House of Representatives
2 October 1922

8th Parliament · 2nd Session



Mr. Speaker (Hon. Sir Elliot Johnson) took the chair at 3 p.m., and read prayers.

page 2946

QUESTION

FRUIT POOL

Mr LAIRD SMITH:
DENISON, TASMANIA

– Has the Minister for Trade and Customs any information to give to the House about the formation of a Fruit Pool?

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– Yes ; and as my answer to the question will he lengthy, I ask leave to make a statement. [Leave granted.] The request was made to the Government by a national conference of fruit-growers which met in thiscity some weeks ago that we should again this year conduct a voluntary Fruit Pool. Subsequently the canners and processers of Australia made a practically unanimous request on the same lines. The Government is unable tosee its way to conduct a voluntary Fruit Pool on the terms on which that of last season was conducted. Last year, just before the harvest matured, the Government, at the request of the industry, and in special circumstances, undertook the conduct of a Fruit Pool, but this year thematter has been approached in sufficient time to enable us to make a very careful analysis of the fruit position.Ministers are of the opinion that there is at the present time an over-production of fruit. I do not say that there would be overproduction were the purchasing power of the world what it was in pre-war days, but there is, undoubtedly, over-production with the purchasing power of the world what it is now, and this is creating a very difficult position in Australia. Stimulated by the excellent prices obtained for fruit and jams and sauces under war contracts, the fruit-growers of the Commonwealth considerably increased the area under crop, and to-day they are faced with over-supplies abroad and a fully supplied home market. The United Kingdom is the world’s best market for surplus foodstuffs, and particularly for fruit. Confronted with these conditions, and at the unanimous request of growers and processers, the Government have consented to give financial assistance to the industry on certain terms. If the industry is prepared to set up an organization of which the Govern- ment can approve, and will relieve it of the task which we undertook last season, of not only financing the Fruit Pool but also of undertaking the handling of fruit for processing, of supervising the processing, and of marketing the product both in Australia and, overseas, we shall be prepared, should the Commonwealth Bank undertake the financing of a Pool, to back the Bank to the extent of the advances of which it may approve, and on such lines of fruit as it may approve. There is to be no’ compulsion in respect of the Pool. The fruit-growers and the processers have agreed to bend every effort unitedly to make a financial and business success of the undertaking. This will permit the selling of the fruit over a longer period. It will remove from a market that will be congested if the crop matures, as it is estimated to do, the fruit selected as suitable for canning, much of which would otherwise have to be sold as fresh fruit or for jammaking. The processers are unanimously of opinion that they are unable to handle the Australian crop in the ordinary course of business. I do not desire to pronounce definitely on the state of the fruit industry, and whether fruitgrowing should or should not be extended - thisis a matter for the growers themselves - but if the best fruit from the best trees in Australia is not now saleable overseas, there must be tens of thousands of acres producing fruit which no consumer in or out of Australia desires. Thus there is need for thenational stocktaking which was determined on by the Federal and State Governments, and the industry is asked to do all it can to see that the over-production of fruit is not continued. As the processers and growers have come together, and have stated that they are unable to handle the output of the coming season, and as the Government are desirous of preventing the fruit-growing industry, in which many returned soldiers are engaged, from meeting with disaster, either through panic-selling or the permitting of a crop which has cost much money to bring to perfection to fall to the ground, we are prepared to lend financial backing to the industry through the Commonwealth Bank, on such terms as the Bank may approve, and for the admission of such fruits to the Fool as the Commonwealth Bank authorities may determine after consultation . with the industry.

page 2947

QUESTION

TRADEIN COPRA

Mr PROWSE:
SWAN, WESTERN AUSTRALIA

– Last Wednesday, I asked the Minister for Trade and Customs whether he had observed an article in the Age newspaper pointing out that Australia had lost its trade in copra with the Pacific Islands; and, if so, whether he was taking any steps to remedy the matter, and retain the trade for Australia? Perhaps he is in a position to give an answer to the questions to-day.

Mr.RODGERS. - I have observed the statement referred to. The trade in copra between the Pacific Islands and Australia is mainly a redistribution trade. The consumption, of copra within Australia is limited to a very few lines. Its principal use here is for the manufacture of soap. Australia has not taken up the manufacture of margarine from copra, as have other countries. In the circumstances it is natural that copra exported from the Islands should find its way to such countries as use it in the manufacture of an article of food. The question involved is one of economics, which the Government cannot control. If it be found profitable to manufacture margarine from copra in Australia, then the trade in copra with Australia will be maintained. The Government cannot be expected to give a lead in this matter to private enterprise. I have said that the trade in copra with Australia is largely a redistribution trade, and honorable members will recognise that, where it is possible to carry the copra direct to the countries in which it is used, that course will be followed, rather than the method of exporting it through Australian channels.” I may further say that the Board of Trade has had this matter under, consideration for a considerable time.

page 2947

PAPERS

The following papers were presented : -

River Murray Waters Act - River Murray Commission - Report for year 1921-22.

Ordered to be printed.

War Precautions Act Repeal Act - Regulations Amended - Statutory Rules 1922, No. 135.

ADJOURNMENT (Formal).

Wheat Guarantee.

Mr SPEAKER (Hon Sir Elliot Johnson:
LANG, NEW SOUTH WALES

– I have received from the honorable member for Hume (Mr. Parker Moloney) an intimation that he desires to move the adjournment of the House this afternoon for the purpose of calling attention to an urgent matter of definite public importance, viz., “ The necessity for providing a guarantee of 4s. per bushel for the approaching season’s wheat.”

Five honorable members having risen in their places,

Question proposed.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– It was my intention to bring this matter under the notice of the House on the motion for the adjournment on Friday last, but so much time was taken up in connexion with the Prime Minister’s1 statement, on the Near East crisis that I was unable to do so. I shall put the case very briefly before the House, and it is one which I think will commend itself to honorable members. I submit the motion at the suggestion, or the instigation, of a great number of wheat-growers, not only in my own electorate, but elsewhere. I have already asked the Prime Minister (Mr. Hughes) several questions in regard to, this matter, but he has, up to the present, gone only so far as to say that he will place a suggestionbefore the Governor of the Commonwealth Bank, in order that he may agree to a guarantee of 3 s. 8d. per bushel, which would include handling charges, freight, and other incidental charges.

Mr Poynton:

– The same as last year.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Not quite; something more was guaranteed in. Victoria. The wheat industry is of so much importance that I feel justified in making such a very reasonable proposal. I have evidence from various sources which goes to prove that the cost of producing wheat to-day cannot be less than 3s. 6d. per bushel, if we take into account insurance, interest on land, and farmers’ wages, based on labourers’ wages, &c. If we add to that handling charges and incidental expenses, it will be seen that in asking for a guarantee of 4s. per bushel at railway sidings I am asking for barely sufficient to cover the cost of production plus incidental charges. Itwill, therefore, be agreed that the proposition I make is not an unreasonable one, and it will involve the Government in absolutelyno risk.

A Select Committee was appointed last year in New South Wales, and after studying the position from every aspect its members came to the conclusion that the cost of growing and harvesting a 14-bushel crop for the season 1920-21 was considerably over 4s. per bushel.

Mr Fleming:

– Who were the members of the Committee?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I believe that Sir Joseph Carruthers was Chairman, and the other members of the Committee were all men versed in agricultural matters. They found that it cost 4s. 4d. or 4s. 5d. to produce a bushel of wheat in the 1920-21 season. I therefore venture to say that I am not overestimating the cost when I say that wheat cannot be produced to-day in Australia at an average of less than 3s. 6d. per bushel. In the circumstances it will be seen that the proposal I put before the Minister is not an unreasonable one, and I hope that because of its reasonableness the Government will give it favorable consideration. Honorable members are seised of the fact that if the wheat-grower is to be encouraged to apply the best methods of cultivation, not only in regard to fallowing, but in regard to the selection of seed and the use of fertilizers, he should not be left to grope in the dark, but should be given some reasonable guarantee for the disposal of his crop. That is all that is asked for by those engaged in the industry. The desire amongst them to-day is to apply to the industry the best methods possible, and in order that they may be encouraged to do so, they should be given a reasonable guarantee. To show that encouragement of this kind is essential for this industry, and in fact for every industry connected with the land, I have only to remind honorable members that for some years past there has been a constant drift of people from the rural districts to the cities. To-day almost half the population of the different States are to be found in the great cities. Every honorable member will agree that that must operate to the detriment of this country. It cannot be said that honorable mem bers, on this side have been unobservant or this. Earlier in this Parliament, and now over two years ago, a motion was submitted from this side in favour of a guarantee to wheat-growers of 5s. per bushel at. railway sidings. So that we are acting quite consistently to-day with the attitude we have taken up on this question in all the wheat seasons from the beginning of this Parliament. I regret that the proposal we submitted on the occasion to which I have referred did not receive the support that it should have received. On that occasion our honorable friends in the Country party corner did not support us. The Deputy Leader of that party moved, in effect, that half the payment be made in certificates.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– And his suggestion was accepted.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Yes, because it was playing the Government’s game. I merely quote the fact to show that we on the Labour side have been consistent throughout the history of this Parliament. I trust that honorable members in the Corner will give us better support on the present occasion. To prove my assertion that there -has been a constant drift from the rural areas, I cannot do better than to quote official statistics contained in the most recent issue of the Commonwealth quarterly returns. Going back to 1915-16 - which, by the way, was the last year which saw a Commonwealth Labour Government in office - the total area under wheat was 12,484,512 acres. In 1920-21 - the last complete year in regard to which official particulars are available - the total area had been reduced to 9,072,167 acres; a decline of more than 3,000,000 acres.

