22nd Parliament · 2nd Session
Thu PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
– I preface a question to the Minister for Shipping and Transport by directing attention to a statement in the report of the Commonwealth Railways Commissioner, which was presented to the Senate last week, to the effect that a large proportion of the goods for the long-range weapons establishment at Woomera in South Australia is carried by road notwithstanding repeated representations to Commonwealth departments and other responsible authorities by the commissioner. The commissioner has claimed that, as there is a rail connexion right into the long-range weapons establishment, the traffic should be carried by rail. The report added that special competitive freight rates with guaranteed fast, safe transit had been quoted. Has the Minister noticed recent statements that next year approximately £5,000,000 may be spent on extensions to the Woomera range to enable a 2,000-mile-range British intercontinental ballistic missile to be tested? Will the Minister strenuously take up this matter with his Cabinet colleagues in charge of the relevant departments to ensure greater co-operation on the matter of Woomera and Maralinga freights, especially in the light of the new £5,000,000 project? Apart from its importance in the matter of government finance, the question has a great bearing on: (1) The prosperity of Port Augusta and other northern towns which are dependent on the rail and sea transport industries; and (2) Relief of the northern road system of South Australia from unnecessary heavy traffic.
– The question why so much of the goods should be transported by road rather than rail could possibly better be directed to my colleague, the Minister for Defence Production. I assure the honorable senator that the matter he has raised has been under review continually. The authorities who are concerned with getting the goods to the site claim that they are of such a character that, once loaded, they can be transported better without any transshipment at all. That is the reason why road transport has been preferred to rail transport. The honorable senator has asked me whether I will stress the matter strenuously with my colleagues. I can assure him that I have been doing that for months past, and I will continue to do so. [ am delighted with the honorable senator’s interest in the subject.
– Has the AttorneyGeneral be.en informed officially that a police magistrate in Darwin recently attempted to depart from a long-established practice by insisting that he be addressed as “ Your Honour “ instead of as “ Your Worship “? Will the Attorney-General rule on the appropriate address for magistrates in all Commonwealth Territories so that the administration of justice will not be brought into disrepute again?
– I have both read and heard of the incident referred to by the honorable senator. I have called for a report on the incident, and in due course, if the occasion arises, and if the circumstances warrant, I shall let the Senate know what the outcome is.
– My question is directed to the Minister representing the Minister for Social Services. I wish to bring to his attention a very unhappy incident which is alleged to have occurred in Sydney in recent weeks. Has his attention been drawn to an article in the week-end press of that city suggesting that a young unmarried mother, aged only fifteen years, has been refused social service benefits, which are available to other unmarried mothers, because she is too young? Is it a fact that if she had been sixteen years of age she would have been entitled to sickness benefit for twelve weeks, and to unemployment benefit thereafter? Can the Minister inform me whether there are age limitations upon the payment of maternity benefit? Further, is child endowment paid for all children, irrespective of the age of the mother? Will the Minister see that social service benefits are made available to all unmarried mothers, whatever their age may be?
– I am sorry to say that I did not see the newspaper report to which the honorable senator has referred. However, it obviously deals with very unusual circumstances indeed - with a case so much out of the ordinary that the best course to adopt would be to take it up with the Director-General of Social Services. The honorable senator might well have a talk with that gentleman about it. My experience of him is that he has great tact and capacity and, under the Social Services Act, he has discretionary powers which the Senate can rely upon him to use as it would wish.
– Has the attention of the Minister for Civil Aviation been drawn to a press report that on 14th December Trans-Australia Airlines and Ansett-A.N.A. will introduce tourist-class air services between Melbourne, Adelaide and Perth? Is the Minister aware that all capital cities except Hobart will then be so served? If these are facts, will the Minister use his good offices in an effort to have tourist-class services provided between Melbourne and Tasmanian airports?
– I will ask both the operators to have a look at the question.
– My question is directed to the Minister representing the Minister for Territories. Has the Minister seen a statement that 300 officers from the Department of Native Affairs guide the destinies of almost 2,000,000 natives in the wild, mountainous Territory of Papua and New Guinea? Further, has he seen the statement that District Officer Sinclair, an expert on the tribal native, has said that, despite the feuding that has gone on over the centuries, the natives were experiencing their first conception of law and order and that, though it would take a long time to sink in, the difference it makes once they realize that they can forget their fear and distrust of their fellows is amazing? Is it a fact that District Officer Sinclair also said that in a few years the natives would be learning about scientific agriculture, and would become prosperous? If these are facts, will the Minister send District Officer Sinclair to the White House, the Kremlin and No. 10 Downing-street, so that he may tell the leaders of the so-called civilized world of his observations among the primitive natives of Papua and New Guinea, and attempt to persuade them to forget their fear and mistrust of their fellows, and get their respective peoples on with the important job of developing agricultural science and other prosperous pursuits, instead of wasting their substance on a futile armaments race?
– I have seen the newspaper report which the honorable senator has quoted. I question very much whether there would be any great advantage in this officer being sent by the Minister for Territories to various parts of the world, as the honorable senator has suggested. However, I shall bring the question the honorable senator has asked under the notice of my colleague.
asked the Minister for Civil Aviation, upon notice -
– The answers to the honorable senator’s questions are as follows: -
Although these two airlines are the only ones using aviation kerosene at this stage an increasing number of international and domestic operators will use this type of fuel in future years as more and more turbine-powered aircraft are introduced.
asked the Minister representing the Minister for Primary Industry, upon notice -
– The Minister for Primary Industry has supplied the following answer to the honorable senator’s questions: -
Under the conditions on which funds for War Service Land Settlement are made available to Tasmania the detailed administration of the scheme is the responsibility of the Government of that State. The questions of the honorable senator relating to matters of such administration should therefore be referred by him to the authorities in that State.
Commonwealth responsibility in the case of Mr. O’Shea is confined to agreement or otherwise to the writing off of moneys owing by this settler for indebtedness incurred by him during his tenancy of a farm under the settlement scheme.
On the information supplied, there is no reason to believe that Mr. O’Shea is not able to make an arrangement to liquidate his debt, and the Commonwealth has agreed that failing his doing so, the Slate authorities should institute proceedings to recover the amount owing in accordance with the provisions of their law covering such cases.
asked the Minister for Shipping and Transport, upon notice -
– I now furnish the following answers: -
– On 13tb November, Senator Pearson asked me a question, without notice, referring to a comment in the recent report of the Fruit Industry Sugar Concession Committee relating to sales of canned fruits in New Zealand. The Minister for Primary Industry has now advised me in the following terms: -
The duty on Australian canned peaches, pears and apricots entering New Zealand is 35 per cent, as against 30 per cent, on South African imports. Furthermore, Australian exporters are at an additional disadvantage by reason of the method employed in New Zealand in duty assessment. The value for duty is based on the Australian home consumption value current at the time of shipment of the goods, plus 10 per cent., but for the purposes of the New Zealand customs the value in Australian currency is treated as if it were the same as New Zealand currency whereas of course it should be 20 per cent, less when expressed in New Zealand currency. Official representations have been made on this question but the New Zealand Government insists that the duties on Australian goods were originally established on the assumption that the Australian pound and the New Zealand pound were of equal value and says that any change in the method of valuing Australian goods for duty purposes would involve a review of the tariff rates applying to Australian goods.
An advantage accrues to South African exporters who do not face this disability. The currencies of New Zealand and South Africa are virtually at par.
Appropriate representations on the tariff issue have been made to the New Zealand Board of Trade in connexion with its general review of the New Zealand tariff.
– I lay on the table the following paper: -
Australian Universities - Report of Committee, dated September, 1957. and move -
That the paper be printed.
I propose to make a statement to the Senate on this report at a later date and, in doing so, to announce the Government’s decisions on the recommendations made by the committee. The interval between now and when I make that statement will provide honorable senators with an opportunity to read what the committee has to say. I ask for leave to continue my remarks at a later date.
Leave granted; debate adjourned.
Debate resumed from 21st November (vide page 1471), on motion by Senator Paltridge-
That the bill be now read a second time.
This is the third time I have risen to address myself to this bill. On this occasion, I shall content myself with expressing a few brief thoughts on the subject of war service land settlement and stressing the imperative need for this Government to apply itself to land development generally. There is a crying need throughout Australia to unlock land. Too much of our land is in the hands of too few people.
I desire to cite figures released by the Commonwealth Statistician as recently as 13th September, 1957. They deal with the position up to 30th June, 1957. A total of 8,044 rural holdings has been provided for the settlement of ex-servicemen from the end of the war until 30th June, 1957. During the 1948-49 season, there were 247,155 rural holdings in Australia and in the 1955-56 season the number was 247,859. There was an increase of 700 rural holdings during that eight-year period, but during only a slightly longer period 8,044 rural holdings were provided for ex-servicemen.
The statistician’s figures disclose further that on 31st March, 1949, the number of permanent full-time workers engaged on rural holdings was 352,839. Included in that total were 91,177 employees. The corresponding figures for 31st March, 1956 - seven years later - were 351,654 and 88,256 respectively. That means that in 1956 there were about 1,200 fewer people working full time on the land than in 1949. That is the picture that I want to leave in the minds of honorable senators.
Although the war service land settlement scheme has been a great success, it is tapering off. There is an urgent need now for the Government to apply itself to the general problem of closer settlement, to the problem of unlocking the vast areas of land held by selfish land-owners who are not making the best use of scientific methods of, for example, pasture improvement and pest eradication. Successful as the war service land settlement scheme has been during the post-war period, there is still an urgent need for closer settlement in Australia.
– The bill under consideration provides for the raising of loan moneys amounting to £8,000,000 for capital expenditure on war service land settlement. Before I proceed with my speech, I should like to make a few observations on the remarks of Senator O’Byrne. I agree with some of his remarks, particularly those in regard to the development of the Woolmer’s Creek and Ouse River schemes in Tasmania. Those schemes certainly have been a success.
The war service land settlement policy that was adopted by the Curtin Labour Government did not meet with the full approval of all the States, in particular Victoria, Western Australia, South Australia and Tasmania. That policy, which was based on perpetual leasehold tenure, was changed by the Menzies-Fadden Government after it assumed office in 1949, and that is the principal reason why the scheme has been such a success.
Senator O’Byrne made a point of defending the Queensland Labour government, which was in office until recently. That government certainly needed to be defended. I refer the Senate to the secondreading speech of the Minister for Shipping and Transport (Senator Paltridge) in which he said -
In the State of Queensland there has been no war service land settlement activity for over three years. The newly elected Country-Liberal party Government there has announced that it is considering the resumption of this work but, so far, no concrete proposals have been received by the Commonwealth Government from the Government of Queensland.
I direct attention also to a speech that was made in another place in October last year by the honorable member for Moreton (Mr. Killen) when speaking on the Loan (War Service Land Settlement) Bill 1956. He said -
The agent States undertook to act on behalf of the Commonwealth.
Of course, Queensland was not an agent State. He said further -
I present to the House four specific charges which I lay at the door of the Queensland Labour Government, or the various sections of the Queensland Labour Government. . . . The first charge that I make is that the Queensland Government repudiated the whole concept of exservice land settlement. In that repudiation it stands charged with a vicious violation of a solemn undertaking.
– That is untrue.
– That is the statement that he made. ‘ He further said -
It was an arrangement that was thoroughly approved of at the time. But the salient fact remains that the Queensland Government has gone back on its word and has repudiated its obligation to ex-servicemen.
The second charge that I make against the Queensland Government is that it has obtained loan funds under false pretences.
He added -
The third charge I make is that the Queensland Government has failed to spend funds appropriated for land settlement of ex-servicemen.
Without going into the details of those particular charges, I draw attention to the fact that the honorable member said later -
The State of Queensland, however, which is also a principal State, spent only 1.9 per cent, of its loan funds on the land settlement of ex-servicemen.
That was in 1948-49. He continued -
In 1949-50, New South Wales spent 14.7 per cent, of its loan funds in this direction, Victoria 32.5 per cent., and Queensland made a modest improvement and spent 3.2 per cent, of its loan funds.
So the remarks of Senator O’Byrne have not been borne out by the facts. The record of the Queensland Labour government in regard to war service land settlement certainly needs to be defended.
My remarks will be related principally to Tasmania, which is one of the agent States, as also are Western Australia and South Australia. I have visited all the principal war service land settlement undertakings in Tasmania, and I have taken considerable interest in the project from the start. I have also visited some of the smaller settlements. Honorable senators know that the scheme was introduced by the Curtin Government in 1945 with the full support of the Opposition of the day, which is now the Menzies-Fadden Administration. Although the Opposition at that time did not fully agree with the original scheme, which provided for perpetual leasehold tenure, nevertheless it backed the scheme to the fullest possible extent and declared it a magnificent conception which deserved the full support of all parties.
Perhaps no Commonwealth Government project of this size and magnitude has been subjected to so much criticism. Much of that criticism has been ill-informed and not factual. Very few of the critics have actually visited all the projects, and most of them’ have only hearsay knowledge of the practical details of the proposition. They have not even bothered to inform themselves on the basic agreements between the Commonwealth and the States.
In the agent States, the emphasis has always been centred on the development of Crown land and virgin country with a resultant increase in national production. The difficulty associated with settlement on virgin land is that its development takes longer than settlement on single-unit farms or suitable properties that have already been developed. The latter can be cut up into blocks of required areas and occupied as soon as fences, homes, buildings, access roads and subdivision roads have been completed.
In my opinion, much of the misunderstanding and argument with the early settlers was brought about by the change-over from the original scheme of perpetual leasehold to freehold. This system came into operation principally when the new scheme was started under the War Service Land Settlement Act 1950. This act provided, amongst other things, that after occupation for six years in Tasmania and ten years in Western Australia and South Australia, the land could be made freehold. While that provision met with universal approval in Tasmania, undoubtedly it has caused difficulties in administration compared with the original scheme of perpetual leasehold.
As I have said, the original legislation was introduced by a Labour government, and provision was written into it that settlement should be based, not on the number of applicants for settlement, but on the area of suitable land available for settlement, the products of which had sound economic prospects. I wish to emphasize that, under the agreement between the Commonwealth and the States, the procedure is that the State decides on the project and submits the proposal to the Commonwealth for approval. The Commonwealth authorities then inspect the proposition and, if they decide that the proposal is suitable and that the ex-servicemen concerned will be able to earn a reasonable living and meet their commitments in due course, the State is given permission to proceed with the proposition. The States decide on the projects that are to be developed. They have full charge of clearing, ploughing, laying down of pastures, erection of homes, buildings and fences, and the construction of drains, roads and other facilities. The States select the applicants and, in addition, have full control of administration and the actual working of the properties. The Commonwealth, in its turn, supplies all the capital required for development and is consulted by the States from time to time on finance. The States regularly submit to the Commonwealth progressive reports on the development of the various projects.
The Commonwealth, in conjunction with the States, has spent approximately £161,000,000 on war service land settlement. Tasmania’s share of that amount to the end of October, 1957, was £9,202,251. That is a considerable amount of money and, despite criticism, nobody can say truthfully that the development should not have taken place. It has been of considerable benefit to Tasmania. Much criticism has been levelled at the Government for not having made greater use of single-unit farms for settlement, but they have not always been available and, contrary to general opinion, few of the properties offered have been suitable or have measured up to the standards required. Of 350 farms inspected in Tasmania, only 90 were approved or accepted.
If the State Government had relied exclusively on the supply of single-unit farms for settlement, ex-servicemen undoubtedly would have had to wait longer, and a great opportunity to develop virgin land would have been lost. Although 90 single-farm units have been purchased and allotted, only one settler has had his lease cancelled so that, from that point of view, the project can be said to have been almost 100 per cent, successful. Production on those properties was directed to dairying, fat lambs and orcharding.
It must be admitted that, particularly in regard to the development of Montagu, Mawbanna, Waterhouse, Flinders and King Islands, costs of establishment have been high. Most properties will have to be written down fairly solidly, but that does not mean that the projects are failures by any means. On the contrary, eventually they will prove successful and be a great asset to Tasmania, despite the heavy costs. In that regard, one must take into consideration the national aspect of virgin land development. The lessons that have been learned and the experience that has been gained have shown how not to go about the job as well as how to go about it. Experiments are costly, but 1 believe that final results will justify the expenditure, and that it will be of inestimable benefit to the State.
Some of these propositions were known to carry calculated risks. Their development was extremely difficult. Matters were made worse because of a shortage of man-power and, in addition, conditions were the wettest for a quarter of a century. As the projects were developed, they were caught in the spiral of rising costs. The physical problems have been great, but all the projects are now making sound headway and, with a decent run of luck and suitable weather, most of them should be completed by the deadline in 1959.
Particulars of the various projects may be of interest to honorable senators and io many Tasmanians. On King Island, 39,000 acres have been cleared, and approximately 33,000 acres have been seeded. This acreage provides for about 150 farms, and 130 of them have already been settled. The other twenty settlers will receive their allotments by June, 1959. Some farms on King Island are designed to produce sheep, fat lambs and wool. They are divided into areas of about 450 acres, with a potential carrying capacity of 900 to 1,100 ewes and a limited number of breeding cattle. The dairy farms are about 220 acres in area. They have a potential carrying capacity of 50 to 60 cows, with an estimated production of 10,000 lb. to 12,500 lb. of butter fat. Very few more dairy farms will be allotted, if any.
The country on Flinders Island is of much the same type and value, there being 32,000 acres cleared out of a total estimated area of 80,000 acres. Sixteen thousand acres have been seeded. This area will provide 120 farms of 450 acres each. Thirty of these farms are already settled; and the carrying potential of the farms settled is from 900 to 1,000 ewes, plus a proportion of breeding cattle. There are only six dairy farms on Flinders Island, their areas ranging from 220 to 240 acres, and, so far as I know, it is not intended to add to that number.
