labour man. The letter continues -
Notwithstanding this, however, the Executive, after very careful consideration of the question, has maintained its former strong opposition.
It is evident that, despite everything that was said by the honorable member for Canning (Mr. Hamilton) and the honorable member for Moore (Mr. Leslie), their words carried no ‘ weight with the members of the Farmers Union in that State who, in common with wool-growers generally, do not want this proposal. The letter continues -
It is, as previously pointed out, considered to be legislation of a sectional nature directed against the wool-growers, and strong and continued objection is on the question of principle. The Executive is of the opinion that the federal -Government’s^ desired object of raising the amount which would be contributed by the wool-growers could be gained by the floating of a loan, to which wool-growers and others could contribute.
The feeling is that if this course was decided upon wool-growers would contribute generously and that there would be no difficulty in raising the amount by this means. As it is, taking 20 per cent, of the wool-growers’ income is nothing but a forced free of interest loan.
That letter sums up succinctly the attitude of the wool-growers to this proposal. In order to balance its budget, the Government proposes to take from the woolgrowers no less than £103,000,000 and it does not propose to pay interest on the money. In truth, it proposes to confiscate the wealth of the growers. Much has been said about the evils of confiscation in comparatively recent times. Honorable senators opposite have said that the term “ confiscation “ has a red tinge about it, yet they support a government which proposes to confiscate money which the wool-growers have earned by honest trading in the product of their labours. Wool-growers have always been prepared to accept the best price they can obtain for their product at auction. The Treasurer (Mr. Fadden), in introducing the budget, said that the wool cheque for last season amounted to £300,000,000. The right honorable gentleman continued -
Whilst future trends in the market are impossible to predict, if current prices hold throughout the season, the clip will bring between £450,000,000 and £550,000,000. That is to say, the wool cheque will be somewhere between £150,000,000 and £250,000,000 greater than the record cheque of 1949-50.
That tremendous amount of money will be earned by the wool-growers in the conduct of their operations on a proper business basis. On more than one occasion Government spokesmen have stated that they uphold the principle of free enterprise as opposed to organized and long-term marketing arrangements, yet the wool-growers who are engaged in free enterprise are to be penalized because they are prosperous as the result of high ruling prices for wool. I admit that the present very high price of wool constitutes a threat to our economic stability, but it does not justify a proposal to subject wool-growers to a special impost amounting to £103,000,000. Next year an even greater “ grab “ may be made by the
Government. If the Government needs additional money to finance its budget commitments it should have amended the income tax law to secure its requirements in a legitimate way instead of imposing a sectional tax as is proposed in this bill.
The Prime Minister (Mr. Menzies) has indicated that he proposes to tax the earnings of profiteers. Had that been done, no one in this country would have taken exception to the proposal, although the supporters of the Government would have been in a cleft stick. They made many promises before the election. Among them was a promise to reduce taxation. The Government now finds that that cannot be done, so it simply announces that it intends to obtain money in another way. I do not intend to vote against this measure. At the same time, I do not believe in it. When the opportunity comes - and I do not think it is very far away - I shall, as a member of the Australian Labour party, immediately vote for the repeal of this legislation, if it becomes law.
– This bill has given rise to a great deal of discussion, and rightly so. As honorable senators on both sides of the chamber have frequently stated, there is an inflationary trend to-day and it is necessary that something should be done in an endeavour to control it. In the last four months the price of wool has jumped to double the record price of last year. Whereas wool-growers then received £80 a bale for their wool, they are now receiving £160 ‘a bale. It is not difficult to realize that that has brought a large amount of additional money into circulation in this country, and that the Government is faced with the necessity of endeavouring to curb the inflationary effect of that money. From what has been stated in this chamber, that position could be dealt with in a variety of ways.
The 20 per cent, deduction, which is referred to by some people as a 20 per cent, tax, is nothing more than a prepayment of tax by wool-growers, deducted at the source. When wool is sold, the 20 per cent, deduction will be made and will be used as a prepayment of tax for which the wool-growers will be assessed at a later date. Naturally there will be various anomalies in the implementation of the prepayment. Those who know the conditions in the wool industry, and especially the conditions applying in Western Australia, will appreciate that conditions differ in the various States. The conditions in Western Australia, which is not highly developed, differ from those obtaining in the other States of the Commonwealth. Western Australia has many small farms, and consequently small farmers and wool-growers. It is to meet the needs of such persons in the various States that the hardship clauses have been inserted in this bill. As the Treasurer (Mr. Fadden) has already stated, those provisions will be administered in such a way that the small farmers will not suffer because of the introduction of this measure. I hope that the Treasurer and the Commissioner for Taxation will pay special attention to the conditions that obtain in Western Australia, because I am certain that more wool-growers in that State will seek redress under the hardship provisions than in any other State. If there is an assurance that their difficulties will be dealt with expeditiously, I believe that half the objections to this measure will be overcome. It is hoped that where a farmer has been subjected to the 20 per cent, deduction and is not subject to income tax, the amount deducted will be made available to him straightaway under the hardship provisions.
Instances have been cited to illustrate how the 20 per cent, deduction would be an amount equal to three, four, five or even eight times the tax payable by producers. Such cases would also come within the hardship provision. There are anomalies in most legislation when it is first introduced. I trust that the Government will adjust the anomalies in this bill and that it will be brought into such good working order that it will not cause hardship to any one.
Senator Nash stated that several telegrams were received by him from Western Australian people, and I have no doubt that most honorable senators from Western Australia have received similar telegrams. I do not think that any State raises more objection to this measure than does Western Australia. The . wool- growers of that State would have preferred the legislation to operate for oneyear only, but I am assured that tinepresent proposal is intended to operatefor one year and that although the deduction at the rate of 20 per cent, will continue after the end of the financial year,, such deduction will be subject to refund! unless the same or a lower rate is fixer! by Parliament for the next financial year..
Another difficulty in relation to thismeasure also concerns the small woolgrower. It must be appreciated that » grower who produces six bales of wool to-day receives an income of practically £1,000. The only exemption, as far asthis tax is concerned, applies to an amount of £20. Had it been possible to provide for the exemption of an income of a larger amount, I think that it would have been better. However, I understand!’ the risk that that would have involved. I hope that all the cases that come within that clause will also come within the hardship provisions and that the people concerned will not suffer because of it. I ask the Minister in charge of this bill to make a special request to the Treasurer to the effect that Western Australian small farmers, who, I feel sure, are those whowill suffer most, will receive as much consideration as possible under the hardship provisions in order that they may not suffer inconvenience and shortage of money. Those small farmers who are to-day enjoying the second or third year of decent prices are at last receiving incomes that would permit them toimprove their farms, to which they have been looking forward for years. In improving their farms they would be helping tn increase production, which is what this Government or any other government would wish them to do. If they are not obliged to make a pre-payment of tax, thesooner a decision in their favour is given by the Land Valuation Board, the better.
Other propositions were made when thi.? matter was first discussed. There was thequestion of the imposition of an export tax. which the Country party resisted. There was also the question of the appreciation of the £1. I do not wish to set myself up as an expert on that matter, although I have always felt that it would perhaps be better if it had not been; bandied about as it has been. I am confident that by means of this prepayment of tax the Australian wool-grower will be its a far better position than he would have been had either of the other proposals been adopted. I noticed in a newspaper report at the week-end that in New Zealand the Government “ froze “ 33^ per cant, of the proceeds of the sales of wool. That percentage was worked OUt under an agreement between the wool-growers and the Government, and the “ freezing “ is to apply for an indefinite period. No “interest will be paid on the money “involved. That is far more stringent than is this scheme. I hope that when it is apparent that the necessity to restrict Spending power has vanished, the Government will ensure that this legislation will vanish also.
Senator McKENNA (Tasmania) f4L30]. - I feel impelled to speak upon this measure because of its very extraordinary character. By agreement, we aire discussing not only the administration measure but also the two deduction measures. When I perused the long titles a,nd the short titles of the three bills, I was struck by one thing in particular - the omission of the word “ tax “. In the drafting of the bills, great care seems to have been taken to avoid the use of the words “ tax “ or “ taxation “. There must be a reason for that approach. Last Thursday week, the Treasurer (Mr. Fadden) had this to say about the measure -
This is not a tax, by any stretch of the Imagination.
He then added these words -
It is nothing more than a pre-payment reserve against future taxes on those who :are recipients of high . incomes in this most fortunate year.
The right honorable gentleman failed to specify for whom the year was fortunate, “but I strongly suspect that he was directing his thoughts to the windfall that would come to him and his .Budget - they would have been in great trouble without it - rather than to the happy position of the wool-growers. ‘
I ask the Minister in charge of Hie bill to tell the Senate what he calls this levy. Even if it is called an export levy on wool sold outside Australia it is still taxation. Money will still be taken from the wool-growers under the taxing power of the Commonwealth. Obviously it cannot be an excise duty, because although the money will go to the Commonwealth it will not remain with the Commonwealth for purely Commonwealth purposes but will be earmarked as a credit for subsequent allocation to wool-growers. I ask the Minister to say what head of power, apart from the taxation power, would justify this very extraordinary action by the Commonwealth.
I point out that if the Treasurer is claiming that this is not taxation, he may be running a very grave risk from the constitutional viewpoint. If it is not taxation, then it is, as honorable senators on this side of the chamber have claimed, a forced loan or, to use the words of the Constitution, an acquisition of property. Something will be taken from the wool-growers, and every honorable senator knows that the Commonwealth cannot acquire property except upon just terms. The High Court, as the custodian of the rights of the people of this country under the Constitution, is charged with the duty of ensuring that property shall be acquired only upon just terms. The court has held again and again that, under those conditions, it is proper, for one thing, that interest be paid. I warn the Minister that the Government, by its continued denials of the taxation element of this measure, is treading upon what may be dangerous ground.
The bills themselves give the show away. Clause 5 of both deduction measures states -
This Act does not apply -
to a producer whose income is exempt from income tax under the provisions of the Income Tax Assessment Act 1936-1949.
If we refer to clause 23 of the administration measure, we find that some 38 sections of the Income Tax Assessment Act are to apply as if directly incorporated in that bill. All the substantive machinery measures of that act are to be incorporated in the administration measure.
