20th Parliament · 1st Session
The President (Senator the Hon. Edward Mattner) took the chair at 11 a.m., and read prayers.
– Can the Minister representing the Minister for Commerce and Agriculture inform the Senate whether any progress is being made by the conference which is considering the future of the InternationalWheat Agreement? Can the Minister say whether any decisions have yet been reached or are likely to be reached at the conference ?
– I have discussed this matter with the Minister for Commerce and Agriculture from time to time. So far no agreement has been reached, but I think that the Minister is hoping that an agreement will be arrived at. Of course, an agreement will only be signed if it is satisfactory from Australia’s point of view.
– I preface a question to the Minister representing the Minister for Commerce and Agriculture by making the observation that during the past few weeks Australian newspapers have published articles concerning the successful sale of New Zealand beef in the United States of America. In view of the fact that the Australian Meat Board has consistently advised the public - and this Parliament has also been so advised - of our inability to sell meat in the United States of America, will the Minister undertake to re-examine this matter in order to see whether it is in fad possible to sell Australian meat in America in competition with New Zealand meat ?
– I shall bring the matter to the notice of my colleague, the Minister for Commerce and Agriculture, and obtain a reply for the honorable senator as soon as possible.
– On the 19th February, Senator Aylett asked the following question : -
Will the Minister take up with the Minister for Health the subject of making some provision in the national health scheme for persons who, through no fault of their own, are not acceptableto an insurance scheme and are not in receipt of a pension but who are badly in need of hospital treatment which they cannot obtain because they have not the money to pay for it? Is the Minister aware thatsuch cases do exist and that some doctors have refused to put such patients in hospital for treatment because they know that they have not the money to pay for it? I assure the Minister that such is the case. Is the Minister aware that in such cases some doctors advise patients to go voluntarily into a mental asylum where they canobtain free treatment although they are quite sane and mentally fit, but physically ill? Does the Minister consider that such treatment of the sick is in the best interests of humanity?
The Minister for Health has furnished the following reply: -
I am not aware of any class of persons that is not acceptable under the Commonwealth Government’s hospital insurance scheme. Possibly the honorable senator has in mind elderly persons or those who are suffering from an illness at the time of seeking membership of a registered hospital benefits organization. If so,I may say that many organizations registered under the Commonwealth scheme do not impose any age limit on applicants for membership, nor do they refuse to accept a new member because he is in- ill-health. The rules of organizations generally preclude payment of the organization’s own benefit for hospitalization arising out of an illness in evidence at the time of joining, or which is a chronic . complaint. In such cases, however, the Commonwealth additional hospital benefit of 4s. a day is payable, so that with the ordinary benefit of 8s. a day, the patient will be entitled to Commonwealth hospital benefits amounting to 12s. a day for the period of hospitalization. 1 do not know of any case in which a doctor has refused to put a patient in hospital because the patient could not pay the hospital ; nor do I know of any case in which a patient has gone into a mental asylum although quite sane and mentally fit. Such treatment would not be in the best interests of humanity. As I have repeatedly said, hospital policy is a matter for each State to determine. The Commonwealth exercises no control over charges for hospital treatment or conditions on which patients may be admitted. I am sure, however, that no patient requiring hospital treatment would be refused admission to a public hospital on the ground that he was unable to pay for his hospital treatment.
– Is the Minister representing the Minister for Health aware that in Western Australia, age and invalid pensioners, who are chronic sufferers from various ailments, are being charged at the rate of 23s. a day at the Perth Public Hospital as the cost of treatment is 35s. a day? Is he also aware that superannuitants, who are chronic sufferers, and to whom the free medical scheme applicable to pensioners is not available, are being charged large sums for treatment? Last week I had brought to my notice the fact that a superannuated person, who was in receipt of only £4 a week, had been charged £83 5s. for treatment at the Perth Public Hospital?
– I point out that charges to patients for hospital treatment are determined by the various State hospital authorities themselves and that the Commonwealth makes available to hospitals the full hospital benefit payment of 12s. a day in respect of pensioner patients. I am not quite sure of the position of superannuitants, but I shall obtain a report on the matter from the Minister for Health. I should think that if they were members of a medical benefits organization they would receive 12s. a day.
– Will the Minister representing the Minister for Social Services inform me whether in-patients of public hospitals who receive accounts after all Commonwealth benefits have been taken into consideration, will be assisted by the Department of Social Services to pay such accounts?
SenatorSPOONER.- My understanding of the position is that the Commonwealth is providing to age and invalid pensioners free medical service, free dental service, and a contribution towards hospital expenses to the extent that they would be assisted if they were members of a benefit society. However, I should be glad if the honorable senator would place her question on the notice-paper so that I can obtain a prepared reply for her from my colleague, the Minister for Social Services.
– In view of the fact that gamma globulin, which is a fraction of human blood containing disease fighting bodies, has been found to give temporary protection against the paralysis which often accompanies poliomyelitis, will the Government ensure that Australia shall be provided with adequate supplies of gamma globulin to fight any future poliomyelitis epidemic?
– I shall be pleased to bring the honorable senator’s suggestion to the notice of the Minister for Health.
SenatorBROWN. - As the result of the sale by this Government of certain public assets, the people of this country are rather fearful about the future of our uranium deposits. Can the Minister for Trade and Customs say whether any uranium deposits or uranium mining rights have been sold or granted to foreign companies or foreign governments?
-Asthetradi-. tions, heritage, and outlook of this Government are non-socialistic, its policy has been to dispose of its shares in purely trading concerns such as Amalgamated Wireless (Australasia) Proprietary Limited and Commonwealth Oil Refineries Limited. But Australia’s vital uranium fields are an entirely different matter.
– As Mr. J. A. Alexander, Chief Commonwealth Film Censor, has stated that third dimensional films will be hard to censor, will the Minister for Trade and Customs assure the Senate that a standard system will be decided upon before such films can be imported into this country?
– I have no hesitation in assuring the honorable senator that the matter that she has raised will be carefully and properly examined by my department.
asked the Minister representing the Minister acting for the Minister for the Interior, upon notice -
Has any consideration been given to the use of helicopters in hastening the completion of the photographic survey of Western Australia, especially in the Kimberley district north of the Leopold Ranges, or, alternatively, what active steps are being taken to throw open this as yet unsurveyed land to prospective settlers?
– The Minister acting for the Minister for the Interior has furnished the following reply: -
Aerial photography for the Department of the Interior is undertaken by the Royal Australian Air Force. The question of the allotment of land to settlers is one for the Western Australian Government. The National Mapping Office of the Department of the
Interiorhas obtained photographic maps of the whole of the Kimberley area, and copies of these have been made available to the State authorities.
asked the Minister representing the Minister for the Navy, upon notice -
– The Minister for the Navy has supplied the following answer : -
Motion (by Senator Armstrong) agreed to -
That leave of absence for two months be granted to Senator Fraser on account of ill health.
Debate resumed from the 25th Feb ruary (vide page 239), on motion by Senator McLeay -
That the bill be now read a second time.
– The Opposition accepts this bill. There appears to be considerable doubt whether the Fisheries Act 1952 covers the waters adjacent to the territories of Australia. The amendments that are proposed are necessary and the Opposition does not oppose this amending bill in any way.
– I wish to recall to honorable senators the occasion when two bills relating to fisheries were presented to the Senate at a previous sitting. I believe that honorable senators will agree that the views that I am about to put forward are reasonably just. These two bills were introduced following the measure that had been debated in the Senate to prepare the ground for the fulfilment of Article 9 of the Japanese peace treaty. That set out that discussions were to take place between the Australian and the Japanese governments following the signing of the peace treaty in an attempt to reach some agreement as to the control of fisheries off the Australian coast. Prior to World War II., the Japanese were the most notorious poachers in that area. This bill is another illustration of hastily and ill-conceived legislation and of imperfect drafting. It seeks to amend a measure that was introduced in the Senate in the early hours of the morning at the closing stage of the last sessional period. I do not lay any blame upon Ministers in that respect. That bill had to be worked out in concert with three departments - the Department of External Affairs, the Department of Commerce and Agriculture and the Attorney-General’s Department. However, the fact that the Parliament is confronted with the need to rectify deficiencies in a measure that was passed only in the preceding session, is an illustration of the slackness and sloppiness which is creeping into administration in this country. The points now at issue were not adverted to when the original bill was introduced. This experience should be a warning to the Government and to members not to accept at face value measures that are put before them. It also should be a lesson to the Parliament itself that it must examine all measures placed before it with the greatest care, and a lesson to the Government that it must give to the Parliament every opportunity to discharge that function.
When I spoke on the bill which this bill seeks to amend, I was able to proceed for only a few minutes, because it came before the Senate at about 2 a.m., and honorable senators generally were weary after a prolonged sitting. However, I directed attention to the position which this measure now seeks to strengthen. I raised the question of what is actually meant by territorial waters. Under this measure we seek to extend our concept of territorial waters and to provide for jurisdiction over such waters. The Minister in his second-reading speech mentioned the waters adjacent to Papua and Norfolk Island as two illustrations in that respect. The Senate should pause and give careful, consideration to this matter. Under this bill we seek to extend our jurisdiction over fisheries and seas outside the three-mile limit. We are now confronted with a situation which can only be described in the coldest terms as an act of violence. We have been provided with more than ample evidence of two important facts. The first of them is that a Japanese fleet is already proceeding to what we claim to be Australian waters. The fact has been well publicized that that fleet is under the aegis of the largest firm of pearl-shell buyers in New York. Secondly, although the Government has agreed to allow Japanese divers to work our own pearl fisheries, the Japanese Government is not, in fact, allowing these divers to engage in such operations. So, it is obvious that even prior to consultation, the Japanese ave already endeavouring to establish their right to operate in these fisheries. It is useless for any Government to claim the right to operate fisheries unless it is in a position to police them. With Senator Scott, I had the opportunity to accompany the Minister for Shipping and Transport (Senator McLeay) on a visit to the north-west coast of Australia in late December and early January last. It is frightening to see. the condition .of Australian fisheries in that region. It is clear, first, that we cannot economically develop those fisheries ; and, secondly, that we have no means of policing operations in them. This is not a new experience on the part of other countries. Every country which pays adequate attention to the development of its fisheries realizes how important it is to police them. However, I see no evidence of recognition of that fact on the part of the people, the Government or of the Parliament of this country. It is not sufficient merely to claim jurisdiction over fisheries ; it is also absolutely necessary to ensure that we shall police them effectively.