Mr Fleming:

– When I quoted them, the Minister for Defence (Mr. Greene) said those figures were wrong.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– They are furnished by the Commonwealth Statistician, and they are undoubtedly correct. In 1915-16 the total yield of wheat over the Commonwealth was, in round figures, 179,000,000 bushels; in 1920-21, the total was just under 146,000,000 bushels.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– But the Minister for Defence has said that we are not to worry about that. The valuewas greater in the later season.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The great decline in production revealed by, that comparison is, indeed, a matter to worry about. Every one having the best interests of the Commonwealth at heart will agree that the reduction in acreage and total yield is a very serious consideration. There have been good rains over a great area of Australia. Speaking for my own division, we have had good rainfalls during the past week or so; but there are districts in the western portion of New South Wales where the position is still serious. A Commonwealth Government guarantee of 4s. a bushel would prove a marked incentive to farmers to get busy with late spring and summerfallowing.It cannot be said that our average yield is as good as it could be if all anxiety to the growers were removed. But our average is growing; and, with the practical form of Government encouragement which I advocate, Australia, before long, would rank among the foremost of the wheat-growing countries of the world with respect to its average yield. I hope that nobody will take a narrow view of this matter. The guarantee would be a good thing, not only for the man who is growing wheat, but for the man he employs. It would be a good thing also for the general community, because of the increased circulation of money. I remind honorable members of what took place when the New South Wales Labour Government guaranteed 7s. 6d. a bushel. They took office in about April, 1920, and I have a vivid recollection of the position at that time. There had been two years of very severe drought, and a most serious decline was threatened in acreage under the plough. TheCommonwealth Government had guaranteed 5s., but the New South Wales Government came forward and tremendously heartened the farming community with their guarantee of 7s. 6d. a bushel.

Mr Bamford:

– Which they did not pay.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– They paid every penny of it, and it saved very many men on the land. Immediately after the announcement of the State guarantee there was widespread activity among wheat-growers. One of the principalSydney newspapers sent a representative to the agricultural districts, and he tendered an independent and politically unbiased report to the effect that at least 750,000 extra acres had been put under wheat.The yield for that season was about 15 bushels to the acre, which meant, indirectly, the circulation of an additional sum of £6,000,000 or £7,000,000 in New South Wales alone. The effect of the State guarantee, as I have just said, was to put many wheat-growers on their feet, and the general community as well, as the man on the land profited. I do not think it is right for the Prime Minister only to say that he will see the Governor of the Commonwealth Bank about the matter. The Government should agree to this guarantee straight out, seeing that it will involve no risk, instead of throwing the responsibility on the Governor of the Bank. The Government should take this responsibility in the interests of a large section of our producers, upon whose welfare the community depends.

Mr PROWSE:
Swan

.- If the honorable member for Hume (Mr. Parker Moloney) had taken some action of this kind earlier in the session, it would have shown that he was really interested in the farming community of Australia. Perhaps he is not aware that the various farmers’ organizations of the wheatgrowing States have come together in a cooperative movement for a voluntary Pool this year after negotiations with the. Government and the Commonwealth Bank. Questions have been asked in this House as to the progress of the negotiations which have now been finalized. The only good purpose which the motion can possibly serve will be to persuade the Commonwealth Government to spring another 4d. per bushel, that is to say, instead , of a guarantee by the Commonwealth Bank of 3s.8d., it would be 4s. That would, of course, be very acceptable. The honorable member would have deserved more backing if he and his party had opposed the duty on sulphur, which, of course, increases the cost of production, and if they had opposed those heavy impostson agricultural machinery in the last Tariff. Had those duties not been placed upon the farmer, his position to-day would have been very much better than it is. I presume that if the Government were to spring. another 4d. per . bushel in the guarantee they would, want more Government control, and the farmer is averse to Government control in the disposal of his products. He wants to avoid this as much’ as possible. He feels, however, that the Commonwealth Bank, and, indeed, any other associated bank, could make a reasonable advance upon the security of his crop without any Government interference at all. If, notwithstanding’ the negotiations, and the decision of the conferences to which I have referred, the Government would agree to a further guarantee of 4d. per bushel, I should be very glad. I believe the Government would be quite safe in offering that guarantee; but I should much prefer a start, being made to remove the ‘shackles on primary industries in the form of high Customs duties The Government have already done something by removing the imposts on wire netting, traction engines, &c. I hope that, when the Income Tax Bill is before the House this week, honorable members will see to it that the farmers are not called upon to pay more than should’ ‘be justly demanded of them. They want to pay no more and no less than any other section of thecommunity. The farmers want to be independent. They do not want to be obliged, to go cap in hand to any Government asking for assistance in connexion with Pools, which would involve Government control. The idea that the Commonwealth Bank should guarantee a certain sum against the wheat harvest is a perfectly sound proposition. It should be remembered that hitherto no guarantee given by the Commonwealth in respect of the wheat-growing industry has cost this country a farthing, but it is rather singular that some time ago a Labour Government in New South Wales as an election cry offered’ an advance on the Commonwealth guarantee for that season. I do not know if I have been rightly informed, but I believe that, in order to make good that promise, the Government had to draw upon the public exchequer.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I think it cost the New South Wales Government nearly £2,000,000.

Mr.Parker Moloney. - Do you not think it. was a good investment?’ The offer was made after, not, bef ore the election.

Mr PROWSE:

– The promise, was made before, the election.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Nothing of the kind. It was made after the elections

Mr PROWSE:

– I took part in that election, and I know what I am saying.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– So did I.

Mr PROWSE:

– The promise was made before, but, of course, the legislation had to be passed subsequent to the election. As a matter of fact, that is the only instance of any wheat guarantee costing anything to the Government that made it. I hope this Government will be able to make the amount of the guarantee up to 4s. The state of the wheat market is still fairly sound, eo there would be no risk. If the increase were granted it would help the farmers to recover some of the additional revenue that is being extracted from them owing to heavy inir posts which the Government laid upon their shoulders in the Tariff.

Mr GABB:
Angas

.- In sup porting the request submitted by the honr orable member for Hume (Mr. Parker Moloney) I feel I am, doing something that will, substantially benefit the wheat farmers of the Commonwealth without, eo far as I can see, any risk to the Government. It is not often that I commend this Government for anything, but I must do so when I compare their attitude with that of. the Barwell-Ritchie Liberal Government in South Australia, which laid itself out not only to oppose the formation of a Pool in South Australia, but, with the Lawson Government in Victoria-, were leaders in the attack upon any proposal for voluntary or compulsory Pools in the wheat-growing areas of the Commonwealth, Comparing the action of one Government with the other, I again commend the Commonwealth Government for having seen their way clear to grant the guarantee of 3s. at railway sidings to the wheat-grower. I hope they will be able to increase the guarantee to 4s. I make this request in the first place because, according to figures from different sources, one may safely, say that the cost, of growing wheat is about 3s. 6d. per bushel, reckoned on an average, crop of 14 bushels per acre of fallowed land. I am not stating just my own opinion; I quote in support of that statement the opinion of Sir Joseph Carruthers, a man of whom honorable members opposite will probably take some notice.He is reported in the country press of the 22nd September as having said -

I am of the opinion that at the present time the average rate for growing and harvesting a 14-bushel crop will not exceed £2 12s. 6d. per acre, or 12s. 6d. per acre less than the costs under the existing conditions, 1920-21, or about 3s. 8½d. per bushel. This cost includes fallowing, insurance, and the farmer’s wages, based . on the labourer’s wage, as indicated in the Committee findings.

The Committee to which he referred was a Select Committee on agriculture appointed in New South Wales early in 1921, and of which Sir J oseph Carruthers was chairman. He stated why wheat can be grown cheaper than 3s. 8½d. per bushel in certain places, and mentioned that it was grown cheaper near Wentworth, and in the Victorian Mallee country, where the land was cheaper and the cost of sowing the crop was less. He summed up his conclusions in these words -

On the whole, I am inclined to the opinion that under now existing conditions the average cost last season has not exceeded 3s. 6d. per bushel on fallowed and properly cultivated land.

In his opinion, 3s. 6d. just covers the actual cost of production, and if the Government will increase the guarantee to 4s., they will be rendering good service, particularly to the struggling farmers in the newer districts.