Heavy rains caused serious delay in the development of that island, the sodden ground ruling out the use of heavy machinery. Owing to wet conditions, seeding from aircraft was attempted, but was only a partial success.
– Where was this?
– On Flinders Island. Seeding from aircraft was only a partial success, and two seedings in one year were necessary in some areas.
The drawbacks to settlers on both King and Flinders Islands are extra freight charges and high costs of production, but the advantages enjoyed there probably outweigh those disadvantages. For instance, land values are lower, the climate is warm, there are no foxes or rabbits, and the rainfall is good, varying from 30 to 35 inches on King Island and from 35 to 40 inches on Flinders Island. A good spread of rain and early lambing are distinct advantages. Every effort is being made to complete these schemes by speeding up the work so that they may be completed within the period set down - that is, by 1959.
The Montagu swamp area offers the greatest problems and has received probably the most criticism of any of the projects attempted in Tasmania. This land has been flooded, probably for centuries, and offers great physical difficulties in development. The basic cost connected with the development of this project has indeed been astronomical, and only time and eventual results will prove whether the expenditure has been worth while and completely justified. The latest figures relating to the preliminary work - I emphasize that they relate to the preliminary work - show that 9,274 chains of drains have been cut, 937,000 cubic yards of dirt excavated, 5,600 yards of access roads have been corded and 3,200 yards have been formed. This work is necessary to open up this property. It is the basic work that is necessary to the opening of the whole project.
The immediate acreage decided upon at Montagu swamp has been reduced from 37,000 acres to approximately 6,000 acres.
– Did you say 6,000 acres?
– The actual figure is 5,800 acres.
– It is 5,280 acres.
– I thought it was 5,800 acres. The final number of settlers has yet to be decided. Twelve houses are in course of erection, most of them being occupied at present by workmen on the job, although four eligible applicants are already working on the properties. These farms will have an area of about 130 acres and will consist of what will be, eventually, some of the finest land in the State.
Another project which was subjected to a great deal of criticism was the Waterhouse scheme. This has been widely criticized, and it has even been condemned by some critics, although I must say those critics did not have a full knowledge of the facts. Contrary to general opinion, this scheme may yet prove to be a splendid success. In my opinion, it will prove to be so. The best of this original 80,000-acre project - an area of only 28,000 acres - is to be made available for settlement. It will provide 23 farms of an average size of 1,200 acres. All these farms have been allotted, and I should say that if any more become available they will be snapped up immediately because intending settlers are just beginning to realize that this project will be a success despite the criticism that has been levelled at it over the years. Each of these 23 farms has a potential carrying capacity of from 1,000 to 1,200 ewes and is capable of improvement to a carrying capacity of 1,500 ewes, in addition to a few breeding cows and young stock.
At Waterhouse, there are 11,000 acres cleared and 10,000 acres seeded. The State is proceeding with a £30,000 scheme for main and access roads in this area with entrances from the Bridport end. All these properties will carry fat lambs, beef cattle and wool-producing sheep.
As I stated previously, the Commonwealth and the States have spent £161,000,000 on war service land settlement. The exservicemen settled throughout the Commonwealth number 8,500 to date. Tasmania has spent £9,202,000, including advances, and has settled 388 ex-servicemen, or allotted blocks. Of the original applicants, there are now 176 Tasmanians and 1 12 mainlanders awaiting allotments in Tasmania, although it is1 doubtful, in my opinion, whether all these applicants still require, or are eligible for blocks. It is worthy of note, too, that wai service land settlement has brought 66 new families to this State from the mainland They are a welcome addition to the population of our State, and are happily settled and are doing well. Tasmania will endeavour to complete the scheme as scheduled by 1959. The possible exception will be Montagu Swamp, which may have to be carried on for, say, a further two years, possibly to June, 1961.
Mr. President, on the completion of wai service land settlement, I should like to see evolved some scheme that will enable the Commonwealth and the States, possibly in co-operation with private enterprise, to carry on a scheme of closer settlement. It will be a pity if the organization which has been built up, and which has now accumulated considerable knowledge, were to be disbanded while there is still a need for further land settlement and while there is suitable land available for settlement. Although I know that closer settlement is constitutionally a State matter, the States cannot adequately finance a sound, progressive scheme on the proper scale without financial assistance from the Commonwealth. I trust that this assistance will be forthcoming and that it will be on a generous basis.
There is a great need for continuing closer settlement in the interests of the national economy, and, in my opinion, in the interests of maintaining increased production. The younger generation is coming on in great numbers, and this increase, together with an approved immigration programme, should boost the production of the States appreciably.
I mentioned earlier that settlers in Tasmania have the right to freehold the blocks allotted to them. This right or option is exercisable after six years’ occupancy under lease, and some settlers have already taken advantage of the provision introduced by the Menzies-Fadden Administration. I understand that four settlers have already purchased their blocks, and that two more are in the process of obtaining their freehold. Of course, not all settlers will choose to freehold, but the number who have already chosen to do so is a good proportion of those who have the right at present. This suggests that, in the opinion of the men working them, the farms are sound propositions. And who is in a better position to make this assessment than the occupants of the land themselves?
The scheme has undoubtedly had its problems and very great difficulties. In the early years, the settlers had to work hard and efficiently, and, be it said to their credit, most of them have been prepared to do so. These conditions certainly applied to early allottees and, from my knowledge of the individual farms, the great majority of those settlers are now happily placed and have good prospects.
Tasmanian soldier settlers have been among the winners of State competitions for fodder conservation and fat lamb and bacon production. This must be a source of satisfaction to all who have been associated with the scheme.
The standard of the farms has not varied, and those who have been recently placed on blocks, as well as those who will soon obtain them, have a similar prospect of success. It has been a big scheme, but it has been continually hampered by shortage of man-power and material, by the wettest eighteen months in the history of the State, by difficult conditions, and by heavy costs, unforeseen delays and an almost crippling cost spiral.
Finally, it cannot be denied that there has been some dissatisfaction among intending soldier settlers, many of whom have been waiting too long for their allotments. This has been caused mainly by the State Government’s decision to develop tracts of virgin country, in preference to purchasing cleared and partially developed properties. This policy has undoubtedly resulted in delay, heavy costs and much friction amongst intending settlers, which is regrettable. There has been, too, a measure of inefficiency. Many costly mistakes of an impractical kind have been made. Some of them, no doubt, could have been avoided.
Despite the delay, the many difficulties and the heavy costs involved, the war service land settlement scheme in Tasmania has been worth while. Eventually the properties established under it will be of great advantage to the State and will result in valuable, increased production. As I have already stated, some properties will have to be written down to productive values, but this will impose no hardship on the settler. Capital loss will be written down in the proportion of two-fifths by the State and three-fifths by the Commonwealth.
I trust that everything will be done to speed up the implementation of the scheme so that all intending settlers will obtain their blocks within the two-year period specified in the agreement. If the country at present being developed is not then ready for settlement, settlers who have not obtained holdings should be placed on single-unit farms. This would honour all promises in regard to war service land settlement, and the “ great and proud responsibility “ of which the Prime Minister has spoken would be discharged to the letter. For the reasons which I have given, I have no reservations in supporting this bill, which makes provision for the continuation of the war service land settlement scheme.
– I congratulate Senator Wardlaw on his very comprehensive review of war service land settlement, especially as it affects the Tasmanian scene. The Government, in providing £8,000,000 for war service land settlement this year, is still showing that it has the interests of ex-servicemen at heart. I should like to mention one or two small matters that I believe to be important. First, too much developmental work is done on the individual farm before it is taken over by the settler. Consequently, he does not build up a great equity in the holding. Some people may say that everything should be in apple-pie order when he takes over, but I believe that a certain amount of developmental work should be left for him to undertake so that he can build up his equity in the property.
The other matter that I should like to bring forward concerns the administration of the scheme. The administrative officers are sometimes bound very rigidly by the regulations, and this operates to the detriment of the applicant for a farm. About two years ago I assisted an ex-serviceman to obtain an individual farm. He wanted to take up a dairy property of about 125 acres in a very good district, but his application was refused. He was told that, if the Montagu Swamp area, which was almost wholly to be devoted to dairy farming, were taken into account a sufficient number of dairy-farm allotments would already have been made. However - and I thought this rather ridiculous - he was told that he could take up a sheep property, lt happened that a neighbouring farm was for sale, so the department, which was doing everything possible for him, said, “ We will buy the farm adjoining it - another 110 acres - and will give you the two areas as a sheep property “. The ex-serviceman in question would have been quite satisfied to take up a farm which would cost about £6,000, but he was told that he must be allotted a sheep property. The department paid £9,000 for the adjoining farm and gave him both properties for sheep raising. I think that in that case the regulations could have been waived for the benefit of the farmer. If that were done, he would not now have had to find £15,000. Clearly, in some circumstances, the regulations are too rigidly applied.
I should like the Minister to ascertain how much has so far been spent upon the development of the Montagu Swamp area. This is a bone of contention in Tasmania at present, and I should like to ascertain exactly what has been spent there. Senator Wardlaw said that in years to come it could be among the finest land in Tasmania. It is undoubtedly a very fertile area, as has been proved when neighbouring swamps have been taken over. However, it seems rather ridiculous to spend £2,000,000 upon putting 5,000 or 6,000 acres into production. In Tasmania there is a dispute about what has been spent already on Montagu Swamp. Some say that about £600,000 has been spent, while others say that the amount is £1,200,000. That area is not expected to come into production for three or four years. I ask the Minister to inform me of the true expenditure up to the present time.
Finally, I support Senator Wardlaw’s suggestion that when war service land settlement tapers off we should not allow the organization to be disbanded. The primary producers are the backbone of this Australia of ours. We must not at any time allow that fact to go out of our minds. Without the farming population, Australia would be in a parlous state to-day. Without further development of primary production, it could be in a parlous state for years to come. Therefore, land development must continue. I believe that when we have finished with the war service land settlement scheme we can still go ahead and, for the expenditure of the same amount of money, provide double or treble the number of farms provided under the scheme. I have much pleasure in supporting the Government’s wise plans in the field of war service land settlement. I hope that those plans will be carried to a successful conclusion and that then similar plans will be applied to the population generally.
– In supporting the bill, I should like to commend the speeches of both Senator Wardlaw and Senator Cole, and also certain parts of the speech delivered last week by Senator O’Byrne. I feel that this bill is being received in the right spirit, and 1 hope that it will continue to be received in that spirit in its course through the Senate. War service land settlement is the discharge of an important trust or responsibility. This is not the time to hold an auction sale, as it were, and to talk of the amounts of money that have been and could have been spent on this important work of repatriation and rehabilitation.
The bill is quite simple. It provides that this year £8,000,000 will be made available for war service land settlement. Of this amount, £3,119,000 will be made available to the larger States - New South Wales, Victoria and Queensland - and nearly £5,000,000 to the smaller States. A very interesting aspect of the matter is that considerable repayments are now being made to the Commonwealth Government and, as a result, over £2,000,000 from this repayment source, in addition to loan money, will be made available to the three smaller States. It is expected that the agent States this year will have £6,933,000. It is significant that the sums repaid are being used again. That illustrates the revolving nature of this fund and also the success achieved by our efforts at war service land settlement.
I should like to stress some of the features of war service land settlement. First, I want to comment on the magnificent esprit de corps that has developed amongst the settlers themselves. This, of course, is in line with the esprit de corps of the settlers after the first world war. At that time, of course, the financial prospects of soldier settlers, as they were called, were not favorable. After a short period of reasonable prices, a long period of depressed prices was experienced. The soldier settlers of those days - and 1 am proud to number one of my colleagues, Senator Mattner, amongst them - learned a number of things the hard way, and they were able to assist, with their advice and experience, in the administration of the scheme after the second world war. Despite what Senator O’Flaherty and Senator O’Byrne may say in this chamber from time to time about the Returned Servicemen’s League, that organization has been in the forefront in assisting ex-servicemen of the second world war.
War service land settlement has been a great success, largely because of the assistance given, not by the Government, but by the voluntary bodies which are so keen to see the scheme succeed. I believe that many churches in sparsely populated areas have received a great impetus from new settlers. Schools in a number of sparsely populated country districts in my own State have expanded tremendously. I think of the Allendale East school in the southeast of South Australia. At present, 400 children attend that school. A few years ago, before the war service land settlement scheme got going, there were possibly 60 children at this school, and there were three or four small schools, each with 40 or 50 children, in the surrounding districts. Because of war service land settlement, a rather remarkable system of area schools has been evolved. That in itself has meant a great deal to the education of the children in the country districts where war service land settlement has taken hold.
I think also of the greatly improved methods of bush-fire control which have come about because of the keenness of these young war service land settlers to protect the assets that they have recently acquired. I consider that, in a sense, the new settlers have educated the old-timers in a number of modern trends. As a matter of fact, the keenest men that I see at agricultural bureau and show society meetings are ex-servicemen who have become new settlers. I could enumerate to the Senate other advantages that have come to the community because of them. I believe that the greatest customers - if I may so call them - of the Commonwealth Scientific and
Industrial Research Organization are exservicemen. They derive the greatest benefit from the extension services of State Departments of Agriculture. The scheme has been a great factor in the development of the rural parts of Australia. I think the position was summed up fairly by the Minister in his second-reading speech, when he said -
Although some difficulties in undertakings of such magnitude as those indicated are probably unavoidable, 1 think that in general it is fair to say that the war service land settlement scheme has been and is a boon to approximately 8,500 ex-servicemen now in occupation of farms, who had a desire for a life on the land and who were prepared to work efficiently on their farms to achieve success. In turn-
And this is the part I stress - the additional rural production thus obtained has been and will continue to be, a national asset.
Of course, as the Minister pointed out, some problems have arisen. I desire to mention several of them to the Senate.
A question that is worrying land settlers under the scheme in South Australia - one of the agent States - is the valuation which will be put on their farms in the event of their making them freehold after a period of ten years elapses from their entering into possession of them. I am a great supporter of the idea of a settler being able to make his farm a freehold, but I think it is desirable that the figure at which he will be entitled to make it freehold - that is, the amount he will have to pay to the Government to go back into this revolving fund - should be notified to him some time before the expiration of the period of ten years.
I found on inquiring that a number ot ex-servicemen who have just about reached the end of the ten-year period do not know precisely, as yet, the amount at which they will be able to freehold their properties. Already, this has become a precise problem. Unfortunately, several of them have died during their tenure of these properties, and there is a certain amount of confusion as to the way the estate is to be treated for succession duty and federal estate duty purposes. I believe that this confusion, doubt, and difficulty would disappear if the government department of the State and, of course, of the Commonwealth - which has to agree to the State’s valuation - attacked the position comparatively early in the scheme of things so that everybody would know where he stood well before the expiration of the ten-year period.
Another important question concerns the fight of the widow and children of an exserviceman to inherit the property before it has actually been made into a freehold. The position is not altogether clear because, I suppose, when the scheme was evolved in the first place it was not envisaged that many widows or children of deceased exservicemen would come into the picture. Unfortunately, as the years progress these problems become quite important. Then there is the question of financial assistance to the widow, or the trustees - in the event of there being a trust estate - to carry on the farm in the interests of the widow and the family of the ex-serviceman. These are some problems that are not altogether clear in the minds of many ex-servicemen and their wives and families. I think it is time that the matter was clarified.
I desire now to say some words on the exact position of the war service land settlement scheme in South Australia, as the Senate may be interested in this matter. In South Australia, the areas mainly fall into four sections of the State. On Eyre Peninsula, there is an area to the north of Port Lincoln. Then there is an area on Kangaroo Island, which is about 100 miles long by 30 miles wide, just off the southern coast of South Australia. There is also an irrigated area on the River Murray, and there is a fairly large scattered area in the south-east section of the State, where the provisions of this bill will have important repercussions.
I was very interested to attend, as a delegate, the last series of annual meetings of the Returned Servicemen’s League iri South Australia, at which the State Minister of Lands presented a most interesting and factual report on the operation of the war service land settlement scheme. The figures he cited were most enlightening. He said that up to June of this year, no fewer than 940 ex-servicemen settlers were actually allotted blocks in South Australia, and that 106 more had been selected for blocks, 51 of whom were actually working for the Department of Lands in preparing these blocks. That brings the number up to 1,046. Apart from all this, 1,211 exservicemen in South Australia have been assisted by the Commonwealth and the State under the Re-establishment and Employment Act.
– How many are still waiting?
– Many are still waiting, but in many instances they have agreed to accept allotments later. The number of those thought to be awaiting blocks has been reduced as a result of recent correspondence with persons who originally applied. They have indicated that they now have other avocations. I believe that the number of those awaiting blocks in South Australia - who really desire to take up blocks - would not exceed 150, although possibly many more have applied over the years. The department is going into the mattei quite accurately, in order to make sure that it has a complete list of those who actually want to pursue dry land farming or irrigation farming under the scheme.
There is an area at Lyrup on the River Murray. I understand that the State Minister for Repatriation, the Honorable Cecil Hincks, is in close collaboration with the Federal Minister who administers the war service land settlement scheme. In view of the gradually improving conditions of the fruit industry at the present time, it is possible that money will be made available for land in the Lyrup area. I would welcome that very much because war service land settlement, on the river Murray area in particular, has been quite well carried out as a result of improved departmental procedures. I think that was clearly demonstrated during the recent floods in the river Murray areas. The ex-soldiers were settled on the higher ground. Very few, if any, of those settled under the government scheme were affected by inundations. I believe that one or two who held properties under the unit-purchase scheme were affected.
– Some of those on the eastern side and also some of those on the western side of the Murray were affected.
– I understand that the recent flood did not affect any of the people who were settled under the main scheme, but that a few first world war settlers and single-unit-purchase settlers were affected. By and large the Government, after the second world war, chose land for soldier settlement very wisely.