I wish now to deal with the subject that I first raised. This is a legal argument which is no doubt open to other points of view because lawyers and even judges rarely agree among themselves. The point that I sought to make was that territorial areas, if claimed by the Commonwealth, have to be established first by the States. If the Japanese Government claims the right to operate these fisheries, as it has for many years, and refuses to agree with the Australian Government on the matter I can only conceive that the case will have to be taken to the High Court of International Jurisdiction at the Hague. If that happened the Australian Government would have given away its strongest card. It would not have established any real claim. We do not know, for instance, whether certain areas inside the Barrier Reef would be international waters in the opinion of the judges of the International Court. They might decide that it is an international waterway. They might also decide, for example, that the Arafura Sea is an international waterway. Another possibility is that some country, supported, perhaps, by nations which are surrounded by deserts, might put the matter to a vote in the United Nations and it is most desirable that we should establish our rights before such an event occurred. I consider that we should specify clearly the area over which we claim jurisdiction.
It has been agreed that this bill has been introduced for the purpose of supporting our case against the Japanese when the peace treaty is finalized. It is possible that other countries may be interested in this matter. For instance, the Portuguese Government and the Indonesian Republic may consider that they have an interest in the waters under consideration. I support the bill and I warn the Government that in my opinion this is not the end of the matter, but merely the beginning. I hope that when legislation of this kind comes before the Senate in future honorable senators will have ample time in which to examine it so as to obviate the necessity to grind out further amendments from time to time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from 25th February (vide page 239), on motion by Senator McLeay -
That the bill lie now read a second time.
Senator COOKE (“Western Australia) 1 11.36]. - The Opposition supports this bill, but I propose to make a suggestion in relation to it. The Pearl Fisheries Act 1952 was introduced by the present Government and presented to the Senate in the dying hours of the last sessional period. It was passed without the full consideration that should have been afforded to it, but that is not unusual in legislation submitted by this Government. Under the Pearl Fisheries Act the Commonwealth took over responsibilities in relation to fisheries from the States. That act repealed the Queensland Pearl Shell and Beche-de-mer Fisheries (ExtraTerritorial) Act of 18S8 and the Western Australian Peal Shell and Beche-de-mer Fisheries (Extra-Territorial) Act of 18S9. Senator Cormack made a good contribution to the debate on the previous bill when he stated that the Government was in a position to claim certain waters as being under the jurisdiction of the Commonwealth. When this bill becomes law proclamations should be made in respect of a wide area of ocean territory adjacent to Australia and Australian territories.
It is unusual, in a debate of this nature, for a Government supporter to tell the Senate that the interests of Australia were not properly guarded when the Japanese peace treaty was drawn. That fact should have been placed before the chamber when the peace treaty was under discussion. Senator Cormack’s statement that our interests were not properly guarded is accepted by the Opposition. Despite the effect of section 9 of the treaty we realized that there was a grave responsibility on the Government to exercise very early whatever right might be left to it to negotiate with Japan. Otherwise Japan would exploit very valuable assets such as our pearl and trochus shell fields as it did before the war. Recently certain Government supporters, including Senator Scott, appeared to be more concerned with bringing Japanese divers to Australia than in protecting Australian interests. I base that comment on remarks that have been made in the north-west of Western Australia.
The DEPUTY PRESIDENT (Senator George Rankin). - Order! Senator Scott will have an opportunity to speak la tei-.
– The honorable senator protests too much. The fact that he has made a violent interjection, which he knows to be disorderly, is sufficient proof that he has a guilty conscience. I repeat that the honorable senator, instead of trying to protect the Australian pearl-fishing industry, adopted a personal approach and made suggestions for the protection of individuals, which is a thoroughly good Liberal party procedure.
Prior to the last war Japanese divers operated in Australian waters, and we know that they were in “ cahoots “ with Japanese who had gained illegal entry. We also know that valuable information was passed from Japanese divers operating in the Australian fishing industry and employed by Australian firms and individuals, to Japanese agents, and that the divers assisted such agents when they illegally came to the Australian mainland. The Japanese were even able to stand up to the Australians in control of the industry and to say which Japanese diver should go out on a particular fishing boat. We also know that the Japanese fished in certain prohibited fishing beds and brought pearl shell to the’ surface, which was a most unsatisfactory position from an Australian national point of view. It is shameful to think that, among the representatives of the Australian people, there is one who thinks that it would be to our advantage to bring Japanese to this country again, although he must know that we have on our hands the problem of establishing internationally our right to keep such people out of our territorial waters.
Section 17 of the principal act is to be amended by this bill by inserting in sub-section (3.), after the word “stipendiary”, the word, “resident”. The object of the amendment is to facilitate the trial of offenders. Clause 4 proposes to amend the principal act 1 by providing that the word “diver” does not include a person employed, or carried on board a ship, for the purpose of diving without the aid of mechanical equipment. That change is understandable. I have every confidence in the persons who are responsible for regulating this industry, and I believe that they are efficient and know what is required. However, there are limits to the ability of administrators or paid servants of the Government to do what is required to protect Australian interests. Such interests must be protected by international agreement. I think that it is incumbent on the Government to take up the matter referred to by Senator Cormack and to proclaim prohibited fishing areas which can be properly policed. It would then be possible for Australia to apply to courts with proper jurisdiction for fishing rights comparable to those enjoyed by the United States of America and Canada.
– I support the bill. At the outset, I wish to contradict some statements that were made by Senator Cooke. The honorable senator said, for instance, that when the Japanese peace treaty was being ratified, not one supporter of the Government said anything about section 9 of the treaty. I remind him that both Senator Cormack and I referred to that section, although not one member of the Opposition did so. Concerning the honorable senator’s contention that I had advocated bringing Japanese divers to Australia to fish for pearl shell, I wish to say that I did not do so during any previous debate on this subject. What I said was that to the north of Australia we have an industry that could earn for us millions of dollars a year. I wish to make it plain, so that there can be no mistake in the future, that the Japanese are the only people capable of bringing that shell to the surface.
– What about the the Australian natives? Two natives broke the Japanese record only recently.
– It is possible for anybody who can go beneath the water to a depth of four or five fathoms to find a patch of, perhaps, 4 or 5 tons of pearl shell and to bring it up in a day or two. However, I wish to cite from memory some figures in relation to the pearlfishing industry in this country. In 1949 approximately 1,500 tons of shell were fished in waters near Thursday Island, Darwin and Western Australia. The reason for that big tonnage was that on Thursday Island a lot of skin divers are employed in shallow water. Such divers - perhaps a dozen or more from the one ship - can go down to a depth of three or four fathoms, find shell and bring it to the surface. However, in the case of Thursday Island, that position lasted for only one or two years, after which it was found that they had fished out all the shallow patches and were obliged to go into deeper water. As soon as they had to go into deeper water they were not able to get any shell. Consequently, the yield in Australia, including that of Thursday Island, dropped in the following year from 1,500 tons to 1,200 tons, and last year it had dropped to approximately SOO tons. The decline, can be attributed to the fact that Thursday Island boats employ skin divers and native labour.
The Australian Labour party has no policy with respect to obtaining pearl shell in Thursday Island waters. The present Government could obtain a lot of shell, but as I have said, the production has tapered off from 1,500 tons to 800 tons, and the average take of each boat to between six and seven tons. Those who are fishing at Thursday Island are losing money.
– Does the honorable senator suggest that the only remedy is to bring Japanese to this country?
– I say that we must do so. The matter should be looked at from the correct angle. A market exists in the United States of America and Europe for Australian pearl shell. The richest pearl-shell beds in the world to-day are in the waters to the north of Australia. If we cannot supply the demand for pearl shell by American manufacturers of shirt buttons they will turn to plastics, and the pearl-shell industry in this country will collapse. Honorable senators opposite are opposed to re-introducing Japanese into the industry. I shall not state my views on that matter at this stage, but I do point out that, in 1946, the Americans employed Japanese divers on the coast of Florida to gather flannel. I support this bill becau.se it will enable Australia to proclaim certain waters adjacent to Australian territories so that the pearl shell in those localities may be retained by the Australian industry.
– How could such waters be policed?
– That is a matter that would have to be considered. Disputes could be taken to the International Court of Justice at the Hague, but I have no doubt that the policing will have to be carried out by armed vessels. The value of the pearl-shell beds is huge, but Australia is not exploiting them to-day and the Government wants to give Australians an opportunity to establish themselves in this industry. It is our task to ensure that the right people enter the industry and that the industry is conducted in a manner that will be of benefit to this country. I support the bill.
– I was interested in Senator Scott’s remarks because I understand that he has practical knowledge of the pearlshell industry. I believe that the industry could be of great value to Australia and I am sure that is also the view of the Government. I have no objection to this legislation and whilst I have no personal knowledge of the requirement’s of pearl fishing, I recall that in Queensland many years ago, some people doubted very much the ability of white people to exist in the tropical climate of that State. I do not agree with Senator Scott that it is physically impossible for the native races of this country and its territories to engage in pearl fishing. I should like to know what the Government is doing to encourage the industry. Is it doing anything at all? If the industry can expand only by the employment of Japanese, it is a serious matter indeed.
– The Labour party would nationalize the industry.
– .Such talk is foolish. It is the duty of all governments, regardless of their political complexion, to develop this nation’s resources and the time has come for the Government to interest itself in undertakings of this kind. For the honorable senator to say that Labour would nationalize the industry is all nonsense. The Queensland Government has introduced a training scheme of some kind. I am not familiar with the details, but that Government believes that the Torres Strait natives can engage in the pearl-shell industry, and it is seeking some assistance from the Commonwealth Government in this connexion. I should like to know the attitude of the Commonwealth Government to the industry. Is the Government prepared to accept Senator Scott’s claim that the industry can be developed only by the employment of Japanese, or does it intend to investigate the possibility of employing other labour? As a Queenslander I cannot overlook the fact that the Japanese have menaced this country in the past. However, I do not wish to say very much about the international aspect of this matter at present. The pearl-shell industry could be of great value to this country, particularly if we could employ in it labour possessing Australian sentiments. I do hope, therefore, that the Government will examine thoroughly the possibility of employing other than Japanese labour. Senator Scott apparently believes that there is something about the Japanese physique that makes J apanese divers superior to any others. I remind him that the Torres Strait native, too, is a fine specimen and that he is interested in this industry. The Queensland Government believes that, with assistance and training, the Torres Strait islander could be successfully employed in pearling. We must do everything possible to develop the industry in the waters adjacent to our island, territories because, in the final analysis, our claim to those waters will depend largely on what we are doing in them. I ask the Government to disregard Senator Scott’s statement that the industry cannot be carried on without Japanese labour.
– I wish to correct one or two statements that have been made by Senator Courtice and to support Senator Scott’s remark. The theme of Senator Courtice’s speech was that we must do our best to develop this part of the world. Obviously, there are many aspects of pearling with which the average member of this chamber is unfamiliar. The first is that the Torres Strait islander will not fish below four or, at the most, five fathoms. The only reason why the quantity of pearl shell recovered since the war has reached even one-third of the prewar figure is that the pearl-shell beds were untouched during the war years. As Senator Scott has said, fishing has been carried out only in shallow waters. I do not wish to argue whether Japanese divers should be engaged or not, but before the war it was proved that only the Japanese would do the deep diving that is necessary. The Torres Strait islanders to-day, thanks .to the inefficiency of the Queensland Government and its Director of Native Affairs at Thursday Island, are ruining the pearl-shell industry. Before the war the export of pearl shell to the United States of America brought approximately 1,750,000 dollars to this country annually. At present, in spite of our urgent need for dollars, our annual income from this industry is only between 250,000 dollars and 500,000 dollars.