The second reason why I think the Government should increase the guarantee is that in my opinion they will not be taking any great risk. I read in this morning’s newspapers that, unfortunately, the wheat crop in France has failed to a certain extent, and that in the coming year France will have to import large quantities of wheat. Ihave also read the wheat reports from other parts, and one may safely say that there will not be more wheat available this year than was available last year, and that the market may be expected to remain practically as last year. I have taken from the South Australian Register, which, represents the merchants, the following list of prices for wheat in trucks at Port Ade laide or outports offered by them to the farmers during the past season: - 14th November, 1921, 4s. 7d. to 4s. 8d. 28th November, 1921, 4s. 6d. to 4s. 7d. 14th December, 1921, 4s. 9d. to 4s.8d. 28th December, 1921, 4s. 9d. to 4s.10d. 14th January, 1922, 4s. 8d. to 4s. 9d. 28th January, 1922, 4s. 8d. to 4s. 9d. 14th February, 1922, 4s.11d. to 5s. 28th February, 1922, 5s. 3d. to 5s. 4d. 14th March, 1922, 5s. 3d. to 5s. 4d. 28th March, 1922, 5s. 2½d. to 5s. 3½d. 14th April, 1922, 5s. 4½d.to 5s. 5½d. 28th April, 1922, 5s. 4d. to 5s.5d. 14th May, 1922, 5s. 6d. to 5s. 7d. 28th May, 1922, 5s. 7d. to 5s. 8d. 14th June, 1922, 5s. 4d. to 5s. 5d. 28th June, 1922, 5s. 4d. to 5a. 5d. 14th July, 1922, 5s. 4d . to 5s. 5d. 28th July, 1922,5s. 5d. to 5s.6d. 14th August, 1922, 5s. 3d. to5s. 4d. 28th August, 1922, 5s.1d. to 5s. 2d. 14th September, 1922, 5s.1d. to 5s. 2d. 28th September, 1922, 5s. 4½d.to 5s. 5½d.

One may safely infer that similar prices will be paid this year. I find that the average of the higher figures quoted for the twelve months is 5s. 2d.; allowing am average of 6d. per bushel for ‘ freight and handling charges, the average return to the grower from the private merchant was 4s. 8d. per bushel. The voluntary Pool in South Australia has up to the present time paid 4s.11s. per bushel, which, less 6d. for freight and charges, leaves an average return to the farmer of 4s. 5d. per bushel. But another payment has yet to be made, and I hope that it will be at least 3d. If that expectation is realized’ the return from the private merchant and the voluntary Pool throughout the whole period will be practically the same. I find that there is a tendency for a farmer to compare what he received from the Pool with what a neighbouring farmer obtained from a private merchant. That is not a fair comparison. In one district a comparison may be made with advantage to the Pool, and in another district to the advantage of the private merchant. The only fair comparison, is to take actual prices quoted for the State for the year, and average same. On the eastern side of the Murray River I met farmers who received 3s.10d. at railway siding for their wheat. This compares badly with Pool return to date, of 4s. 5d. net . I am hopeful that when the last payment from the Pool is made it will bring the average return from that source to about the level of the price paid by the private merchant. But that is not the only way in which to , sum up this matter. The grower must consider what price he would have received from the private merchant if there had been no Pool. I am confident, on the experience of the past, that if there had been no Pool the farmer would not have received such good prices from the private buyers, and there would not have been that keen sympathy between the wheat markets in Australia and the markets in other parts of the world. No doubt the merchant this year has worked on a finer margin of profit than usual, so as to try to defeat the Pool.

My third reason for this request is that the increased guarantee will be of the greatest advantage to the farmer in the newly-settled areas - the Mallee farmer, for instance. I particularly request this help for him, because of all the wheatfarmers on whom the Tariff presses heavily, it is most burdensome upon the Mallee farmer, the country being so rough and full of stumps that his machinery depreciates more rapidly than does machinery in older-settled and more favorable districts. We also have to remember the tremendous disadvantage he is under in having to haul wheat over roads that are mostly of a sandy nature. I ask the Government to agree to the proposal, because the cost of production is very, high to-day, because I can see no risk in granting 4s., and because I believe that the additional guarantee would be a decided advantage to the farmers in the newer areas, who deserve allthe help that we can give them.

Mr GREENE:
Minister for Defence · RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– It is a little amusing to hear honorable members opposite raise this question. Apparently, they are very anxious that the farmer shall make a profit on his crop, but, one and all, they nave signed a platform that aims at the socialization of industry, under which everybody would have to work for the benefit of the community, and nobody would receive a profit at all.

Mr Gabb:

– Do you think that this proposition would be in the direction of the socialization of industry ?

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– No.

Mr Gabb:

– That is where you are wrong.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– If I so regarded it, I would have nothing whatever to do with it. Evidently, the honorable member is advocating it merely because he sees in it a step towards the socialization of industry, and the realization of his hopes when the farmer will have to work to keep the rest of the community going, and have no profit for himself. After all, there is in this extraordinary desire to help the farmers at the present time some echo of the coming elections.

Mr Gabb:

– Like your taxation proposals.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I shall put the question from the Government stand-point, as I see it. The proposal for the guaranteeing of the wheat crop had its origin in the war period, when extraordinary circumstances made it desirable that some means should be found for paying the farmer for a crop that it was perfectly patent to everybody he could not sell and get the money for at the time. Consequently, the Government came forward with a definite guarantee of so much per bushel. That, to all intents and purposes, was a definite purchase.

Mr Maxwell:

– Because the Government were responsible for the sale of the wheat.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The Government, through the Wheat Board, became responsible for the sale of the crop, and the net effect of the arrangements made at that time was a purchase of the wheat from the farmer and the sale of the crop by the Government. The operations then carried on demonstrated to the farmers what it was possible for them to do by co-operative effort. When the Government appealed to the electors on the last occasion, they made the very definite statement that, whilst they were not prepared to carry on the business of wheat buying and selling, they were ready to assist great co-operative movements amongst the primary producers of Australia to enable them to obtain the best possible price for their products in the world’s market.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– You guaranteed 5s. at election time.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The whole object the Government had in view was to get away from definite trading operations, and substitute co-operative enterprise among the primary producers. It is along those lines that the Government are trying to steer the movement amongst the wheat-farmers. We believe, and believe very strongly. that co-operation oan do a great deal to assist the primary producers.

Although the Government stated last year that they would have nothing whatever to do with a compulsory Pool, they were prepared to assist in the financing of a voluntary Pool, provided the farmers wished to take advantage of it. In two States the farmers availed themselves of that assistance, and in the other wheatgrowing States other arrangements were made. I understand that this year the wheat farmers throughout Australia aire making provision for the establishment of voluntary Pools. That will not,, of course, prevent any individual farmers from selling their wheat on the market for whatever price they choose to take for it. On the other hand, the farmers are perfectly free to combine and form a voluntary Pool, so as to obtain for their crop the uttermost farthing that that arrangement will afford.

Mr Maxwell:

– If that is a sound business proposition, why does it require Government assistance?

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The financial backing required for shifting the wheat crop of Australia is so great that at present the fanners, unaided, aire unable to make the necessary arrangements. On page 547 of Hansard of this session honorable members will find the Government’s proposal very definitely set out by the Prime Minister (Mr. Hughes), and ton page 2155, in answer to a question by the honorable member for Hume (Mr. Parker Moloney) will be seen the Prime Minister’s statement of the present position. We have told the Commonwealth Sank that if voluntary associations are formed, and the great co-operative movement amongst the farmers comes tq fruition, the Government are prepared to guarantee the Commonwealth Bank in respect of any advance which the Bank in its wisdom thinks right to make under the circumstances. I wish to draw a clear distinction between this proposal and the financial arrangements entered into during the war period. In those days the Government made what, to all intents and -purposes, was a definite purchase. The present proposal is not to purchase the wheat at all, but we shall try to see that the producers entering the Voluntary Fools shall have sufficient financial backing to enable them to meet their urgent financial obligations, whatever they may be, in order to hold their wheat, so that they may finally obtain the full price. We are leaving the buying and selling of the wheat in the hands of the organizations of the farmers themselves. We say that we shall guarantee an advance to them of so much money as will enable them to meet their present financial obliga-tions, and hold their product so that they will eventually get the best possible price for it. That is the basis of the arrangements which we are making.

Mr Gabb:

– Is the responsibility for fixing the price on the Commonwealth Bank?

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The responsibility is on the Commonwealth Bank, in conjunction with those voluntary organizations, to come to an arrangement which, in all the circumstances, is fair.

Mr Maxwell:

– But you fix a limit?

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The matter has been discussed with the Commonwealth Bank, which has come to the conclusion that a fair advance is 3s. 8d. As I say, I believe that that, advance is sufficient to secure the purpose which the Government have in view. It has no relation to the ultimate price which the farmer will get.