I am now in a position to quote, for Senator Toohey’s benefit, figures to which I made reference previously. I understand that 171 applicants are waiting for dry-land blocks and 30 applicants are waiting for irrigated blocks. I did not have those figures available when I answered the honorable senator’s interjection. In other words, 200 blocks are still required to satisfy those whom the South Australia Government believes genuinely require to be rehabilitated under this scheme.
One of the most interesting comments I heard at the conference I attended related to the discharge of commitments by the settlers. I understand that 96 per cent, of the soldier settlers in the south-eastern area, 93 per cent, of those in the Eyre Peninsula area and 86 per cent, of those on Kangaroo Island have met their commitments in full. With regard to settlers who have taken over single-unit purchases in South Australia, I understand that 100 per cent, of them have met their commitments. Those figures show clearly that the scheme has been successful. If it were not, many more men would be behind in their repayments.
I submit that the scheme has been well worth while. The South Australian Government, in collaboration with the Federal Government, has in mind the settlement of the 201 settlers still requiring land. The settlement of those men will be accelerated. This Government has always adopted a prudent attitude in the selection of both men and land. It has learned from mistakes made in the past, when unsuitable land was selected for settlement. Faulty selection in the past brought depressed conditions to some ex-servicemen.
In conclusion, I say that the war service land settlement scheme has brought renewed vigour to the country districts of the State which I am proud to represent. Keen, vigorous men have been put on the land. Large holdings have been subdivided, with the result that attacks have been made on vermin and noxious weeds on a scale which was not always possible on larger holdings. Men have come into these districts who have been prepared to play their part in civic affairs. Some of them have become the chairman of district councils and some have become the chairmen of hospital boards and other boards. These men have been a great force in advancing the prosperity and fostering the cultural activities of the people of the country districts of Australia. I have great pleasure in commending the bill to the Senate.
– It gives me a great deal of pleasure to support this bill. I have consistently supported bills of this nature year after year. I listened with pleasure to every honorable senator who has so far addressed himself to this measure. I am glad that my colleague from South Australia, Senator Critchley, is present to-day. He may not feel inclined to address himself to the bill to-day, but I appreciate his past attitude to bills of this nature, particularly as they have applied to South Australia.
I desire to refer briefly to the success which has characterized the soldier settlement scheme in South Australia. As time goes on, all who have been connected with this scheme can take increasing credit for the way in which the project has developed. Time, of course, proves many things. As my colleague, Senator Laught, reminded the Senate a few moments ago, very few soldier settlers are in arrears with their financial commitments. I am very pleased to know that in the Eyre Peninsula, an area in which I took a particular interest, only a few settlers have not been able to meet their financial commitments in full. I think I can claim that I directed the attention of the South Australian Government to that area. After a great deal of persuasion, the South Australian Government agreed to include that area in the soldier settlement project. It always gives me a great deal of pleasure to travel through that district and to see the success of the scheme.
Senator Laught also said that 100 per cent, of the single-unit settlers in South Australia had met their financial commitments. We are all glad to know that that is so. I merely make the comment that the Commonwealth Government might have given wider approval to the single-unit scheme in South Australia. In its wisdom it declined to accept some of the projects submitted, but events have shown that no financial embarrassment has been caused to the Government by those who secured singleunit farms in South Australia. That shows that possibly the Commonwealth Government adopted a rather strict attitude in regard to the single-unit propositions.
Two or three honorable senators commented on the fact that since the Menzies Government inherited this scheme from its predecessors it has seen fit to introduce the principle of freehold tenure. That has given a great deal of pleasure to honorable senators on this side of the chamber, who believe in the private ownership of land.
We are grateful that that principle has been accepted. But I agree with the suggestion of Senator Laught, for what there is in it, that the department should inform ex-servicemen who are contemplating converting the tenure of their properties to freehold just what commitment is involved. There is no doubt that, as the ten-year period that applies in South Australia draws on, many men will be giving a lot of thought to the wisdom of having their tenure converted. I imagine that the guiding principle in the whole matter is the total burden that the settler will have to bear in order to convert the tenure of the property that he has grown to know, which he has done so much to develop, and which he naturally desires to pass on to his family.
Senator Laught referred also to the benefit of the scheme to the community in general. It certainly does make for closer settlement and bring people into areas which previously may have been sparsely populated. That, of course, has a direct bearing on life in that area in every way.
My main purpose in rising is to ask the Minister to give me, if possible, figures showing the number of people in South Australia who are still waiting as approved applicants for blocks. Senator Laught cited a figure which is probably correct, but I should like the Minister to indicate whether it is correct. Lest some of my colleagues from South Australia may feel that the number of waiting applicants constitutes a problem, I remind the Senate of the very great difficulty that has confronted the South Australian Government in its attempt to settle ex-servicemen. I do not attempt to qualify in any way my assertion that the South Australian scheme has been a credit to all concerned. I know my friend Senator Critchley agrees with me when I say that quite an effort has been needed to develop areas that previously were not in production, and that that development has posed very great problems and involved the expenditure of large sums of money. The scheme has not lent itself to a very quick allocation of blocks to applicants. All those things I have mentioned must have a bearing on the number of men who have been able to settle.
The fact that South Australia is able to claim that more than 1,000 people have settled or are working on their blocks shows that the scheme is successful. The additional fact that all those people have been placed on blocks which were almost completely or at least partially developed shows the magnitude of the task that has been undertaken in that State. If it is a fact that only 30 people are seeking blocks in the irrigation areas, great credit is reflected on all concerned. There is a possibility of the Lyrup area being accepted. If it were accepted, it would quite easily take care of the number of men who are seeking irrigation blocks under the scheme.
I also ask the Minister whether he can indicate at what stage the Government will decline to accept any further applications for acceptance of projects under this scheme. The Commonwealth must fix some time after which it will not accept the submissions of projects for approval. We all realize that the scheme must be wound up at some stage, but I am not sure whether the dead line has been set. I shall be very happy indeed if the Minister will answer these few elementary questions that I have directed to him.
I heartily support the bill, just as I have supported earlier legislation of this kind. I give credit to all concerned, particularly - party politics do not enter into this - the Minister of Lands in South Australia, who has done a very great job. I note that my colleague, Senator Critchley, is again nodding his head in approval. I give credit, too, to the Lands Development Executive, which has borne the burden of developing what has been, in nearly every case, virgin or undeveloped country. It has had a terrific job to do. Men of great heart have been needed. The fact that these areas have been cleared and that men are working and settled happily on them reflects great credit to members of the Executive and everybody else concerned.
– in reply - 1 rise to express briefly the pleasure of the Government at the fact that this measure has been so well received by honorable senators on both sides of the chamber. That has been the experience in regard to similar legislation throughout the post-war years. It is satisfying to note, too, that year by year the debates on similar measures have engaged the interest of honorable senators and also of members in another place.
It has been stated that the scheme for the land settlement of ex-servicemen is one of the things of which we as a Parliament may well be proud. I agree. Senator Wardlaw, in a very interesting and informative speech, quoted details of the quite impressive progress that has been made. He reminded us that more than £160,000,000 has been spent and that 8,500 men have been settled. Having moved around the country and seen the manner of settlement and the standards that have been attained, I honestly believe that the scheme is something of which we may be proud, particularly when we think of the soldier settlement scheme that followed the first world war.
Senator O’Byrne, who was the first speaker on behalf of the Opposition, referred to the need to unlock the land for primary production - a theme that he has developed on a number of occasions. I do not suppose any one will seriously join issue with him on that point. I merely point to the success of the scheme at present under consideration and express the hope that in the years to come it will be possible for the States, which have the constitutional responsibility for civilian land development, further to unlock the land for primary production.
Senator Cole said that, in his opinion, there was. at one time, too much development on the farms themselves and that, as a result, the ability of a settler to build up an equity was prejudiced. Experience in this scheme has shown that most of the difficulty has arisen where development has been insufficient to permit a settler to make a living. Generally, there are undeveloped areas on holdings. Indeed. T think that applies to all holdings. The settler can build up his equity by developing the land that is handed over to him in an undeveloped state.
Senator Cole referred to the Montagu Swamp and asked for particular figures. Senator Wardlaw also had something to say about that project, which has had rather a chequered history. Originally, the plan was to develop about 37,000 acres, but that area was reduced to 13,000 acres when it became obvious that the State authorities could not develop the scheme to the extent that they had originally estimated. Surveys were started seven years ago and were followed by draining to permit surface clearing lo be started late in 1952. An unduly wet season then set in and virtually stopped operations throughout 1956 and the early part of this year. Clearing and partial clearing now runs to about 4,900 acres. The cost incurred totalled £1,142,884 to 30th September. I believe that for the month ended 31st October, an additional amount of £18,000 has been spent on this development. The amount that I have given includes considerable capital outlay for plant, tractors, bulldozers, draglines, workshops and camp buildings totalling about £500,000. It also includes approximately £350,000 for digging drains. On the cost to date, blocks which average 120 acres will cost about £19,500 each excluding the cost of drains external to the blocks.
– Does that include buildings?
– It would include the usual buildings on the properties. Fourteen houses have been erected, four of which are occupied by potential settlers. One man is already running some stock. I imagine that the amount of £19,500 includes the cost of the houses.
– Will the cost of drains be added?
– Drainage is a capital cost which will not be added to the cost of the individual block.
Senator Laught expressed some concern about values, and asked when they would be available. T have been informed that the value will be the lesser of the cost of the holding or the market value on the completion of the planned development. In South Australia, costs have been kept on a zonal basis, and final costs for apportionment io holdings are only now being obtained. Apart from not knowing the figure, the settler is not prejudiced. He does not have to obtain the freehold of the land and will get the benefit of the lower of the two figures when the valuation is made.
– The settler can obtain the freehold?
– He can doso after ten years.
In reply to the question also asked by Senator Laught, I wish to inform the Senate that a widow is considered an eligible person who can receive all the benefits of the scheme. The property can be willed and the beneficiary will be treated on his or her merits.
– What about families? If the property is put into the hands of trustees to be held for children, is the usual financial benefit available to the trustees?
– Yes. I am informed that in that case, the trustees are considered to be eligible persons.
asked about the number of outstanding applications. There are 2,030 men with certificates still without blocks, but the State authorities have recently attempted to find out how many of those men are still interested. It is estimated that actually only approximately 200 applications are now outstanding. The programme for development of the project is aimed at completion of the holdings by 1959. As to the Lyrup project, I believe that the Minister in South Australia has been advised that the Commonwealth Minister in charge of war service land settlement will not consider that project for inclusion in the scheme in this financial year.
Question resolved in the affirmative.
Bill read a second time.
– I wish to ask the Minister for Shipping and Transport some questions regarding war service land settlement on Kangaroo Island which was undertaken by the South Australian Government and the Commonwealth Government. The type of settlement undertaken there is peculiar to the conditions obtaining on the island, but 1 believe it can be said that the scheme there has been successful. We had little practical experience in the proper treatment of the land on the island and all concerned have had to overcome major problems. Some of the conditions are peculiar to individual holdings. I should like the Minister to inform the committee, from experience gained, what is the best time for seeding and the appropriate rate of application of pasture seeds after the land has beencleared and ploughed. Generally it is sown with subterranean clover and various grasses.
I should also like to know what is the best time to apply artificial manures, and the proper quantity that should be used. Is it known whether an initial dressing of 3 to 4 cwt. of superphosphate to the acre has given better results than the application of the same quantities in two or three dressings? There has been some suggestion of spreading 4 or 5 cwt. over two or three years. Some settlers have found that they have required about £1,000 for superphosphate in the first year after a block had been allocated to them. I think that this has caused a certain amount of hardship to some settlers. Recently the Minister sent two of his representatives to Kangaroo Island with two State representatives to make a complete survey of the position of any settler who claimed he was in difficulties. I should be interested to be told, if the Minister has the information, the result of these investigations. Were any of the moneys expended on superphosphate capitalized, over what period were they capitalized, and on what terms and conditions?
From my knowledge of Kangaroo Island, I am aware that both Commonwealth and State governments have been sympathetic to the settlers there. I have visited the settlement on many occasions, and whenever it has been my privilege to accompany a responsible officer I have seen that in no case was anything hidden. The investigating officers were given the names of settlers claiming hardship and they were also told what properties were involved. They were taken to the properties and, to the best of my knowledge, every settler who claimed that he was experiencing hardship was given every opportunity to state his case. Generally speaking, the most serious difficulties encountered by the settlers have been met.
In conclusion, 1 should like to know from the Minister what is being done about these outlays on superphosphate. Whilst it is too much to expect that the Government should make a gift of the money, I hope that it has been made available on very good terms.
– During the second-reading debate, it was stated that £2,052,000 of the £8,000,000 referred to will not be met out of the moneys mentioned in this bill. This expenditure is to be met by using repayments in respect of expenditure inc.irre.1 in previous years. Will the Minister for Shipping and Transport, who is in charge of the bill, inform me how these repayments are treated? For instance, if there is a repayment from settlers in South Australia, is that money made available for relending in South Australia, or is it put into a common fund, with repayments from other States and used to make loans to other States as well as to South Australia? In other words, is a particular State given credit for the repayments received from settlers in it?
I should like to know also whether Queensland has adopted this system of war service land settlement and whether New South Wales is availing itself of all the assistance to which it is entitled.
– Someone said, I do not know who it was, that there is nothing like politics for creating ironical situations. I do not know of anything more ironical than that I, who have never grown a blade of grass in my life, should now be called upon to answer questions relating to practical farming. I am asked what is the most advantageous seedingtime for sub-clover on Kangaroo Island. The answer is August.
As to the application of superphosphate on early allotments, I point out that the settlers will be given the opportunity to capitalize the cost of superphosphate up to 2 cwt. per acre. This will mean that they will be required to pay an increased rental. Superphosphate application, as part of development, will be determined on the actual reaction of pastures to individual applications. The basis is a total of 5i cwt. per acre, spread over three years, the rate being 2 cwt. for the first year, 2 cwt. for the second year and li cwt. for the third year. This basis may be increased if necessary.
Seeding rates are not definitely known. They will be decided on the results obtained from experimental plots.
As to the financial inquiry which has been conducted, the result has been agreed to with the State authorities and the settlers were advised by letter about two weeks ago. Again, pre-allotment settlers will be allowed to run up to 200 sheep free of agistment.
I inform Senator Laught that repayments are credited for use by the State concerned. There is, however, some fluidity in the use of the gross funds available.
As to Queensland, that State has not yet made any official approach, and New South Wales has not yet used the total loans available from the Commonwealth in the last two years.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Debate resumed from 12th November (vide page 1143), on motion by Senator Spooner -
That the bill be now read a second time.
.- The purpose of the bill is to extend the exemption granted in 1941, when this legislation was introduced. This is the third amendment that has been made to the original act. Under it, the employer whose pay-roll does not exceed more than £200 a week is exempted from the tax. It is interesting to recall that in 1940-41, when the tax was introduced, £8,900,000 was collected. The 1953 amendment excluded employers who paid out less than £80 a week, and the amount then raised was £40,400,000. In 1954, when the exemption was increased to £121 a week, pay-roll tax amounted to £41,500,000. It is estimated that this year it will be £50,500,000.
Anyone who cares to do so may find ou! some very interesting facts about who pays. this tax. Of the estimated revenue for this year, about £14,000,000 will be paid by public authorities. In practice, that sum is given to the States by way of reimbursement, is parcelled out to public authorities, and is then repaid to the Commonwealth as payroll tax. That is certainly true of the major part of the sum. It is rather like Peter paying Paul, and then Paul paying Peter back again - Peter being the Commonwealth.
Recently, Senator Spooner, in reply to a question by Senator Wright, showed conclusively who paid this tax. This year approximately £14,000,000 of the estimated revenue figure of £50,500,000 will come from public authorities, and £36,500,000 from employers in industry, one-half of whom will be in the manufacturing field.
The Australian Labour party welcomes this further exemption, but is opposed to the whole principle of pay-roll tax. It is true that it was introduced in 1941 - by the Menzies Government of the day, and that Labour retained it in war-time and right up to 1949, but we believe that, in these days at least, some other means of providing this money ought to be found. It has been shown that pay-roll tax can be classed as a reduction in company tax and that of the total tax of £50,000,000 the new money which the Commonwealth actually receives - after taking into account the contribution of the States, and the consequent reduction in company and individual taxes, amounts to only about £23,000,000 or £24,000,000.
Every honorable senator has read what the Tariff Board has had to say about the effect of pay-roll tax on costs. On 7th November, 1957, John Eddy, the economist of the Melbourne “ Herald “, wrote a very interesting article on the subject. He traced the cost of a product from its raw material source right through to the point of consumption. He showed that whereas, in the early stages, 6d. might be paid in tax by an employer who was so liable, by the time the product reached the consumer the tax would increase to ls. 4d. We welcome any reduction in pay-roll taxes, and have said for years now that as the tax is known to be passed on, it is undesirable. Senator Spooner said that it increases prices at least to the tune of 1.68 per cent. The Tariff Board has said that every £1 of income received by the Government in pay-roll tax means an increase in price to consumers of at least £2. I do not propose to go into that matter very deeply, and will only say that Labour feels that the tax should be abolished. We believe that if £23,000,000 has to be found it should come from income tax, because such a tax places the burden upon those who have the capacity to pay it. At present an employer may show a loss on the year’s operations, but may still be required to pay the tax. That is wrong, and therefore Labour is opposed to the tax. We are especially opposed to the payment of the tax by local government and similar authorities, for this creates tremendous hardship.
– Has the Australian Labour party announced, in any policy speech, its opposition to the continuance of the tax?
– Yes. 1 think it was in the last policy speech, so I am not stating an idle objection.
– It was not in your policy speech in 1948-49.