– The pearl shell cannot be sold.
– That is not the difficulty; it is not being produced. The output is now less than one-third of the pre-war figure. The New York market is as good as it ever was, and the restoration of our pre-war dollar income from this industry would be of great value to Australia. That would be a very great thing in this country at present. The Queensland Government has set up Island Industries Limited on Thursday Island, a socialist venture. With the assistance of the Director of Native Affairs, that company picks up the best crews available for the pearling boats. The remainder of the crews are loft for the free enterprise pearlers who are bound by the laws of Queensland, which provides that they must pay their crews before they go to sea. In addition to paying the members of the crew large sums of money, they have to place on board a good deal of equipment and a large quantity of food. The boats are usually away for “six or eight weeks. The members of the crews visit their relatives and friends on Wednesday Island and Friday Island. When the boats return the average yield per boat is about one-quarter of what it was before the war.
– That is purely an administrative matter.
– Yes, it is maladministration by the Queensland Government. If we cannot obtain this valuable pearl shell from the bottom of the ocean, in order to earn dollars, by using the Torres Straits islanders, we should look further afield. It may be that we could do it by using white divers wearing suits, but we cannot do it with the material that is available at the present time.
– This is a tremendously important matter. I am not sure that the present discussion should be about the merits of the pearl-fishing industry, and the value of Japanese divers and various aspects of their working conditions There will possibly be other occasions for that. A lot of these things should be discussed by the Senate, but now is not the time for such a discussion. One could obtain from the cemetery at Broome some valuable information about various nationalities.
I was interested to hear Senator Scott say - although he was speaking from memory - that there has been a fall of the annual producton of pearl shell from 1,500 tons to 800 tons. The honorable senator stated that in 1949, 800 tons of pearl shell was produced at Thursday Island, which was then the greatest producer. He also stated that as the boats have now moved from shallow waters into the deeper waters, production has fallen to 400 tons annually, because many of the Torres Strait islanders will not dive in deeper waters. If those figures were followed to their logical conclusion, it would be found that production throughout Australia has fallen proportionately.
– That is not so.
– The honorable senator mentioned 1,500 tons as the production figure in 1949.
– I am sorry. I meant 1,200 tons.
– Senator Scott said at the time that lie was speaking from memory.
– It is now too late to be sorry. Once the credibility of a witness has been so sadly assaulted, I am afraid that the correction does not count for much.
– The honorable senator is quibbling.
– On the contrary, I am dealing with the lighter side before I come to the more serious aspect of the matter. If 1,200 tons of the 1,500 tons was produced at Thursday Island, only 300 tons was produced in Darwin and the north-western Australian pearl-fishing areas. On the figures that the honorable senator has mentioned, there was a fall of production apparently all over Australia. I think that is true, because, if we consider the position ten years before the war, Senator Kendall has said there has been quite a definite fall in the production of pearl shell in Australia. I agree with Senator Scott’s statement that there is a tremendous quantity of pearl shell now available to be taken out, but I do not know the best method of doing it. I think that Senator Courtice put his finger on the crux of the position when he asked whether governments are doing enough to get this important dollar-earner out of its place on the bed of the sea and on to the New
York market. Certain industries, because of their location and special problems, need a little bit of socialization and government assistance. Every time that government help is mentioned, supporters of the Government contend that we are advocating socialization, but after all, some of the socialization, that applies to a particular industry that needs it is very pleasant indeed. Some definite help is needed in the pearling industry, if we are to obtain the results that the people want. It is the Government’s duty to consider what can be done to get the pearl shell on to the New York market. I think that the price has held.
– It has gone up.
– That is an indication that the market is in great need of additional supplies of pearl shell. When I was in Broome in 1948 there was no complaint about the number of Koepangers that were allowed to come in. At that time the industry was allowed all of the Koepangers that it wanted, although it was realized that the Japanese divers were better. However, the strenuous efforts that were made by the Government in those days to obtain Koepangers would not have been made unless they had some very definite value.
I was very interested to listen to Senator Cormack. His remarks showed how wide of the mark is the Government in these international matters. I do not think there is any possible doubt that we have been left trailing in this matter, and we now find that our position is much weaker than it would have been if proper governmental action had been taken previously. It is not nearly so sound as is the position in the United States of America and ‘Canada. The Japanese have agreed to have a talk about these things, although there is no compulsion on them to discuss with us matters related to our territorial waters or anything else. It can be imagined what would happen if Australian boats engaged in fishing operations near the Japanese home islands, yet Japanese fishing fleets can come here, and their crews are not too careful to observe the protocols.
After the war, when the Japanese reentered the whaling industry, we sent observers with the Japanese whaling fleets. They told us on their return that the Japanese had not been prepared, even in those days, to comply with the laws and regulations that had been laid down in relation to the size and quality of the whales that could be caught. Apparently they have to be watched and policed very carefully. I think there has been some mishandling of dealings with, Japan. At the time that the Japanese peace treaty was discussed in this chamber, we argued that it was not the best that could be obtained. However, it was rushed through the Senate, and now we find that we have nothing binding on Japan in relation to Ashing outside Australian territorial waters. It is all very well for the Minister for External Affairs (Mr. Casey) in another place to plead for tolerance. I assure the Government that the attitude of the Opposition has not been one of intolerance in connexion with the safeguarding of our national industries, which is our first responsibility. We are not intolerant of the Japanese in any circumstances. The war is over. The man who took the first step towards tolerance to the Japanese was the late Mr. Chifley. When the first conference with representatives of the United States of America and the United Kingdom with regard to the Japanese surrender was held in Australia, Mr. Chifley made it clear that he was not eager to seize booty from the Japanese home islands or to press for reparations. His attitude was that as the war was over, we should try to live together, and not lay the foundations of future bitterness by antagonism towards our defeated enemies. The Opposition is not intolerant in this matter, although at times it may appear to be so. We have a duty to protect our territorial waters and, apparently, that duty has been overlooked by the Government. It is not clear yet whether these measures will help to solve the problem, but I hope that they do.
The circumstances generally provide another warning that countries such as ours must fight for their rights at the appropriate time. Once matters of this kind get into world politics, we are overwhelmed by other people who may be our friends and we are left, as we seem to have been left in this case, struggling alone at a tremendous disadvantage to the national economy and possibly to our future safety and security. That was one of the lessons that we drew from World War II. The Japanese, who were fishing, in our waters, were much better informed upon the geography of our coastline than we were. Their maps were . more detailed than our own. A firm stand should be taken by the Government to ensure that Australian territorial waters are respected not only by the Japanese but by every interested country.
– The information that honorable senators can obtain from these two bills indicates that the whole affair is much ado about nothing. Apparently, no provision is to be made to police Australia’s northern coastal waters and, in fact, it is not possible to police them. The debate has developed into a discussion of extraneous things. For example, honorable senators have considered whether the Japanese, as individuals, should be permitted to enter Australia. I am not interested in the pearling industry. I am convinced that any advantage we get from its development will be lost through the Japanese coming here. I have no prejudice against the Japanese as Japanese, but I can visualize the economic circumstances of Japan. It has a large population and its people must get out of Japan because they cannot possibly live upon the available land. I visualize another war and I think of the great territory in the north of Australia that has not been developed. Senator Scott has said that only the Japanese can develop this industry. I do not believe it.
– I will get Senator Grant a boat and let him go out in it and see what he can do in developing the pearling industry.
– I advise the honorable senator to go out in a boat and forget to come back. He has in mind the development of the pearling industry by cheap labour. Australians cannot be persuaded to do the work and honorable senators on the Government side want the Japanese to do it. I do not agree with that proposition. I do not believe that the Japanese have any physical or mental qualities that are superior to those of other nationals. I have heard the same story with a different application before. It was said that the Japanese could not swim, but they gained one world record after another. I have heard it said that the Chinese could not fight, but they tied down 1,000,000 Japanese in China for twelve years. I have heard the Gordon Highlanders praised for their exploits, but when the Japanese acted similarly they were described as fanatics. There is no scientific basis for the assertion that a yellow man is better than a white man or that a white man is better than a yellow man. I am not concerned about a luxury industry being developed by cheap labour.
– That has nothing to do with the question.
– If that is so, why did Senator Scott speak about it? He said that it was impossible for the Torres Strait natives to do the work and Senator Kendall said that those natives could go down in the water only to a certain depth. I can understand why Senator Scott is so stupid. He never listens. I know that with him what’ I say goes in one ear aud out the other because there is nothing to stop it. In all seriousness, I say that the pearling industry is a luxury industry and if the Government wants to develop the north of Australia, it can do it in a better way than by developing pearl fishing. I see no objection to the industry being developed if labour can be obtained to do it, but it must be paid adequately.
The question of the 3-mile limit has been discussed in many countries. Norway has a problem associated with its territorial waters. In Scotland ‘ the German fleets are penetrating the North Sea and ruining the herring fishing which is one of the most important industries for the Eastern Highlands of Scotland. The Germans have cut the market to ribbons and an approach is to be made to the International Court to determine whether it is possible to alter the 3-mile limit because it is out of date. The Government proposes to encourage the development of the pearling industry by allowing Japanese labour into Australia. If it is a question of not developing the pearling industry and keeping the
Japanese out, or allowing the Japanese in and developing the industry, I am against its development.
– I support the two hills that are before the Senate, but I believe that they are belated and that they do not go far enough. It is clear that the Japanese pearling fleets have already left for Australian waters before the International Agreement dealing with the matter has been drawn up.
I wish to refer to another aspect of this subject to which no reference has been made previously in this debate. I refer to the danger to our Australian native women from the Japanese with the fishing fleets. This has been a real menace in the past. A visit to the north-west coastal towns of Australia will disclose to any observer numbers of half-caste aboriginal- Japanese children. They constitute an acute social problem. We have a problem that is difficult enough in our half-caste aborigines. The menace of the Japanese in this respect is borne out by the evidence of missionaries and others who have worked among the natives in the north of Australia and on adjacent islands. They have given a warning that the re-entry of the Japanese to Australian coastal waters is a renewed menace to aboriginal women. Because the women are aborigines, very few bother about them. Apparently, they are nobody’s concern; but, after all, they are the true natives of Australia. The Government should take definite steps to police these waters in order to provide the protection to which the aboriginals, particularly the women, are entitled.