From the viewpoint of direct dealing, apart from other considerations, it would have been better if the Government had said quite frankly, “ This is a tax levied in an extraordinary way to meet the extraordinary difficulty in which the Government, finds itself”. That would have been a direct approach to the matter, but the Government has preferred not to make that approach. One is tempted to ask why it is exhibiting this nervousness and evasiveness in relation to the taxation element of these measures. The reason for that will appear very quickly if we refer to the policy speech that was delivered during the last general election campaign by the Treasurer, who is also the Leader of the Australian Country party and has sponsored this measure. In the course of that speech the right honorable gentleman said -
If the socialists are defeated, therefore, rates of taxation, both direct and indirect, can and will be steadily reduced. In short, our policy is a progressive reduction of taxation on individuals and the community in general, commensurate with national economic and financial policy.
It has been reported that the Treasurer has denied that either he or the Australian Country party promised that taxation would be reduced. He and the members of his party have confined themselves to the latter portion of the statement that I have just quoted, and, very conveniently, have forgotten the first sentence, which, I repeat, was -
If the socialists are defeated, therefore, rates of taxation, both direct and indirect, can and will be steadily reduced.
I should like the Minister, when he replies, to explain these measures in relation to that specific promise.
If the Minister wants to disown the Treasurer, who is a member of the Australian Country party, I refer him to the policy speech that was delivered by the Prime Minister (Mr. Menzies) in November, 1949, on behalf of the two Government parties. In order that a clause that I shall read shortly may be considered in its proper setting, I direct the attention of the Senate to the following passage from that speech : -
In the long run (and not very long at that), increased production will mean competition among sellers, and therefore lower prices. Greater turnover will mean reduced costs. A resolute reduction in the burden of government and, with it, in the rates of tax, will mean reduced costs of production. In brief, higher production will mean lower costs; and lower costs will enable us to enter and secure overseas markets which are now not supplied by us because we are not producing the goods. We will attack all these problems with vigour and imagination.
I invite honorable senators to note the vigour and imagination with which the Prime Minister and the Government have attacked the problem of, to use the words of the right honorable gentleman himself, “ a resolute reduction in the burden of government and, with it, in the rates of tax “. This Government is faced with the dilemma that both the Prime Minister and the Treasurer have specifically promised reductions of taxes. That is the reason for the Government’s nervousness and avoidance of the words “ tax “ or “ taxation “ in these bills or in speeches delivered upon them.
There has already been a breach of the Government’s promise to reduce indirect taxes, because an additional £10,000,000 of sales tax is to be imposed. These measures represent a further breach of the promise to reduce taxes, because they are designed to take from the woolgrowers of Australia, willy-nilly and at short notice, £103,000,000 by way of taxation. There can be no argument about that. If the Minister in charge of the bill claims that this is not taxation, I should like him to tell the Senate to what head of power he relates these measures. In short, this is a new and direct tax that will be imposed this year upon the woolgrowers of Australia only, and upon no other section of the Australian community. I point out that it will be a colossal tax of £103,000,000.
We have been told in this chamber that this payment, as the Government calls it, or this tax, as the Opposition knows it to be, will place wool-growers upon the same basis as ordinary wage and salary earners. In this year, 1950-51, a wage and salary earner will pay income tax, as he goes, upon what he earns this year and deductions will be made weekly or fortnightly from his wages or salary. He will not handle the money deducted from him. On the 30th June, 1951, he will send in, a return of his income and in due course he will pay a little more or receive a refund, if the money deducted from his wage or salary has exceeded the average drawn up by the Commissioner of Taxation in the light of his experience of the average man. Businessmen - in the term “ businessmen “ I include primary producers, persons engaged in secondary industry and all classes of persons who derive income from sources other than from salary or wages - will, during the currency of this financial year, pay provisional income tax at the rate determined for this year, but, because their net incomes or assessable incomes for the year will not be known until after the 30th June, 1951, they will pay tax upon figures that represent their net incomes for 1949-50. That will have the effect of putting wage and salary earners upon exactly the same basis as businessmen, including wool-growers. When businessmen have sent in returns of their income, they will, like wage and salary earners, in due course either pay a little more or receive a credit or refund. The wool-growers of Australia, like everybody else in that category, are due to pay provisional tax this year based upon the incomes that they earned last year. Now, out of the whole field of business people in this country, they are singled out by this measure to pay 20 per cent, of the gross proceeds of the sale of their wool, whether inside or outside Australia, in addition to their provisional tax this year. That is the first criticism by the Opposition. The wool-grower is singled out of all. the categories of businessmen in this community, and a direct approach is made to him because, in the first place, he has ready cash, and in the second, because the Government .can very readily get its hands upon that cash.
I shall refer now to the three very evil principles involved in the proposed tax. I have already dealt with the first, which is that it is directed at one class only. I am not prepared to deny that, under its taxing power, the Commonwealth may be completely discriminatory against classes and individuals. That, of course, is immoral, as one honorable senator on this side has stated, and it is not what one would expect from the Government, the duty of which is not only to uphold the words of the Constitution, but also to revere its spirit. Section 51 of the Constitution provides -
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to -
Taxation; but so as not to discriminate between States or parts of States.
Therefore, a safeguard against discrimination was written into the Constitution in 1901. Whilst this bill may not offend the words of the Constitution, it certainly cuts right across the spirit of the Constitution, and across the main principle .of fair dealing in taxation.
The second evil feature in this measure is that this tax is to be calculated not on what a man has left after paying the expenses of earning his income, but on his gross sales. This is a very bad principle, because conceivably a man may have no net or assessable income at all, or have very little assessable income which, if it were known, would certainly not justify a levy of the magnitude imposed under this measure.
The third very evil feature of this measure was the one that was referred to by Senator Aylett, when he contended that the Government is mortgaging the revenues of future years. There is no reason why the Government should not confine to one year action to meet the extraordinary circumstances that have been created by the proceeds of the wool sales this year. Under this measure the Government will draw off as revenue this year £103,000,000 that would normally be collected next year. Adverting to the second evil principle I concede at once that the calculation of tax on gross sales may not impose any great hardship on wool-growers who are in business in a big way, and will have colossal incomes this year. But, as Senator Nash has pointed out, about 73 per cent, of the wool-growers of this country produce only between one bale and 30 bales of wool a year. They would run only from 40 to 1,200 sheep. Many of those wool-growers are really mixed farmers. It may be true of a good many people in that category, and who are concerned with wool, that even in this year of grace, they will have a particularly bad time in some areas because of floods, droughts, fire and pests. Many of them have suffered heavy losses which may result in an overall net loss for the year.
The situation may well arise that a person who suffers a heavy loss over the year will have 20 per cent, of his gross sales of wool taken from him under this measure. The honorable member for Lalor (Mr. Pollard) in another place advanced a very powerful submission in connexion with re-stocking. He mentioned that on some properties sheep can be carried for only six months of the year, and that every year those farmers have to buy sheep on the open market. To-day the major portion of the purchase price of sheep for that purpose would be represented by the value of their wool. In due course, when the wool is shorn and sold, the Government will take 20 per cent, of the gross sales. Quite obviously that would he prima facie a capital levy. That Ls a good illustration of the iniquity of this measure.
– The honorable member for Lalor (Mr. Pollard) could not be called a wool-grower.
– He will certainly shear his sheep.
– The measure would apply to him.
– I agree that he would come within the four corners of this measure. The honorable member for Lalor cited his own position. His property will not carry sheep for more than six months of the year, and he has to re-stock year by year.
– He is a dealer rather than a wool-grower.
– Honorable senators opposite will say that in these instances the wool-growers will be afforded relief by the Treasurer (Mr. Fadden). I point out that a great many of the woolgrowers of this country are only in a small way of business. I doubt whether many of them would be able to prepare a Statement of affairs, and to present their submissions in the manner that the commissioner would require, in order that he may consider a request on the ground of hardship. There may be a delay of 30 days before the commissioner announces his decision. If he delays beyond that time, the wool-grower could apply to a valuation board, of which there are about 40 in this country. If his claim is held to be justified, who will pay the costs that he will have incurred, including travelling, expenses, and time that he has lost m> prosecuting his claim? He will not get the amount back if he is indebted in anyparticular to the Taxation Branch. I suggest to the Government that it would! be fair to consider a basis of costs or reimbursement to a man who is successful in his application to the valuation board or to the commissioner, and that prima facie there is a case where some provision foainterest should be made.
An honorable senator has referred towhat has happened in New Zealand. Ashe pointed out, in’ that dominion complete agreement has been reached between* the wool-growers and the Government, asa result of which the amount involved^. 33?,- per cent, of the net proceeds of thewoolgrowers’ wool, remains in the handsof the wool-growers themselves. Apparently the Government has not approached the wool-growers of this country on the lines that were adopted by the New Zealand Government. Another honorable senator has suggested that if this matter were put to the wool-growers,, they would unquestionably come to therescue of the Government by lending perhaps £100,000,000 to assist the Government to overcome its present difficulty-.. Of course, that would involve the payment of interest. That is why the Governmentmay yet find itself involved in connexionwith this matter. I have been told by representatives of the wool-growing, interests that as soon as this measure is passed by the Parliament, an applicationwill be made to the High Court of Australia for it to be declared invalid. I have given them no advice, and1 I do not know the legal grounds on which they rely, but let us compare the position in New Zealand, where the Government and the wool-growers got together in the national interest, with thehostility that animates the woolgrowersof Australia, who are just waiting for theflag to fall to rush off again to gain theprotection of the courts of the country., The fault for this cannot be laid at the door of the wool-growers. Unquestionably it is the fault of the Government of the day. Admittedly, the Government is in an awkward fix, because it promised the people of this country that it would reduce governmental expenditure. I [point out that its expected expenditure this financial year will be £172,000,000 more than in the previous year.
– Disgraceful !
– It is very inflationary, and it does not help to curb :the trends that are developing in the com- imunity to-day. To supporters of the “Government who may say, “ We are forced along by our defence commitments, our migration policy, and our developmental programme, and we are up ‘ for war gratuity payments “, I point out that the Government promised, when it was wooing the electors, that there would be a reduction of governmental expenditure. Instead, there has been a colossal growth under every heading, including the Public Service. When -dealing with another measure, the Minister for Social Services (.Senator Spooner) stated -
The Government is withholding from circulation part of the proceeds of wool sales.