– Whenever a bill comes before the Senate, Government supporters begin to talk about 1948-49, and compare that year with the present year. They were lucky to escape the great obligations that were placed upon the Labour Government in the period 1941-49. Government supporters of to-day are very fond of comparing what the Government is giving this year with what the Labour government gave in 1941, or 1949. It is all so much eye-wash to do that unless the figures are related to the change in money values. Indeed, such comparisons belittle the Parliament. Comparisons are only worth while when they take into account what £1 will buy to-day as compared with what it would buy in other days.
– That is a fair argument so far as comparisons of values are concerned, but what about your policy? You continued to levy this tax.
– That is true, but you cannot compare present conditions with those of the post-war period, when our every effort was bent towards changing over to a peace-time economy. Pay-roll tax then did not bring in anything like what it does to-day - even if the change in purchasing power is taken into account.
In committee we shall move that local government at least should be excluded from the liability to pay this tax. The Government will not be worried about £1,600,000. Some people might argue that the money is given to the States from loan funds, from petrol tax revenue for roads, or from income tax revenue under the disbursement formula and then finds its way to local government, but that is not true. No money that is given to Victoria for roads finds its way into the metropolitan area. I know that that is not the fault of this Government. It is the reason why I have never been one to criticize the aid roads formula, because I think Victoria should put its own house in order.
– What relevance has that to pay-roll tax?
– Some people may advance the argument that local government authorities in country areas do receive money from the Commonwealth, through the State governments, for roads, but in the Melbourne metropolitan- area local authorities do not get it.
– It is a curious sort of argument.
– No, it is not. Some people may want to advance that argument. I do not agree with it. Without going into a long dissertation on the matter, I suggest that we should relieve local government authorities of this tax. I do not think that the Government could object on the score of cost, because only £1,600,000 is involved. If that were done, it would be a step in the right direction. Let us hope that when this legislation is renewed, if the Government still desires to collect pay-roll tax - I do not think it should - it will pick out the employers who are most worthy of relief, instead of making an overall reduction. All that the Government actually collects out of the £50,000,000 is about £23,000,000 - I do not bind myself to the exact amount - because if pay-roll tax were not imposed the Government would collect so much more in income tax from those who claim pay-roll tax as a concessional deduction. I understand that in another place it was said that although the States growl about paying pay-roll tax on State instrumentalities, the States get the money back in disbursements from the Commonwealth. That seems to me to be a very cranky way of financing the States. I propose later, on behalf of the Opposition, to move an amendment which will have for its effect the relief of local government bodies from the incidence of this taxation.
.- A bill amending the pay-roll tax engages the interest of the country so much that the Senate should give real consideration to the measure. I should like to take this opportunity to refer to the origin of this tax. First, it was regarded simply as a supplementary tax to assist the family wage-earner. At that time, the Arbitration Court took the view that it was incapable of making, or that it would be unwise to make, any discrimination between the family wage-earner and the single wageearner, but that there was a real demand for an increased benefit for the family wage-earner.
I think that the government of the day took a very wise step in bringing in a new form of tax, the pay-roll tax, which was generally payable by all employers of labour. Although the impost took the form of a tax, it was simply an economic measure designed to prevent a rise of wages in industry, confined in its benefit to the family wage-earner, because in that time of war it was imperative to keep costs as low as possible. I think it is a mistake to regard the pay-roll tax as being in its original concept in the nature of general taxation. If I were speaking in 1941, I would be wholeheartedly in favour of the maintenance of this tax, generally payable by employers of labour, and devoted to financing child endowment, but the reason why I have risen to speak on the bill is that the circumstances of the intervening sixteen years have given cause for an earnest reconsideration of the tax.
In the years following the imposition of the pay-roll tax, the Commonwealth reorganized the whole basis of CommonwealthState finances by arrogating to itself the whole field of income tax. By the uniform tax measures, it assumed the right to levy the sole income tax in Australia. That was a terrific revolution in Federal and State financial relations. When the States were independent and had an income tax field of their own to resort to it was proper that State business enterprises, such as railways, hydro-electricity projects and tramway undertakings, should pay wages on a basis of equality of costs with private employers. But I take leave to suggest that it almost bespeaks an incapacity to think when we have the pay-roll tax applied now to State government undertakings. According to information which the Minister for National Development (Senator Spooner) was good enough to give me the other day in answer to a question I asked, the Commonwealth solemnly raises from State government and semi-governmental authorities £11,400,000 by direct taxation of their pay-rolls, and repays to the States in reimbursement for income tax rights the sum of over £160,000,000, and an additional £20,000,000 as a supplementary grant fixed at the discretion of the Commonwealth Government. To my mind, that reduces almost to a farce the present CommonwealthState financial relations.
– Unnecessary circumlocution!
– Is that what it is? I hesitate to go on after “ Big Ben “ has sounded, especially in such vehement tones, but it is an observation which might be soberly considered.
Senator Kennelly pointed out, and he focused attention on the matter by foreshadowing an amendment, that local government authorities were asked to pay tax of £1,600,000 on their pay-rolls last year. He seemed to relate that in some way to benefits which municipal authorities get out of the petrol tax for road-making. I am at a loss to understand any argument as to their interrelation, but I suppose, for the most part, the municipalities which have pay-rolls of £10,400 are those that have a large section of improved values as the basis of their rating structure. I do think that it is something of an anachronism that the Labour party should bring forward an amendment to pierce a chink in this pay-roll structure designed solely to relieve the city ratepayer.
– We will go further than that, if you like.
– I am sure you will while you are in the blissful state of irresponsibility that is associated with a seat on the Opposition side.
– It is quite easy to make such suggestions from the other side of the chamber. I am only developing this point because, as this is a budgetary measure, I believe the Senate should take a thoroughly responsible attitude to what may be considered a vital amendment to a budgetary proposal. It is not the chief function of the Senate to revise budgetary proposals; it is one of our ultimate functions to do so.
Senator Kennelly, the proponent of the amendment, said, in effect, that he hoped that when this tax was submitted to us for consideration at another time it would be completely revised. I thought - I do not wish to seem presumptuous - that there was real sense in that attitude, and it is precisely in that sense that I am expressing my view, because I think that by the time another Budget comes before us, not only will municipalities be given relief, but if this insupportable system of Federal-State financial relationships continues until that time, State undertakings will be given relief and the reimbursement of the States grants will be adjusted accordingly.
– It would require a new formula?
– Yes, but I am putting that forward for earnest consideration now, because I believe that there are afoot at this time proposals for a revision of Commonwealth-State financial relations. I believe that the next twelve months will afford the opportunity, if there is the will and the capacity within this Parliament to do so, to revise the whole relations so as to give the States sinews and independence and allow them to finance their functions within the ambit of their responsibilities. That is why I am addressing myself to this subject now. I believe this is one of the vital measures that can play a real part in the more general programme. It is for that reason that I take the opportunity to declare that I will oppose a piecemeal amendment such as this, which I do not think can be justified, upon any principle, as a separate attack on the pay-roll structure.
– Would not a vote of the Senate in support of the amendment lend colour to the feeling of the chamber in relation to the whole problem?
– I would not gainsay that argument; I would not gainsay any political appeal it could have in the interests of an opposition. I am not willing, on a political party basis, to concede that the Opposition anticipated my thoughts on this matter, which cannot be taken in isolation. I do not presume at any time to speak for any one else in this chamber, but I feel that many honorable senators on this side would welcome the opportunity to relieve local governing bodies of pay-roll taxation. I say that, from the point of view of the ultimate purposes of this Parliament and of the State governments, and much more importantly, from the point of view of the ultimate purpose of local government, there -are considerations in support of the integration of this idea into a much more general scheme, because this is, I hope, a year of opportunity with regard to this matter of Federal-State financial relations, including the very significant element of municipal finance.
– Basically, this is an unfair and an unjust tax.
– The pay-roll tax on municipalities?
– Irrespective of a municipality’s income, the tax on a pay-roll lias to be paid.
– I hope to have an opportunity to address myself to that subject. If there is anything that could be more destructive in this matter, it is this obsession on the part of the Labour Opposition that the exclusive source of revenue -should be income, and that a man should pay a higher rate of income tax as his earnings increase.
I stand four-square behind the maintenance of a properly graduated scale of income taxation. It is just headstrong obstinacy for people on the other side to persist in their present attitude when they have no information on the subject that precedes their own time in politics. That as a rather nice way of describing ignorance, is it not? It may be that they had no other concept in relation to public finance than the incomes of the very successful individuals in the country. It was not until 1935 that that obsession developed to any degree. It was accelerated in the favorable atmosphere of war-time with my complete consent because I believe that when men are exposing themselves as flesh and blood to the enemy, the incomes that are earned at home can be yielded to finance them. But a civilized community is destroyed if the whole weight of public finance is put solely on those who are industrious or those who are financially successful.
– Hear, hear!
– Having heard Big Ben applaud my sentiments, and now this squeak from Tasmania, I feel that I have made my point. So let us not proceed on this basis that all government expenditure - all the urgent matters that the Government now undertakes, including such things as were indicated in the report on the universities that was tabled earlier - can be financed by dragooning the successful man and by making the graduated income tax rates simply a deterrent to industry and skill. If you do that you will drive this country into a worse economic situation than that which existed during the feudal era. By a selective and rather ingenious combination of sources of revenue, a government arrives at a successful budgetary policy. If a government thinks it can get the extra money it requires by taxing employers who make a success of their businesses, it will not abandon pay-roll tax.
– Would you say that taxation imposts of various kinds do not ultimately pass into net profit or into net earnings?
– I certainly would not. I think it is one of the fundamental fallacies of the high taxation experts in socialism that a tax can be imposed on industry without being paid eventually by the consumers of the products of industry. This is a turnover tax. For the purposes of his argument, Senator Kennelly traced the way in which this tax accumulates as it is passed on. I think he said that the Tariff Board had disclosed that an additional £1 tax ultimately becomes an extra £2 to be paid by the consumers.
– That would be correct.
– I heard a boom and a squeak previously, but I completely missed that interjection. I have a booklet called “The Taxpayers’ Bulletin”, from which I understand that a manufacturer makes a profit of 15 per cent, when he sells to the wholesaler, and that the wholesaler marks up the price by 25 per cent.
– Not in the grocery trade.
– No, but there are other more difficult trades. Then the retailer marks the price up by 33i per cent. That rather astonished me. On that basis, a tax of £1 eventually costs the consumer £1 18s. 4d. lt has increased by 92 per cent. The Treasurer, in reply to a question asked by me the other day, said that the increase was only 1.68 per cent. Is it seriously suggested that the company tax, which is paid by all companies in Australia, apart from some statutory exemptions, is not just one layer in turnover costs? Of course it is. Is it seriously suggested that if a man running a business is faced with a taxation impost of £4,000 he will not so arrange his cost structure as to recover that money and, in addition, make a living for himself and his family? Of course he will. The socialists who think that an enterprising businessman cannot recoup his taxes by making the people who purchase his goods or services pay have a very shortsighted outlook indeed.
What I have been saying applies to general taxation, but pay-roll tax is a turnover tax which inflates the cost structure, ft has to be considered in that regard. I did not intend to speak so discursively or at such great length. I rose to point out that this tax was imposed before the basic revolution of uniform taxation took place in Commonwealth-State financial relations. When one considers that the Commonwealth Government is gathering from State governments. State semi-government authorities and local authorities £13,000,000 in order to reimburse them with £20,000,000, the situation seems to me to be farcical. When one further considers that this tax was imposed for the purpose of supplementing wages and that the exemption limit in 1941 of £1,040 a year has been gradually raised until it is £10,000 to-day, the inequity of the tax as a wage tax is making less acceptable, to those still liable to pay it, the idea that they are financing a special social service such as child endowment. The fact that this Government has not made any increase of child endowment in accordance with the increased cost involved in the maintenance of children between 1949 and the present date is an additional factor that makes this tax, as the source of child endowment finance, illogical.
– The honorable senator is effectively condemning the tax.
– That may be so, but honorable senators opposite should not ignore the facts I am putting before them. I know that Senator Courtice, in his earnestness, will give sober consideration to these facts. There is no tax, other than income tax, so flexible in the Australian fiscal structure. In the general vacillation of the economy, pay-roll tax does rise and fall. Therefore, it is one of the flexible taxes which, along with income taxation, could form an appropriate item of fiscal independence for the States, and one which I think they could assume without much prejudice, if it were successfully applied as a flexible supplement to their fiscal arrangements.
I should like to see these matters considered during the next year in a general overhaul of Commonwealth-State financial relations. First, I do not think that the continued imposition of pay-roll tax on State undertakings and local municipalities can be justified from the point of view of general revenue purposes, however much it was justified for the special purpose of financing child endowment. Secondly, having regard to the fact that the increase in the exemption limit for pay-roll tax is causing inequity as between small and large employers from the viewpoint of wage costs, I do not think its continuance can be justified as a basis for financing child endowment. I hope that in the ensuing twelve months, if the programme for an adjustment of Commonwealth-State financial relations gets under way, the elimination of this tax will receive consideration as one of the means of solving that intricate problem.
Sitting suspended from 5.45 to 8 p.m.
– I want to continue the debate on the Pay-roll Tax Assessment Bill 1957. If I may say so, I am delighted to see honorable senators display such interest in this measure. The sole purpose of the bill is to grant to taxpayers concessions amounting to £2,750,000. I think we all agree that, when legislation is introduced to give a concession to the taxpayers, it is an occasion for great rejoicing and jubilation. To-night, of course, is no exception. It is odd that the bill should be under criticism, because ;no such measure would be before the Senate if a concession was not to be granted.
The bill seeks to raise the level of exemption from pay-roll tax from £6,240 to £10,400 in regard to wages payable after 1st September last. The raising of the exemption will relieve from the payment of pay-roll tax an additional 16,000 taxpayers, most of whom are small businessmen with between twelve and fifteen employees. The number of payers of pay-roll tax will be reduced from approximately 39,000 to 23,000. The raising of the exemption level from £6,240 to £10,400 will give a corresponding concession to those remaining 23,000 employers.
– What about all the other people who pay tax?
– I know that we are living in an era of impatience, but I suggest that if the honorable senator is patient all will be revealed. As the Opposition, in a gentle way I must say, has attacked the measure- Senator Kennelly, who led on behalf of honorable senators opposite, attacked it because it did not grant the concessions that he desired - I think it is proper that I should briefly place on record the history of the pay-roll tax. It was introduced in 1941 for the purpose of financing child endowment. When it was introduced, the level of exemption was £1,040. It will be agreed that that level was not very high.
Almost immediately after the tax was introduced, the government of the day went out of office and the Curtin Government assumed office. Labour remained in office until 1949. During that period Mr. Chifley became Prime Minister and Treasurer. For the purpose of giving the background to the tax and in view of what I shall have to say later, it should be remembered that Mr. Chifley had experience in local government. He was either president of a shire or a councillor concurrently with his being interested in politics. It is significant that for the eight years that the Curtin Government and the Chifley Government were in office the original exemption level of £1,040 remained unchanged.
The Menzies-Fadden Government assumed office in 1949 and, by way of contrast, pay-roll tax concessions became a reality. In the first budget presented by this Government, the level of exemption was raised from £1,040 to £4,160. Several budgets later, the level of exemption was raised to £6,240, and now it is to be raised to £10,400. In all things, the proof of the pudding is in the eating, and I suggest to honorable senators opposite that, when they attack this concession, they should have some regard to history. This Government is progressively placing more small employers beyond the range of the tax.
I ask honorable senators opposite whether they want this tax, collections of which total approximately £51,000,000, to be abolished. They must know that we cannot abolish in cavalier fashion ay tax involving £51,000,000. The financial policy of any government or treasurer must stand on a logical basis. Do honorable senators opposite want the pay-roll tax to be abolished but sales tax to be increased? Do they want this tax to be removed from the big employers and placed on the ordinary workers? That, obviously, is what would happen, because a government having some regard to its responsibilities cannot say, “ We are going to wipe that £51,000,000 off “. What is the Commonwealth to do about its responsibilities towards the States? In what light is the Government to regard its responsibility for social services and all those other benefits for which a prudent federal government must find finance?
Here we have a tax on big employers, whom honorable senators opposite profess to hate. Apparently they want to remove the tax from the big man and have it spread over the rest of the community. If the tax were to be abolished, the Treasurer would have to raise the money from some other source, and that other source obviously must be the small taxpayer. When one is in opposition and is without responsibility, one can say that the tax should be removed, without having any regard to where the revenue is to come from. If this Government vacated the pay-roll tax field tomorrow, the States would enter it. History has proved that. It is not long since this Government abandoned the entertainments tax. Some of the State governments, although not all of them, immediately imposed an entertainments tax. The Commonwealth Government abandoned the land tax and immediately the State governments entered that field of taxation. In New South Wales the land tax was imposed in a particularly vicious form.
Surely honorable senators on the Opposition side do not believe that the land tax, when imposed on big retail firms, is not passed on to the goods that are bought by the working man? Commercial firms are in business for profit and when they are levied for land tax, they pass the charge on to the community. Therefore, it is obvious that if the Commonwealth Government were to abandon the pay-roll tax as suggested by the Opposition, the State governments, because of their needs, would certainly enter that field of taxation.
– It is not a certainty. It is only Senator Anderson’s idea.
– The evidence is there in the history of the Commonwealth’s vacation of the fields of entertainments tax and land tax. Senator Wright made an unassailable point when he said that the overall question of taxation must be considered and that the whole matter must be rationalized. We cannot vacate one isolated field of taxation as suggested by the Opposition. That would be absurd and defeat the Opposition’s purpose.
– But it has to be done as a whole.
– I do not challenge that statement. Senator Wright may remember that when speaking in the debate on grants for the States, I said that the Commonwealth Government would be unwise to vacate any isolated field of taxation until it had made up its mind about relations between the Commonwealth and States and had a comprehensive plan to cover the whole field of taxation. I repeat that the States would impose a pay-roll tax if the Commonwealth abandoned it.