This problem must also be considered from the point of view of defence. We are now aware that before the recent war many of these Japanese fleets were fishing not for pearls but for information about our defences. Japanese pearling crews knew more about our north-west coast than we ourselves did. Adequate provision must be made to combat this danger to our security in the future. We do not want a recurrence of what happened in 1941 when Western Australians witnessed the bombing of towns on their north-west coast. Japanese who had been among us in the guise of friends and workmen returned as high ranking enemy officers to carry out those raids. I agree with Senator Cormack that the Australian Government and the Governments of the two States directly concerned, Queensland and Western Australia, must face up to the problem of ensuring the adequate defence of our northern and north-western coasts. Unfortunately, that duty has been seriously neglected. One would think that as a result of our experience in World War II. the Government would be alive’ to this danger and would do more about it than merely indulge in lip service. We cannot afford to overlook the menace inherent in permitting Japanese pearling fleets once again to engage in operations in proximity to our coast. I deplore the fact that when the Japanese peace treaty was being drafted, this Government did not follow the example of its- predecessor and seek- the advice of Australian experts in respect of problems, such as the control of fisheries, arising out of the treaty proposals. I have always opposed the re-entry of Japanese pearl divers into Australian waters, and I still do so. I am familiar with the country from Perth to Darwin, and am acquainted with the views of the great majority of the people who live in that area. In my discussions with them about this matter, I found that the reentry of Japanese pearl divers was favoured by only a few persons, not because the development of the industry would increase our ability to earn dollars but merely because they happened to be engaged in the industry. Just before last Christinas it was reported in the press that two Australian native divers had broken all records that had been established by Japanese divers before the war. At the time, I raised that matter in the Senate but, apparently, the Government lias not followed it up. It may be argued by those who know more about pearling than I do that those Australian natives were able to achieve that feat because the waters had not been disturbed for a considerable period.
– Were they aborigines ?
– Yes. As I do not believe that those two natives were unique specimens, I should like to know whether any steps have been taken to absorb greater numbers of aborigines in pearling crews. I believe that if they were given a fair go and’ the opportunity to be trained we should not need to rely upon Japanese divers to develop this industry. I should also like to know whether the period of re-entry of Japanese divers in the industry will .be limited in any way. Are the Australian Government and the Queensland and Western Australian Governments making any efforts to obtain labour from other sources or to train Australian labour for operations in this industry ?
Those Governments will have to face up to this problem if we are not again to be confronted with the menace that confronted us before the recent war. I am not averse to Japanese as individuals; but I speak in the light of this country’s experience in the past and after having investigated conditions on our north-west coast. Unfortunately, very few Australians realize the extent of the damage that the Japanese inflicted in that area. For that reason, I am pleased that the Minister for Shipping and Transport (Senator McLeay) and other honorable senators had the opportunity during the recess to visit that region and see conditions there at first hand. Although, today, the damage inflicted by the Japanese is not so apparent, sufficient evidence is available to indicate that they caused serious damage in the area between a point a little north of Carnarvon right up to Darwin. The enemy was able to inflict that damage solely as a result of the information about our lack of defences which the Japanese pearlers were able to obtain in the course of their operations in that region before the recent war. We should learn the lesson that that experience should teach us. The Government must arrange for the adequate control of those waters and ensure that if Japanese pearl divers are to be allowed to re-enter the industry they shall be kept under strict supervision. At the same time, the fisheries must be effectively policed. I again emphasize the responsibility that devolves upon the Government to ensure that aboriginal women shall be adequately protected and shall not again be subject to atrocities of the kind that were perpetrated on them before the war and of which every Australian should be deeply ashamed.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 25th February (vide page 240), on motion by Senator Spooner -
That the bill be now read a second time.
SenatorCRITCHLEY(SouthAustralia) [12.29]. - The Opposition supports this bill. As the Minister for National Development (Senator Spooner) indicated in his second-reading speech, this measure does not relate to the rates of war pensions or to the conditions under which they are payable but simply authorizes the appropriation of funds from which the pensions are financed. Having regard to the ever-increasing number of pensioners, the Opposition does not agree that the sum of £37,000,000 will be sufficient to meet disbursements. After all, Australian taxpayers are only too willing to provide aid and relief to those who risked their lives and suffered injuries in the defence of their country. As the Minister pointed out in the second-reading speech, expenditure on war pensions in 1949-50 amounted to £22,023,000 and in the following financial year to £27,500,000. In 1951-52 the estimate was approximately £33,500,000, an increase on the year 1950-51 of £6,000,000. The amount estimated in respect of 1952-53 is £35,879,000. It will be observed that this year the increase in the estimate is less than any increase since 1949. One might be a little perturbed upon considering whether the estimate for the current year will be sufficient to meet the ever-growing living costs and whether those who receive these pensions are in possession of the same purchasing power as they possessed even last year. However, an appropriate occasion on which these matters can be discussed will present itself. I repeat that the Opposition supports the bill but is concerned at the fact that these pensioners are having great difficulty in paying their way and purchasing the necessaries of life.
Question resolved in. the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 25th February (vide page 238), on motion by Senator Spooner -
That the bill be now read a second time.
– With the consent of the Senate the Opposition proposes to discuss not only the Taxation Administration Bill but also the Land Tax Abolition Bill which deals with the same subject. The Opposition opposes both of these bills which are a direct result of the abolition of federal land tax last year. The land tax was an integral part of the Australian taxing system from 1910 to 1952 and due to the many amendments to taxation legislation that have been passed since 1910 these two measures have become entwined. Having eliminated the land tax it became necessary for the Government to adjust certain aspects of other taxation legislation. The Taxation Administration Bill contains a number of provisions which have been made necessary by the abolition of the land tax. For instance, under certain taxation legislation the offices of Commissioner of Taxation and Second Commissioner of Taxation and the taxation evaluation boards have been established. These authorities would cease to function unless other arrangements were made. This bill, therefore, provides for the continuance of the offices of Commissioner of Taxation and Second Commissioner of Taxation and prescribes the terms of office and salaries attaching to the occupants of the offices. It also gives to the Government the power of delegation, which is an integral part of any taxation system. The present occupants of those offices were appointed for seven years and without the passing of a measure such as this their period of office would lapse. The bill has a similar effect in relation to the valuation boards.
Primarily these bills are of a mechanical and machinery nature, necessitated by the abolition of the land tax last year. During the debate on the land tax abolition legislation that subject was very thoroughly covered and it is not my intention to debate the pros and cons of the policy of land tax. But I think that some aspects of the subject are well worthy of consideration. Having abolished federal land tax the Government provided an opportunity for State governments to derive income from land tax. Up to the present, most Premiers have not taken advantage of that opportunity. Only the Liberal Premier of South Australia has taken action in this field by increasing land tax assessments so as to recover what he considers he may have lost from the federal source. I have always considered that the main purpose of federal land tax, the breaking up of the larger estates, has, to a degree, failed in later years. In its earlier years I think that the tax had an important impact on land settlement. But during the last ten years a most disturbing movement back to large holdings has been discernible. Apparently some other action is required in order to break up the larger holdings. At this stage of the development of Australia the trend from, smaller farms to larger farms is tragic. I think that our future lies in using the land to the utmost capacity and 99 times out of 100 the man who will use his land to the utmost capacity is the man with the small holding. He is forced by the size of the holding to use every square yard of his land and all his knowledge in order to secure a living from it. But during the last ten years the tendency has been for smaller farms to be incorporated in larger holdings. In my opinion, federal land tax did not force the division of larger estates during the last few years but now that it has been abolished I am afraid that we may have removed a barrier to the absorption of smaller farms. After all, before acquiring more land, one would give consideration to the increased amount of federal land tax that would be payable. Now that that barrier has been removed the tendency for smaller” farms to disappear might be accelerated. I think that the Government should watch this position carefully. In view of the fact that it is trying to bring more people into the country the Government should realize that we must develop the great primary industries on which prosperity rests as well as the secondary industries which can employ the millions of people that we want.
The Acting Commonwealth Statistician has announced that the number of rural holdings in Australia declined from 253,536 in 1938-39 to 243,900 last year. That is a decline of 3.8 per cent, in twelve years - a very substantial reduction. But, in addition, the area of rural holdings, in Australia has increased by 4.4 per cent., from 897,000,000 acres in 1938-39 to 936,000,000 acres in 1951-52. It is therefore obvious that larger rural properties are becoming the order of the day.
– In spite of land tax.
– I made that clear. But I am afraid that this movement will now be accelerated because a barrier in the form of land tax has been removed. Whether the Government has another approach to the problem I do not know, but I think that the subject should be given a considerable amount of thought by the Australian Government and by State governments. I think that all honorable senators will agree that the largest number of people can be absorbed into primary industries by the provision of small holdings. Since 1938 the population of Australia has increased from 7,000,000 to over 8,000,000 and one would imagine, because of the increased pressure of population, that the number of small holdings would have increased. But the movement has been in the opposite direction. Despite the greater population the number of large holdings has increased and the number of small properties has decreased by 3.8 per cent. For the purpose of supplying these figures the Acting Commonwealth .Statistician has described a rural holding as a piece of land of one acre or more used in the production of agricultural products. It includes fruit or vegetables and the raising of live-stock including poultry and bees. This fact emphasizes the alarming drift from small properties that is occurring throughout Australia.
Sitting suspended from 12.45 to 2.15 p.m.
– I wish to make only one more point, and that refers to the use to which the income which was received from federal land tax could be put. The debate which ensued in the Senate this morning on the Pearl Fisheries Bill raised the question in my mind whether the Government could not use such revenue for the benefit of primary industries and thus assist in the development of the country. Senator Scott referred this morning to the depreciating returns in the pearl-fishing industry. I have already mentioned the decreasing number of small farms in Australia. For many years, in our two major primary producing industries - wheat and wool - production has not been as great as one might expect. Our population is growing rapidly, and if we are to maintain a sound national economy it is important that primary production should move along and provide an exportable surplus. It is also important that our secondary industries be efficient and able to absorb large numbers of workers. Our defence position appears to be relatively sound to-day because of our international connexions, but no one knows what Australia may have to face in 50 or 100 years’ time. Fifty years is not a long time in the life of a nation. China has already recorded history of more than 4,000 years. It is, therefore, urgent for us to use every effort to develop the primary production of our country, so that ultimately it will be able to support 40,000,000, 50,000,000 or even 60,000,000 people.
It seems to me that the expenditure of Commonwealth money on the pearlfishing industry could, in a short time, show beneficial results not only for the industry itself, but also for Australia by building up overseas credits. Nebulous as the thought maybe, I nevertheless suggest to the Minister for National Development (Senator Spooner) that the income derived from land tax could be used for the benefit of primary industry generally. It is disturbing that the number of small, efficient farms is dwindling. We are now getting new Aus tralians from European countries who have built their lives on farms of one, two orthree acres. They have been able to do that because of good farming methods.
– Can the honorable senator suggest reasons why small farms are disappearing in Australia?