If only the Government were to do something similar to what is being done in New Zealand, that is to withdraw £103,000,000 for the time being in order to prevent that money from going into circulation, something might be said in favour of the measure. However, the Government intends to tate this money from the wool-growers because it would be inflationary to leave it in their hands, and to regard it as revenue to expend this year. The Treasurer has referred to this year as being a very fortunate year. It certainly is a fortunate year tor him.
– The money will not be spent on luxury goods, as it would be if it were left in the hands of the woolgrowers.
– The honorable senator who has just interjected has no assurance that the 20 per cent, of the total proceeds of the wool would be spent by the wool-growers upon luxury goods. I have before me a most interesting “brochure entitled the Liberal Platform. ^Paragraph 9 of the section “Primary Industries” reads -
A review of income tax upon primary producers
From what follows, the .Senate will understand that there is intended a review downwards, not upwards - in order to encourage the expenditure of money by landholders in finding, conserving and reticulating water, on soil improvement and conservation, the provision of fire breaks, and the like.
The Liberal party has honoured that plank of its platform by taking money out of the hands of the wool-growers who, as a class, have had a very tough time.
– They will still have left £55,000,000 more than they received last year.
– They have many arrears to make up. I am sure that honorable senators from Queensland will remember the Payne report, in which it was stated that, during ten years prior to 1939, the wool-growers were receiving less for their wool than the cost of production. Now, the growers, in their one moment of exhilaration, are singled out by a rapacious and extravagant Government for special taxation.
– But the growers remember that the Labour Government would have taken everything from them.
– I assure the honorable senator that she misjudges both me and my colleagues on this side of the chamber.
I return now to the extraordinary statements made by the Minister for Social Services when introducing this bill. I have no doubt that he was led astray by the Treasurer. I invite honorable senators to listen to this statement made by the Minister -
The amount paid by the producer will be held by the Commissioner of Taxation until income tax is assessed and payable by the producer on the value of the wool sold or exported by him.
When introducing the Wool Sales Deduction Bill (No. 1), the Minister repeated that statement in this form -
The Government proposes that the amounts paid to the Commonwealth by wool producers shall be held by the Commissioner of Taxation for the purpose of paying the income tax which will be assessed on the proceeds of the wool.
Under the Constitution, the Commissioner of Taxation cannot hold money. Everything that he receives must be paid into the Consolidated Revenue Fund. He may establish a credit in his books in favour of the unfortunate wool-grower who is singled out for this sectional and discriminatory treatment, but the commissioner will hold no money in the till. The Treasurer has made it plain that he intends to put the £103,000,000 into the budget on the revenue side, and that he is going to expend every penny of it. Will any honorable senator opposite claim that the wool-growers would have expended every penny of it on luxury goods ? If so, they do the wool-growers a grave injury. Will the Minister say what will happen if the appraised value of wool sold for delivery overseas is greater or less than the actual sale price? No payment is to be made until the proceeds of the sale are received by the wool-grower, but what will the grower be required to pay if the appraised value is higher than the actual sale price? Will he be required to pay on the fictitious appraised value, or on the actual price realized overseas? Will an adjustment be made before he is called upon to pay anything ?
There is another important feature of the measure which has not been discussed at length, but which becomes evident if we project our minds into 1951-52, and see how the grower may fare then. This year, he will pay provisional tax based on his income of last year, and then he will pay this discriminatory tax of 20 per cent, of the gross proceeds of the sale of his wool. Let us now consider what is to happen in 1951-52. The Commissioner of Taxation, working on the basis of the 1950- 51 income, will probably find that the wool-grower is about square in his account. But in 1951-52, the grower-will be called upon to pay provisional tax based on the exceedingly high income he has earned this year, and he will be committed to pay at that rate even if he suffers a calamitous decline of income in 1951- 52. This tax of 20 per cent, is to be collected year after year, unless the provision is varied. If there is an easing of the war tension, and the demand for materials for re-armament falls off, as we hope will be the case, it is certain that the price of wool will tumble. That might happen dramatically and suddenly. It could even happen next year if there should be an improvement in international relations such as we hope will take place.
Should that happen, the wool-grower will be committed next year to the direct payment of a ruinous amount. It is certain that, sooner or later, he will run into great difficulty, and it will happen in the year in which the price of wool falls.
I repeat that this is a discriminatory measure which comes ill from a government supported by parties which preach the doctrine of free enterprise. Now, the wool industry, which has been a Cinderella industry for so many years, is getting its one bright year, and the Government comes along with .a measure designed to take the cream off the profits. The growers could well use the money to improve their pastures, and to strengthen their financial position. Such a provision comes ill from a government which is committed to the policy that was stated by the present Prime Minister before the last election in these words -
You cannot have a controlled economy without controlling human beings, who are still the greatest of all the economic factors.
That statement was made in November, 1949. Are not the wool-growers human beings? Is not the Government attempting to control the economy of the country when it introduces discriminatory legislation of this kind directed against one section of the community?
I take this opportunity to point out that the Government has diverged from its stated policy in regard to other matters, also. After pointing out in his election speech in 1949 how controls ruined industry and kept up prices, while writing down man’s estimate of man, the Prime Minister, in his Defence Call to the Nation (No. 3), had this to say -
What I am saying is that we are reaching the point where, as we cannot do all the things that many of us may want to do, at the same time we must begin to think coldly and clearly in terms of priorities; for example, we are grievously short of steel, and under present world conditions imports of steel from overseas are already becoming very difficult. This being so, should Ave, as a nation, allow steel to be used indiscriminately so that it goes into some constructions which are for merely luxury purposes or for industry of low priority? Should we not begin to organize our economy so that what is most important is first served, regard being paid all the time to producing some balance between the civil and military demands made on our total resources?
Now, after all those fine words, we are to have a planned economy. A sectional assault is to be made on the wool-growers, and we are to revert to the control of materials. If we may judge from recent wool sales, there is a great shortage of wool in Australia. I should not be surprised if the shortage was contributed to in part by the fact that Government supporters were so active in the 1949 election campaign in pulling the wool over the eyes of various categories of voters. It is certain that the wool was plentifully and effectively applied.
The Opposition criticizes this measure on principle. We believe that it is a bad bill. We realize, however, that it is an integral part of the Government’s budget arrangements, and that rejection of the measure would bring all those arrangements down. Therefore, the Opposition does not intend to reject it. We criticize the bill objectively. We have enunciated principles upon which we find the bill at fault. We commit ourselves to the statement that if the Labour party gets into power again we shall introduce legislation immediately to repeal this measure.
– in reply - The main theme of Senator McKenna’s speech was that the bill is directed against one class only; that the deductions are to be calculated on gross sales; and that it is proposed to collect immediately revenue that is not yet due. In the notes that I have prepared, I have dealt comprehensively with those three points. Therefore, instead of taking them separately, I shall discuss them as they fit logically into the pattern.
Before dealing with the bill itself, I propose to discuss two points made by Senator McKenna. The first is his claim that the Government promised to reduce taxation. It would have been only fair to add to any quotations dealing with that subject the point which we made that such reductions would take place if economic conditions permitted. No one will deny that a marked change in economic conditions has taken place because of the growing war cloud. The charge has been made that the Government is extravagant. The short reply is that no speaker on the Opposition side of the chamber has put forward one suggestion as to how expenditure can be reduced. Indeed, all Oppo sition speakers have claimed, in regard to various activities, that the Government should expend more money than it is expending at present.
During the debate on this bill, statements have been made that were both wild and wide. I should like, therefore, to re-state the principles of the legislation. First, I shall cross swords with Senator McKenna by saying that the wool deduction is not a tax. Under this legislation, the wool-grower will not have to pay one penny piece more in tax than any other member of the community on a corresponding income. All that the wool-grower will be obliged to do, is to pay his tax earlier than he would have been required to pay it in the absence of this legislation. There is to be a deduction of 20 per cent, from the gross proceeds from the current wool clip. That sum will be paid to the Commissioner of Taxation who will credit it against the wool-growers’ assessments for the current year when they are finally issued. Therefore, in simple terms, the net effect of this legislation will be to call upon woolgrowers to pay certain amounts during the current wool season that they would not otherwise have had to pay until perhaps April of next year. Any one who attempts to establish that the woolgrowers will be victimized or harshly treated by this legislation has a hard task ahead of him. The plain truth is that the wool-growers will not be taxed differently from other members of the community. In fact, but for this legislation, the wool-growers would be in a much more advantageous position than most other members of the community in respect of taxation. Furthermore, if action were not taken to deal with the present situation, there would be grave danger to the national economy. Let me illustrate my point. All income earners are taxed at the time of earning their income. Under the pay-as-you-earn system, tax deductions are made from wages and salaries. Provisional tax is paid by those whose incomes are not received in the form of wages or salaries. Provisional tax is estimated on the income of the year preceding the year in which the tax is paid. Let us assume therefore that a wool-grower receives two assessments, one in May, 1951, and one in
May, 1952. The first is based on his income for the year ended the 30th June, 1950, and the second is based on his income for the year ended the 30th June, 1951. The provisional tax included in the May, 1951, assessment is based on his income for the year ended the 30th June, 1950; but as everybody knows his income for 1949-50 will have been far short of his income for 1950-51 because of the extraordinary rise of wool prices. So, the provisional tax payable will be far short of his actual tax liability. There is no such discrepancy in the tax instalments paid by wage and salary earners. If a wage or salary earner receives an increase of pay, his tax deduction i3 immediately increased. That is not so with the wool-grower. His income has increased enormously, but under the present system, his provisional tax is based on the very much lower income that he received during the year ended the 30th June, 1950. He will not be called upon to pay provisional tax on his higher income until he receives his second, assessment in May, 1952, which will be ba,»ed on his income for the year ended the 30th June, 1951. Therefore, but for the proposal now before the Senate, the wool-grower would not have to account to the Commissioner for Taxation for his tax indebtedness on his greatly increased income until May, 1952. On the other hand, as I have said, if a wage or salary earner is fortunate enough to receive an increase of his income, under the pay-as-you-earn system he immediately pays increased tax instalments. The purpose of this legislation is to place the wool-growers on the same footing as the wage and salary earners.