Mr Prowse:

– Will you take the duty off sulphur?

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– At the present moment I am not dealing with brimstone, but with wheat. I may say, however, that I do not suppose, even if the whole of the sulphur duty were passed on to thefarmer, it would make a difference of Id. per acre to his wheat. I am quitesure, from the arrangements that havebeen already made, that this’ will not be passed on to the farmer at all. However, even if it were all passed on,<?it would not, as I say, make a difference of Id. per acre, while, incidentally, the farmer will be given a security within Australia that otherwise he would! not have. One other matter was mentioned by interjection by the honorable member for Cowper (Dr. Earle Page), whom we are all glad’ to see back after his adventurous trip in the north. The honorable member for Hume (Mr. Parker Moloney) referred to soma figures which he said indicated the way in. which men are leaving the country for the cities. Those figures are not indicative of any such thing.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Not wholly. I did not say wholly.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Everybody knows that the enormous increase in production which took (place in the years 1915-16 and 1916-17 was due to a special cause. If we compare the figures of those years with the figures for the years 1910-11 and 1911-12, we see that there was a special cause, and, as I say, we all know what that cause was. It was a great patriotic effort made by the farming community of Australia to meet the demand of the Empire for foodstuffs; and hundreds of thousands, aye, millions, of acres were rushed into wheat at that time, without fallowing, in order to meet the pressing necessities of the war. Immediately the war was over, and conditions became normal, the farmers went back to exactly the same old way of putting in the fallow and ploughing their land in preparation for next year’s crop; and so there was a retardation of increase that was perfectly natural. -I noticed in the press, a week or two ago, a paragraph stating that in the State from which the honorable member for Hume comes, there had been this year a very marked increase iti the acreage of land’ -put under, wheat. In Western Australia also there has been an immense increase; and I venture to say that, when the statistics for this year are produced, it will.be seen that there is a considerably greater area under wheat than there was the year before. That is to say, we have got back to a normal condition of affairs, and gradually each year, having- due regard to the seasonal changes which it is impossible to get away from in a country like Australia, we shall find an enormous expansion of agriculture, particularly in wheat.

It is not necessary for me at this moment to say more. The Government have had this matter under their serious consideration for some time past, and stePS are being taken with the definite aim of endeavouring to assist and encourage a great co-operative movement amongst the primary producers of Australia, such as I believe will make for their definite good and ultimate advancement. I have always been a great advocate of that class of co-operation; and when it presents itself, as it does in this case, in its higher form, the State is perfectly justified, not in taking the management and control out of the hands of the producers themselves - I do not stand for that, nar does the Government - but in giving such financial assistance as the circumstances may warrant, and thus enable them to carry their efforts to fruition.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

.- I am sorry to see the Minister (Mr. Greene) resume a very bad former habit of his when he desires to be humorous. It ill- becomes a Minister, especially one in the fine position that the honorable gentleman has earned by his own efforts, to contract a habit of that kind, for the subject is one too serious to call for jokes, or for gibes at the “ Socialism “ that may be involved.. It was the bad management of this Government that helped to create the evils in the wheat industry. Some 5,000,000 bushels of wheat have disappeared’: - most of it ‘ stolen, and yet ho man is in gaol in consequence.’ In spite of his gibing, the Minister knows that the world is approaching Socialismsthat even England, forced by the’ war, has been compelled to bring about by means of taxation the breaking up of huge estates. I defy the Minister, however, to propose to interfere with the Socialism of the Post Office- VI defy any one to. interfere with that Socialism. What we all desire is the greatest good for the greatest number in Australia, and I believe that in his. heart the Minister is as much in unison with that idea as I or any other ‘honorable member on this side of the House. Let us see what- the position was before the Government took up the matter, and applied the socialistic idea. Had the Government not stepped in at that time, what would have happened ? Three or four of the great wheatbuying companies of Australia would have bought enough wheat from the farmers for local consumption, and, as for the rest of the wheat, would have bought what suited them. The farmers could not have sent the wheat to the seaboard:; and perhaps these wealthy companies would have bought it at ls. per. bushel, as they had done in the past when the farmers were compelled to sell. The farmers, if’ the Government had not stepped in, would not have received the great amount of money they did. That result was brought about by the Government stepping in, assuming control of the industry, and obtaining ships to send the products abroad.

Mr Richard Foster:

– Do you know that is what the great wheat-buyers asked the Government to do?

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– I do not, but I know they would ask’ anything, even from the devil himself, that would fill their pockets. If they did do so, was that not after they had bought some wheat?

Mr Richard Foster:

– No; they had not bought a bushel.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– Was it not after they had purchased large quantities at high prices, and when there was likely to be a slump? Was it not then that they applied to the Government?

Mr Richard Foster:

– No; they would not touch a bushel.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– Well, it is a pity they did not act with the same generosity seven or eight years before. Whether it be called socialistic or not, I wish to see the Government assist the farmers, and I may say that no member of this House has given so many votes as I have to help the man on the land. During the thirtythree years I have been in political life, I have always done my best to assist the farming community, and if honorable members will peruse Hansard they will not find a single instance in which I recorded a-vote against the man on the land. I want him to get his land for nothing, because extensive settlement means that the railways will be fully occupied in bringing the products of the farmer to the sea-board and taking back those articles which he requires on his property. Some time ago, I asked the Government to make the fullest possible inquiries concerning a wheat known as Yeoman, which, according to experiments conducted at the Cambridge University, showed the enormous return of 96 bushels per acre. I was anxious that the fullest information should be made available, so that our Australian farmers might benefit and the Minister at that time made many inquiries throughout Australia, and ascertained that only in Western Australia has the “Browick” and “Red Fife” variety, of which the Yeoman is a hybrid, been tried. This wheat has given good results in the cooler climate of Great Britain, in which country, as agriculturists very well know, there have been some enormous returns. Denmark, of course, holds the premier place for wheat production) in Europe. I am glad to be able to inform honorable members that, following upon the satisfactory results from the use of “Federation” wheat, which has been the means of providing millions for Australia, there is another wheat known as the “ Minister,” which was first produced by Mr. H>. Pye-, and which, I understand, has won lie Australian first prize for wheat. Although the Government have authorized that autocratic Governor of the Commonwealth Bank to render financial assistance to the extent of 3s. 8d. per bushel, I think they might be prepared to increase the amount to 4a Honorable members, particularly those engaged in farming, as well as every other man who has a son or relative -engaged in wheat-farming, are indebted to the honorable member for Hume (Mr. Parker Moloney) for bringing this matter before the House. His action was justified, if only for obtaining from the Minister for Defence (Mr. Greene) the statement, with the exception of the first few sentences, which he has just made. If Socialism or even antiSocialism will help this country, I trust the Minister will not take up the lance as he did when he commenced to reply to the speech of the honorable member for Hume, and that if he. sees any means whereby the farming community can be assisted, he will use his best efforts, in that direction.

Mr ROBERT COOK:
INDI, VICTORIA · VFU; CP from 1920

– I trust the Government will be able to see their way clear to advance the additional 4d. per bushel, although what we really require is a system of rural credits, so that wheat and other producers may be financially assisted without having to come’ cap in hand to the Government. I understand that an advance of 3s. 8d. per bushel is to be made only in the event of shipments being made by the Commonwealth Line of Steamers. If that Line is charging as low a rate as other companies, it should be given preference, but not unless, I also understand that the Bank is only prepared to make advances through, approved agencies, and I do not think it right for such conditions to he submitted, particularly as there is a possibility of others even more objectionable being imposed. Those whose product is concerned surely should have a voice in the appointment of agents, and it is a matter of serious consideration for the primary producer to get away from the question of Government backing as early as possible. In connexion with the suggested additional advance, it should be remembered that a single penny has not been lost by the Government up to the present on previous advances, and there is not likely to be any losses .in the near future, as the world’s wheat market for the coming season is likely to be very sound. In handling the wheat crop the Commonwealth Bank will have a good asset, and is not doing any more than any proprietary bank would be prepared to do. Considering all the circumstances, and the necessity of fostering the industry, I trust the Government will see their way clear, not only to grant the extra 4d., but also to remove the conditions which at present accompany their acceptance of the proposal.

Mr FENTON:
Maribyrnong

.- The wheat producers, although combined ito carry out their own handling and export arrangements, have to seek Government backing, because, in common, with other primary producers, they are .up against the big financial agencies, whose shareholders in the past have pocketed all the profits at the expense of the producers. The Prime Minister (Mr. Hughes) gave a striking illustration of this when he said that Lord Inchcape had stated that it was impossible for the steamers under his control to compete against a Line controlled by a Government. I was surprised at’ the Minister for Defence (Mr. Greene) endeavouring io get in a cheap gibe in regard to the socialization of industries, because he west on to point out what the Government intended to do in connexion with wheat export, and if the Government do not, intend going to the full extent in the matter of socialization, they are at least going some of the, way. I can claim to have had some little experience with the cooperative efforts of primary producers, and I remember what was said when I was endeavouring to get the dairy farmers to organize. Some of the crusty butter factory managers whom I was trying to convince that co-operation was in their interests said, “ Why, Fenton, this is a phase of Socialism.” I replied, “What odds if it is?”