– I have no doubt that there are many reasons, but I do not wish to discuss the subject fully. Some of the reasons are obvious. For instance, it might be that it is becoming economically difficult to run a small farm. Perhaps it is that when farmers are offered reasonably large sums of money for their farms they find it almost impossible to resist the temptation to sell. Most of them put in a tremendous amount of work on their farms, and present day values encourage other people to purchase farms. As I say, the farmers may not be able to resist the temptation to sell. In my opinion, it is the duty of the Government to attempt to stop the drift from small farms, because I am sure that all honorable senators agree that it is not desirable.
The Opposition intends to oppose the passage of these bills and to call for divisions.
– As Senator Armstrong has said, honorable senators on this side of the chamber are opposed to the proposals contained in these bills. There are one or two extraordinary phases of the measures before us with which I wish to deal specifically. All kinds of excuses have been made for the removal of the so-called land tax. Even in the second-reading speech of the Minister for National Development (Senator Spooner), some of those excuses were repeated. The fact is, of course, that land tax, as imposed by Federal authority during the last year, has applied only to the estates with an unimproved value of £8,750. Owners of land with an unimproved value of less than that amount were not obliged to pay federal land tax at all. That meant that the majority of landowners were not subject to land tax, so that the abolition of tax did not help them at all. It did not give them any concessions, or rebate any of the other taxes for which they are liable. From the point of view of land-holders in primary producing areas, a substantial acreage might be held before land tax became payable. The contention of the Government, therefore, that it has removed a burden from land-holders, and particularly from those who toil on the land, is fallacious. Those affected by the remission of land tax are the big landholders and the owners of land with an extraordinary high value, such as that in the cities and large towns. It particularly affects banking institutions which, of course, are receiving a pay-off for the support given to the Liberal party and the Australian Country party. Such institutions are now getting a pretty big rake-off from the abolition of land tax. The chain theatres, which own small tremendously valuable blocks of land in the cities and country towns, also benefit greatly from the remission of the tax.
– What about the trades halls? Do they receive any benefit?
– Yes, a little benefit, but not nearly as much as the large business undertakings to which I have referred. The two major newspaper organizations in Australia will also receive big concessions from the abolition of the tax. If the Minister, in his secondreading speech, had been frank about this matter, he would have said, “We wish to give these people something in return for the support they have given to the Government parties “. Or perhaps he would have said, “ These people cannot afford to pay land tax and we are, therefore, prepared to remit the tax”. How.eVer. he did not do so. Instead, he said that land tax “ was originally enacted to break up large rural estates “. That is an absolutely untrue statement. Land tax was one of the factors considered as a means of breaking up large rural estates, but the tax was certainly not imposed originally for the purpose of smashing such estates. In 1911, a large body of opinion in Australia held that the correct method to collect the unearned increment belonging to the people of Australia consequent upon the growth of cities and towns, was by the imposition of land values tax as it was then known.
The original thought behind land values tax was that the unearned increment of the land of Australia could be collected by taxing the rental value of such land and placing it in the coffers of the Commonwealth, after which it would be returned to the people. It is true that many Australians, including members of the Australian Labour party and the original “ dinkum “ Liberal party, had the idea that great aggregations of estates in Australia could be broken up by the application of a progressive increase in the amount of tax over the rental value. Of course, that never happened. It is true that the revenue increased because of gradually rising land values, but the rates varied very little. Admittedly, when the laud tax was first imposed, some propertyowners were frightened into selling their holdings to the Government for closer-settlement purposes, but, generally speaking, the tax did not achieve its orginal purpose of breaking up large estates. Until last year, estates valued at les3 than £5,000 a year were exempt from the tax, and then the exemption was raised to £8,750.
– Does the honorable senator not agree that the income tax lever is sufficient?
– I do not. I believe that the unearned increment on land belongs to the people and that the people have a right to the. rental value of that increment.
– We cannot have it both ways.
– We have had it both ways since 1910. The unfortunate part is that the land tax rates were not progressively increased to ensure that the tax would fulfil its purpose. Landowners have been able to defeat the objective of the tax because of the influence that they have been able to bring to bear on the press and on certain political elements. Let us be frank about the matter. They tried to exert influence on Labour governments, but they had very little success; they were more fortunate with non-Labour governments.
– Most big freehold estates have already been resumed for private settlement.
– The honorable senator is referring mainly to Queensland, where estates were held under lease only. Very seldom does my friend get away from the experiences of the State that he represents. He is always bringing Queensland into discussions in this chamber. I am speaking of the whole of Australia, and I say that there are still some big estates which will reap the benefit of the abolition of the land tax. I recall an honorable senator who was PostmasterGeneral in a non-Labour government, telling us about some of the big estates in Victoria. A Labour government was in office in this legislature at that time, and he told us what should be done with those estates and how it should be done. One argument advanced at that time was that the government should deprive landowners of the rental value of the capital increment on their estates, and hand it back to the people. However, that is only by the way. The great bulk of small landholders never paid land tax, and the tax has now hean abolished. The first step was taken by legislation passed last year. Immediately that was done, the Liberal Administration in South Australia jumped in and increased its own land tax rates to draw off some of the money which until then had been going into the Commonwealth Treasury. Apparently, therefore, some portions of the Liberal organization at least still believe in taxing the rental value of land.
I come now to what I regard as an extraordinary situation. The land tax has been, abolished. When the original repealing measure was before us last year, we were told that certain other measures would be necessary to give full effect to the abolition of the land tax. The bills that we now have before us are two such measures. I am concerned primarily with the Land Tax Abolition Bill, which provides for the repeal of the long list of acts enumerated in the First Schedule. Those measures go back as far as 1910 and include even the Land Tax Abolition Act of 1952. . The Minister has told us that, although the land tax has been abolished, it will he necessary to keep certain administrative machinery in operation to collect outstanding taxes. As I pointed out when speaking on the land tax legislation last year, some claims have been out standing for many years. Apparently the appeal tribunals, or whatever other authorities exist to deal with disputed assessments, have not been working as efficiently as they might have been and now provision has to be made for the continuation of those matters. Although the land tax no longer exists there is still to be a Commissioner of Land Tax and an Assistant Commissioner of Land Tax, although under different titles, as well as an administrative organization. The Minister said that the collection of £7,000,000 in land tax revenue cost the Commonwealth £240,000. Yet we find that the land tax administration is to be continued even though the tax has gone out of existence. But that is not all; the salaries of the Commissioner, the assistant commissioner and certain other officers are to be increased. Not content with retaining the Commissioner and the Assistant Commissioner to deal with matters which, because of laxity over a period of years, or for some other reason, are still outstanding, the Government proposes to increase the salaries of those gentlemen. The salary of the Commissioner is to be increased by £1,000 and that of the Assistant Commissioner by £700 a year. The salaries of certain other statutory officers are to be increased by £500 a year. As I have said, according to the Minister’s own statement, the collection of £7,000,000 in land tax revenue has cost the Commonwealth £240,000 a year, whereas merely by increasing the tax rates, a similar expenditure could have yielded £70,000,000 a year if necessary. Now, instead of reducing expenditure the Government is increasing it by raising the salaries of tax officials. Surely arrangements could be made with the officers of some other branch of the Taxation Office, say the Income Tax Branch, to wind up the land tax administration. Until now the salary of the Commissioner of Land Tax has been £2,000 a year. The Government proposes that it should be £3,000 a year. Similarly, the salary of the Assistant Commissioner is to he increased from £1,500 to £2.250 a year. It is preposterous to ask the Senate to approve of those increases in the present circumstances. Judging by past performance - I understand that some land tax matters have been outstanding for seven or eight years - it will be another seven or eight years before the administration of the tax can be finally wound up. Presumably for all that time, the Commissioner and his assistant will be drawing the extra salaries of which we are now asked to approve. Are we to assume also that the land valuers who have been associated with the land tax administration are to continue in their present jobs? I realize that the valuers are engaged also on work for other departments, but I assume that their main employment is with the land tax administration. Land valuation boards and other authorities for which land valuers work, meet infrequently and cannot possibly occupy the full time of the valuers. Why are valuers needed for land tax purposes now ? Why should they not be absorbed by other departments and made available when necessary to wind up their work with the land tax administration ? If the Government considers that it is right to repeal the act, it should abolish the administrative staff that has functioned under it. It is true that those valuable officers can be used in other spheres, but the Government should not, by a measure of this kind, keep an administration going after it abolishes the act that established that administration. Although much could be said about other phases of the abolition of land tax, I think that I have given the Government sufficient food for thought in connexion with the matter.
– I have been rather interested to discover that the articulated skeleton of Henry George has been creeping around the corridors during the last few days. Although he has been dead for many years, it is interesting to find that he still has some devotees in the ranks of the Labour party. I do not take very much notice of Senator O’Flaherty’s last series of arguments because they only supported his general contention that the abolition of federal land tax is a very bad thing. All I could discover from his remarks was that the abolition of land tax is a very bad thing only because it is the abolition of a tax. Indeed, that is the essence of the whole attack by the Labour party, that I have been able to discern by reading the newspapers and listening to speeches in another place and by honorable senators opposite. The first element of resistance in Senator O’Flaherty’s contention is that a tax has been abolished. The second element of his resistance is that a tax on the wrong people has been abolished. I deny the claim that the federal land tax was imposed for reasons other than to break up large estates. As Senator Armstrong has mentioned, it has failed signally in that purpose. Large estates have been broken up, but not as a result of federal land tax. They have been broken up as a result of an evolutionary force that has operated in primary production in Australia. It is of no use for honorable senators opposite to say that property should be heavily taxed because.it is large. We must consider the use to which the land is put. In the northern parts of Australia there are pastoral and grazing properties comprising from 200 square miles to 300 square miles. Their value is not attributable solely to their large areas. There must be a proper usage of the land. If holdings have not been fully developed there may be a case for federal land taxation to break them up. But the federal land tax never succeeded in doing that. During the last 20 or 25 years probate and estate duties have done more than anything else to break up large rural holdings.
A second factor in the reduction of the size of holdings is cost. I do not accept the contention that has been advanced that this has been caused by federal land tax. I have paid federal land tax for many years and, in the family with which I am connected by marriage, large areas of land have been split up. Government intrusion during the early settlement of Victoria was responsible for the breaking up of large holdings into small segments, which were uneconomic because they were too small. Then there was a reconcentration of land, and subsequently the concentrations of land became too large. Inevitably, mortality overtakes people, and in the end those estates were broken up. That has taken place all over Australia. At a later stage I shall deal with some of the counter arguments that have been advanced by Senator Armstrong. In the main, the breaking up of farming and grazing land has been caused by aspects outside the ambit of federal land tax.
Let us consider whether land tax is doing any good anywhere else. It has been said that people who have properties and factories in the cities have been recipients of a large measure of generosity as a result of the abolition of land tax. I point out that their costs were passed on to the consumers.