– Why single out the wool-growers ?
– I shall come to that. It is true that the position in which wool-growers find themselves to-day is shared by all members of the community who have received a substantial increase of income, but never before in Australia’s history has any single group of taxpayers received such a large increase of income in such a short period as the wool-growers are receiving this year. Surely therefore, in view of the extraordinary economic conditions that are now being experienced by this nation, no one can object to the wool-growers being placed in the same position as the vast majority of Australian taxpayers.
Obviously, the magnitude of this proposal is such that one could not possibly hope to avoid all criticism and objection, but I contend that whatever objections there are to it, they are secondary to the need to withdraw from circulation the substantial sum of money to which I have referred. Our wool cheque for 1950-51 is estimated at £515,000,000, compared with £286,000,000 last year. There can be no doubt that this increase of £229,000,000 to the income of woolgrowers in one year will add to inflation. The need to withdraw portion of that money from circulation cannot be doubted.
Honorable senators opposite ask why the wool-grower has been singled out for this treatment. My answer is this : Just as the threat of war has resulted in the extraordinary increase of the price of wool, so also has it resulted in a need to increase national expenditure substantially. That is the justification for the Government requiring the wool-grower to pay his tax liability now when the national need is greatest, just as a greater majority of others in the community are meeting their tax commitments as they earn their income. The Government therefore has decided to withdraw from circulation £103,000,000 of the additional £229,000,000 that the wool-growers are to receive this year. That action is being taken in accordance with the Government’s financial policy. The Opposition cannot have it both ways. Honorable senators opposite complain consistently that the Government has not taken courageous steps .to deal with inflation; yet now that it is taking such a step criticism continues unabated. I contend that the legislation is fair and I repeat that the wool-grower will not be asked to pay Id. more than his normal tax liability. He will merely be asked to meet that liability sooner than he would otherwise have had to meet it. The result must be anti-inflationary. There has been some confusion of thought among honorable senators opposite on that point. It has been claimed that as the £103,000,000 will be expended by the Government instead of by the woolgrowers, this legislation will not curb inflation. The truth, of course, is that if the £103,000,000 that this measure proposes to withdraw from circulation were left with the wool-growers, it would be necessary for the Government to obtain an equivalent sum by some other means such as treasury-bills.” Thus, £206,000,000 would be expended instead of £103,000,000.
What alternative to this scheme has been suggested by honorable senators opposite? I have not heard one suggestion for the curtailment of’ any specific expenditure. Even .Senator McKenna could only say that the Government was extravagant. Nobody has suggested that expenditure on social services, defence, the war gratuity, or anything else should be reduced.
The Government hopes that this is an abnormal year. Money has to be found for specific commitments. Some honorable senators opposite have suggested that income tax rates should be increased to meet the Government’s needs but let us examine that suggestion to see how futile it is. Income for the current year is derived in two ways. It is either deducted at the source from salaries and wages or it is received in payment of assessments based on incomes for the year ended the 30th June, 1950. The sum with which we are concerned is £103,000,000. That is not a small amount. To obtain that money in the current year, income tax rates would have to be increased steeply. I am certain that honorable senators opposite who have advocated increased income tax rates have not made a close study of the figures. The Government is not prepared to increase income tax rates to the degree that would be necessary to yield the desired revenue. “It is confident that the prepayment of tax by wool-growers out of their extraordinarily high income this year will meet the situation. The Opposition would have the. greatest difficulty in persuading taxpayers of the necessity to increase taxes to meet what may well be, and what we certainly hope will be, a passing crisis in our financial affairs. Therefore, I have gone to the trouble of calculating the increases of income tax that would be necessary to yield the additional £103,000,000 that is to be provided by the wool deduction scheme. A taxpayer with a wife and two children, in receipt of an income of £500 a year, instead of paying £14 ls. in tax this year, would have to pay £21 16s. The same taxpayer on £700 a year would be called upon to pay £6S 8s. instead of £41 lis. On an income of £1,000 the increase would be from £96 5s. to £149 4s.
– What about the men on high incomes? Some Government supporters receive as much as £250,000 a year.
– If there is any one on this side of the chamber who receives £250,000 a year I should like to meet him. Continuing my comparison, I point out that a taxpayer earning £1,500 a year and now paying £226 14s. a year income tax would have to pay £351 10s. The Government believes that it would not be justified in imposing such savage tax increases, even if by that means it could obtain its additional revenue requirements this year. The Government will abandon the wool deduction scheme as soon as it can safely do so. It is not intended to be permanent. I ask honorable senators whether they would prefer that scheme or the tremendous tax increases which I have just mentioned. I ask wool-growers which they would prefer. The wool deduction scheme provides a sound solution of what we hope are merely passing financial problems. I doubt whether increases of income tax of the kind I have outlined would ever be eliminated.
In the few minutes that remain to me, I shall endeavour to deal with some of the comments made by Opposition senators during the second-reading debate. Senator O’Flaherty said that a woolgrower would be liable to pay an additional 10 per cent, if his woolbroker failed to pay to the Commissioner of Taxation the amount which he had collected from him. That is not so. .Clause 6 (2.) of the bill absolves the wool-grower of liability in such circumstances. The honorable senator also criticized the proposal to confer on the Commissioner power to fix the value of wool when he is not satisfied that the price obtained for it is fair and reasonable. He contended that that power would extend to all sales. Clause 20 provides that the only classes of transaction covered by the power of the Commissioner to fix values are, first, where the wool is disposed of other than by sale - that is, by barter or exchange - and, secondly, where it is sold other than at auction. That power is usually given to the Commissioner in legislation of this kind. Senator O’Flaherty also said that if the Government was still in office next year and decided not to review the legislation, the deduction rate of 20 per cent, would continue to apply. It is clearly stated in this legislation that the percentage payable shall be that fixed by the Parliament for the financial year.
– The rate could be increased or decreased?
– I should like to have notice of that question. My recollection is that it may be reduced but not increased, but I am not sure offhand whether that is so.
Senator Cooke, in claiming that this proposal was not in effect a prepayment of tax, referred to the exemption of wool producers in the Northern Territory. The wool deduction will not be collected from persons who are not liable to pay income tax. This proposal in truth involves a prepayment of income tax because it does not apply to those who are not liable to pay income tax.
I regret that Senator Fraser is temporarily absent from the chamber, for I should love to slay him with the figures which I have prepared to contradict his extraordinary statement that since this Government has been in office the number of Commonwealth employees has been increased by 8,000. As Senator McKenna was also critical of the Government on this point, I took the trouble to obtain accurate figures. From the 31st December, 3949, to the 30th September, 1950- for all practical purposes the first nine months of administration of the present Government - the total number of all Commonwealth employees was increased by 3,471. Administrative staffs were decreased by 480. The increase of the number of Commonwealth employees in the last nine months was due largely to an increase of the number of employees in the Postal Department by 5,205. Will anybody criticize that increase? Senator Aylett contended only on Thursday last that the staff of the Postal Department should be further increased. Has he something to say about that matter now?
– I complained that the number of employees had not increased commensurately with the increase of the business of the department.
– I notice that the Leader of the Opposition (Senator Ashley), who was at one time in charge of that department, remains silent on this point. He is well aware of the arrears of work that had to be overtaken in that department. The overall increase of the number of Commonwealth employees has also been due in part to an increase of 1,883 in the number of employees of the Department of Works and Housing. I am sorry that I did not ascertain whether that figure includes employees engaged on the Snowy Mountains Scheme. I believe that it does include them. At all events the figures which I have cited constitute a very effective answer to the criticism by the Opposition on that point. I commend the bill to the Senate.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 (Short title).
– During my second-reading speech I asked the Minister whether the Government in introducing this bill relied on some head of power in -the Constitution other than the taxing power. I should like the Minister to indicate whether the Government acknowledges that this bill is based on the taxing power in the Constitution. If I am permitted to do so, I propose now to discuss the term of the bill. Will the Minister state why the Government is not prepared to meet the request of the wool-growers that it should introduce separate legislation each year if the continuance of this tax is found to be necessary? With the permission of the Chair, I shall raise other matters relative to the bill while they are fresh in my mind. Why does not the Government make some concession in response to the request of the wool-growers, made through their organizations, for the exemption from the tax of up to £1,000 of income?
– Separate notes have been prepared by the departmental officers covering each clause. If the honorable senator will raise these matters when the appropriate clause is under discussion, I shall be able to furnish him with satisfactory replies.
– The committee is considering the bill clause by clause.
– Senator McKenna has asked why the money to be collected from woolgrowers is called a deduction and not a tax. Frankly, I do not know. A rose by any other name would smell as sweet. 1 do not combat his claim that the Government has based this bill on its taxing power. I should not think that there would be any argument on that score. I can only explain why the money to be collected from the wool-growers is called a deduction and not a tax, by stating the business viewpoint that a tax presupposes a new field of revenue or some new set of circumstances, whereas this is merely a part of the general revenue scheme.
– During the second-reading debate the Minister compared the position of a wool-grower with that of a wage or salary earner. Does he differ from the view which I expressed that the woolgrower is to be placed in a position entirely different from that of any other class of businessman in the community? There is no parity between the position of the wool-grower and the wage or salary earner because in addition to ordinary income tax a rigid deduction of 20 per cent, is to be made from the income of the wool-grower. It, is inevitable that, with 91,000 woolgrowers, a deduction of 20 per cent, will be too little for some and far too much for others. It is not possible to get the same close approximation of actual tax in a scheme such as this as in the case of a wage and salary earner whose tax is adjusted week by week or fortnight by fortnight. Will the Minister say that I am wrong in contending that the woolgrower will be in a position completely different from that of any other businessman in that whereas the businessman pays provisional tax for this year which has been calculated on the income which he earned last year, the wool-grower will pay provisional tax and an additional deduction from his wool income of 20 per cent, under the provisions of this bill ? In these circumstances it cannot be contended that the wool-grower will be in a position of parity with other businessmen in Australia.