Mr ROBERT COOK:
INDI, VICTORIA · VFU; CP from 1920

– It is a sound phase.

Mr FENTON:

– What is the difference? It is a phase of Socialism, and the Government are standing behind a cooperative movement. The farmers rightly say that they wish to handle their business in a co-operative way. We want the producers and the purchasers to work together to reduce the distance between them and so cut out the middlemen. It is socialization of industry. No doubt there will be a considerable amount of gambling in respect of the forthcoming wheat harvest. Private firms will make big offers for the sole purpose of trying to break down the co-operative movement. Therefore, I am pleased to see an otherwise exceptionally Tory Government standing behind this Socialistic movement, instead of standing by the big wheat agencies, such as Dalgety and Company, the New Zealand Loan, Dreyfus Brothers, and others who used to buy the wheat from the Australian farmer and export it in . their own name, and thus pick up all the best profits attaching to the wheat industry. The Labour party has been fighting these big institutions day and night, and we are glad to have this augmentation to our strength. We are pleased “ to be able to tell the farmers that,, although late in the, day, an otherwise Tory Government have come almost into stride with us.

Mr Richard Foster:

– That is very thin stuff. The farmer does, not take chaff like that.

Mr FENTON:

– When the Minister talks in that way I know that I am hurting him a little. Having been an agent for big private traders, he is, no doubt, at heart opposed to the Government’s action, and would rather see the wheat going through the old channels. But he is only one of a Cabinet, the majority of which say, “ We must back the Bank that will back the farmers.” The’ Minister for Defence (Mr. Greene) has been for many years ‘ a prominent figure in the co-operative movement in New South Wales.

Mr Richard Foster:

– And I am the oldest member of the biggest cooperative movement in Australia.

Mr FENTON:

– There are some members of the Government who do not believe in taking this business out of the hands of private firms, but the cooperative movement, among the producers, has come to stay. During the last two or three years the Victorian Producers Cooperative Company . has accomplished more for the farmers than private firms have done for them since wheat was first grown in the State. Therefore, I repeat that I am glad the Government have thrown over their old friends and are now prepared to stand behind the great co-operative movement that has been brought into existence among the producers themselves.

Question put. The House divided.

AYES: 9

NOES: 25

Majority….. 16

AYES

NOES

Question so resolved in the negative.

page 2957

QUESTION

DEFENCE DEPARTMENT

Officers in Receipt of War Pensions.

Mr FENTON:
for Mr. McGrath

asked the Minister for Defence, upon notice -

  1. How many officers in the Defence Department are in receipt of war pensions?
  2. Whatare the ranks of officers receiving such pensions, the salaries they receive,and the amount they receive as pension?
  3. Is it true that only one officer in the service of the Defence Department is not receiving a war pension?
Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– As war pensions are dealt with by the Repatriation Department, it is suggested that this question be addressed to the Minister representing the Minister for Repatriation.

page 2957

QUESTION

REFERENDUM

Time Occupied and Cost

Mr HIGGS:
CAPRICORNIA, QUEENSLAND

asked the Minister repre senting the Minister for Home and Territories, upon notice -

Will he state approximately -

How many weeks would be required in which to take a referendum of the electors of the Commonwealth, i.e., to print and issue ballot-papers, conduct the voting, count the votes, and declare the result?

The number of polling places throughout the Commonwealth?

The number of electors and ballotpapers required?

The cost of a referendum held on a different date to that of a Federal election ?

Sir GRANVILLE RYRIE:
NORTH SYDNEY, NEW SOUTH WALES

– The answer to the honorable member’s question is as follows: -

  1. Approximately twelve weeks.
  2. 8,300.
  3. (1) Total, number of electors in the Commonwealth, 2,930,000.

    1. Estimated number of ballot-papers required, 4,000,000.
  4. Approximately £80,000.

page 2957

ARBITRATION (PUBLIC SERVICE) BILL

Motion (by Mr. Greene) proposed -

That leave be given to bring in a Bill for an Act to amend the Arbitration (Public Service) Act 1920.

Mr ANSTEY:
Bourke

.-I move -

That it is not expedient to introduce legislation to exclude any section of the Public Service from the operations of the Arbitration (Public Service) Act.

No indication has been given of the purpose of the measure which it is proposed to introduce. The Government has intimated that it desires to close the session at an early date, and that itwishes to get through a certain amount of business before adjourning. The Leader of the Opposition (Mr. Charlton) has promised to facilitate the conduct of business, and, following upon that, the Government has suddenly brought down a proposal to introduce a measure without in any way indicating the purpose of it. Later, when any honorable member on this side of the House wants to criticise the Bill, the gag will be applied to prevent him. I wish this amendment to be taken as an indication that the Opposition will not give leave to introduce any measure unless the Government states dearly what its purpose is.

Mr SPEAKER (Hon Sir Elliot Johnson:

– The proposed amendment in the form submitted is not in order.

Mr MATHEWS:
Melbourne Ports

– I move-

That all the words after “ That “ he omitted with a view to insert the following words: - “the motion be referred to a Committee of the whole House to consider the advisability or otherwise of introducing the proposed Bill.”

I was not previously aware that it was proposed to introduce this Bill, which even the Minister (Mr. Greene) must admit raises a very contentious question. Mr. FENTONMaribyrnong)[4.36].Surely the Minister for Defence (Mr. Greene) is acquainted with the main provisions of the proposed Bill. It has been stated that the Government intend by the Bill to exclude a certain number of public servants from the provisions of the Arbitration (Public Service) Act. If that be one of the main purposes of the proposed Bill, why should the Minister not say so?

Mr Watt:

– That has already been declared.

Mr FENTON:

– I do not think so. I know there is considerable misapprehension in the Service regarding the object of the Bill. I have, on former occasions, heard honorable members and the Minister himself, when he was in Opposition, ask for information when a Government has sought leave to introduce a Bill. If the Bill has for one of its objectsthe depriving of certain members of the Public Service of their rights under the Arbitration (Public Service) Act, I do not want to see it. It is a very undesirable Bill if it seeks to discriminate between one class of public servant andanother. Whether a man is at the top or the bottom of the tree, he should have an equal right with other in the Service to enter any Court established in the country. If I have correctly stated the object of the Bill, and we can muster sufficient members to support the amendment, I would like to see the proposal defeated at this initial stage. I think I have heard the Minister speak in rather flowery language of what a blessing it is for a country to have a loyal, united, and contented Public Service. I agree that it is; but it seems to me that this Bill is in the nature of a wedge to divide into two sections the Commonwealth Public Service. I do not know of anything more calculated to create discontent in the Service than the knowledge that while those receiving less than a certain salary are entitled to enter a Court established by law, the rest are debarred from doing so. If that is one of the objects of this Bill, I shall oppose it. Those who, by this Bill, are excluded from the Public Service Arbitration Court will be inclined to ask themselves whether, after all, they are living in a British community. Every taxpayer, whether he is in the Public Service or not, should have the right to enter any Court established by law. I have never had to appear in a Court, and while litigation is occasionally rather expensive, it is our proud boast that, in a British community, every citizen has a right to appeal to the Courts of his country. I am opposed to this motion.

Mr WATT:
Balaclava

– I am somewhat reluctant to agree to the passing of the motion, but not for the reasons that, apparently, influence honorable members opposite. I am not, at this stage, concerned with the merits of the proposition covered by this formal motion. The best time to consider them is when we have the Bill before us. We shall then know the scope and extent of its provisions, and what is likely to be its effect on those to whom it will apply. I have two objections to the motion; but I do not propose to stress them at any length. The first is that we had submitted to us last Friday an extensive list of the Bills that we were expected to pass, before we rose, and the second is that this is an addition to that list. It was not on the list submitted by the Prime Minister.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– It was !

Mr WATT:

– Then my first reason will stand, and I shall stress it briefly, but I hope with pardonable emphasis. It is preposterous, and an act of incredible folly, for the Government, in order that it may close the session at an early date, to call upon honorable members to dispose of an already inflated list of important measures without giving time for their proper consideration. I hope the Government will take this as an intimation from, at least, some sections of the House, that, if the House is to rise at an early date, and is expected, before doing so, to consider the business already on the notice-paper, then* that list of business shall not be added to except in cases of extreme urgency.