– That might go for any tax.
– Yes. The Government parties are dedicated to the reduction of taxation wherever possible, but the Labour party is dedicated to the imposition and maintenance of taxation.
– Oh, no !
– I have never heard of a Labour government advancing a plea for a reduction of taxation. Members of the Australian Labour party only clamour for a reduction of taxation when they are in opposition. I have never seen them make attempts to reduce taxation when they have been in office. The simple reason why this Government abolished land tax was that it was a gross imposition on the people who were paying it, or brought within its ambit. There was no defensible basis on which this tax should have been maintained. It was expensive to collect, and it was a constant source of worry. It was a tax that was imposed on land-owners whether or not a profit was made. It was a direct tax on productivity from which there was no escape. Its abolition was justified.
I shall now deal with the claim that there has been an immense decrease of the proportion of people who own land in Australia. I have before me a statistical bulletin entitled Rural Land Use and Crop Statistics, Australia, issued by the Commonwealth Statistician. It defines a “ rural holding “ in Australia as a “ piece of land of 1 acre or more “. Table I. shows that there was a reduction of the number of holdings in 1951-52, compared with 1938-39. The claim has been made that the abolition of federal land tax will accelerate the accretion of holdings.
– Does the honorable senator contend that the figures are wrong ?
– Figures have been cited to show that the abolition of the land tax will increase this tendency. From an examination of the subsequent tables in the bulletin it will be seen that there are many reasons for this trend. I do not think that Senator Sheehan would deny that the policies of successive Victorian governments have tended to hasten the elimination of small areas in the Mallee lands of Victoria, by gathering them into larger areas capable of being economically worked, and to check wind erosion. Is not that a good thing ? That is an illustration of an accretion of holdings taking place, not because of the imposition of federal land tax, but because other factors have developed pressures.
I shall cite another illustration. After World War I., large areas of land in Victoria were broken up for soldier settlement. Areas of from 30,000 to 50,000 acres were cut up into farms of 1,000 acres. The principles of land usage that existed at that time were such that no person could possibly obtain a living from a farm of 1,000 acres of land of the kind that was resumed. It was demonstrated to a royal commission that sat in Victoria that that area was too small, and therefore another process took place. By government action, properties were made larger. That came about not as a result of greedy land-owners buying it, but as a result of direct government intervention. You, Mr. Deputy President, have seen an accretion of holdings taking place in the irrigation areas of Victoria, where men ‘had to abandon their blocks because of salting. It was subsequently found by experiment that salting could be overcome, but some of the irrigation blocks were grouped into larger holdings. All the time there exists in the community a tendency to break down these larger areas, and although theCommonwealth Statisticianhas revealed that there has been a reduction of the aggregate number of holdings,I claim that to-day there is a more soundly balanced distribution of holdings. They are more efficient and more economical than were the holdings twenty years ago.
– Did the abolition of the land tax bring that about?
– No, it had nothing to do with that result. The claim of the Opposition all the time is that the federal land tax is either breaking up large areas or, alternatively, stoppinglarge areas from coming together. They are caused by circumstances well outside the ambit of federal land tax.
I can well understand Senator Armstrong’s plea that there should lie a larger number of people occupied on their own land, but I believe that this thesis can be carried too far. There are already signs in parts of Victoria of the breakdown of holdings to uneconomic units. For the purpose of illustration, I shall relate something that has happened under my own eyes. For 30 years I saw worked satisfactorily a station property of 40,000 acres. Then it was sold and divided into 1,000-acre blocks. A man who had been a loyal servant of the owner for many years bought one of the blocks and made a good farm of it. I attended his funeral many years afterwards. He had divided the property into two farms of 500 acres each, and he left one to each of his sons. One of those farms has since been divided into 30-acre or 40-acre paddocks, and handed on to the six grandsons. They are uneconomic blocks. Although that process has a tendency to continue, there is a limit to which holdings of land can be reduced.
I shall mention another historical fact. Senator Byrne will realize that I am quoting history. In the 1800’s Ireland had a population of about 8,500,000 people. The average size of a holding in Ireland at that time was about 2£ acres of arable land which was below subsistence level for a family. These things could take place “in Australia. Rural areas can be reduced to a size that is below subsistence level. It must not be assumed that the economy of a country in terms of primary production is sound merely because more of the land is in use. The value of land devoted to primary production must be gauged on its capacity to produce and its economic size. France is a modern illustration. The greatest single social problem in France is the situation similar to that which occurred in Ireland in the 18th century. A farmer may hold a piece of land 2 acres in extent and on the other side of the road half a mile away he may have another field. His family is dependent upon the cultivation of a number of small blocks which are not contiguous. Many farmers in France have land all over the place and the country’s primary production has become uneconomic as a result although France is a big producer of grains and many other crops. Penal fiscal measures that are directed to achieve arbitrary ends are not successful. There are indirect methods by which desired ends can be obtained, but in turn those indirect methods must be closely watched by any government and the Parliament to ensure that they do not tend to defeat their own ends as the land tax has done.
, - I have always regarded the land tax as a form of tax on capital and a very proper tax because in the first place the owners of the land> did. not create it and also because they have not been responsible for increasing its value. Actually community effort has made those values. Therefore, it is a proper and necessary tax. The action of the Government in abolishing the land tax will necessitate the Government getting money somewhere else. Money will have to be found by direct and indirect means and the lower income tax groups and the workers in particular will have to pay more in taxes. The workers who are engaged in’ essential industries and services pay all taxes, both direct and indirect. They are producers as well as consumers. Therefore if the tax is lifted from the land or if it is abolished, obviously the burden will be passed on to the workers. That is one of the reasons why there is so much industrial unrest.
I agree that the land tax did not have the effect of breaking up the large estates. I agree also with Senator Armstrong who said that smaller holdings are disappearing. A brochure that was issued by the British Farm and Equipment Company dated February, 1952, stated, in a thoroughly documented summary, that during the last decade, the rural population of Australia had been reduced by 70,000. That supports my contention that small farms are disappearing. The experience is similar in the United States of America. . Small farms have practically disappeared in California. Even the larger ranches are owned hy the banks and the former owners are managing them. That will happen here if the policy of this Government is not successfully challenged and put into reverse. It is happening not only in primary production in the United States of America but in secondary production also.
The economic law of the greater absorbing the lesser is responsible. In this highly mechanized age, small farmers cannot be expected to compete successfully against those with large mechanized holdings. In the circumstances, ex-servicemen numbering about 6,000 who are thoroughly qualified to go on the land and want to do so have no hope of succeeding in primary production. As Senator -Cormack has admitted, after the 1914-18 war thousands of ex-servicemen who were imposed upon by land speculators and landlords were starved off the land and all the work they had done went for nothing. They swelled the ranks of the unemployed in the cities by thousands. The population is increasing principally at present by immigration. What do we intend to do with the people who are entering Australia? Will they be centralized in the big cities as they are to-day, living in primitive conditions, or will the Government face this problem as it should do and make it possible for the rural population to live in reasonably decent, conditions ? So far nothing has been done in this direction.
The abolition of the land tax will reduce government revenue and will make the position even worse. The bigger population is supposed to be provided with opportunities for employment, but the number of unemployed is increasing. Yet, the Government has not advanced any proposition to deal with the situation. That state of affairs cannot continue indefinitely. The Government is not the master of the situation, as it believes. As surely as the sun shines, a reaction will set in and will cause the same trouble as that which is occurring in other places. This is the time to realize that the internal economy must be re-organized so that all who are willing to work may live in reasonable conditions and those who are qualified and willing to go on the land will have an opportunity to do so and make a decent living.
– They will not get it by means of the land tax.
– 1 am not suggesting that that will be achieved by means of the land tax alone. I am suggesting that by the abolition of the land tax a bad position is being made worse. Taxation is the basis of the machinery of government. The Government cannot carry on without it. I am directing attention to the incidence of taxation. The taxation policy of this Government is making the poor poorer and the wealthy wealthier. Results speak more convincingly than do all the words of honorable senators on the Government side. As the British Farm and Equipment Company has stated in its brochure, the rural population of Australia has declined by 70,000 in a decade and the production for each working unit has increased by 50 per cent. The Wheat Growers’ Association in New South Wales has advised wheat-growers not to increase production this year. If they carry out that policy in the next financial year unemployment will be increased. A situation is now developing similar to the depression days of 1930. That is not an exaggerated statement.
– Politically, the wish is father to the thought.
– I would rather see honorable senators on the Government side trying to do their job efficiently than adopting the attitude that they are adopting now. Mentally, the Government and its supporters are back in the nineteenth century. They do not understand the way that twentieth century affairs are developing.
What chance has a small farmer to compete against one who has mechanized his farm? Land tax is a tax upon that part of wealth that is created not by the individual owner but by the working population generally; and it is paid into Consolidated Revenue to help to meet the expenses of government.
– Does not the Government obtain sufficient revenue from taxes on incomes?
– No. I recall an example which the Minister for Commerce and Agriculture (Mr. McEwen) cited in a debate on taxation in another place last year. So far as I recollect, he said that a farmer who had a net income of £10,000 and who expended £6,000 of that sum in adding to his capital increment would be obliged to pay tax on only £4,000.
– That would be an isolated case.
– No; such cases are general. If Senator Maher will study this matter as closely and as critically as he should, he will find that during the period between the two world wars, monopolists added hundreds of millions of pounds to their capital increment. Monopolists can use such additional capital for investment purposes. At a conservative estimate, interest on the national debt amounts to £92,000,000 annually, and that money will continue to be taken out of the hides of the workers until capital is taxed as it could and should be taxed. As I have said, land tax which this Government has abolished was a tax on capital, but the rate of that tax was not sufficiently high. If capital is not taxed to an adequate degree, it will be necessary to tax incomes at a rate as high as 20s. in the £1 ; and, of course, this Government would not do that. That is the position that is developing in this country. I am not criticizing this measure merely for the sake of being critical or to score a debating point. Indeed, many of my colleagues do not share fully the views that I have just expressed. I regret that the majority of the people have not an intelligent idea of the economic law which now operates and to which I have directed attention. That law applies in respect of not only primary but also secondary production. As the greater will always absorb the lesser, small businessmen will be forced out and only those men who are indispensable and cannot be displaced will remain in the economy. To-day, monopolies in every country are extending and gaining strength in every direction and the problem that is arising is whether monopolists or the people shall control governments. That is the fight that is going on throughout the world to-day. If honorable senators do not realize that fact, they will have only themselves to blame for their lack of understanding or for their failure to deal with this problem. Government supporters should not get the idea into their heads that by the payment of unemployment relief the Government is giving unemployed persons very much. The fact is that if unemployment benefit were abolished, the purchasing power of unemployed persons would be correspondsingly reduced. If all social services benefits were abolished, the purchasing power” of the working community, upon which:the economy relies, would be proportionately reduced and unemployment”’ would be increased. In conclusion, I urge all honorable senators to realize that all taxes, both direct and indirect, are paid by the workers who are engaged in essential services and industries whilst consumers who are not producers are passengers on the backs of the workers; and I maintain that honorable senators fall within the latter category.