– I have not burked the issue to which Senator McKenna has referred. I have stated, I hope clearly and distinctly, that it is true that this measure places the woolgrower in a different position from that of other people on whom provisional tax is levied. I have said that this legislation is entirely justified having regard to the circumstances of the nation. The Government is committed to heavy expenditure as the result of conditions arising from the threat of war, and the great rise in the price of wool has resulted from the same threat of war. Therefore, I believe that it is quite fair and equitable that this deduction should be made from the incomes of the wool-growers and applied to meet the Government’s budgetary commitments.
Clause agreed to.
Clause 2 agreed to.
Clause 3 (Administration).
– During my second-reading speech I questioned the Minister regarding the interpretation of “ appraised value “. As I do not recollect the Minister having answered my question, I accordingly repeat it now. In the event of the appraised value being greater than the amount realized at the sale, and the 20 per cent, being calculated on the higher value, will any adjustment be made at the time the proceeds are received and the wool-growers’ liability to pay arises?
– The answer is that the producer who exports wool will pay 20 per cent, of the appraised value fixed by the Australian Wool Realization Commission. If he desires to defer payment until the wool is actually sold, he may do so by arrangement with the Commissioner- of Taxation. In such a case, the appraised value would not be arrived at before the wool was exported. It can scarcely be imagined that the Australian “Wool Realization Commission would fix an appraised value higher than the actual sale price, which would then be known. Subject to that, there is no provision in the bill for an adjustment.
. - Why, then, is it necessary for the fixation of an appraised amount? This bill, or another measure with which we are also concerned at the moment, permits the postponement of payment until payments are in fact received. Why should not there be a calculation based upon the actual proceeds at the time that they are received? I take it that the appraisal takes place at the time of exportation, and that there is some interval of time between then and the receipt of the proceeds, assuming that the wool is sent abroad for sale. The amount that it will realize is not determined at the time it leaves Australia. I could understand it being necessary that there should be some appraisal by the Commissioner of Taxation, but as this legislation permits a wool-grower to defer payment until he in fact receives his proceeds, why should not his payment be based, not upon an assessment or appraisal, but upon the actual proceeds?
– The question is not an easy one to answer. It turns upon the tenor of the financial arrangements. A wool-grower may receive payment in advance, before the wool is sold. The bank requires security if it makes an advance before the wool is sold. The division is in order to provide clarity and to provide a prompt determination where that is necessary.
Clause agreed to.
Clause 4 (Interpretation).
– I understood that the Wool Sales Deduction Bill (No. 1) 1950 was called, and that we were dealing with that measure. As it was to that bill that I was addressing my questions to the Minister, I can understand his embarrassment because it is obvious that he had the wrong notes to the right bill.
– The measure before the chamber is the Wool Sales Deduction (Administration) Bill 1950, and weare considering clause 4 which deals with interpretation.
. –Sub-section (3.) of this clause deals with liens on wool and mortgages of livestock. Where a person holds a mortgage or a lien over a wool-grower’s clip, this provision might well be the means of that grower losing his property. The 20 per cent, deduction must be made, although the making of that deduction might be completely out of the hands of the wool-grower, who would normally collect the wool cheque. Where grave hardship is likely to be caused to the woolgrower, some relaxation of that provision should be made. A decision made by the Commissioner of Taxation might be too late to prevent foreclosure. That decision might be made after the owner of the property had lost either his property or his sheep.
– I think that the honorable senator overstates the position. After all, this deduction is only an application of the general principle that a Crown debt has priority over other debts. If, for purposes of illustration, the 20 per cent, deduction were replaced by, say, the payment of rates to the local municipal council, there could be no cavilling at it. The same principle is applied in relation to this measure. It means that the Crown debt ranks before the secured debt. I do not think it will result in the consequences envisaged by the honorable senator.
– What happens to the property and to the mortgagee?
– The mortgagee knows his legal rights. He is entitled to the balance. He knows that rates and taxes must be paid on the property, and he also knows that the property must be kept in good repair. This deduction is a charge that ranks before his.
– That is the very point to which I was drawing the Minister’s attention. He now states that the Crown has first claim, which means that the 20 per cent. must be paid. In relation to loans, liens, or mortgages that were entered into before this legislation became law, it would still be necessary to discharge them if the property-owner wished to retain his stock or his property. I have no doubt that many property-owners have entered into negotiations and have contracted liens or mortgages which must be met on a certain date. It might well be that a person is dependent upon the whole of his wool cheque to meet such a lien or mortgage. If his wool cheque is £5,000 the Crown will deduct 20 per cent., or £1,000. That £1,000 might be the means of losing his property, if he is not able to come to some arrangement with the Commissioner of Taxation before his other commitments must be met. Is the policy of the Government the same as that of financial agencies and the Commonwealth Bank : that there will be no fixed mortgages, but that when demands are made, they must be met?
– I confess that I am not sure that Senator Aylett and the Minister for Social Services (Senator Spooner) are at one. As I understood the position, Senator Aylett was referring to subclause 3 of clause 4, and I understood that the Minister was replying on another clause, which relates to the priority of Crown debts. I draw attention to the fact that the Minister’s reply to Senator Aylett, when he previously raised this matter was not in connexion with the clause with which the honorable senator is dealing.
– I shall reply to Senator Aylett first, while the matter is clear in my mind and on the assumption that it is in connexion with this clause. All transactions must fall within two categories. They must be either normal transactions, or abnormal transactions. If the situa tion, to which the honorable senator has referred, should arise, it would be an abnormal transaction. If it is an abnormal transaction, it is necessary to look to the hardship provisions in the bill. I suggest that the extraordinary case should not be confused with the normal case. So far as the normal case is concerned, surely the short answer is that as a result of the tremendous increase of wool prices, the average woolgrower, even after paying the 20 per cent., will have far more money left in his hands than ever before.
– There might, perhaps, be a drought or something of that kind.
– That also is covered. I reply to Senator McKenna by saying that his knowledge of interpretation clauses is greater than mine, but I point out that sub-clause 3 goes on to define who is entitled to the proceeds of the sale of wool and who is liable to pay the deduction.
Clause agreed to.
Sitting suspended from 6 to 8 p.m.
-by leave - read a copy of the statement delivered in the House of Representatives by the Minister for External Affairs (Mr. Spender)(vide page 3163), and laid on the table the following paper : -
International Affairs - Ministerial Statement, 28th November, 1950 and moved -
That the paper be printed.
Debate (on motion by Senator McKenna) adjourned.
In committee: Consideration resumed.
Clause 5 (Registration).
– This clause provides that the Commissioner of Taxation may register under this legislation a person who sells or otherwise disposes of wool on behalf of a producer, or who purchases wool from a producer. A penalty of £100 is mentioned. I should like to know whether it is necessary for every person who ^ deals in wool in any manner or quantity to apply to the Commissioner for registration. Is the obligation on the dealer to seek registration, and what period of time is to be allowed to him to do so?
– The bill requires all wool brokers and dealers to register with the Commissioner of Taxation. Registration is necessary because of a later clause which requires brokers and dealers to deduct a portion of the proceeds of the purchase price of wool.
– What is the need for the penalty of £100?
– A penalty is imposed to ensure that unregistered persons shall not act as brokers and receive the proceeds of the sale of wool and also to ensure that all wool transactions are made known to the Commissioner of Taxation.
Clause agreed to.
Clause 6 (Deductions from proceeds of wool).
– Paragraph (a) of sub-clause (1.) provides that any person who holds an amount in excess of £20 in respect of wool sold by him on behalf of a producer shall be liable to pay to the commissioner an amount equal to the prescribed proportion of that amount which, this year, is to be 20 per cent. Twenty pounds is a very small amount to be credited to a person who would describe himself as a wool-grower. The provision covers a very insignificant field of exemption. Why was that figure chosen? The 91,000 wool-growers of Australia will pay a total amount of £103,000,000. If all woolgrowers made an equal contribution the amount paid by each would be approximately £1,132. It seems rather incongruous1 that when such a large average sum is involved provision should he made for an exemption only ‘in respect of an amount under £20. Has the Government given further consideration to the request of the Australian Primary Producers Union of Victoria that the amount of the exemption should be raised to £1,000 ?
– The amount was fixed at £20 to ensure that all wool transactions shall be subject to the deduction. The Government considered the request that the exemption be raised to £1,000 but decided not to accede to it. The underlying principle of the bill is that all growers should make a contribution to the scheme. It would he difficult to administer the bill if the exemption were raised to £1,000 because many wool-growers do not sell the whole of their clip in one sale. Many of them spread their sales over the whole of the year. If the exemption were raised to £1)000 wool brokers would be involved in a great deal of work in ensuring that wool-growers had not made other sales which, if added to the sale negotiated through them would make the total sales in excess of £1,000.
Clause agreed to.
Clause 7 (Time of payments to Commissioner by brokers, &c).
– In replying to the second-reading debate the Minister stressed the point that this deduction is a levy and not a tax. If that be so, I should like to know why, in the event of breaches of the provisions of clause 6 the persons concerned should be mulcted in a fine not exceeding the amount payable to the commissioner. If, in fact, the wool deduction is not a tax, why should such a person virtually have to pay double the amount he would otherwise have had to pay?
, - I do not think that it has ever been stated that the wool deduction has no relation to a tax.
– Then it is a tax?
– It has the closest relation to a tax. It is, in fact, a prepayment of tax which is to be collected in advance of tax payment due at a later date.
Senator ASHLEY (New South Wales “Would the Minister consider the imposition of lighter penalties than those prescribed in the measure for late payment of the deduction ? In times of prosperity such as this the Commissioner would have ample time in which to collect his money.
– In reply to the Leader of the Opposition (Senator Ashley) I think it is fair to say that in the case of some wool-growers very substantial amounts will be involved and accordingly the fine for late payment of the tax must be more than a nominal amount. The penalties stated in the bill are the maximum penalties which may be imposed by a court after the usual legal proceedings have been taken. Some of the money that will be taken from the wool-growers will be set against their future tax liabilities.
– The Minister’s statement i9 not in keeping with the spirit of his second-reading speech, in which’ he said that as the woolgrowers of Australia now have an abundance of money the Government proposes to skim off some of that money for the purpose of enabling it to meet certain budgetary commitments.
– If a wool-grower in days of prosperity contemplates evading his liabilities under this legislation, in common justice to those working in other industries we must provide penalties which ensure that he shall realize his obligations.