Mr ANSTEY:
Bourke

.- The reasons advanced by the honorable member for Balaclava (Mr. Watt) in opposition to the’ motion aTe the primary reasons for my objection to it. I object to the introduction of any Bill in addition to the list outlined by the Prime Minister lon Friday last, unless it is imperatively necessary. The Government . has told the House and the country that it desires to close the session as early as possible, and immediately following that statement, it has applied the “gag” to prevent discussion. There is, no reason why every honorable member’ should not .have an opportunity to discuss these measures. The Leader of . the Opposition (Mr. Charlton) definitely promised the Prime Minister that no factious opposition would be raised to the passing of any of the measures set down as’ Orders of the Day, and which the Government said they” wanted to pass before the closing of the session. In accordance with that promise, many members of the Opposition have refrained from speaking, but whenever those of our party, who wished to exercise their undoubted right to speak, have risen to discuss a measure, the Government have promptly applied the “gag.” If the Government are really anxious to bring this session to an end as quickly as possible, they have no right. to add to the list already outlined, and until they promise not to apply the “ gag “ not another Bill will be introduced with my consent. The Minister for Defence (Mr.

Greene) may say that this Bill was- included in the list- of measures which the Prime Minister said last week he desired the House to pass before the session closed.. We know, however, that the object of tha Government is to destroy the Arbitration Court. To that we naturally object. The first step in that direction was the removal of the Commonwealth public servants from the jurisdiction of the Conciliation and Arbitration Court, under which they had been for many years. The next step was the creation of an Arbitration Court to deal only with complaints of Commonwealth Government servants. The Government now propose by this Bill to remove three out of the five classes of the Public Service from the jurisdiction of that Court. They will gradually whittle away the power of the Court until nothing is left. The honorable member for Balaclava says that he proposes to discuss the merits of the Bill when it is introduced. He and other honorable members in the Ministerial corner, whom the Government’ wish t’o placate, will be permitted to do. bo, but the Opposition will be “ gagged.1” Honorable members in the Ministerial corner are listened to with patience ‘by the Government while they speak in’ apposition to- ‘a Bill; but as soon ‘as an - honorable member on this side seeks to exercise’ the same right’ of criticism, the; Government apply the ‘’ gag.” -The Souse should not’ permit the Government to apply the :.gag “ when at the same time it- agrees to the introduction of measures in addition to those with which we were told last week we had to deal. Every additional Bill introduced gives Ministers a further pretext for applying the closure. These are some of the reasons why I object to the motion. I thought that I would submit one or two amendments in order to change the ordinary procedure, and I fortified myself by a reference to May and other authorities. I felt sure that, according to May or some one else - according to authorities laid down in 1814 or 1732 - I was clearly within my constitutional rights in submitting my first proposal. I am pleased, however, to find that at least one amendment from this side of the House is in accordance’ with the Standing Orders, and if it is successful I hope we shall be able, Mr. Speaker, to submit a few more which will mee with your approbation.

Mr McWILLIAMS:
Franklin

– For a reason that has not yet been advanced, I also object to the introduction of the Bill to which this motion relates. Last year, as well as the year before, we were distinctly promised by the Government that the consideration of the Estimates would never again be left until the closing hours of the session. The Government escaped defeat on a want of confidence motion last year only by promising the honorable member for Wilmot (Mr. Atkinson) and the honorable member for Oxley (Mr. Bayley) that in future ample opportunity would . be given for their discussion. That bargain was made on the floor of the House; but the Government - .. . keep the word of promise to our ear,

And break it to our hope.

During my long experience as a member of this House there has not been submitted a Budget that required to be so carefully scrutinized as does that which was delivered a few weeks ago by the present Treasurer (Mr. Bruce). Only two members, the Leader of the Opposition (Mr. Charlton) and the right honorable “member for Balaclava (Mr. Watt), have so far spoken on the Budget, and, although measures giving effect to the Treasurer’s promises have been introduced and passed, and others are being discussed, the motion for the resumption of the Budget debate is now practically at the bottom of the noticepaper. I shall be no party to the introduction of further measures of this kind until the Budget has been dealt with. I do not wish to have the Estimates again bull-dozed through the House, as was done for very many years until the Corner party objected thereto. It will be impossible for the Budget and Estimates to receive the attention that they deserve if all these other measures are to be dealt with. The Budget proposals this year are of the greatest moment. Take that, for example, which affects the Note issue. In that instance the Government proposes to act in defiance of an absolute pledge. At the very end of the session, when a good many members have already left for their constituencies, we are asked to consent to an expenditure of anything from £30,000,000 to £40,000,000, and to deal with a number of other measures, the consideration of which will make it impossible for us to properly consider the Budget and the. Estimates. I protest against this course being taken, and shall carry my protest as far as I can, by voting for the amendment.

Mr GREENE:
Minister for Defence · RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Honorable members have taken rather an extraordinary course in objecting to this motion, which is one of a kind almost invariably regarded as formal. It is not as if they were not fully acquainted with the purposes of the Bill, because these have been’ set out in detail in the Treasurer’s Budget speech. This is one of the measures to which the Government is definitely committed by the Treasurer’s proposals. The honorable member for Franklin says that he wishes to discuss the Budget. This measure forms part of the Budget proposals, and it might be contended that it would be impossible to discuss the Budget intelligently without having this measure before honorable members. All that we ask now is leave to introduce the Bill so that honorable members may have it before them. Should the Budget debate be resumed before the Bill is dealt with, honorable members will be able to discuss the Budget in the light of the provisions of the Bill.

Question - That the words proposed to be omitted stand part of the motion - put. The House divided.

AYES: 29

NOES: 9

Majority . . . . 20

AYES

NOES

Question so resolved in the affirmative.

Amendment negatived.

Original question resolved in the affirmative.

page 2961

WAR SERVICE HOMES BILL

Order of Business.

Motion (by Mr. Greene) proposed -

That Order of the Day No. 1 be postponed until after the consideration of Orders of the Day Nos. 5 and 2.

Mr BRENNAN:
Batman

.- As the first Order of the Day refers to the further consideration in Committee of the War Service Homes Bill, I shall be glad if the Minister for Defence (Mr. Greene) can let the House know whether the Government propose to deal with that very important measure to-day.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I hope that we shall be able to reach it.

Question resolved in the affirmative.

page 2961

INCOME TAX ASSESSMENT BILL

Second Reading

Mr BRUCE:
Treasurer · Flinders · NAT

– I move -

That this Bill be now read a second time.

This is a consolidating Bill, and repeals the Income Tax Assessment Acts 1915 to 1921. The Bill is a long one, comprising 101 clauses, but the task before the House in considering it is in no sense as serious as the length of the Bill would suggest. The alterations which are being proposed by this measure in the basis of our income tax assessment are not very great. They might have been made by means of an amending Bill, but it was felt that it would be more convenient that the whole of the existing law should be consolidated, since, if an amending Bill had been introduced it would have been necessary to refer to no less than eight different Acts of Parliament to determine what the position was with regard to the basis of income tax assessment. The alterations of a major character proposed by this Bill are very limited in number. There is a number of small drafting amendments proposed, but the number of principles that are involved in the alterations submitted are very limited. I desire to make it quite clear to the House that this Bill, though very large in bulk, . is not one which need involve a lengthy and detailed consideration. A great number of the clauses have been in force for some time, and there is no desire or suggestion that I know of that the provisions which they embody require amendment. There is a certain number of quite material9 alterations proposed which will require the very careful consideration of the House.

It is within the knowledge of honorable members that a Royal Commission has been sitting for the purpose of considering the incidence of income tax under the Commonwealth law. That Commission has submitted three reports. No doubt honorable members have read them with interest, and have studied them carefully. During the last few months I have had to study the reports of the Australian Royal Commission in detail. I have also had to study reports on income taxation by Commissions appointed in Great Britain and in South Africa. I have further had to consider various reports on taxation questions which have been presented to Congress in the United States of America. After considering and studying all these reports, I say, without hesitation, that those which have been presented by the Royal Commission appointed in Australia, compare very favorably with any of the other reports I have had under consideration. The Commission devoted a great deal of time to its task, and a study of its reports shows that the members of the Commission dealt with the subject intrusted to them in what I am justified in describing as a masterly manner. I believe that any student interested in income tax questions would do better in studying the three reports submitted by the Royal Commission in Australia, than in studying any published text-book dealing with the question of the bases and principles of income taxation. I consider that the thanks of this Parliament, and of the whole of the people of Australia, are due to the members of the Taxation Royal Commission for the great services they have rendered during the past few months in connexion with the subject referred to them for inquiry.

In the Bill which the Government are submitting, a great number of the suggestions of the Royal Commission have been given effect to. In addition to the Bill, I have had a memorandum prepared which will, I think, assist honorable members to see what alterations of the existinglaw are being made. The text of the existing law is given, and where it is proposed to alter it by this Bill, the alterations are indicated. The memorandum will be sufficient to inform honorable members as to the minor alterations proposed, and I intend to deal with some of the major variations in principle which are being submitted.