– I had no intention to participate in this debate until I heard the astounding historical howlers to which Senator O’Flaherty gave utterance. My first aim is to correct that honorable senator. It is an historical fact that land tax was introduced originally mainly, if not solely, for the purpose of breaking up large estates. I was amazed to hear Senator O’Flaherty attempt to deny that. Secondly, land tax has completely failed to achieve tha.t purpose. That being so no justification exists for its continuation. I remember the campaign of 1910 very well. At that time, I was precociously interested in politics and I heard speeches delivered by men like Fisher, Watson and Hughes and other leading political figures of the day. Apart from explanations of machinery measures, the speech that Mr. Andrew Fisher delivered in the House of Representatives, when he introduced the Land Tax Assessment Bill in 1910, which is recorded in Hansard, volume 56, at page 1536, was redolent with the nineteenth century doctrine that there was unearned increment in land and that the imposition of a tax on land was the only way to break up large estates. I do not deny that there is such a thing as unearned increment in land. I refer, for instance, to economic rent. However, it is not always possible to isolate the unearned increment. It may be that the actual owner has unearned increment because of liability that arises from too high a valuation. Consequently, modern economists prefer to use income taxation because it can be graduated and strictly applied to actual income. For that reason, most modern authorities have said that the whole theory of the nineteenth century economists that a government can get at the whole of the unearned increment by imposing land tax is fallacious, and they have discarded that theory. However, that does not mean that land tax cannot be justified in principle. I believe that taxation on the unimproved value of land has proved to be a valuable means of raising revenue in this country. But that is a field which should be left to local-government authorities.
One great difficulty to-day is that the federal authority has too much taxing power and the problem of returning a portion of that power to State governments and local-government authorities has not been faced up to fully. I hope that a solution of that problem will be found. This measure is a contribution to such a solution, for four reasons. They are: First, land tax has failed completely to achieve the purpose for which it was originally composed ; secondly, the revenue so raised is insignificant in comparison with revenue derived from other forms of taxes; thirdly, vacation of this field by the Australian Government will tidy up the process of taxation ; and, fourthly, the Australian Government will leave this field to State governments and localgovernment bodies. When speaking on the Land Tax Assessment Bill in the House of Representatives in 1910, Mr. Andrew Fisher, who was then Prime Minister, said -
I do not wish to dwell upon it, except to say this - the justification for this bill is the necessity of the Government to have the machinery to enable them to impose any taxation they think desirable on the unimproved value of land. Incidentally I may express the opinion - it is a personal opinion, but it is an opinion that I believe every thinking man and woman in this country must hold - that the incidence and effect of unimproved land value taxation in every country where it has been applied, has been to make lands available on more reasonable terms for the people . who desire to use them.
Mr. Fisher was not particularly felicitous in expression. I recall that very often he used long and involved sentences. But in that sentence he made his meaning quite clear. Speaking of what the States were trying to do, he said -
About twenty years ago, it was discovered by the statesmen of several States that, although the lands were largely in the possession of the people, or hold under leasehold, thu actual settlers were being dispossessed’ because of the monopoly of lands in the form of large estates.
Then, he turned to Sir Littleton Groom, who was then Mr. Groom, and pointed out that that honorable gentleman and his father had always advocated the taxation of the unimproved value of land. Mr. Groom replied that so far as the Darling Downs was concerned he thought that the splitting up of great estates had gone as far as that process could be proceeded with.
I shall now quote a passage from a speech that was made on the same bill by Mr. Thomas Brown, who was then member for Calare. Mr. Brown made a long and erudite speech which was crammed with quotations from all the leading economists and politicians of the nineteenth century. They included Marshal], Adam Smith, Mill, Ricardo, George, Gladstone, Cobden and Bright. Among the quotations that he cited was the following : -
The question of the unearned increment will have to he faced. It is unendurable that great increments which have been formed by the industry of others should be absorbed by people who have contributed nothing to that increase.
That sounds a little like something which we have just heard from Senator Cameron, and it is rather curious that the honorable senator should twit Government supporters with adhering to nineteenth century ideas because that was typical of the view that was widely held by economists of that period. That quotation was taken from a speech that was made by Lord Morley in 1890.
It is clear that land tax was not originally imposed for the purpose of raising revenue. Indeed, speakers on behalf qf the government of that day explicitly denied that that was its intention and affirmed that its main purpose was to break up big estates. I repeat that land tax has failed to achieve that purpose. If further proof of that assertion is required it is provided by the fact that State Labour governments have been forced to use other methods to achieve that purpose. Land tax is a completely futile method of breaking up big estates. We must face this problem realistically. I strongly advocate closer settlement; and it becomes increasingly our duty to promote small holdings. However, certain industries cannot flourish on the basis of small holdings. For instance, our great pastoral industry could not have been developed on that basis. Indeed, only very great estates could afford to make the experiments that were necessary to enable the industry to develop as it has developed. I should not be happy to think that we had in this country only pastoralists who were operating in a big way. However, the pastoral industry has worked out its own development practically free from outside interference. We owe most of our prosperity to it. I think that my case supports what the Minister said in introducing the bill. This is a futile tax. It is a relic of a policy which has been discarded by the Labour party itself, although a few of its members, such as Senator Cameron, will not admit it. We are not condemning land taxation generally. In particular, we are not condemning the taxation of the unimproved value of land. But we support the vacation of a field which the Commonwealth never should have entered and which should be left to the States.
. : - I am pleased that at least two honorable senators opposite have supported this legislation, possibly for the purpose of informing some honorable senators on this side of the House who are opposed to the action of the Government. ‘ The pastoral industry has obtruded itself into this discussion a little more than is necessary. It is true, as was stated by Senator Cormack and Senator McCallum, that the Fisher Government of 1910 introduced the land tax for the purpose of breaking up large estates and also in order to secure some revenue for the Government. Whilst it might be suggested that the legislation of that day has not achieved the great objective which it set out to achieve, I think that it did serve some useful purpose. Senator McCallum quoted Mr. Andrew Fisher, then Prime Minister of Australia, as stating that the purpose of the legislation was to provide the government of the day with machinery to impose taxation for purposes which it had in mind. The fact that governments which were in office from the time the Labour Government was defeated in 1913 until it returned to power during the first world war did not take action based on that legislation does not indicate that the principle on which the Fisher Government acted was wrong. Even the Curtin and Chifley Governments did not take any action in relation to land tax because those governments were concerned with other big problems.
I do not object to a government retiring from a field of taxation. Labour senators have suggested that when their party returns to office it will be their pleasure either to reduce or abolish certain taxes. Taxation is frequently introduced as an emergency measure, but it is very rarely taken from the statute-book when that emergency ha3 ceased to exist. A government always has some reason to retain taxation. Amusement tax was introduced as an emergency measure during World War I. It still exists. The Australian Government had very little to do with income tax in the early days of its existence, but for some reason or other it did introduce an income tax. How many people in Australia will benefit as the result of the Government’s ceasing to collect land tax? About 21,000 taxpayers out of a population of 8,000,000 will be absolved from the payment of £7,000,000 in land tax. Those who will benefit chiefly are the owners of valuable city properties. Pastoralists have obtruded into this discussion out of proportion to the amount that they contribute in land tax. It can he justly charged that this taxation has been abolished by the Government for the purpose of assisting its wealthy friends who assisted it to gain office. This is a sectional action which will benefit the banking institutions and other owners of large city properties who are enjoying the unearned increment that has accrued over the years as a result of the development of our country.
This is a tax which could justly have been retained by the Government. Its abolition will result in a loss to revenue of £7,000,000. Could not the Government have ascertained whether other taxes could have been reduced by an equivalent amount? Might it not have examined the incidence of pay-roll tax which bears heavily upon secondary industry? The Government could have examined the possibility of reducing sales taxation, which is bearing heavily upon the consumers of goods manufactured in Australia. But the Government has not examined the general field of taxation in order to ascertain whether it could reduce the total levy by £7,000,000 in order to benefit the greatest number of people. It has selected a comparatively small section of the community to receive the gift of £7,000,000. Therefore, the Opposition is justified in charging the Government with having made special concessions to that section of the community which helped it to attain office in 1949 and 1951. In a very well thought out speech, from his point of view, Senator Cormack mentioned that probate duties have been responsible for the breaking up of the larger estates. That may bc. But that fact does not prove that there should be no land tax at all. Senator McCallum admitted that a land tax is an equitable tax. In Australia we are faced with a great problem in regard to the settlement of land. Commenting on the figures of the Acting Commonwealth Statistician, which indicate that the number of small land-holders has decreased and that the size of holdings lias increased, Senator Cormack suggested that this circumstance was due to such factors as the amalgamation of holdings in Victoria where it was discovered that the area of certain farms was insufficient for their economic working. That amalgamation took place as the result of a deliberate act of the Victorian Government after investigation and report and is an isolated instance.
In many eases the most valuable land in Victoria and other States becomes available through the death or retirement of the owner when it is offered for sale. The large land-holders in the district buy these farms and prevent the returned soldier or civilian, who is eager to become a producer from obtaining the land. Land tax, applied in an efficient manner, could prevent an aggregation of land under these conditions. The agenda paper for the country conference of the Australian Labour party, which will be held in Melbourne in a few weeks, contains a number of motions from country branches requesting our party to take such action as will prevent the aggregation of farms in the possession of one or two families. These motions have been forwarded by people who are on the land and know what is likely to happen if the aggregation of land is allowed to continue without effective steps being taken by the State governments to prevent it. As we all know, the great problem in Australia is to increase primary production. Most of the food-hungry nations of the world look with envious eyes on Australia. They are eager to obtain the food-stuffs that our country is capable of producing. There is a tendency on the part of primary producers to decrease production. Papers published by the pastoral industry have drawn attention to the fact that, slowly but surely, production is decreasing. The rate of production of primary products is decreasing, and it is necessary for us to watch that trend. During the period of exceptionally high prices for wool, many of our best dairying areas went out of production. Dairy farmers bought sheep.
– That is only a passing phase.
– That may be so. However, I suggest that the aggregation of land by a small number of people is not a passing phase. Statistics show that, notwithstanding the efforts that were made by the Labour Government which preceded the present Government, and which have since been continued, to bring people to this country and place them on the land, the number of people settled on the land continues to decrease. In my opinion we should be wary of removing a taxation formula which, if developed, could prevent this very dangerous trend from, continuing. One of the great problems of the world to-day is that in some countries such as some of the continental and eastern countries the holdings are too small, whilst in others they are too large. If a taxation formula can he utilized to correct that position, I suggest that it should not be removed from our statute-book. It is useless to say that the tax has not served the purpose for which it was introduced.