– Under this clause an obligation is placed on the person who is liable to pay an amount to the Commissioner to pay it not later than the seventh day of the month next succeeding the month in which he becomes so liable, or within such further time as the Commissioner allows, and also to furnish to the Commissioner, at the time of making the payment, a return in a form authorized by the Commissioner in respect of the transaction to which the payment relates. The penalty for failure to comply with that provision is a find not exceeding the amount pay able to the Commissioner. Under clause 11 provision is made for refunds when the rate is reduced after commencement of the financial year or when no rate has been fixed. Apparently, it is the intention of the Government to give to the person entitled to a refund an I O U which may be subsequently wiped out by the tax imposed in the following year. A penalty is to be imposed on the woolgrower who does not make immediate cash payment in relation to the sale of his wool, but when the Government has to make a refund it will be a sort of “ Kathleen Mavourneen “ affair because it may be absorbed by the tax imposed in the following year. The Government should show more leniency to those who, through circumstances beyond their control, may contravene the provisions of clause 7, or alternatively it should provide for the payments of cash refunds at the end of each year if the amount taken from the wool-grower exceeds that due by him.
, - There seems to be some confusion in Senator Cooke’s mind in regard to this matter. The penalty prescribed in this clause will be imposed not on the wool-grower but on the broker or agent who will be responsible for lodging returns and paying the appropriate amounts to the commissioner. Refunds to be made under the provisions of clause 11 will be paid to the woolgrower, Refunds will be dealt with in the most expeditious and practical way. They are to be applied in reduction of the tax liability of the wool-grower or paid in cash, whichever may be appropriate.
– If the penalty is incurred by the broker, will he have to pay the appropriate amount plus a penalty of an equal amount or, in total, double the amount which he had originally been obliged to pay, or will he have to pay a fine?
– If he is fined by the court, he will have to pay the amount of fine determined by the court.
Clause agreed to.
Clause 8 (Wool deduction certificates).
.. - Under this clause a person who is liable to pay an amount to the commissioner in relation to any wool shall, not later than the day on which he pays that amount to the commissioner, deliver to the producer of the wool a certificate in duplicate setting out the amount received hy him in respect of the wool, or the price at which he purchased it, as the case may he, and the amount payable to the commissioner in respect of the transaction, and also deliver to the commissioner a copy of the certificate. Considerable increases of staff may be necessary to cope with this additional work. Has provision been made whereby brokers may impose an additional charge to cover the additional expenses which will be forced on them as the result of the passage of this legislation?
– I pity Senator Aylett, who, with tears running down his cheeks has made such a fervent plea for the poor woolbrokers ! I remind him that the Government of which he was a supporter during its long reign passed much legislation which contained provisions somewhat similar to that in this bill to which he now objects. I remind him that similar additional work is imposed on employers who have to make deductions of income tax from the salaries and wages of their employees and on small and large shopkeepers in respect of sales tax collections. The Government does not intend that the woolbrokers should be remunerated for any additional work which they will have to do as the result of the passage of this legislation.
Clause agreed to.
Clause 9 agreed to.
Clause 10 (Application of wool deduction certificates in payment of tax).
– This clause provides that a producer shall forward all wool deduction certificates delivered to him in respect of wool sold, disposed of or exported in a year of income to the Commissioner with the return which be is required under section 161 of the Income Tax Assessment Act 1946-1949 to furnish in respect of that year of income. I ask the Minister for . Social Services (Senator Spooner) does that clause contemplate the continuance of the wool tax year after year, in accordance with the income tax legislation referred to?
– The short answer to the honorable senator’s query, is that the Government hopes to abolish the wool deduction scheme as soon as it possibly can.
– Will the Minister give an assurance to the wool-growers of this country that this legislation will terminate at the end of the financial year?
– I can give no assurance that the legislation will operate for one year only, but I can give an assurance that it will be terminated as soon as it is practicable to do so.
Clause agreed to.
Clause 11 (Refunds where rate reduced after commencement of financial year, or no rate fixed).
– I ask the Minister in charge of the bill whether it is not a fact that under this clause the rate of deduction must be fixed each year by this Parliament before any deduction may be made and applied for any purpose hy the Government?
– The position as stated by the honorable senator is correct, although it is not the position outlined in this clause. It is set out in the Wool Sales Deduction Act (No. 1) 1950, which will subsequently come before the Senate.
– I understood from Senator Gorton’s question that a new rate had to be fixed every year. As I recollect from my reading of the hill, although I cannot at the moment put my finger on the relevant clause, the deduction of 20 per cent, is to remain fixed unless altered, and that under this measure it may be reduced but not increased? Is it not a fact that the 20 per cent, for this year is to obtain for subsequent years unless varied in a downward direction by further legislation?
– The position is not as stated by the honorable senator. A rate must be fixed each year.
– I wish to draw the Minister’s attention to a question that I asked this afternoon while he was replying to the secondreading debate. The Minister then stated that he would have to ask for notice of a portion of my question.
– It concerns another measure.
– It has some relation to the clause with which we are now dealing. The Minister stated that he would have to ask for notice of portion of the question. I interrupted the Minister when he was speaking this afternoon and asked whether the rate could be increased or decreased and whether it would be continued or not. The Minister stated that it could not be increased, but he was unable to say whether it could be decreased.
– I think that in reply to an interjection this afternoon I said that the rate could be decreased but not increased.
– That is correct.
– Irrespective of what I may have said this afternoon, the correct position is that a new rate must be fixed by the Parliament. It may be any rate, higher or lower than 20 per cent., according to the will of the Parliament. There is, however, a provision in the Wool Sales Deduction (Administration) Bill which prevents a wool-selling broker from deducting more than 20 per cent.
– Then the Parliament could make it higher or lower?
– That must be done by the Parliament.
– The Parliament could make it 33 per cent. next year!
– Adverting to the question I posed to the Minister a little while ago, when he intimated that a fresh rate must be fixed each year, if it is in order I wish to refer to one of the bills that is also being dealt with during this debate. I refer the Minister to sub-clause (3.) of clause (4.) of the Wool Sales Deduction Bill (No. 1) 1950, which states -
Until a proportion of the sale value is fixed by the Parliament for a later financial year, the proportion of the sale value for that financial year is the proportion fixed for the immediately preceding financial year.
– The honorable senator should also read sub-clause (4.) of that clause.
– Sub-clause (4.) states -
The last preceding sub-section is subject to the provisions contained in the Wool Sales Deduction (Administration) Act 1950 for refunds where -
the proportion of the sale value fixed for a financial year is fixed after the commencement of that financial year and is less than the proportion fixed for the immediately preceding financial year ;. or
) no proportion of the sale value is fixed for a financial year before the end of that financial year.
If no proportion is fixed, I take it that the rate operating in the first year will apply.
– That is subject to refund under sub-clause (4.). It says so.
– Let us consider sub-clause (3.) by itself. Leaving aside all questions of refunds, surely, to reduce it to mathematical terms, that sub-clause contains a clear statement that if the percentage is fixed as 20 per cent. for this year, the proportion for the following year will also be 20 per cent.
– But it is not fixed.
– Surely 20 is the percentage unless something is done by the Government to alter it.
– The position is that under the legislation the Parliament must fix a rate each year. There is room for confusion of thought because of the provision that until such time as the Parliament fixes a rate it continues at 20 per cent. But if we consider the circumstances under which the Parliament did not fix a rate, the result would be that the 20 per cent., which continues until such time as a rate is fixed, would have to be refunded to the wool-growers. The position is that the Parliament must fix a rate each year, whatever that rate may be. Until that is done, the 20 per cent, operates.
Clause agreed to.
Clause 12 (Cases of hardship).
– This clause refers to cases of hardship. Earlier in- the day I posed to the Minister the proposition that legal costs may be involved, and that there might be travelling time and loss of working time. I inquired whether the Government had given any consideration to meeting expenses incurred by applicants where their applications were successful, at least before land valuation boards.
– The matter has been considered, but it is not proposed to make any such provision in this bill. It would be unusual, in that no such provision is contained in similar legislation.
Senator COOKE (Western Australia) ([9.30]. - I ask the Minister whether consideration can be given to exempting from the provisions of the bill small woolgrowers who would suffer hardship because of the imposition of the 20 per cent, deduction. I should like to see some line of demarcation drawn between large woolgrowers and small wool-growers. It is obvious that it would be most expensive for a small wool-grower to be compelled to make an application to the Commissioner of Taxation. For example,’ a woolgrower with an income of £2,000 would suffer hardship if the legislation applied to him. I consider that it would be reasonable to draw a line of demarcation, so- that it would be a formal matter for small wool-growers to show that their incomes were of such small proportions that they should be granted certificates of exemption merely on their business figures and their capacity to earn.
– The question asked by the honorable senator is. in fact, the same as that asked by Senator McKenna, although in a somewhat different form. Senator McKenna suggested that the exemption limit be raised from £20 to £1,000 whereas Senator Cooke suggests that the exemption be in some way graduated in order to eliminate the small wool-grower. The Government gave careful consideration to a proposal along those lines and, for a variety of reasons, believes that it is fair, in the circumstances, that the deduction should be made from all wool-growers.
.- Following on the remarks made by Senator Cooke, I should be glad if the honor.able senator would explain how the cases of hardship are likely to arise. The wool-grower who last year received 60d. per lb. for his wool and this year receives 120d. per lb., is left with 96d. per lb. after allowing for this deduction. How is it explained that he will suffer hardship?
– I appreciate the difficulties that would confront the Government if the exemption figure was raised to £1,000, but it cannot be denied that there will be many cases of .hardship. Senator Scott, laughs, but of course he is in a very big way.
– I am a small woolgrower.