The first to which I desire to refer is the question of the averaging of incomes. The Taxation Commission was directed, under its reference, to inquire into the assessment of income tax, particularly regarding losses of primary producers. In the course of its inquiry, the Commission considered various systems which have been inaugurated in different parts of the world ‘to endeavour to secure greater equity for those who are in receipt of fluctuating incomes. The members of the Commission considered, I understand, every known system of what is called “ averaging,” and also the system known as “ the carrying forward of losses.” After exhaustive consideration, the Royal Commission recommended, on the 2nd November last -

That the income oftaxpayers be made subject to tax in accordance with the provisions of the Act for the time being in force -

As to the basis of liability - on the net taxable income of the twelve months preceding the year of assessment.

) As to the measure of the rate of tax - at the rate applicable for the year of assessment to the average net taxable income of the taxpayer for all the years for which the taxpayer shall have lodged returns with the Department, not exceeding the five immediately preceding the year of assessment.

That was the recommendation of the Royal Commission as to how effect could best be given to the desire of this Parliament that a greater measure of equity should be afforded to those who arein receipt of fluctuating incomes. The system of averaging was recommended by a majority of the Commission. Four of its numbers were in favour of averaging, and three were in favour of the carrying forward of losses. The averaging system recommended by the Commission was embodiedin the amending income legislation passed last December. Thus, the system recommended by the Commission has been in operationin respect of primary producers for about nine months. When I assumed office it became necessary that I should look into the question of income tax assessment generally; and when I considered this provision for the averaging of incomes for primary producers, I was faced with two considerations. One was, whether a system of income tax assessment whereby certain taxpayers were assessed on one basis and others upon another was proper; and the other factor was, whether the administrative cost of carrying out this dual system might not prove prohibitive. As to the first point,I came to the conclusion that the application of the averaging systemto one class of taxpayer only would not be equitable. The reason for introducing the averaging system at all lies in the fact that certain incomes are subject to fluctuation, and it was suggested that that factor applied particularly to primary producers. In many instances producers are subjected to income fluctuations owing to weather and other well-known conditions - fluctuations of a more violent character, perhaps, than in the case of other taxpayers. But fluctuations are by no means confined to the incomes of primary producers. I may instance the case of the country storekeeper. He is absolutely dependent upon the prosperity of the district in which his store is situated. When his rural neighbourhood is prosperous, healso does well; but when it falls upon evil times, the effect upon his income is often more serious than upon those of his producing neighbours. And, in a minor degree, these same fluctuations, from the same causes, may be traced throughout the whole course of trade. The community, then, is, to a great extent, dependent upon the prosperity of the primary industries; and, when the latter meet with reverses, there is a sympathetic reduction in incomes practically throughout the trading section of the people. Thus, it appeared to me to be quite inequitable that this averaging provision - designed, as it was, to grant relief to taxpayers with fluctuating incomes - should be applied to only the one class.

On the score of administrative difficulties and costs, I was faced with this position: that certain incomes would have to be assessed in one manner and others after another method, but that, in respect of composite incomes, it would be necessary to assess the same income in two ways. From information which I received it became obvious that the Department could not carry out this new provision of the law without a very great increase in the staff of the Taxation Department and a considerable swelling of administrative costs. Further, there was grave doubt whether the whole machinery of tax gathering might not break down. As an outcome of investigations, both in the matter of its being inequitable to confer the averaging benefit upon one class of taxpayer solely, and. with regard to administrative difficulties, I recommended to the Government that the averaging system should be applied to all classes of taxpayers. That view was accepted, and is embodied in this Sill. The decision of the Government is in accord with the opinions of the Royal Commission, as will be shown by the .following extract from the first report of that body.: -

The terms of the reference quoted at the head of this section ‘do ‘not require us to express an opinion ‘as to whether the scheme should be .extended to all individual taxpayers, but it should be pointed out that many persons are engaged both in primary industries and in other vocations, the separating of which will cause complication in administration. The scheme is capable of extension to them and to all individual taxpayers without any modification whatever, and its ‘general application to all taxpayers would help to place Federal income taxation upon a sound and equitable basis.

I wish to make the fact very clear that all that has been done, in the present instance, is to make the system which was embraced in our legislation nine months ago of general application to all taxpayers. I stress this point because I have heard suggestions that the averaging system is some new scheme of my own. It is nothing of the sort; it has been recommended by the Royal Com mission, and it was adopted, in its application to the incomes of primary producers, at the end of 1921.

The averaging provision having been introduced, and the Government having subsequently determined to apply it to all taxpayers, . consideration had next to be given to certain anomalies which were seen to exist. One of the greatest of these is inherent in all schemes for the averaging of incomes. That is to say, there is bound to be a difference in the incidence as between those taxpayers who show a f alling income and those showing a rising income. These differences would probably adjust themselves over a period; at any rate, in the majority of cases. But it was felt that the real difficulty, where legislation of this character was being introduced for the first time, lay, in the case of a taxpayer who, after its introduction, revealed a continually falling income, and had not a sufficiently long tax-paying life, under the new principle, for his income to fluctuate upwards again, and so average itself. Bearing in mind that difficulty, it was decided that the original scheme - as introduced last year - should be modified so that the averaging system should not apply to any taxpayer until such time as he could show a taxable year greater than its immediate predecessor. That means that the scheme will not apply so long as an income is falling; and will not be inaugurated, in fact, respecting the individual concerned, until has income begins to rise. Provision of this nature should get over the difficulties inseparable from the inception of the new scheme.

The other point to be recognised with regard to this latter alteration is that it will apply both ‘to those who came within the scope of the Act of last year and to those who will -be embraced by the provisions of this Bill. The other case in which it is thought this system might operate harshly is that of a taxpayer who has retired from business ‘or is in receipt of a pension of a “lower amount than the salary or income he had been enjoying whilst in employment or business. To get over this difficulty there is provision in the Bill that, if a taxpayer’s income is reduced to less than two-thirds of his average taxable income, he will be treated in that year as if it were the first year in which he had ever been, a taxpayer; that is to say, he will start a new average, the first year of which will be when his income is upon a lower basis in consequence of his retirement, or from other causes. To give an example of how this principle will operate I may take the case of a man who had, say, been in receipt of £1,500 a year for four years, and had retired on a pension of £750 a year. After he gets to the lower basis of income, that is, £750 a year, if the averaging system applied in his case, he would have to pay income tax, not on £750, but at the rate applicable to an income of £1,350, which would be the average of four years at £1,500’ a year and one year at £750 a year. Under this Bill he will not pay tax on an income of £750 at the rate applicable to £1,350, but at the rate applicable to £750. These are two alterations that have been recommended by the Royal Commission, and they have been made to meet what appeared to the Government to be a very real anomaly in the existing system. I think honorable members will agree that both are important, and do a greater measure of justice to the individual taxpayers concerned.

The next important alteration is one that is not actually embodied in the Bill, but is a machinery regulation that is being put into operation under this measure. It deals with the question of the valuation of live, stock. The Bill says that for live stock the value shall be’ as prescribed. That,’ of course, refers to the natural increase. Purchases can be brought in at the purchase price. This question is, I think, the most difficult one that I have had to face during the last few months, and, strange to say, it is one upon which there is no unity of opinion amongst those chiefly concerned. There are four alternative methods under which the value of the natural increase in live stock for income purposes could have been treated. Perhaps it would -be more correct to say that there are three alternative methods, and one which excludes them altogether, the latter proposal being to deal with the position on a cash basis entirely, the owner arriving at the amount available for taxation by taking the difference between receipts and outgoings in any single year. With regard to- this method I have seen a great number of representatives of the primary producers, and I have not yet found one organized body or one individual who is prepared to recommend this basis. The next method is the market value, which system was recommended by the Royal Commission. The third method’ is the owner’s valuation. Under this system, when an owner has determined his valuation, he is, of course, compelled to continue on the same basis. The fourth is, value as prescribed by the Department.

To illustrate some of the difficulties that one is faced with in regard to this particular question, I ‘may inform honorable members of an extraordinary coincidence experienced by me in one day. In the morning I had a deputation of primary producers, and amongst other questions they raised this particular issue. When I asked them which system they would recommend, they replied that there was only one, namely, the owner’s valuation, but that when once he had made his valuation he must continue on the same basis. In the afternoon of the same day I saw another deputation, and put the same question to them. Their reply was that the best method was value as prescribed by the Department, but on a lower basis than at present.

Mr Gabb:

– Were they primary producers?

Mr BRUCE:

– Yes. .- I asked them about the owner’s valuation, which had been recommended by the deputation ‘in the morning, and they said it would not work at all. Thus I had two different opinions in one day, and in the evening I received the report of the Royal Com? mission, which recommended market value.

What I have said will, I think, demon:strate that this is a fairly difficult question. After a great deal of discussion we decided that the principle should be value as prescribed by the Department, with minimum and maximum values, the maximum being a little less, probably, than’ the existing, fixed value, and the minimum one-fourth of that value. When, these prescribed values are- fixed,’ it will then be competent for the. primary pro1ducers to select any value between the two- limits, and, having ‘done so, theymust maintain that valuation. ‘There will be an opportunity to deal with this issue in Committee, and I can assure any honorable member who starts out in a lighthearted manner to examine the question,’ and in the belief that he knows the. only way in which this subject should be dealt with, that I shall be able to produce; a! volume of opinion against almost anythinghe may have to suggest.