I return to my original point, that the people who are gaining most from this remission of taxation are those who own valuable areas in the large cities, such as banks and insurance companies. The famous case of the Howey estate in Collins-street, Melbourne, was referred to during the debate on the Land Tax Abolition Bill in the House of Representatives. The people who to-day are receiving the benefits of the fact that one of their ancestors came to Melbourne in the early days and fortuitously bought 2 acres of land which later became the centre of that thriving city, have never put foot in Melbourne or, indeed, in Australia. They have done nothing to develop Melbourne, the State of Victoria, or the Commonwealth. That is not an isolated case.
– Surely they must pay very heavy property income tax?
-Whatever they pay in that respect, I suggest that a charge, by way of land tax, upon the capital value of the estate would not be out of order. Land tax should be continued against such interests. The Government is making a grave error in getting out of this field of taxation. If it wished to give a handout of £7,000,000 to the people of Australia, it could have done so by abolishing or remitting other forms of taxation.
I hope that each State government will take advantage of the Commonwealth departure from this field of taxation. Last year, during a debate on land tax in the Senate, Senator Henty stated that the money involved might be handed over to the municipal authorities in order to help them to finance their activities. In my opinion, that would be a good idea. I hope that the State governments will follow the example of the Liberal Premier of South Australia, Mr.
Playford, and increase State land tax commensurate with the amount which the Australian Government is handing out to a favoured few. If the State governments do that, those who to-day believe that they are to get something from the remission of the tax will in fact get nothing. I repeat that the Government is making a mistake in departing from this field of taxation, which, if used properly, could work to the great advantage of Australia.
SenatorSPOONER (New South Wales Minister for National Development) [3.51]. - in reply - I do not think it unfair to say that the argument advanced by honorable senators opposite against this measure can be translated roughly as, “ We quite agree that this tax has failed to achieve the purpose for which it was originally levied, but despite that failure,we think that it should be continued and the revenue from it used in other directions “. That seems to me to be too specious an argument to be maintained. A tax, introduced for a specific purpose, which fails to achieve that purpose deserves scant consideration. A tax which is not based upon profits is thoroughly bad in principle and deserves to be eliminated. The argument of honorable senators opposite can be reduced to a fairly narrow compass, although there have been some subsidiary arguments with which I shall endeavour to deal. Throughout the debate there has been an exchange of views upon the trend of rural production in Australia and the size of holdings. I do not propose to become involved in that discussion because I think that honorable senators on both sides of the chamber have presented the pros and cons effectively.I content myself by supporting the general principle that any steps taken to increase primary production are both necessary and desirable. I agree with an honorable senator who stated during the debate that that can be done and should be done without detriment to the progress of our secondary industries. I hold the view that the policy at the present time should be to weight the scales in favour of primary producers and increased primary production. I also believe that that policy can be successfully adopted without retarding the progress of our secondary industries, because I am firmly convinced that whatever government is in power, and whatever may he the change in our political circumstances, our secondary industries must continue to grow because they are so favorably placed in regard to supplies of iron ore, steel and other metals and minerals.
Replying to some of the points raised during the debate, I think that I should first deal with those of Senator O’Flaherty concerning the continuance of the administration of land tax and the salaries and emoluments of the officers concerned. I wish to do so while the honorable senator is present, because he presented such a thoroughly silly argument that it deserves to be demolished. The views expressed by him represent the most potent argument that I have yet heard for the abolition of the Senate. I suggest that if we cannot deal with legislation in a more intelligent fashion than he dealt with this bill, we have no right to remain a part of the legislature of this country. The honorable senator criticized the Government for keeping the land tax administration in existence. It is not possible to abolish overnight an administration which has been collecting a tax for 43 years. It is necessary to provide means whereby matters that have not been completed can be completed. Many matters arise to prevent the completion of assessments. Unless the administration is continued, people whose assessments have not been completed will avoid payment of land tax. The suggestion is too absurd to be considered.
The next point of view expressed by Senator O’Flaherty was even more ridiculous. He tried to read into the legislation the view that although the administration is being abolished, the salaries of the Commissioner of Taxation and the Second Commissioner of Taxation are to - be substantially increased. I can only assume that he was endeavouring to play a joke upon the Senate, but he appeared to be serious in expressing the belief that the salaries of those officers are being increased although their work is being curtailed. The honorable senator should have looked at the bill. “What it does, in a schedule, is to alter the provisions of certain acts.
It is entirely a mechanical drafting arrangement. It proposes to alter the provisions of certain acts and certain figures contained in those acts. The salaries of the commissioner and second commissioner, which are prescribed in the principal act, were fixed by thi3 Parliament, in 1951, at £4,000 per annum for the Commissioner of Taxation and £3,000 per annum for the Second Commissioner of Taxation. Those salaries are again referred to in the bill before us. That an honorable senator would suggest that the salary of the Commissioner of Taxation is fixed in accordance with the amount of land tax collected is almost beyond comprehension. The collection of land tax is a minor part of the work and responsibilities of the officer. The Commissioner of Taxation is one of our highest ranking public servants, and his work covers all the fields of taxation enumerated in the bill, including income tax, land tax, pay-roll tax, and sales tax. Surely, in a debate such as this, there is an obligation on all honorable senators to mabo an intelligent contribution to the discussion.
The theme song of honorable senators opposite - and it is a theme song with some political content - has been that the abolition of the land tax is in effect a hand-out to certain wealthy interests. Let us look at the matter dispassionately. Speaking from memory, there have been approximately 21,000 land tax contributors. They are being relieved not only of the obligation to pay the tax itself, but also of the obligation to make the necessary complicated returns. Therefore, the remission of land tax revenue is, in that respect, a -relief to the community.
– To 21,000 members of the community.
– Yes, it is a relief to 21,000 members of the community. The collection of the land tax revenue of approximately £7,000,000 a year has cost the Commonwealth £240,000. It was, therefore, an expensive tax which operated over a comparatively restricted area.
I have no apprehensions about big companies in Australia. I have just returned from a visit to Great Britain and the United States of America, and I assure the Senate that whilst I was in those countries I took every available opportunity to induce big companies to establish branches in Australia. There is widespread goodwill for Australia in both the United Kingdom and the United States of America. In the United States of America that goodwill is evidenced by all sections of the community from the girls behind the counters and the men who drive the lifts, to the industrial leaders, and it derives very largely from the regard that the American people have for the quality of our fighting forces.
– And for our Prime Minister.
– That also is true. At all the gatherings I attended, everything that our Prime Minister (Mr. Menzies) had to say was listened to with attention and respect. His standing in Great Britain, the United States of America and Canada is not exceeded by that of any other person outside those countries. He has done a great job for us overseas, as I was privileged to witness at first hand, and I believe that we shall get additional capital investment from America and the United Kingdom as the years roll on. “We should encourage that by every means in our power. I believe it to be very wrong, therefore, for any one to indulge in carping criticism of big business in this country, because big business here, as in other parts of the world, is making a great contribution to employment, national development and to scientific and technical training. We have much to gain from the establishment of big new industrial enterprises, and as a nation we should be thankful to existing big undertakings for the progress that they have made.
The land tax is not a tax in the real sense of the word in spite of the proud claim of some honorable senators opposite. It is a capital levy, and even though the Opposition may subscribe to the principle of capital levies, I do not. Let me carry a step further my argument about the attacks that are made on big companies in this country. Let us try to be sensible about the matter. I concede that the Labour party, with all its faults, is as much concerned about the future of this country as are the parties on this side of the chamber; but confused thinking is not good enough. We must all think clearly. Who constitutes big companies? Do honorable senators opposite direct their attack against the directors of big companies? Are not those directors, by and large, men who have proved their worth and earned their place in the community? How many members of the Opposition are prepared to point a finger personally at any of the overwhelming majority of the directors of our big enterprises? Generally speaking, they have climbed to their present positions from the bottom ‘of the ladder. Matters such as this surely should be resolved in practical terms. Members of the Opposition must justify their dislike of big companies in some logical manner. If their criticism is not of the directors, is it of the employees? Are those employees any different from us? Is an Australian workman to be penalized because he is employed by a business enterprise instead of by a government, a dentist, a baker, or any other tradesman? Every Australian has a right to choose his vocation and his employer and to use his endeavours to improve his position.
If the attack on big business is not an attack on the directors or on the employees, is it directed against the shareholders? What everybody should appreciate is that few companies do not consist of thousands of Australians who have invested their savings in shares. I believe that one of the best things that could be done in this country would he to encourage people to invest more and more in industrial concerns so that Australia, like America, might take pride, not only in the growth of its governmental enterprises, but also in the growth of its private industrial undertakings. One of my pet beliefs is that some of our great Australian companies should issue 5s. shares to bring investments in such undertakings more within the reach of small investors. The greater the spread of shareholdings, the greater will be the interest and pride of the Australian people in the development of those enterprises, and, of course, the more private enterprise is developed, the more Australia will develop. Therefore, I take strong exception to attacks on companies merely because they are big and successful.
I need not say much more. The land tax is bad in principle; it is virtually a capital levy and its abolition will make a contribution towards a reduction of costs, which is Australia’s number one problem under present conditions. There will, of course, be a loss of revenue, but I am one of those who hope that there will be other similar losses of revenue in the not distant future. I subscribe to the view expressed by Senator Armstrong that although our urgent need is for an increase of primary production, the retarding of our secondary industries is not a necessary corollary to that proposition. I shall conclude by mentioning what I regard to be one very good result of the recent conference of Commonwealth and State Ministers. I refer to the tacit agreement on the part of all governments concerned to give priority to matters that will tend to strengthen thebalance of payments position of the British Commonwealth of Nations. I believe that, with goodwill, much can be accomplished. The solution of our financial difficulties would greatly strengthen the British Commonwealth, to which we all owe allegiance. The decision of the Premiers, therefore, was most important. There was unanimous agreement that, in public works’ and in private ventures, everything possible should be done to give priority to the problem of restoring the balance of payments. That, of course, will mean increasing exports or reducing imports. If something can be achieved in those directions it will have a great influence for good on the development of Australia.
Question put -
That thebill henow read a second time.
The Senate divided. (The Deputy President - Senator George Rankin.)
Majority . . . . 11
Question so resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 24th February (vide page 238), on motion by Senator Spooner -
That thebill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Motion (by Senator O’Sullivan) agreed to-
That the Senate,at its rising, adjourn to Wednesday, the 11th March, at 3 p.m.
The following papers were presented: -
Public Service Act - Appointments - Department -
National Development - P.G. Duff.
Parliamentary Library - T. M. Exley.
Repatriation - M. I. Michelmore.
Senate adjourned at 4.23 p.m.
Cite as: Australia, Senate, Debates, 26 February 1953, viewed 22 October 2017, <http://historichansard.net/senate/1953/19530226_senate_20_221/>.