I have vivid memories of the imposition of the pay-roll tax in New South Wales. A fellow named Lang was the head of the government in New South Wales and some said, “ Lang is right “. He imposed a payroll tax of 3 per cent, and its impact was far more vicious and its effects far more cruel than were those of the impost that has been levied on the 23,000 pay-roll taxpayers throughout the Commonwealth by this Government. I do not believe that the submissions of the Opposition for the aboli tion of the pay-roll tax are real. In fact, we should be rejoicing unanimously that this form of taxation has been eased to the extent of £2,750,000 this year. Some thousands of small employers - the men for whom the Opposition is always appealing - are being relieved of the responsibility of paying the tax.
The Opposition has foreshadowed an: amendment to provide for the exemption of local government authorities from the payroll tax. As I stated earlier in giving the background of the pay-roll tax, when Mr. Chifley - a man with a local government background - was Prime Minister and Treasurer, he had a similar submission put to him. Being a prudent Treasurer, he examined the proposal in relation to the overall problem of taxation. As a result, he was not prepared to submit to the Cabinet that local government authorities should be exempt from the pay-roll tax. During the life of this Government, while Sir Arthur Fadden has been Treasurer, local government representatives have submitted to the Government that local government authorities should be exempt from the pay-roll tax. The amendment that has been foreshadowed by the Opposition, therefore, does not contain an origins! thought. A similar suggestion has been made previously on various occasions. It has been considered by governments of both political persuasions and, reluctantly - I am bound to put it that way - they have rejected the proposition for varied reasons. In 1953 a Commonwealth Committee on Taxation examined this proposition. The members of the committee were men of outstanding quality. Mr. S. D. Holder, the acting chairman, had a reputation as an accountant and a man of wide experience. Mr. John A. L. Gunn was a member.
– He was a squatter.
– No, the honorable senator is confusing him with a Mr. Gunn who was a member of the Australian Meat Board. Mr. Gunn was an authority on various aspects of accountancy. Two other members, Messrs. J. W. Hughes and R. S. Turner, were both accountants. Mr. Gordon Wallace is, or was, the leader of the bar in New South Wales”. He is a barrister of great repute and a Queen’s Counsel.
– Let us get on with the business.
– Perhaps Senator Grant would like to call it off. I want to read portion of the report that was presented by the Commonwealth Committee on Taxation. The Senate might be reluctant to hear all of it, but I am sure honorable senators will be interested to hear some of the most meaty parts. The report was dated 22nd July, 1953, and the committee stated -
The original basic concept of the tax was that employers as a class should contribute to a fund to bring the incomes of family men more into line wilh their financial needs. To this end, it is stated, local governing bodies - and State Government Departments - were asked to share, in common wilh other employers, the cost of supplementing the wages of employees who had children to maintain.
A year after the pay-roll tax was introduced the Commonwealth and the State income taxes were merged in a single tax which is still in force, although amended and varied in certain respects. The merging of the income taxes has brought about a change in financial relations between the Governments. A large proportion of State revenue is now received from the Commonwealth by way of tax reimbursement grants and special grants. Thus there could be a corresponding reduction in Commonwealth grants if State pay-rolls were exempted from pay-roll tax.
I mention that because the point was made by Senator Kennelly. The committee added this paragraph -
Although the Committee is of the opinion that a strong case exists for exempting certain local governing bodies from pay-roll tax, it is unable to deline the extent of any such exemption because it feels that other considerations cannot be excluded. Some of these have not been referred to the Committee and involve Government policy. These matters include -
the difficulty of exempting local governing bodies such as municipal councils without extending the exemption to State Governments and statutory authorities which derive their revenues otherwise than by a service charge;
the fact that approximately one-quarter of the working population is employed by Australian Government Authorities (Commonwealth, State and Local);
the hidden effect on Revenue of abolishing, or narrowing the field of, payroll tax.
These matters include -
the difficulty of exempting local governing bodies such as municipal councils without extending the exemption to State governments and statutory authorities which derive their revenues otherwise than by a service charge;
The next point, in my view, is the potent one. It is -
There are other points, but I hope that, if I do not mention them I shall not be charged with slanting the matter. In any event, I am open to subsequent criticism in this place if it is felt that I have done so. This committee says that whilst there is a strong case it is difficult to make a definite recommendation. The members of this committee are not practising politicians; they are practising accountants and men of that ilk who have some regard for the technical difficulties of the problem. These men had been appointed to sit as a committee for the specific purpose of examining the case for the exemption of local governing bodies, and they say that in their opinion it is too difficult for them to make a definite recommendation.
– But at the present time the money is not being spent on the purposes for which it was collected originally.
– The committee did mention that point.It did refer to the whole principle of consolidating all taxation into the one fund, but that is a matter of high government policy which I cannot debate here. If I attempted to do so, even if I knew enough about the subject to debate it, I should soon be called to order.
I do not want to argue that matter; I simply mention the fact that Senator Kennelly has foreshadowed an amendment in relation to a matter which was considered during the life of a Labour government and which has been considered by the present Government as well as by a Commonwealth committee appointed to examine the proposition. The members of the committee were men of high repute in the community, and even they could not make a firm recommendation in regard to it, although they conceded that it had its points. They could not make a firm recommendation because they could not say where the delineation in local government could be made.
I think Senator Kennelly said that if the concession proposed by him were granted, the cost would be only £1,600,000, or perhaps £2,000,000. In point of fact, if we accept the report of the Commonwealth Committee on Taxation as correct, the cost would not necessarily be restricted to £1,600,000; the alteration could start a chain of reactions which would lead to a cost of between £15,000,000 and £16,000,000 by the time all local governing bodies became affected by it. At that stage, the question becomes one of the budgetary responsibilities of the Government. For instance, if taxation is to be eased to the extent of £15,000,000, might it not be more logical to grant the remission by way ot sales tax exemptions? Again, might it not be more logical to do it by way of direct income tax concessions, or by way of company tax concessions? The whole question then becomes one of Government policy.
There are many of us in the Senate who have had a fairly close association with local government. We know that there are the pure local governing bodies - the municipalities or the shires - and that there are other bodies which are similar to them. 1 refer to such authorities as electricity undertakings, water and sewerage authorities, town-planning authorities. Then there are those cases in which local governing bodies embark on schemes for the construction of swimming pools. Further, some local bodies conduct operations under the Libraries Act. Then, as in the case of the Sydney City Council, some local governing bodies conduct hotels. The biggest hotel owner in Sydney is the Sydney City Council, and probably one of the biggest landlords in Sydney is the Sydney City Council. It will be appreciated, therefore, that the whole matter becomes interwoven and complicated so that it becomes almost impossible to say that the concessions will be restricted to local governments. lt is because of those difficulties - I have only touched the fringe of them - that Mr. Chifley, Sir Arthur Fadden and this special Commonwealth Committee on Taxation all said that, even with the best of goodwill in the world, the concessions could not be offered.
The only other matter to which I wish torefer is a suggestion by Senator Kennelly that since the States hand over to local governing authorities for the construction, of roads moneys which they receive from the Commonwealth out of petrol tax collections, it may be argued that the money is only being taken out of one hand and put into the other. Senator Kennelly alsosaid that the authorities constructing roads in city and suburban areas would not receive funds from petrol tax collections. I point out to him that in New South Wales - andI should be surprised if this does not apply also to Victoria - there are what are knownas main roads boards. I know that in New South Wales the Department of Main Roads, has been established and that even in the inner municipalities roads are gazetted and declared main roads with the result that the local authorities have no commitments in connexion with the construction and maintenance of those roads. I shudder to think how local governing bodies would get on in New South Wales if they had the responsibility of constructing and maintaining the main arterial roads through the City Df Sydney and its environs.
This tax exemption amounting to £2,700,000 must give cause for great rejoicing. It is an occasion for rejoicing when we realize that at last we are getting a concession in respect of pay-roll tax and that because of the Government’s proposal the employers of only a small number of employees - 16,000 such employers are involved - will no longer be required to pay the tax. This is not an occasion for sadness; it is an occasion for rejoicing. 1, being, perhaps, an innocent fellow, came into the Senate to-night thinking that we would all be as one on this matter, that the Opposition would be with us to a man. I thought that the Opposition would be saying, “ This is a jolly good thing. You have done something that we could not do when we were in power, and we give you full marks and full credit for it “.
Since honorable senators opposite do not say that, I, for one, congratulate the Government upon making the concessions. 1 concede that it would have been very nice to have more, but I realize that if the Commonwealth went out of this field entirely it would be only making the position more difficult for our people because the States would, with alacrity, go into the field which we had vacated. That would be a greater danger to the people. It is far better that we remain in this field of taxation, gradually making reductions wherever we can, having regard to all the other commitments of the Treasury in the fields of social services, defence, contributions to the States, war service land settlement and war service homes. All these avenues which require finance from the Commonwealth have to be taken into account when financial requirements are being assessed by the Treasury.
.- During my membership of the Senate, I have not seen any subject create greater public interest than the one we are discussing to-night. This night will go down in history as the night when the Australian Labour party foreshadowed an amendment that is more of a sham and a mockery than usual. I was particularly interested to note that the amendment was sponsored by ons member of the Opposition only. I am somewhat grieved to find that one of my distinguished and honoured friends on the opposite side, who for many years has made a great contribution to local government in Victoria, has not risen in his place to say one word in support of it. I regret that, unlike Government supporters, he has not taken the opportunity to record either his approval of, or opposition to, this measure.
Senator Kennelly, who foreshadowed the amendment, and speakers on this side of the Senate, have stated that this measure directly affects the finances of municipalities. For that reason, I want to devote a short time - I promise to speak for not more than an hour - to discussing some of the ways in which pay-roll tax affects municipalities. Lest there should be any misunderstanding on either side of the chamber, let me assure honorable senators that I mean every word I say. It is something of a disadvantage to the people of Australia that when laughter and interjections of a somewhat frivolous nature are thrown at people discussing serious subjects they are not always recorded. Honorable senators - whether they think this is a joke or not - may take it from me that this matter affects a great many municipalities in Victoria, and in other States also. I remind honorable senators that Victoria and New South Wales are making such tremendous contributions to the finances of municipalities in other States that they have every reason to be concerned about this matter.
– But you are not concerned now?
– My friend from Western Australia suggests that I am noi concerned about Victorian money going to Western Australia.
– Petrol tax does not.
– Apparently this honorable senator from Western Australia has never heard of the bridge across the Narrows and that Western Australians have suggested that the Victorian Premier should be invited to come over to open it. I suggest that Victoria and New South Wales have very good reasons for looking closely at any matter which affects the finances of municipalities. I was a member of a country municipality in 1941, when pay-roll tax was introduced.
– I should have thought that Senator Cooke would know his history better than to ask me that.
– Why were you a member?
– I am trying to hurry through my speech, but honorable senators opposite will not let me. I will gladly devote extra time to telling Senator Cooke what he wants to know. Pay-roll tax was levied in 1941 as a war measure for the purpose of providing child endowment.
– And has never done so.
– We shall discuss a little later whether that is so or not. When payroll tax was introduced it was - in common with all taxes - not welcomed with open arms, but at that time governments, semigovernment bodies, municipalities and every member of the community were engaged in an all-out war effort. For that reason, the tax was accepted. During my years as a member of a country municipal council I learned something of the frustration which confronts country councillors, in particular, year in and year out. In season and out of season they have never enough money to enable them to say that they have finished making a particular road. If they could seal a road it would end their worries for years, but such is their financial position, because of the limiting of grants for capital works, that they are forever carting material onto roads only to see it blow away. The process goes on and on and on, demonstrating the great need for more municipal finance.
Victoria is suffering more than is any other State. It has to contend with interstale transport passing from Western Australia to New South Wales. I am not suggesting that that is not a good thing for Australia, but I know the great havoc that these transports, quite apart from the average motorist, are creating on our highways. Any honorable senator who suggests that this is a matter for levity reveals that he does not really appreciate the problems confronting the country municipalities.
What of the city municipalities? I remind honorable senators on the opposite side of the chamber, who have not the great privilege of being Victorians, that our State accommodates 47 per cent, of all new Australians.
– Victoria takes them in, but it does not accommodate them.
– Day in and day out honorable senators on the Opposition benches rise in their places and ask for the unemployment figures in such and such a place - hoping against hope that they can build a case with which to taunt the Government. However, as times goes on, the figures indicate that the Government has the position well in hand. I repeat, 47 per cent, of all the new Australians who come to Australia go to Victoria.
– The honorable senator is merely repeating his statements.
– I do not wish to interrupt Senator Grant.
– It is a pity that somebody did not interrupt the honorable senator, who is saying the same thing over and over again.
– That is because-
– It is because you cannot govern the country.
– It is because I am trying to impress honorable senators opposite with the fact that this foreshadowed amendment is not what it may appear to be. Many of these new Australians go to the cities, so the city councils, too, are facing tremendous problems. They have to take water, electricity and sewerage to all the new housing estates. There is no need for me to tell honorable senators that there is a terrific lag-
– You have to see the light yourself yet.
– My friend interjects again. I remind him that in Western Australia, thanks to the abundant finance that that State receives as a result of the petrol tax - because Victoria is obliged to pay out a far greater proportion than it receives - not one shilling has to be paid locally towards the provision of private roads - not one shilling. I am sure that Senator Vincent from Western Australia, who is sitting on my left, would say that Western Australia does not like it either; nevertheless, it is true.
– Victoria is glad to give it.
– Victoria is big-hearted. But honorable senators should make no mistake about the matter. The time will inevitably come when there will be an end even to the big-heartedness of Victoria. The people of Western Australia do not pay one shilling towards the construction of private roads, but in Victoria the people are compelled by law to contribute. Therefore, I emphasize that this is not an occasion for levity; the matter before us is of great concern.
A very weak case has been made out by the Opposition to justify the amendment that has been foreshadowed. From the interjections of honorable senators opposite, one might be pardoned for thinking that this tax has been levied only by the Menzies Government. Pay-roll taxation was introduced in 1941, and the war ended in 1945. After the war, many municipalities - both city and country - appealed to the Labour Government that was then in office to amend the law in order to exempt municipalities from the tax, but their appeals were rejected. The level of exemption remained at £1,040 from 1941 till 1949. This Government, in the first Budget that it introduced after coming to office in 1949, raised the limit of exemption to £6,240. The bill now before the chamber raises the figure to £10,400. Expressed arithmetically, the level of exemption has been increased tenfold since this Government came to office eight years ago.
I suggest that this Government’s policy is serving the best interests of municipalities throughout Australia. Let us consider what could be the ultimate result of our acceptance of the amendment that has been foreshadowed on behalf of the Opposition. Surely honorable senators do not think that we on this side of the chamber are so naive as to believe that the municipalities would be better off if it were accepted by the Government. I am convinced that history would repeat itself - as it invariably does - and that, as Senator Anderson has mentioned, there would probably be a repetition of what happened after the Commonwealth vacated the land tax field. Overnight, certain State governments immediately invaded that field. It is true that initially the rate of land tax levied by the States was not as high as the federal land tax had been, but subsequently, in some instances, the rates were higher.
– That is true of Western Australia.
– The people of that State are worse off now than they were when land tax was levied by the Commonwealth. The same is true of the amusement tax.
– There is plenty of amusement here to-night.
– There appears to be plenty of amusement on the other side. What I have to say will be good, and it will be true. In fact, everything that I have said is true. After the Commonwealth abandoned the field of amusement tax, the States invaded it overnight.
– Not all of them.
– Of course, Western Australia did not invade that field, because that State is already getting our petrol money. Indeed, Western Australia is even talking about building a standard gauge railway with that money. As I have said, if the Commonwealth vacated the field of pay-roll taxation, I am sure that the States would do as they did in relation to the land tax and the entertainment tax. I think that the Government’s policy of gradually raising the limit of exemption is sound. Although nobody is particularly happy about the pay-roll tax, I think that the best interests of the municipalities will be served by the limit of exemption being progressively raised sufficient to preserve the municipalities from State taxation.
I believe that the foreshadowed amendment is a snare and a delusion, and when it is moved I hope that it will be rejected. If honorable senators opposite are really sincere in their desire to perform worthwhile service in the interests of the municipalities, I for one would support the making available of an opportunity at a future date for them to express their views.
– I have listened for some time to the debate as it has proceeded. There appears to be a misconception on the part of the Government in this matter. The Opposition is supporting the second reading of the bill. I emphasize that point. Successive speakers from the Government side have ranged over a variety of subjects, including amusement tax and land tax, not connected with the measure before the chamber. It is quite plainly seen that the Government, for some reason not connected with this measure, is seeking to prolong the debate and to stall the passage of its own bill.
– You have been looking into a mirror.
– Unfortunately I have, occasionally, and what I have seen has not pleased me. The Opposition favours this bill, and presumably the Government wants it to be passed. Therefore, in order to bring the matter to a conclusion satisfactory to both the Government and the Opposition, I move -
That the question be now put.
The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)
Majority . . . . 1
Question so resolved in the negative.
. -I am amazed that members of a political party that proposes an amendment to this bill are not prepared to get up and speak in favour of the amendment. Senator Kennelly is the only honorable senator opposite who has mentioned the pay-roll tax legislation. He spoke for only a few minutes, and at the end of the speech said that he intended at a later stage to move an amendment. The amendment that Senator Kennelly proposes to move in committee reads as follows: -
After clause 4, insert the following new clause: - “4a. Section fifteen of the Principal Act is amended by inserting after paragraph (ba) the following paragraph: - (bb) by a municipal or other local governing body, or an authority established for the purpose of carrying out all or any of the functions ordinarily carried out by such a body, otherwise than in the conduct of an enterprise which, in the opinion of theCommissioner, is a trading enterprise; ‘ “.