– I suggest that the difficulty might be overcome by exempting those wool-growers who have less than, say, 500 sheep. That is not a very large number of sheep. Producers with 500 sheep or less could easily be exempted from the provisions of this scheme. If that were done, it would assist small woolgrowers who are endeavouring to improve their properties - men whose income this year will probably be £2,000, one-half of which will be needed to pay their expenses. It is men of that kind who will suffer hardships as a result of this scheme. I suggest to the Minister that the Government should review the position and consider whether it will be possible to do something to relieve the burden that will be cast upon small growers if the bills are passed in their present form.. I am not asking the Government to do anything that is impossible or anything by which it will lose money. Under the present proposals, the Government will get very little money from men with 500 sheep or less, but much hardship will be caused to those men. The Minister has made it clear that the Government is not prepared to compensate a wool-grower for expenses incurred in making what in many instances would he a long trip to interview the Commissioner of Taxation and ask for relief under this clause, even if his application were successful. The cost of making an application would, in many instances be so great that many small wool-growers would prefer to suffer the hardships that the loss of part of their incomes would inflict upon them. They would be unable to afford the time lost or expense involved in making an application for relief under this clause, and would probably come to the conclusion that the benefits that they would derive from a successful application .would not compensate them for their expenditure of time and money.
– What is the income of a man with 500 sheep ?
– It is more than Senator Aylett is getting.
– I know that the difficulties of small wool-growers are not appreciated by some honorable senators opposite, who were probably born with silver spoons in their mouths, or inherited large estates. Their lives are entirely different from the lives of small producers who have had to struggle hard. Because they have had such a flying start in life, they have never stopped to think about the other man’s point of view.
All of the primary producers’ organizations support the proposition that I am now presenting to the committee. Their main objection to this scheme is that it will cause hardship to small producers. I. suggest to the Minister that, even at this late hour, the Government should consider whether it will be possible to assist small wool-growers by providing that growers who have up to a certain number of sheep shall be exempted from the provisions of this scheme. Such an exemption would eliminate 95 per cent, of the cases of hardship that will be likely to occur under the present provisions.
– Senator Aylett’s proposal that small woolgrowers should be treated differently from large growers is by no means a new one.
It has arisen at each stage when the bills have been under consideration. The Government has not brushed aside lightly the representations that have been made in this connexion, and which have come, not only from primary producers’ organizations, but also from members of the Government parties. The small woolgrower to whom Senator Aylett has referred is rather a myth. In normal times, 500 sheep would not provide a farmer with a living, and a farmer who has only 500 sheep has other interests. The Government does not consider that it would be right to exempt a woolgrowerof that kind from the provisions of thescheme, because he is receiving the benefit, not only of high wool prices but also of the income that he derives from his other pastoral activities.
– I realize that many small wool-growers have other interests, but I am concerned about the men with very small flocks who have been struggling to improve their pastures and clear their properties. There are thousands - per- hans tens of thousands - of them in Australia to-day. In my travels through Tasmania I have been amazed to see the vast improvements that have been made in some areas, where large tracts of land have been cleared and put under grass during the last few years. Many men are putting their money back into their land in an effort to increase production, as this Government and the previous Government asked them to do. It is true that many of them have interests other than sheep, but there are occasions when some farming activities are not profitable. Sometimes the mixed farmers to whom the Minister has referred find themselves with their potatoes rotting on their hands because ships are not available to transport them to the large centres of population. They are helped by windfalls such as increased wool prices.
The Minister has not given any reason why the Government would be inconvenienced by making the exemption for which I have asked. The only reason that he has given for refusing to accede to my request is that because the big man - is in a position to pay, owing to the fact that he has wool, the little man should be asked to pay also. If that be a valid reason for not exempting from the provisions of these measures small men who are doing more to increase production in this country than is any other section of the community, why does the Government not propose to apply a similar scheme to big men in other sections of primary industry whose incomes may be ten or 50 times larger than those of small woolgrowers? In my opinion, the Minister has advanced the weakest reasons that I have ever heard produced in an attempt to justify the rejection of a concrete proposal. If the suggested exemptions were granted, not only the Government but also many small wool-growers would be relieved of much embarrassment.
Very few small wool producers would know how to present their cases properly to the Commissioner of Taxation if they applied for relief. All that they know is how to work and produce. If a producer were fortunate enough to meet a member of Parliament, he could explain his case tothe member, who could present it properly to the Commissioner, but if the producer were not fortunate enough to have some one to do that for him, his applications would probably be rejected by the Commissioner, not because the Commissioner was unsympathetic, but because, owing to the way in which the case had been presented, he could not justify acceding to the application, even though in truth it was a reasonable one. It might be that the producer, owing to faulty bookkeeping, for instance, had not produced all the evidence necessary to support his application. In dealing with small farmers, that would be the position in seven out of ten cases.
It would not hurt the Government to grant the exemption for which I have asked. In fact, if it were granted, the Government would regain some of the prestige that it has lost as a result of the introduction of these unpopular bills. The exemption would help, not only the Government, but also the small producers. The main objections raised by primary producers’ organizations to this scheme is that it will adversely affect the small man who is trying to find his feet and is doing his utmost to assist the Government by increasing production. That is the man that the Government is trying to push down.
Clause agreed to.
Clause 13 (Appeals).
– Who are the members of the Land Valuation Board established under the Land Tax Assessment Act 1910-1949 ? In their official capacities, do they represent only the Government and the Commissioner of Taxation?
– The Land Valuation Board consists of a permanent public servant, assisted by two local assessors.
– Are the assessors members of the Taxation Branch?
– No. They are two local residents.
Clause agreed to.
Clause 14 agreed to.
Clause 15 (Bankruptcy of person or liquidation of company holding moneys payable to Commissioner).
– This clause deals with the bankruptcy of a person or the liquidation of a company holding moneys payable to the Commissioner. The position may well arise that when an agent or broker, acting for a principal, has deducted moneys pursuant to this bill, he becomes bankrupt. His estate may yield nothing, or a relatively small amount, sufficient only to pay his creditors 5s. in the £1. The question that I pose to the Minister is: Does the obligation to find, in the one case the whole of the money and in the other case 15s. in the £1, rest upon the producer of the wool? If that be so, the producer may be called upon to pay twice. If money has been deducted by a broker, acting, I suggest, as agent for the Commissioner, and nothing is paid to the Commissioner owing to the bankruptcy of the broker, is a producer to be called upon to pay again?
– That position is covered by clause 16.
Clause agreed to.
Clause 16 (Person failing to deliver wool deduction certificate).
– Does the mere issue of a wool deduction certificate ensure the Commissioner’s assumption that that person has received the amount of deduction in cash, and that where the Commissioner thinks it fair to do so, he may credit the amount of the deduction to the producer?
– We cannot go beyond the wording of the clause. Where the Commissioner thinks it just to do so, he will credit the wool-grower accordingly. The Commissioner will take all circumstances into consideration.
– I assume that the word “ person “ where first occurring mean a broker. As I read the clause, the obligation is upon the broker to pay the amount to the Commissioner and to deliver the certificate. The condition under which the Commissioner may credit the producer of the wool is not that the broker has failed to pay the amount to the Commissioner but, in terms of the clause, that the broker has not delivered the wool deduction certificate to the producer. The clause is not qualified by the words “ and has paid the relevant amount to the Commissioner “. I understand the Minister to mean that where a broker has become bankrupt and has failed to pay the amount to the Commissioner, if the Commissioner thinks it just to credit the amount to the producer he has discretion to do so.
– That is the way that I read the provision.
Clause agreed to.
Clauses 17 to 22 agreed to.
Clause 23 (Application of certain provisions of the Income Tax Assessment Act 1936-1949).
– Will the Minister inform me whether the sections of the Income Tax Assessment Act 1936-1949 enumerated in the clause are penalty sections or sections vesting the Commissioner with plenary powers to collect the taxes being imposed on the wool-growers?
– The purpose of the clause is to apply certain machinery provisions of the Income Tax Assessment Act 1936-1949.
The sections which it is proposed shall be applied are sections relating to the observance of secrecy by officers, collection and recovery of taxes, penal provisions and prosecutions, and public officers of companies. The clause has been drafted to obviate a repetition of those provisions.
Clause agreed to.
Clause 24 agreed to.
Clause 25 (Payments to and from Consolidated Revenue Fund).
– Earlier to-day I drew the attention of the Minister to a statement in his second-reading speech that amounts paid by producers would be held by the Commissioner until income tax was assessed and payable by the producer on the value of the wool sold in Australia, or exported by him. At the time I intimated that, in accordance with section 81 of the Constitution it was compulsory for those moneys not to be held by the Commissioner but to be paid into the Consolidated Revenue Fund. However, the clause reads -
All moneys received by the Commissioner in pursuance of this Act shall form part of the Consolidated Revenue Fund, and there shall be payable out of that Fund (which is, to the necessary extent hereby appropriated accordingly) such amounts as the Commissioner becomes liable to pay in accordance with the provisions of this Act.
In order that there shall be no misunderstanding by the wool-growers, will the Minister state whether these moneys will be held by the commissioner, or paid into the Consolidated Revenue Fund.
.: - The moneys will be paid into the Consolidated Revenue Fund. They will not be held in a special account. The commissioner receives a certificate showing the amount of deduction, which presumably will be placed with the taxpayer’s papers and taken into account when income tax is being assessed and adjustments made.
– Will the amount of deductions be kept to one side by the Treasurer in order to provide for refunds if necessary? The Minister has stated that it is unlikely that any refunds will be made before 1952. I should like to know where the Government will obtain the money to make refunds to wool-growers who have paid in more than the taxes for which they are liable. Will that money come out of the next year’s revenue, or from a special holding account?
– I remind Senator O’Flaherty that the purpose of the bill is to obtain £103,000,000 as prepayment of income tax. I should think that the amounts involved, in instances in which refunds would be necessary, would not be large compared with the amounts that the revenue will gain this year, and which normally would not be received until May, 1952. Any refunds necessary will be paid from the Consolidated Revenue Fund, when the liability arises. Cash repayments will be made only in those instances in which the amounts collected exceed the tax liability.
– During a debate recently it was stated that there was no money in the National Welfare Fund to enable payments to be made from that fund. Any refunds to the wool-growers will have to be made in cash. Does the Minister mean that there would be no money in a special account from which to make refunds and that it would be necessary either to tax the wool-growers again or to rob the Consolidated Revenue for the purpose of paying the refunds between now and 1952?
Clause agreed to.
Clauses 26 and 27 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Debate resumed from the 21st November (vide page 2653), on motion by Senator Spooner -
That the bill be now read a second time.