In other words, Senator Kennelly proposes that all local authorities throughout the Commonwealth be exempted from pay-roll tax.
It is interesting to note that after the inception of the act in 1941, when it was decided to make a charge of21/2 per cent, on all pay-rolls in excess of £20 a week, the exemption was not altered until 1953. In that year the Menzies Government increased the exemption from pay-rolls of or under £20 a week or £1,040 a year to pay-rolls of or under £80 a week or £4,160 a year. That was the first alteration. It is indeed interesting to note that when the Australian Labour party was in office, the number of employers, including companies, paying pay-roll tax, increased from 34,000 in 1943 to 59,000 in 1949. In 1953, when the Menzies Government increased the exemption to the figure that I have just mentioned, 88,000 employers were paying pay-roll tax. The number decreased to 74,000 in 1954.
– They had gone broke under your government.
– No. The people of Australia - the employers, the companies, the manufacturers, and the employees - have never been better off in our history than they have been under the Menzies Government.
– The honorable senator can say “ Rot! “, but if he takes any index he likes to look at he will find that my statement is correct. He can, if he wishes, look at some of the workers’ homes, find out how the occupants are getting on, and see what amenities they are able to provide because they have been under a good, sound, stable government.
– All sound and no substance, like an empty drum.
– If we look at any of the figures which are available to honorable senators and compare the conditions existing to-day in any family of workers with the conditions that existed when Senator Cameron was a minister, we will find that the people of to-day are at least twice as well off as they were in those days. You will find that virtually 90 per cent, of the workers of Australia to-day have refrigerators, washing machines and other such amenities. When Senator Cameron was a Minister only 30 per cent, of the workers had such amenities.
In 1953, the Pay-roll Tax Assessment Act was first amended, to increase the exemption from £1,040 a year to £4,160 a year. The number of persons or companies paying pay-roll tax decreased in the first year after the amendment from 88,000 to 74,000. I believe that was a step in the right direction. In 1954, the Government again increased the exemption, from £4,160 a year to £6,240 a year, or £120 a week. That was an increase of a little over £2,000 a year. This year the Government proposes to increase the exemption to £10,400 a year, or £200 a week. That is a remarkable achievement, particularly when we remember that in the seven years during which the Labour government was in office not one increase was made of the exemption limit. From 1953 to 1957 the number of persons or companies paying pay-roll tax has decreased from 88,000 to 23,000. That, too, is a remarkable record. Under a Liberal-Country party government, from 1953 to 1957 the number of persons or companies paying pay-roll tax has decreased from 88,000 to 23,000, while from 1943 to 1949, under a Labour administration, the number increased from 34,000 to 59,000. Under Labour’s administration the number increased by almost 100 per cent., whereas under the present Government’s Administration it has decreased by almost 400 per cent. I believe that is a record of which this Government can be proud.
The number of employers in Australia at present is about 200,000, but only 23,000 of them are paying pay-roll tax. By increasing the exemption limit from £1,040 in 1950 to £10,400 in 1957, this Government has not only exempted a large number of persons and companies from the pay-roll tax, but also has helped another group. In 1949, under a Labour government, when the exemption limit was £1,040 a year, an employer could employ the equivalent of two and a half men, assuming the average income at that time to be £8 a week, before he had to pay pay-roll tax. In other words, employers employing only the equivalent of two and a half men would be exempt from pay-roll tax. If such an employer increased his staff, he would have to pay tax at the rate of 2± per cent, of the amount of wages paid over £20, which was the amount those two and a half men would earn in one week. In 1949, under a Labour government, an employer, to be exempt from the tax, could employ only the equivalent of two and a half men, but on 1st October, 1953, when the exemption limit was increased to £80 a week, an employer - paying an average wage of £10 a week - could employ eight men before he became subject to pay-roll tax.
In the following year the exemption limit was raised to £6,240 a year, or £120 a week. On an average wage of £12 a week, in 1954, an employer could employ ten men before becoming subject to pay-roll tax. Taking the period from 1949 to 1954, the number of men an employer could employ before becoming subject to pay-roll tax increased from two and a half to ten. This legislation proposes to increase the exemption limit to approximately £200 per week. Assuming that the average wage to-day is £17 a week, an employer will be able to employ twelve men before becoming subject to pay-roll tax.
Many local authorities in Australia do not employ more than twelve men, so they will be totally exempt from pay-roll tax. Assuming that another large group of local authorities employs in the vicinity of 24 men, those bodies will pay in the form of this tax only 1 i per cent, of the total wages paid. It is of interest to realize that very few local authorities, particularly in country areas of Australia, employ more than 24 or 25 employees. I am not completely in accord with the idea of all local authorities paying pay-roll tax. I point out that this Government is making a very sincere attempt to progressively reduce the number of companies and employers forced to pay this tax. If this measure is agreed to, the number of taxpayers will fall to 23,000. So it will be seen that we have a very favorable record indeed. And doubtless it is the desire of the Government to abolish pay-roll tax eventually.
We know full well that the tax was introduced in 1941 for the sole purpose of enabling the Government to meet its commitment in regard to child endowment. Despite the fact that the number of exempted employers has been increased, pay-roll tax collections have remained almost constant. If we examine the figures showing pay-roll tax collections from 1941 onwards, we find that the collections have fallen short of the Government’s child endowment commitment to the extent of £8,000,000 or £9,000,000.
– The pay-roll tax was never intended to meet that commitment. It is not being devoted solely to that purpose.
– I never said that it was. I said that it was introduced for that purpose and that each year pay-roll tax collections have accounted for all but £8,000,000 or £9,000,000 of the Government’s commitment in regard to child endowment. I have said, too, that, after the passing of this bill, the number of taxpayers will fall to 23,000 and that it should be the ambition of the Government to abolish the tax eventually. I have heard honorable senators on this side of the chamber, but none on the other side, say that they thought it would be a good idea eventually to abolish the pay-roll tax.
– You have not enough courage to act according to your convictions.
– You may make a speech soon. I shall be very interested to hear what you have to say.
– If you believe in what you are saying, then vote accordingly.
– Would you like to rise and make a speech? We will listen to you for half an hour or so.
– He is not allowed to.
– I do not know whether he is allowed to speak or not, but I shall be very interested to see whether he does. No doubt he intends to rise and make a contribution to the debate. In certain circumstances, companies and other employers are paying pay-roll tax on a loss. I do not think that is a very satisfactory feature of the incidence of pay-roll tax. I believe that the pay-roll tax could be abolished.
– I believe in your creed, but I do not agree with the way you vote.
– You are interjecting again! Let us examine the situation to see what the abolition of this tax would cost the Government. It is anticipated that collections of pay-roll tax in this financial year will be £50,500,000. If we were to abolish the tax, in the ensuing year personal income tax and company tax would rise by £12,500,000. I have taken the rate of payroll tax as being 21 per cent., and on that 2i per cent. I estimate that the increased income tax commitment would be £12,500,000. It has been computed that the State Governments pay in the vicinity of £12,400,000 a year in pay-roll tax, which the Commonwealth gives back to them in the form of tax reimbursements. If we were to add to those two sums the sum of £900,000 that is paid by semi-governmental authorities in the form of pay-roll tax, and a further sum of £1,600,000 that is paid by municipalities throughout the Commonwealth, we get a total of £27,400,000. That means that, if the pay-roll tax were abolished, a further sum of £23,000,000 would have to be found from other sources to offset the loss of pay-roll tax revenue.
This Government recently reduced he rate of company tax by 6d. from 8s. to 7s. 6d. in the £1. That will mean a reduction of £14,500,000 in company tax collections.
– The Government added ls. and then took off 6d.
– The Government raised the rate by ls. in the £1 some time ago. I was saying that in the last Budget it reduced the rate from 8s. to 7s. 6d. in the £1. That is a reduction of 6d. in the £1, or 2i per cent.
– The Government raised the rate by 100 per cent, and then rebated it by 50 per cent.
– I never said anything about raising it by 100 per cent. You may rise later and tell us about how we raised it by 100 per cent.
– I am only trying to help you.
– I do not need your help. I repeat that company tax has been reduced from 8s. to 7s. 6d. in the £1 - a reduction of 6d. in the £1. That will mean a reduction of company tax collections amounting to £14,500,000.
– In two years it will have cost the Government £28,000,000!
– Do you understand that?
– What I am trying to tell Senator Cooke is that in this Budget-
– I know what you are trying to say, but you are making a bad job of it.
– What I am trying to tell Senator Cooke is that the Government has reduced company taxation from 8s. to 7s. 6d. in the £1 and that that will mean a saving of £14,500,000 this year to the companies concerned. If the honorable senator does not interject again, I shall proceed with my speech.
– You have made my point!
– I said earlier that only £23,000,000 remained to be accounted for. If we bring into account the sum of £14,500,000 to which I have just referred, approximately £9,000,000 remains to be collected to offset the loss of pay-roll tax collections. This year, income tax collections are expected to amount to approximately £465,000,000. So, if we raised the rate of income tax by 2 per cent., we would obtain the sum of £9,000,000 that would still be needed to offset the abolition of the pay-roll tax. Income tax would have to be increased by 2 per cent, and company tax would have to be raised from 7s. 6d. to 8s. in the £1 to meet the decline in revenue. I believe it is more equitable for a government to meet its commitments by way of income tax and company tax than to make a charge of 2i per cent, on pay-rolls above £10,400. Those are my thoughts on the pay-roll tax.
I believe that the Government will give consideration to some of the proposals that have been made to-night so that the way will be cleared to abolish this iniquitous tax. I do not wish to resume my seat, however, without congratulating the Government on gradually raising the exemption from pay-roll tax from £1,040 to £10,400 a year. As a result of this latest concession the Government will reduce the number of employers who have to pay the pay-roll tax from an estimated total of 88,000 in 1953 to 23,000 in this financial year. If a similar percentage decrease can be maintained by the Government for another two or three years,
I believe we shall be able to do away with the pay-roll tax entirely. I cannot support the amendment that has been foreshadowed by Senator Kennelly, and I support the bill as presented.
– in reply - It is all very well for the Leader of the Opposition (Senator McKenna) to say that the Opposition supports the second reading of the bill and believes that it should be given a quick passage. He conveniently overlooks the fact that the Deputy Leader of the Opposition (Senator Kennelly) decried the continuation of the pay-roll tax and in fact suggested that it should be abolished. He indicated that, in committee, he would move an amendment which, if carried, would have the effect of reducing substantially the revenue that is derived from the pay-roll tax.
– The figure quoted by the honorable senator was £1,600,000. If honorable senators do not consider that to be a substantial sum of money, we are losing our perspective as Australians. In the circumstances, the Government has allowed the debate on the bill to run its course for a reasonable time as it had some responsibility to do. Opposition senators cannot have it both ways. They cannot support the bill on the second reading and announce at the same time that they propose to move, in effect, to reduce the revenue that will be collected under the legislation. They have said, in effect, “ If we are elected to office as the government we will abolish the pay-roll tax and increase income tax “. When honorable senators make statements like that they must expect to stand up to them in debate.
I wish to refer now to the general statement by the Opposition that the pay-roll tax should be abolished, because a tax that yields more than £50,000,000 a year cannot be dismissed in that lighthearted way. Honorable senators opposite cannot just rise and say that if they were the government they would do something else and eliminate the pay-roll tax. I venture to suggest that if they were in office as the government again, they would do exactly as they did previously in similar circumstances. The weight of responsibility would descend squarely on their shoulders and they would collect taxes in much the same way as they did before.
I think it is proper that I should repeat the statement that Senator Kennelly attributed to me because it gives the view of the Treasury on this matter. The best estimate that the Treasury can make is that, all round, the pay-roll tax comprises 1.68 per cent, of the cost of goods. None of us likes to defend a tax. We would like to say that we would eliminate this tax, but the difference between the Government and the Opposition is that the Opposition can make such statements with rare abandon, but a government is unable to do so. Those who have said that the elimination of the pay-roll tax would result in substantial reductions in the prices of goods have to measure that opinion against the estimate of 1.68 per cent., which is the best figure the Treasury can reach in estimating the effect of this tax on costs.
If the pay-roll tax were eliminated and relief was not passed on to the public immediately by way of reduced prices, it is estimated that receipts from income tax would rise by £12,500,000, leaving £38,000,000 still to be made up from other sources to compensate for the loss to revenue resulting from the abolition of the pay-roll tax. It is well that we should keep these figures in mind, and pay a tribute to the Government for the progress that is being made through this bill - and has been achieved through previous measures - in reducing the level of the pay-roll tax and its incidence.
Question resolved in the affirmative.
Bill read a second time.
New clause 4a.
I move -
After clause 4, insert the following new clause:_ “4a. Section fifteen of the Principal Act is amended by inserting after paragraph (ba) the following paragraph: - (bb) by a municipal or other local governing body, or an authority established for the purpose of carrying out all or any of the functions ordinarily carried out by such a body, otherwise than in the conduct of an enterprise which, in the opinion of the Commissioner, is a trading enterprise;
– I rise to order. The point I take is that the honorable senator cannot move that amendment. It is, in truth, an amendment to section 15 of the act, and section 15 of the act is not before the committee. The committee cannot adopt an amendment to a section of an act when a bill that amends the general act contains no reference to that section, unless there is a specific direction from the Senate to the committee that that section, not mentioned in the bill, can be dealt with.
My authority is Standing Order 332, which says -
An Instruction can be given to a Committee of the Whole on a Bill to amend an existing Act, to consider amendments which are not relevant to the subject-matter of the Bill, but are relevant to the subject-matter of the Act. . . .
That, I suggest, is the position with this bill. The amendment seeks to amend a portion of the act that is not before the committee.
– A portion of the act, or of the bill?
– It seeks to amend a portion of the act, and the portion of the act that it seeks to amend is not the subject of any provision in the bill. I submit that the committee cannot do that at this stage because it has no direction from the Senate.
– The Minister relies upon Standing Order 332. The heading to Chapter XXIV. in which Standing Order 332 appears is, “ Instructions to Committees “. That deals with action taken in the Senate, not in committee. An instruction can arise only in the Senate and be passed on to a committee. That is not the position that we are in now. The Senate has issued no instruction. It has issued no prohibition. The bill is before the committee. The amendment that Senator Kennelly has proposed is completely relevant to the bill, and the Standing Order upon which the Minister relies deals with a matter that can originate only in the Senate. It is not exhaustive. It is not conclusive against the committee stage, and the amendment that is moved is to insert a new clause.
– An instruction must be obtained from the Senate.
– If the Senate takes the view that the committee should take certain action in relation to a particular matter, then the Senate passes a resolution; but that is not to say that when we are in committee a matter of this type, that is strictly relevant to the relief of taxation-
– It is not an amendment of the bill before the committee.
– I agree that it is not an amendment of a particular clause that already exists. It is proposed to insert a new clause. It is unquestionably an amendment of the bill. The Minister must see that.
My point, which I repeat, is that the Standing Order upon which the Minister relies is not exhaustive. It has no application whatever to proceedings in committee. It merely relates to proceedings that arise in the Senate when we are in the Senate, and accordingly has no relevance here.
– It is all to do with an instruction from the Senate.
– With an instruction. One has only to look at the heading, “ Instructions to Committees “. That is an instruction flowing from the Senate to this committee. In this case, the Senate has not seen fit to exercise that power; therefore this particular rule has no relevance whatsoever to matters that arise, for the first time, in committee.
In the second-reading stage, the matter was in the Senate, and reference was made to this amendment. That has probably caused the confusion. The reference was made by Senator Kennelly from a sense of fairness. He foreshadowed that in committee he would be moving this amendment, and debate, although not relevant to the matter before the Senate at all, was allowed to proceed in relation to the amendment. That created a confused position.
The fact is that the amendment was not before the Senate at all and strictly should not have been the subject of debate. Senator Kennelly, in fairness to all honorable senators, circulated his amendment in advance and foreshadowed that he would move it in committee. Accordingly, the Senate has neither given an instruction nor issued a prohibition in the matter. It is quite obvious that the Standing Order upon which the Minister relies has no relevance whatever to proceedings arising in committee.
Let me put this argument to you, Mr. Chairman: Suppose the Standing Orders intended to provide that the committee could not consider a matter of this nature unless so instructed by the Senate. I submit that the Standing Order would have said so. I point out, too, that there is no prohibition of that type contained in this chapter nor in the Standing Order to which the Minister refers.
– Then you take the view that in committee the Senate can amend any section of any act?
– Not the Senate. If the Minister will re-phrase his proposition, I might agree with him, but I could not accept that one.
– Is that not the proposition here?
– No. If the Minister will say that the committee can introduce an amendment to any section of any act, I could agree with him. The Minister said that in committee the Senate could do something. In fact, of course, it is in committee only, and a committee can do anything.
– That is what I mean.
– If the Minister’s proposition is that in committee this type of amendment can be moved, I do strongly support that particular proposition. There is no prohibition to which the Minister can point in the Standing Orders that prevents it. It is only when a direction is given by the Senate that the committee shall be bound in advance. That is clear from reference to Standing Order 333, in the same chapter, which says -
An instruction to a Committee of the Whole requires notice, and can only be moved before going into Committee on any question.
Surely that indicates that unless there is a delimitation upon the committee, the committee has a free hand. I argue that that is completely clear, Mr. Chairman, if you will refer again to Standing Order 333. The committee, in fact, can only be instructed after notice has been given in the Senate and the instruction can only be moved before going into committee. In other words, the committee is perfectly free to run at large through the bill.
– Through the bill, not through the act.
– Through the bill, and to incorporate a measure that is relevant to the subject-matter of the bill. What does the bill do? It provides relief from taxation. The whole purpose of the bill is relief from taxation. That is the whole purpose of it - not one particular form. Senator Kennelly is merely dealing with the basic principle of relief from taxation and is suggesting an additional form. I cannot imagine anything that would be more relevant to the basic purpose of the bill. The honorable senator is thinking of relief to taxpayers from a particular tax. What is the purpose of the bill, if not to relieve taxpayers of this tax? The bill says, “ Let us relieve these employers “. The amendment says, “ Let us relieve a few more “. How can Senator Spooner argue that that is not completely relevant to the basic principle of the bill? It is, of course, relevant. If Senator Spooner had wished to tie the committee to considering this particular matter he need only have complied with the Standing Order which provides that the Senate must have notice of a motion, or instruction; that the Senate itself must so bind the committee in advance. Very plainly, the committee is not bound by any instruction.
On the second point, as to whether what Senator Kennelly proposes is relevant to the bill, or to the act as distinct from the bill, I affirm the first proposition most strongly. What does it do? It seeks to relieve taxpayers in a particular way. All that Senator Kennelly says, having in mind that broad principle, is, “ Extend what you are doing a little more “. I could not imagine anything more relevant. Any suggestion to the contrary surprises me completely.
– I have no desire to become involved in a long debate on this point, and I am quite willing to accept the Chairman’s ruling cheerfully. The point was drawn to my attention, and I thought it interesting and sound. If I may re-state it in the way I see it, it is this: The committee has before it a bill which seeks to amend some five or six sections of the act. My point - and I believe it to be correct - is that this does not give the committee an opportunity to range over the whole of the act, which may have 500 sections, and amend any one of those sections. I suggest that the committee’s amendments must be restricted to sections of the act that are before it; that it can only go beyond those sections when it has the authority of the Senate, as distinct from the committee, to do so.
– Does the Minister claim that Senator Kennelly’s amendment has no relevance to the basic purpose of the bill?
– A very strong argument could be made out to support that contention, because this is a tax bill. Taxation consists of a series of refinements. It is not something that you deal with in a broad act, or in a broad way. You deal with particular sets of circumstances, putting tax on particular items, or particular levels of income, and so on. This bill proposes to exempt another level of employer from the incidence of the tax. The amendment says that we shall adopt a different principle; that we shall bring in another layer of people, under another section of the act, and cover them also. My point is that the committee may amend only the proposal contained in the bill; that it may not amend another portion of the act that is not before it.
– I submit that the point of order is not well founded, and refer honorable senators to Chapter XXIV., “ Instructions to Committees “. Standing Order 328 reads -
An Instruction empowers a Committee to consider matters not otherwise referred to it.
This matter of the reduction of pay-roil tax has been referred to the committee in its present form. Standing Order 329 provides -
No instruction can be given to a Committee to do that which it is already empowered to do.
I submit that the committee is empowered to amend a bill in relation to the reduction of this tax because it has before it a bill for that very purpose. There was no need for any instruction to be given to the committee, and, in fact, no instruction was given. The committee is merely exercising its power to amend a bill which is designed to reduce taxes - in this case, the pay-roll tax. To make the intention of the Standing Orders clearer, Standing Order 330 provides -
An Instruction may be given to a Committee to divide a Bill into two or more Bills, or to consolidate several Bills into one.
Such an instruction could have been given if it had been our intention to divide the bill into two or more bills, or to consolidate several bills into one. Such an instruction was not given. Our normal sense of duty, and our powers, permit us to extend or restrict the field of tax, when a tax bill such as this comes before us. We do not desire to divide or consolidate the bill, but merely to extend its incidence in this matter of reduction of tax. Therefore, I believe that the point of order is not well founded and that we have every right, as a committee, to amend the bill as it stands, and extend the incidence of the relief proposed.
– My first point is that, as Chapter XXIV of the Standing Orders alone deals with this subject of instructions to committees, it is fair to draw the inference that it is, in a sense, mandatory. The Leader of the Opposition suggested that Standing Order 332 did not exclude the present amendment, but was in some way elastic in its interpretation. I suggest that we must accept Standing Order 332 as mandatory in the sense that before an existing act can be amended - and this amendment proposes an amendment of an act - an instruction must, as a prerequistite, be carried by at least fifteen affirmative votes in the Senate. In other words, if Senator Kennelly wanted at the committee stage to move an amendment to the act, prior to the Senate going into committee he should have sought an instruction from the Senate to the committee, pursuant to Standing Order 332, and it would have been necessary for that instruction to be carried by fifteen affirmative votes. As Senator Kennelly did not take the precaution of obtaining the requisite instruction to the committee he is now. in a sense, out of court, because he has no jurisdiction to move the amendment. I quite agree that the amendment is relative to the act, but I think the gravamen of the matter is that although it is relevant, before he can move it he must obtain an instruction to the committee by the Senate. As that has not been done, I agree with the Minister’s contention that the present amendment is out of order. At the same time, I suggest that the amendment could be put in order very simply by being so worded as to amend the bill before the committee, not the act.
– I did not count on entering into a controversy with so much legal talent in the chamber. Let us look at the bill itself. It is a bill for an act to amend the Pay-roll Tax Assessment Act 1941-1954. That is the full title of the measure. Therefore, I suggest that it is in order for any amendment to be moved which is designed to amend the Pay-roll Tax Assessment Act 1941-1954. As that is what my amendment seeks to do, I fail to see that it is out of order.
– I submit that the amendment under consideration was submitted under Standing Order 201, which reads -
Any Amendment may be made to any part of the Bill, provided the same be relevant to the subject-matter of the Bill, and be otherwise in conformity with the Rules and Orders of the Senate.
I think you will agree, Mr. Chairman, that the amendment is in conformity with the Rules and Orders of the Senate, and that the only question you have to decide is whether it is relevant to the subject-matter of the bill.
Turning to the bill itself, we see that clause 4 refers to section fourteen of the principal act. Clause 5 refers to section sixteen of the principal act. Section 15 of the principal act is the machinery section which provides a general exemption. It reads -
The provisions of this Part shall not apply to wages paid -
And there follow a number of paragraphs enumerating the wages paid that shall be exempt from tax. Adverting to the words I used a moment ago - the subject-matter of the bill - I say that the subject-matter of the bill is to grant exemption to certain employers. There is no other section of the act that could be amended by the amendment we are considering. Accordingly, Mr. Chairman, I submit that you should rule that the amendment is in order.
– I think that, as a matter of relevancy, we should direct our attention to the measure now before the chamber. Two measures are mentioned. Clause 1 (2.) reads -
The Pay-roll Tax Assessment Act 1941-1954 is in this Act referred to as the Principal Act
And, of course, the bill before us, when passed, will become an act. The amendment that has been moved by Senator Kennelly refers specifically, not to this bill but to the principal act. The principal act is not at present before the committee. It is the bill to amend the principal act that is before the chamber. Senator Kennelly has not attempted by his amendment to amend the hill that is now before the committee; it purports strictly and exclusively to amend the principal act. If he wanted to do that, there is provision as to procedure, as Senator Benn has pointed out, in Standing Order 201.
– But cannot the committee consider the amendment?
– The procedure laid down is that if it is desired to amend an act, the necessary instruction shall be given from the Senate to the committee. No such instruction was given.
– Would the Minister call the addition of words to the bill an amendment of the bill?
– The amendment makes the position clear. It states, in part -
Section fifteen of the Principal Act is amended by inserting after paragraph (ba) the following paragraph: -
The- amendment does not touch the bill before the chamber.
– The Senate has before it a bill. If I wanted to add words, would that be an amendment of the bill?
– You may add words in two ways: You may get an instruction from the Senate to the committee, or move an amendment to the bill in committee. In this instance, there is no relevance in the amendment that has been moved by Senator Kennelly. On the contrary, the amendment seeks to amend the principal act.
– I feel that the argument is following a line that has never been taken before, that is, the narrowing of the Senate’s powers rather than the broadening of them. I think that Senator Benn proved relevancy when he quoted Standing Order 201. Let us look at what the Senate has done in the past, and the rulings that have been given. For instance, it has been held that-
Except where otherwise provided by the Standing Orders, any motion is open to amendment providing the amendment is relevant.
It goes on - and I think this is the important point -
Generally speaking, the Senate has followed the line that when there is a doubt it is better to allow an amendment to be proposed rather than limit the Senate’s powers and the opportunities for full consideration of a question by too narrow an interpretation of the relevancy rule.
I suggest that, very clearly, there is an equal division of thought, and it is certainly not clear under the Standing Orders that Senator Kennelly’s amendment is not in order. I suggest that the amendment is an amendment to a substantive motion, and the substantive motion is an amendment to the bill, because this is -
A Bill for an Act to amend the Pay-roll Tax Assessment Act 1941-1954.
Senator Spooner and Senator O’sullivan have suggested reversing the procedure of the Senate by narrowing rather than broadening the interpretation. I believe that we should err on the side of generosity and allow the amendment to be proposed and debated.
– Am I in order in speaking again? If so, I want to deal with what Senator O’sullivan had to say. The argument of the honorable senator, if I understood it, was that Senator Kennelly’s amendment purported to amend the principal act and not to touch the bill. If the Minister looks at the amendment that should be before him, he will find that he omitted the first and most significant line in the amendment, which is -
After clause 4, insert the following new clause: -
– From where are you reading?
– From the amendment that has been circulated. I point out to the Minister through you, Mr. Chairman, that, on the face of it, this is an amendment which proposes to insert in the bill a new clause which, as Senator Kennelly pointed out a moment ago, is completely relevant to the broad purpose of the bill, if one looks at the bill in the widest possible terms. The bill is described as “ A Bill for an Act to amend the Pay-roll Tax Assessment Act 1941-1954 “. lt is a bill to amend the whole act in the terms of that broad authorizing title. If the Government wanted to delimit the purposes of the bill, it might have added other words, such as “ in relation to exemptions “ or “ in relation to “ one particular aspect of relief, but it has not done that. It is an omnibus authorization. It is perfectly certain, and I think it is well understood in the committee, that no purpose other than that which is dealt with in the headnote “ To amend the Pay-roll Tax Assessment Act “ can be included, but when the headnote is as wide as that, what amendment is not possible? I refer the Minister again to the amendment which has been circulated in writing and ask him to commence reading at the beginning of the amendment moved by Senator Kennelly. He will find that, in fact, it does purport to amend the bill and not the act.
– I desire to raise one small point. I do not know if it will add to the discussion. The amendment proposed is an amendment of section 15 of the principal act which, of course, is expressly recited in clause 3 of the bill, which reads -
This Act is divided into Parts, as follows: -
Part III. - Liability to Taxation (Sections 12-16).
I think it is very difficult to exclude as being not relevant a proposed amendment to a section, which for one reason or another is expressly covered by a clause in the bill before the committee. The bill does not perhaps purport to amend that section, but the section is specifically referred to in it.
– It is put in issue.
– It is put in issue. I would say that that is, perhaps, a rather unusual recitation, which is included for particular reasons. It does present an opportunity, if there were no other ground that could be availed of, for anybody who wanted to do so to attack any of the sections that are there recited, although they are not recited for specific amendment in terms of the bill. I would say that if no other authority could be relied upon to warrant consideration of the amendment proposed by Senator Kennelly, we would be entitled to suggest that the broad reference to “ Sections 12-16 “, which includes section 15, to which the amendment is proposed, would warrant the amendment being considered, discussed, and finally determined by the committee.
The other point I make is in relation to Standing Order 201. I do not know exactly what is meant by the term “ amendment to the bill “. If new words are added to a bill, as is now projected, is that an amendment to the bill?
– Standing Order 332 states how it can be done.
– Yes, but Standing Order 201 makes no discrimination between what I shall call bills for originating acts and bills to amend principal acts. Standing Order 201 deals only with bills, and reads -
Any Amendment may be made to any part of the Bill, . . .
It does not state whether it is a bill to amend an existing statute or whether it is an originating bill. It gives a blanket power of authority to amend the bill. If the addition of words to a bill is an amendment to the bill, I submit that in terms of Standing Order 201 it would be in order.
– It has otherwise to be in order.
– I admit that it has otherwise to be in order. I submit that on the other ground this amendment is quite properly proposed.
The CHAIRMAN (Senator the Hon. A. D. Reid). - In reference to the point of order that has been taken by the AttorneyGeneral (Senator O’sullivan) on the amendment that has been moved, and replying to some of the arguments that have been used, I shall first deal with the matter raised by Senator Byrne, as it is in my mind at the moment. He referred to clause 3 of the bill, which contains the words and figures “Liability to Taxation (Sections 12-16)”. My interpretation of that clause is that it is only an index and does not refer to any amendment that may follow.
After listening to the argument and carefully considering what has been said, I am of opinion that the point of order raised by the Minister is well founded, on the grounds that he set out quite clearly. The bill, as it is before the committee at this stage, is to amend the Pay-roll Tax Assessment Act in certain respects. In the bill itself, an amendment of section 15 is not proposed, but such an amendment is proposed in the amendment which is before the committee. The Minister has pointed out - and I agree - that no instruction has come to the committee to deal with an amendment of section 15 of the principal act, which is not referred to in the bill. 1 uphold the point of order that has been taken, and rule that the amendment is out of order.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Debate resumed from 21st November (vide page 1415), on motion by Senator Spooner -
That the bill be now read a second time.
– The Opposition does not oppose this bill, but, of course, the discussion will range over all the sales tax bills that were introduced by the Minister for National Development (Senator Spooner). A number of interesting facts can be dealt with in considering the bill, and in the short time that I will take, I should like to point out the most interesting approach adopted by the Government when it described the loss that the Treasury will suffer because of the most generous concessions given to the public in reduced sales tax. The Minister said that the actual loss of revenue will be £4,000,000 per annum, or £3,000,000 in the current year. When we look back, we see that collections of sales tax for 1955-56 were approximately £110,000,000, and the estimated collections for 1956-57 are £130,000,000. In other words, the Government will collect an extra £20,000,000. Yet, at the same time and in the same breath, it blithely talks about a loss of £4,000,000. Those are the ideal losses to suffer, where, in losing £4,000,000, an extra £20,000,0000 is collected. That is what the Government is proposing in this bill. In its generosity, it is giving very, very little away. Whether or not inflationary tendencies are resulting in greater collections, there was an opportunity for the Government to be generous and not to make only the niggardly concessions that are to be made, totalling £4,000,000 in a complete financial year, while at the same time allowing total collections to rise by over £20,000,000 a year. I think all honorable senators will agree that sales tax imposes a very heavy burden. Admittedly this tax was introduced into Australia by the Scullin Government during a time of very great stress. The purpose at that time was to keep the wolf from the door. The Scullin Government thought that if it collected £3,000,000 a year, it would be doing well. I do not want to be bound to that figure of £3,000,000 but that is the figure that comes to my mind. Since 1930 the revenue from the tax has increased and this year it will be £130,000,000.
The sales tax is unfair because it falls on the spending public. The burden of sales tax is slight for a man of great wealth but it is substantial for people on small incomes. In 1955-56 sales tax collections amounted to £11 16s. per head of the population, and in 1956-57, with collections of £130,000,000, the figure was approximately £13 12s. per head. Applied to the average family of a man, wife and three children, that is a very substantial burden. In the current financial year, with the present rate of collections, it could amount to possibly £65 a year for such a family. The sum of £13 12s. which I have mentioned is the actual sales tax paid per head of population. But the sales tax is calculated before goods are sold to the retailer. The retailer, in fixing his price, works on the basis of a profit of 25 per cent, to 40 per cent, on the cost of the article to him, including the sales tax.
I would have thought that this was a year when the Government could have been generous, but it is showing exceptional meanness. It has decreased the rate of sales tax on household equipment, but, to my mind, it should have exempted such items entirely. The rate of tax on furniture and household equipment has been reduced from 10 per cent, to Si per cent. Even the meanest amongst us cannot accept that as a very generous gesture. The purchase of furniture and household equipment imposes a substantial burden upon the average family and particularly upon newly married couples. When a young man and a young woman marry and commence life together, they find when they seek to build and furnish their home that sales tax imposes a very substantial added burden on them. The immigrants coming to this country have to start from scratch to build their homes and furnish them. They, too, find sales tax a very heavy burden indeed. This tax affects every article in the home from the kitchen to the attic. It is imposed on the pots and pans and almost all of the things that are important in making a home a workable unit. As I have said, this was a year in which I would have thought the Government could approach the subject of sales tax with a greater degree of generosity than it has shown. I suppose in a matter such as this there is a school of psychology which say that one should be thankful for small mercies. The mercies are indeed small, and consequently the thanks are small, too.
Some substantial reductions have taken place, and it is most interesting to study them. The one thing that must not be applied to a study of sales tax is common sense, because any one applying common sense will become confused. That statement does not only apply to this Government. The advisers to the Labour government used to make some extraordinary recommendations in regard to sales tax. The tax on travel goods, baskets, evening bags and purses has been reduced from 25 per cent, to I2i per cent., which is indeed a substantial reduction, but I cannot possibly believe that those goods are as essential as are pots, pans and other aluminiumware needed in a kitchen. However, the Government has seen fit to make that reduction, which no doubt will make a lot of people happy. The people who manufacture those goods will be happy because the sales tax on them has been reduced.
I cannot understand why the Government has not reduced sales tax on radios and television receivers. Of course, the latter are not relatively as important as the former. The Government has exempted cathode ray tubes used in television receivers but has left the tax on the receivers at 25 per cent. A radio is now, I think, in the same category as a refrigerator, an oven or a stove. The Government should have reduced the rate of tax on radios. It has exempted from the tax the cathode ray tube used in a television set, but has maintained a tax of 25 per cent, on television sets. I cannot follow that reasoning. The end result is that the sales tax on television sets is substantially reduced, because the cost of the cathode ray tube accounts for a considerable portion of the cost of a television receiver.
– The cathode ray tube is subject to a pretty solid customs or excise duty.