– It may save a little time if the Minister could tell me the approximate number of wool-growers to whom this measure will apply. This bill provides for the taxing of the proceeds of wool sales in Australia. The wool-grower will send his wool for sale at auction, and the deduction will be made by the selling agent. Can the Minister for Social Services (Senator Spooner) say how many growers will be affected by this measure ?
The bill provides that the percentage to be deducted from the proceeds of wool sales shall be fixed by Parliament from year to year, but it also provides that if a new rate is not fixed before the end of a financial year, the existing rate shall continue to operate. Are we to assume, therefore, that if no new rate is fixed before the end of June, 1951, deductions will be made at the rate of 20 per cent. for the year 1951-52?
– in reply - It is estimated that there are 107,000 wool-growers in Australia, of whom less than 1 per cent. sell their wool overseas. It is necessary for the rate of deduction to be fixed each year, but until a new rate is fixed the existing rate will operate. However, when the new rate is fixed, it will apply retrospectively for the whole of the year. Thus, the rate this year is 20 per cent. If the rate is fixed at 5 per cent. for next year,deductions will be made at the rate of 5 per cent. for the whole of next year, and the Government will refund deductions in excess of 5 per cent. If the tax were not reimposed at all next year, the Government would have to refund the whole of the moneys collected under this provision.
Question resolved in the affirmative.
Bill read a second time.
– Clause 5 provides for the granting of exemptions from deductions in certain circumstances. I have already pleaded on behalf of the small wool-growers, and I suggest that provision should be made in this clause for exempting them from the operation of the act. In making that pica, I am not moved by any political consideration. My only wish is to assist the small wool-growers and, incidentally, the Government. It would be of no use for me to move an amendment to give effect to what I have in mind, because if the Government refuses to accept it, the amendment will be thrown out of the House of Representatives. I suggest that the Government should agree to the postponement of clause 5 so that a suitable amendment may be considered to give relief to a section of the community who will receive no benefit from this legislation. I do not want Ministers to say later that the matter has not been brought to their notice. Organizations of woolgrowers are hostile to the measure, not because it is proposed to take some money from the wealthy interest, but because this legislation will prove injurious to the small growers.
– I have already made it clear that the Government’s proposal has been given very serious consideration. Various representations have been made to the Government by its own supporters, and also by associations outside the Parliament, and they have received due consideration. The number of small woolgrowers is large, but they are not, for the most part, dependent entirely upon their wool clips. The Government has considered all the circumstances, and has submitted the present scheme to the Parliament.
Bill agreed to.
Bill reported without requests; report adopted.
Bill read a third time.
Debate resumed from the 21st November (vide page 2653), on motion by Senator Spooner -
That the ‘hill be now read a second time.
– I have already pointed out that, under the Government’s proposal, there will be discrimination between one group of wool-growers and another. Most of the wool sold overseas is handled by woolbroking firms which, in addition to being stock and station agents, are financially associated with big pastoral interests. Members of the Labour party have been twitted with having referred to those interests in the past as wool barons. Under this legislation, they will receive a better deal than the ordinary wool-growers who sell their wool on the local market. Wool sold overseas is to be taxed on its appraised value. Because the nations are stockpiling wool for defence purposes, the overseas price will be, in general, somewhat higher than the Australian price. Sometimes, the big woolbroking firms which ship wool for sale overseas do not wait for it to be submitted at auction abroad, but sell it on the high seas at a higher price than it would have fetched at auction in Australia. Nevertheless, should that happen, they will pay only 20 per cent, on the appraised value. The legislation should be amended to provide that those who dispose of their wool in that way shall pay 20 per cent, on the full price realized.
. - in reply - In effect, Senator O’flaherty has said that there will be a difference between the appraised value of the wool and the selling price. The man who sells his wool overseas must either pay the deduction on the appraised value, or make an arrangement with the Commissioner of Taxation to pay it when he receives the proceeds of the sale. There may be something in what the honorable senator has said, but there cannot be much in it. The appraised value of the wool, as fixed by the Commissioner of Taxation, will be in practice the auction value of the wool at that date. Thus, the seller can gain an advantage ‘by disposing of his wool overseas only if there is an increase of price between the time his wool is appraised and the time it is sold overseas. However, I do not think that advantage could be taken even of that loophole because when a grower sends his wool overseas he will arrange with the commissioner to pay his deduction when he actually receives the proceeds from the sale of his wool. Even if he did not do that, he would have to disclose in his tax return his income from the sale of his wool overseas. After all, this deduction is only 20 per cent, of his gross proceeds, and he will have to pay the full amount eventually.
– He will he let off for two years.
– Yes. Obviously the game would not be worth a candle.
Question resolved in the affirmative.
Bill read a second time and passed through its remaining stages without requests or debate.
Debate resumed from the 22nd November (vide page 2810), on motion by Senator Cooper -
That the bill be now read a second time.
– This is not a contentious bill, t am sure that honorable senators on both sides of the Senate will support it. I congratulate the Minister for Repatriation (.Senator Cooper) upon the introduction of a bill which will “fill the bill “. The all-round increases of repatriation pensions proposed in this measure is commendable. They are certainly most timely. I agree with Senator Finlay that everything possible should be done for men who sacrificed their health, and for the dependants of others who lost their lives, in the two world wars. Anything we can do for these people we should do willingly and cheerfully. No payment that we can make to them can possibly compensate them for the losses they have suffered.
I agree with Senator Finlay that a measure of this type should be above party politics. The Minister endeavoured in his second-reading speech to keep the measure on that high level. Senator Finlay claimed that, in 1943, an all-party committee of this Parliament had made recommendations upon which subsequent repatriation legislation was based. That i,« quite true, but I contest Senator Finlay’s right to criticize this Govern ment for not having followed a similar course on this occasion. The honorablesenator did not mention, for instance, that the committee to which he referred was appointed by a non-Labour government in 1940, or that when the Chifley Government increased repatriation pensions in 1947 and 1948, the committeewas not consulted. In fact, the Chifley Government did exactly what the present Government has done on this occasion. As I have said, in introducing this measure, the Minister for Repatriation endeavoured to place the discussion on a non-party basis. He could have pointed out, for instance, that in 1949, the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia petitioned the Chifley Government for an increase of pensions, but was told that its request would be considered after the elections. The Chifley Government’s failure to increase repatriation payments earned it considerable unpopularity in the electorate. The defeat of the former Minister for Repatriation, Mr. Barnard, was an indication not only of his own personal unpopularity, but also of the unpopularity of the Chifley Government for its handling of repatriation matters generally.
Senator Finlay interpreted the action of the Minister for Repatriation in quoting an extract from the policy speech of the Prime Minister (Mr. Menzies) as an attempt to introduce party politics into this debate. I remind honorable senators opposite that, on all possible occasions, they have flaunted that policy speech in our faces; yet now they turn round and object when an honorable senator on this side of the chamber quotes from it to prove that the Government intends to fulfil its election promises! Such tactics are hardly in keeping with the Opposition’s plea to consider repatriation matters on a non-party basis. I maintain that the Minister for Repatriation did his best to keep this legislation above party politics.
Senator Finlay said that the Government had taken a long time to introduce this legislation. That is a charge that one frequently hears from honorable senators opposite. I maintain that the Government is doing what it promised to do. It announced that a review of repatriation payments would be made by a sub-committee of Cabinet. That was done expeditiously, and this measure has been introduced to give effect to the committee’s recommendations. The only criticism that the Opposition has offered of this measure is that payments to certain pensioners are insufficient and that payments to others are too great. The Government was well advised, I believe, to take considerable time to prepare this legislation thoroughly, rather than to rush its introduction, only to have it criticized because of its failure to do justice to all classes of beneficiaries under the Repatriation Act.
I wish to deal particularly with totally and permanently incapacitated pensioners whom Senator Finlay considered are not being treated as well as they should be. Let us compare the income of a totally or permanently incapacitated pensioner with a wife and three children, with that of a basic wage-earner in the same category.I realize, of course, that honorable senators opposite will object to the comparison on the ground that there are few basic wage-earners to-day.
– The basic wage is only the minimum standard.
– Yes, but I can assure the Senate that there are many workers in Tasmania who receive only the basic wage.
– Name one.
-Certain employees of the Launceston City Council earn only the basic wage. Why do honorable senators opposite make such a fuss about the basic wage if no one receives only the basic wage?
SenatorCooke. - Because it is the basis of all wages.
– I realize that few workers earn only the basic wage to-day, but I shall take that wage as a measure. Totally and permanently incapacitated pensioners have an extremely limited earning capacity, but the Department ofRepatriation has no objection to their earning what they can. A totally and permanently incapacitated exserviceman with a wife and three children receives a pension of £7 for himself, an allowance of £1 10s. 6d. a week for his wife, and £1 14s. 6d. for the children. If the children are attending school he also receives an education allowance of £1 13s. for them. In addition, of course, there is a child endowment payment of £1 5s., bringing his total income to £13 3s. On the other hand, a man receiving the basic wage of £61s. 6d. in Tasmania will receive an increase of £11s. a week shortly. He will also have his child endowment payment of £1 5s., making his total income £9 2s. I believe therefore that the repatriation pensioner is liberally treated. Certainly he does not receive too much, but he is hot badly done by. In addition to his repatriation payments he gets many other concessions. His income of £13 3s. a week is free of income tax and social services contribution. He receives free medicine and free hospitalization if he is sick. Those are the people whom Senator Finlay complained were not being treated fairly. He said that an ex-serviceman in receipt of the ordinary base pension was far better off because he was in a position to earn a substantial income. Those are the two main classes of pensioners, and it might interest honorable senators to know that there are 157,000 of them. For that reason, the base pension has been increased from £2 15s. a week to £3 10s. a week, an increase of 15s., and in spite of what Senator Finlay has said I am sure that the recipients are all very pleased to receive that payment.
– Order ! In accordance with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question put. The Senate divided. (The President - Senator the Hon. Gordon Brown.)
Majority.. .. 7
The following papers were presented : -
Lands Acquisition Act - Land acquired for Postal purposes - Moorook, South Australia.
Senate adjourned at 10.36 p.m.
Cite as: Australia, Senate, Debates, 28 November 1950, viewed 22 October 2017, <http://historichansard.net/senate/1950/19501128_senate_19_211/>.