– That duty was imposed for a special reason. I think it amounted to £7 a tube. If the Government saw fit to impose a solid excise duty of £7 a tube, why has it moved in the opposite direction and reduced the sales tax on these tubes? If the first impost was unwarranted, it should be withdrawn. If it was warranted, it should not be interfered with.
The Government has also failed to give relief to the Australian motor car industry, which has developed into a tremendously important industry. The industry is at present manufacturing motor cars up to world standard. In Adelaide on Monday, 19th November, Mr. Birrell, the Assistant State Secretary of the Vehicle Builders Union, announced that about 550 employees had been retrenched in the South Australian motor industry during the last three months and it was feared that more retrenchments would follow. He said that the employment position in the industry was the worst he could remember since the end of the last war. I know that honorable senators opposite will say there has been a substantial improvement during the last month. In my opinion, that is just a flash in the pan, but I hope I am wrong. I hope the motor car industry will be able to continue to increase its sales, which, I think, are a barometer showing the prosperity of the country.
I noticed from the published balancesheet of the Rootes Group, whose main product is the Humber car, that last year its consolidated net profit decreased by 88 per cent. I am not. going to suggest that all of that decrease was caused by the operation of sales tax. The industry is faced with other problems as well. However, I think that the main trouble in the industry commenced when the impost of 30 per cent, sales tax was imposed, I believe, last year. That was a very high rate of tax to apply to motor cars. I know that the Government has had representations from the industry and the employees engaged in it.
– It was to be only a temporary measure.
– When sales tax was introduced in 1930, it was supposed to be only a temporary measure. That is the trouble with these measures. I think the least the Government could do would be to reduce sales tax on motor cars to a reasonable level so that the industry may be lifted from the condition of near depression that it has been passing through in the last twelve months. Not one good balancesheet has been published in recent times by motor traders other than those who handle the Holden car. Almost every other motor trader, in particular those that handle English cars, has been passing through a very bad period financially. The imposition of a 30 per cent, tax has been one of the most important factors that have brought about that state of affairs.
Although the Opposition does not oppose the bill, it does not compliment the Government upon its approach to the question. We think that this is an occasion on which the Government could have displayed generosity, instead of which it has displayed meanness.
– I welcome the bill and compliment the Government upon the treatment it has given to a number of items that have been mentioned. I wish to deal at some length with some of the remarks of Senator Armstrong. He said, first, that pursuant to this measure there would be a loss of revenue of about £4,000,000. Then he twitted the Government on the fact that sales tax collections had risen considerably over the last year and had exceeded the Estimates. I point out that that was because of greater buoyancy in the nation’s economy. Eighteen months ago the Opposition said that sales tax would kill business, but it has done nothing of the kind. To the contrary, business has progressed, and sales tax collections have exceeded expectations.
Senator Armstrong also referred to the fact that sales tax fell on the spending public. That is true. But then ‘the honorable senator tried to prove that it fell on people in receipt of small wages, and he referred to a sum of £11 per head. At this stage, I think it is appropriate to examine the Sales Tax (Exemptions and Classifications) Act 1935-1951 to ascertain what products are completely exempt, and also to examine the exemptions that are contemplated in the bill now before us. It will be noted that sales tax on items that the average wage-earner procures is relatively light but that on articles that are not being bought continually by him it is heavy. To take a figure of £11 per head and to suggest that in a family of four, five or six persons the incidence of sales tax would be £44, £55 or £66, tends to be misleading. Division I. of the first schedule to the Sales Tax (Exemptions and Classifications) Act exempts completely agricultural machinery, implements, equipment and materials. It will be noted, therefore, that machinery that is used to produce foodstuffs and like commodities is exempt.
Other items that are exempt are as follows: Division II. - Mining machinery and equipment; Division III. - Irrigation, water supply, drainage and sewerage equipment; Division IV. - Fishing and pearling machinery and equipment; Division V. - Primary products; Division VI. - Foodstuffs, beverages and tobacco, with certain exceptions that I shall mention later; Division VII. - Drugs, medicines and surgical goods; Division VIII. - Fuel, power and light; Division IX. - Books, printed matter and paper; Division X. - Scientific, educational and religious goods, and works of art; Division XI. - Goods for use by governments, representatives of governments, and public bodies; Division XII. - Building materials; Division XIII. - Containers; Division XXIV. - Manufactures of small businesses; and Division XV. - Miscellaneous. Those exemptions have been provided for ever since the tax was introduced. They have been extended from time to time, particularly by this Government.
I think it would be well for the Senate to consider some of the new exemptions that are proposed in the bill now before us. The first item referred to covers fire-fighting equipment and fire protection apparatus, and parts and accessories for the maintenance of those goods. Chemicals used in fire-fighting appliances are also included. Industrial gases and cylinders of the kind used in the marketing of those important industrial gases are also to be exempt. Machinery, implements and apparatus used for the servicing, repairing or reconditioning of ships, boats, and railway rolling stock are included. Also included are foodstuffs put up for carriage as emergency rations on life boats. Non-alcoholic carbonated beverages containing not less than 5 per cent, by volume of juices of Australian fruits are to be exempt in order to give a boost to the fruit juice industry. Moreover, cathode ray tubes, to which Senator Armstrong referred, are to be exempt. The obvious reason for exempting those tubes from sales tax is that last year an excise of £7 per tube was imposed.
Senator Armstrong advocated the abolition or a reduction of sales tax on radios, radiograms and television sets. They are still regarded as being luxury items, particularly television sets, which cost as much as £200. Other important exemptions which should reduce the cost of goods to all consumers are steel strapping of a kind that is used to secure goods for marketing or delivery, seals for use with that strapping, corner brackets for use with wire strapping of a kind used to secure goods for marketing or delivery, and the small gauge wire that is used in the tying of packages. It will be noted that already there are exemptions of great magnitude, and that the approach of this Government is to add further exemptions that will reduce the cost of goods to consumers.
I pass on and refer to the fact that exemptions are to be granted to parts and fittings for bottles, jars, boxes, cases and crates for use in marketing non-alcoholic beverages. I submit that will be of assistance to the industry that uses fruit juices in the manufacture of non-alcoholic beverages.
The PRESIDENT (Senator the Hon. Sir
Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
– I wish to refer to a case of a soldier settler in Tasmania. I asked a series of questions on this matter, after I had been referred to the Director of the War Service Land Settlement Division, Mr. Colquhoun. After the Director and the Minister for Primary Industry (Mr. McMahon) had accepted the responsibility, and after they had put up a number of “ Aunt Sallies “, which I knocked over, they have tried to slip out from under in answering my questions by claiming that this is not a Commonwealth matter. They have stated that it is all a matter for the State. Consequently, I have submitted these further questions, and those concerned know that they cannot answer them without putting themselves further into the mire. The first question I asked was this -
Is it a fact that Mr. O’Shea, a soldier settlement farmer on King Island, was sold up by auction at the direction of the Closer Settlement Beard officers?
Mr. Colquhoun accepted responsibility for that when I met him in conference. I want that noted now. That does not indicate that this Government can slip out from under. I also asked -
Is it a fact that part of the debt owing by Mr. O’Shea was for superphosphate which was spread over the property and left for the benefit of the next settler?
There has been no attempt to answer that question. Again, Mr. Colquhoun accepted the responsibility. He has admitted that the superphosphate was charged to Mr. O’Shea and that Mr. O’Shea spread it over the property which was sold immediately afterwards. Therefore, I say that the Government is charging Mr. O’Shea for the superphosphate because it is in the account which he owed on the property. It has now been spread for the benefit of the next settler, who will not make any contribution towards the cost. I also asked -
What was the price paid by Closer Settlement Board officers for the dairy stock bought for Mr. O’Shea when going on the property?
Surely there is no harm in stating the price paid for the stock which was added to the price of the property when it was sold, because there is a tremendous difference between the price that was paid and the price that was received. This man was working under the guidance of these very efficient officers in the name of the Government. Another question was -
Is it a fact, as stated in an affidavit signed by Mr. O’Shea, that Mr. Handley, a Closer Settlement Board officer and Mr. Bergess, a district agricultural officer, told buyers on the day of the sale that Mr. O’Shea’s cows were diseased with mastitis?
Mr. O’Shea stated in an affidavit signed before a justice of the peace that those two officers had spread that information among the public at the sale. I have no doubt that the information was spread because in conversation with the Director of the Closer Settlement Board, that was not denied by him. He indicated that the stock had the disease. Mr. O’Shea has denied it. No Commonwealth veterinary officer inspected the stock before the sale or milked the cows just before the sale. A Commonwealth officer did milk them a year previously when Mi. O’Shea was away, but he did not at any time report the disease in the cows. At least there is nothing to suggest that he did so. By a peculiar coincidence, Mr. Handley, a Closer. Settlement Board officer, bought this stock himself for the Closer Settlement Board stockman. Of course there would not be a conspiracy there! There would not be anything corrupt in that, would there? Of course not. One would not expect anything of that sort from officers of such a high standard. That an officer of the board should make a statement that the stock was diseased, and then buy it for one of his own clan - one of the other officers, gives rise to suspicion in my mind and the mind of anybody who has studied this matter.
I also asked this question -
Is it a fact that Mr. Handley bought most of the stock for a Mr. Lynch, who was a stockman for the Closer Settlement Board?
A statement to that effect is contained in Mr. O’Shea’s affidavit and it is not denied by the Department of Primary Industry. I want to know whether Mr. Handley or Mr. Bergess will sign a similar declaration that nothing of the sort took place. Mr. Colquhoun asked for a declaration. I got one and nobody has signed anything to the contrary.
I also asked this question -
Is it a fact that Mr. O’Shea has a family of ten, is a repatriation pensioner and has less than £2 10s. per unit coming .into the home each week?
Will anybody on the Government side deny that? Government supporters can assess Mr. O’Shea’s income any way they like, and they will not be able to get it above £2 10s. a unit going into the home. If the Government is going to get the State to proceed against Mr. O’Shea it will have to penalize his children to get its way.
– Where does Mr. O’Shea work?
– At the scheelite mine. I have a signed affidavit about his earnings, the sickness he has suffered and the time he has spent in hospital.
I put this question also to the Minister representing the Minister for Primary Industry -
Is it a fact that if the Minister persists in garnisheeing Mr. O’Shea’s wages, Mr. O’Shea’s children will be deprived of food even though to-day they are managing on £2 a week less than the Government claims is necessary for age pensioners to live on?
The Minister did not answer that question, but there is an indication in the reply - and the Minister for Shipping and Transport, who represents the Minister for Primary Industry, should confirm this if he can - that the Commonwealth Government is pulling out after accepting all the responsibility. It is going to shift all the responsibility to the State, because I have correspondence from the State Government stating that this is a Commonwealth responsibility. I have correspondence from Mr. Driscoll, who is manager of the Agricultural Bank, stating that he was acting under direct instructions from the Commonwealth Government and nobody could override those instructions. He was the man who issued the instructions for proceedings against Mr. O’Shea. The Commonwealth Government has not denied that. The Minister was responsible for the instructions that the man should be prosecuted. No answers were given to those questions. The reply that I received to-day concluded -
On the information supplied, there is no reason to believe that Mr. O’Shea is not able to make an arrangement to liquidate his debt, and the Commonwealth has agreed that failing him doing so, the State Authorities should institute proceedings to recover the amount owing in accordance with the provisions of their law covering such cases.
Has the Commonwealth Government withdrawn the instruction to prosecute Mr. O’Shea? Is it leaving everything to the State authorities? If the State does not proceed, that is the end of it. If the instructions -have not been withdrawn, does not the Government consider that, as it has to wipe off £100 an acre on the Montagu swamp development to a total amount of £500,000, it could take into consideration the hardship this man has suffered, the size of his family and the effect of the prosecution if it is proceeded with? When the Government can spend millions of pounds in wiping ofl: debts in other directions, surely it can have a little human feeling and wipe off this man’s debt. Believe me; it will have to be wiped off sooner or later.
No answer has been given by the Minister to another question. Mr. O’Shea, acting on my advice, offered to pay 15s. a week. That was refused by the department. It wanted more and threatened to garnishee his wages. How could he pay more? I ask the Minister to explain how he could fairly or justly take more than 15s. a week out of this soldier’s present income.
Mr. O’Shea says he cannot settle his debts. I know the whole position. I listened to the debate that took place to-day on the Loan (War Service Land Settlement) Bill. I did not want to take part in the discussion, but I assure honorable senators that they would have been here until midnight if 1 had done so. And I am not finished with this matter yet!
I am asking the Minister to give me a concrete reply. Is this Government sliding out from under now? Is it passing the buck to the State? If that is the position, then I ask the Minister to give me a definite answer. I want some concrete evidence of the Government’s attitude. Is the Commonwealth prepared to meet three-fifths of the cost if the State will meet the other two-fifths? Is the Commonwealth prepared to do this instead of taking it out of the hides of young Australians who, because of the ruthlessness of either the Commonwealth or the State government, are faced with the spectre of malnutrition?
– Senator Aylett raises this matter on the adjournment as a result of answers he received to a series of questions to-day. He has pursued this matter consistently for some months. The answers which were given to him to-day made it quite clear that the State authority, as the administering authority, was the organization which might best be able to give him the information he sought.
The capital money for acquiring and developing farms and providing credit facilities for soldier settlers is made available by the Commonwealth. Conditions attaching to the grants provide that advances made to settlers can only be written off by the State with the concurrence of the Commonwealth.
– Do not forget that one - with the concurrence of the Commonwealth.
– With the concurrence of the Commonwealth! Obviously, if the Commonwealth has a financial interest in these matters, its concurrence is necessary.
Generally, the Commonwealth determines the policy but leaves the administration to the State. That does not apply only to Tasmania; it applies throughout Australia where soldier settlement schemes are administered by agent States. As a matter of policy, no endeavour is made to collect from settlers who vacate their holdings amounts owing if it is considered the indebtedness is due substantially to causes beyond their control, or if collection would materially prejudice their ability to maintain their families at a reasonable standard. The settlers are given 100 per cent credit finance, and it is reasonable to expect that they should apply themselves with diligence, and at least average efficiency, to making a success of their farms. There is no merit in writing off, as a matter of course, money owing by settlers who failed to grasp the opportunity given them, and whose income from positions they take after leaving their farms would permit of repayment over a reasonable period. The Government’s responsibilities as attaching to the expenditure of public moneys must be given due regard. That is a general statement.
Now let us have a look at the case of Mr. O’Shea. For a long time, I have maintained silence, out of deference to this man, when the matter has been raised by Senator Aylett from time to time. What sort of farmer was he? Did the farm allotted to faim give him sound prospects for success? It did, and the settler to whom it was allotted subsequently is proving so beyond any doubt whatsoever. The man who followed him is making a good fist of it.
Did Mr. O’Shea manage his farm with average efficiency? The major items necessary to make a success of this particular farm were to milk the cows, to apply superphosphate, to control breeding and to maintain structures. All these were neglected to some extent - the application of superphosphate and the control of breeding to a ruinous degree. Secondary growth was not controlled, some areas were ploughed and pasture was not re-established, and excess superphosphate was spread on limited areas while none was applied to others. A bull paddock was available, but the bull was allowed to roam with the herd causing uncontrolled calving which resulted in shortened lactation and reduced production, as well as difficulty in raising calves during winter.
Mr. O’Shea’s lease was cancelled by the State, which then took action, under its security documents, to recover amounts owing to it. The amount received was not sufficient to liquidate the debt.
The next question is: Can Mr. O’Shea afford to liquidate the balance of his debt by reasonable weekly payments and still maintain his family? Since the family left the farm, a car was purchased in the name of Mrs. O’Shea, the monthly payments being about £25. To this must be added the cost of running the car. From what we have been told here on several occasions by Senator Aylett, are we to assume that the car was purchased, and running costs met, at the expense of food and clothing for the children? If we are not to assume that, and as the car is now paid for, would it not be reasonable to expect him to meet his obligations to the settlement authorities rather than purchase a new car on terms? The Commonwealth has been advised that an order for a new car was, in fact, placed. Mr. O’Shea denies having ordered a new car, but he also omitted to make any mention of the fact that, despite his allegedly small weekly income, his wife had already been able to purchase a car on terms.
– Another new car? Make it clear as you go. Was it another new car?
– His wife had already been able to purchase a car on terms. That is the first car.
What are O’Shea’s weekly earnings? No one knows. His employers have refused this information. It has been suggested to Senator Aylett that Mr. O’Shea should provide some documentary evidence in the form of income tax returns, pay schedules from his employers, and so on, of his income since leaving the farm. All that has been received is a declaration dated 25th July, 1957, that his average earnings are approximately £42 a fortnight. I assume that this would exclude an amount of more than £11 a week which the family is receiving in pension from the Repatriation Department.
Much has been made of family illnesses. I believe these to have taken place, but they were all some time ago. It may be of interest to mention that the broken leg suffered by Mr. O’Shea resulted not from his efforts on the farm, but from his activities on the football field.
I sum up. This man contracted a debt through inefficiency, and there is obviously no reason at all why the public purse should be expected to subsidize inefficiency.
During the course of his remarks to-night, Senator Aylett implied that there was corruption. I can only suggest to him that he attempt to sheet home these charges of corruption against those officers who he believes - if he does believe it - have been guilty of corruption.
– I asked you whether it was a fact. You answer that. Is it a fact, or is it not?
– If Senator Aylett believes that they have in fact been corrupt, he has his remedy, just as Mr. O’Shea has. For a long time now, Senator Aylett has come into the Senate and made accusations not so much against Commonwealth officers as against State officers who are administering the scheme. He is not satisfied with my answer to-night and I invite him to take the action which will give him the satisfaction which he seeks.
Question resolved in the affirmative.
Senate adjourned at 10.50 p.m.
Cite as: Australia, Senate, Debates, 26 November 1957, viewed 22 October 2017, <http://historichansard.net/senate/1957/19571126_senate_22_s11/>.