Now, with regard totrading stock other than live stock. Onesuggestion is that trading stock, not being live stock, shall be brought to account at either the actual cost price, market selling value, or replacement value, at the option of the taxpayer. This is a basis which, I think, will meet with general acceptance, and be regarded as fair. It contemplates all the possible and reasonable bases upon which a trading stock could be taken with justice to the individual taxpayer and the Department. When we are considering this issue in Committee honorable gentlemen will, no doubt, have some points to raise, and we can more properly discuss the matter then.

The next point with which I desire to deal is the taxation of companies. There seems to be an impression that this Bill contemplates some alteration in the existing system. That is not so. We are staying on the same basis that we have been under since the inception of Commonwealth income tax legislation, but that basis is different from the method adopted in most countries, where taxation is usually levied at the source. This whole question of the, taxation of companies was carefully and exhaustively considered by the Royal Commission, which recommended that the present system should be adhered to. For the information of honorable members, I remind them of some facts in regard to companies taxation and the different systems that have been suggested.The questionis very complicated, and there are a great number of difficulties about it which some critics appear to completely overlook. The first system is the taxation of companies’ profits without adjustments, and the exclusion of dividends from theshareholders’ returns. That is the system in use in Victoria. It is the simplest system and the cheapest to administer, but it is very inequitable. At the end of June, 1920, there were in the Commonwealth 225,364 shareholders in companies whose rate of tax was below the company rate. Of those, 200,000 had not a taxable income, 25,364 paid at a rate less than the then company rate of 2s. 8d., and 2,636 taxpayers paid at a rate exceeding the company rate. The effect of taxation at the source without adjustments would be that 225,364 people would pay taxation which, as individuals, they are not liable to pay, and 2,636 taxpayers would pay at a rate less than that which the law prescribes for their individual cases. I think that is a fair indication of the inequity of that particular form of taxation. The other side of the picture is that there would be very great administrative savings if it were adopted. It is difficult to estimate them, but it is considered that a sum not less than £100,000 per annum would be saved if we adopted this system instead of the one which we have in operation to-day. I stress that fact in view of the statements that are constantly made as to the excessive cost of the collection of Commonwealth taxation in comparison with the cost of collection by the State of Victoria, for example. If we changed the Commonwealth system to that employed in Victoria we could save £100,000 at least in administrative expenses, but we will not do that, because the Victorian system is inequitable.. The reduction would, be at the expense of the taxpayer.

Mr Fenton:

– How would the revenues of the Department fare?

Mr BRUCE:

– We would collect a great deal more revenue, because from 225,364 people we would collect more than we are getting to-day, and we should lose a little in respect of the other 2,636 taxpayers.

Sir Robert Best:

– It is only fair to say that the Victorian taxation is smaller, and, therefore, the same inequity does not occur.

Mr BRUCE:

-The same inequity does occur, but not to the same degree. The Royal Commission said, with regard to this system of taxation-

There is no need to traverse the arguments advanced in support ofthe method under discussion, beyond saying that its comparative simplicity and. greater productiveness are purchased at the cost of sogreat a degree of inequity that we have no hesitation in unanimously deciding that itis a method which cannot be recommended for inclusion in a system oftaxation which it is intended should rest upon a sound and equitable basis.

The next system is the taxation of companies’ profits, with subsequent adjustment in the individual assessment of shareholders. That system is really the same as that which the Commonwealth has in operation so far as the individual taxpayer is concerned, because when the tax is collected in the first place at the source the individual is entitled to an adjustment, so that he only pays at the rate applicable to his own income. But the difficulty in regard to this system is that it is very complex and . costly. It would mean, for example, that every one of the 225,000 taxpayers, to whom I have referred as paying less than the company rate, would have to individually apply tothe Department for a refund of the overpayments of taxation they had made. That certainly would engender a great deal of friction with the taxpayer, it would not simplify the duties of the individual taxpayer, and it would necessitate the establishment in the administration of a refunds branch to deal with this question only. The additional administrative costs, so far as I have been able to arrive at them, would be in the region of £25,000 annually. But I am by no means convinced that that would be the end of the additional expenditure which would be involved by the adoption of that system, of which the Royal Commission sas -

After fullconsideration, we are of opinion that the disadvantages attached to the method of taxing the whole of the company’s profits, even with subsequent adjustments to shareholders, are such as not to warrant us in recommending the adoption of that method.

The third method is the one which is in operation in the Commonwealth to-day, whereby companies are assessed on the amount of their undistributed profits, and the distributed profits are assessed in the hands of individual taxpayers. That means that each individual taxpayer is assessed on the dividends he receives; they are included in his total income, and he pays on those dividends at the rate applicable to his income under the graduated scale.

Mr Watt:

– The Government do not propose to alter that ?

Mr BRUCE:

– No. But there has been so much discussion on the subject, and such definite statements that an alteration was intended have appeared in the press, that I thought it necessary to make this contradiction.

I come now to bonus shares, and here an apparent alteration is being made in the law, although, as I shall indicate to the Committee later, the alteration is more apparent than real, because what we are actually proposing to do is to make clear beyond doubt what apparently is the law to-day. The assets against which bonus shares can be issued are - (1) Where the fixed or capital assets are written up; (2) where there are profits on the sale of fixed or capital assets; (3) where there are accumulated profits held in the form of reserves; and (4) where bonus shares are issued against the current profits on the company’s trading year. In regard to (1) and (2), the issue of bonus shares against the writing up or realization of the profits in respect of capital assets, there has been- little doubt but that they were exempt from taxation. They, were issued against the accretion of capital, and it has not been seriously maintained that they were liable to taxation. The difficult question has been where bonus shares have been issued against accumulated profits, generally in the shape of reserves. There has been a great deal of argument with regard to this question, both in Great Britain and here, and the Royal Commission gave a great deal of consideration to it. The Commission recommended : -

On the grounds specially that bonus shares are capital, and that the issue of those shares affects neither the proportionate interest of the shareholder in the company, nor histaxable capacity, the Commission is of opinion that bonus sharesshould not be treated as liable to income tax in the hands of the recipient shareholders.

The Government agree with that finding, and propose to exempt such shares.

Mr Watt:

– In some cases it does affect the relative proportion, as between preference and ordinary shares.

Mr BRUCE:

– Yes, but it will not affect the individual’s own proportionate interest.

Mr Watt:

– That is arguable.

Mr BRUCE:

– The old Acts were not clear on the subject, and there hasbeen a good deal of litigation. Webb’s case is the latest one, andeven there the power to tax bonus shares issued against accumulated profits was not made absolutely clear.

Sir Robert Best:

– It was made clear with regard to the reconstruction of companies.

Mr BRUCE:

– Yes. There is very little doubt as to what the decision would be, and, in view of the judgment in Webb’s case, the Government have come to the conclusion that, although the point has not been absolutely settled bythat case, they would be unable, by taking further action in the Courts, to establish that bonus shares issued against accumulated profits are liable, to tax under the law as it existed prior to the present Act. They have accordingly decided to take no further steps in endeavouring to establish the claim for income tax in respect of such shares, and they are prepared, where any tax has been collected on the ground that such shares were liable to tax to make a refund, if such refund is applied for not later than six months after the date of this notification. The only case where bonus shares are liable to income tax is where they are distributed out of the trading profits of the year. I desire to make it very clear that you cannot issue bonus shares out of your current trading profit with a view to escaping liability to income tax. With that exception bonus shares are to be exempt from income tax.

The next point is the question of the assessment of companies that are considered not to have made a reasonable distribution of their profits. Section16 (2) has led to endless difficulty. That provision was designed to defeat taxpayers who attempted to evade taxation through forming private or “ one-man “ companies.

Sir Robert Best:

– There must be two men.

Mr BRUCE:

– I agree with the honorable member that there should be two, but it is ordinarily accepted, even in legal circles, that there are “ one-man “ companies. A great deal of pressure has been put upon the Government to repeal this section entirely, and they have absolutely refused to do so. I think that they had a very great justification for their action in refusing, by the fact that Great Britain, in its latest Finance Act, has adopted a section that is more or less modelled on the Australian section, and is designed to do what we are attempting to do. While the Government are not prepared to repeal the section, I think it has to be admitted that the provision has operated harshly in the past, and in a way that was never intended by the Parliament that enacted it. The intention of the Parliament, I believe, Was to see that a reasonable distribution was made, and to give to the Commissioner the power to prescribe what was a reasonable distribution; but, unfortunately, on the Court’s interpretation of the Wording of the Act it was found that the Commissioner had no discretion to say how much was a reasonable distribution. It was held that the Act meant that, if the Commissioner found that a reasonable amount had not been distributed, he had no option except to collect tax on the whole of the profits. He could not tax a proportion of the profits and say that that was a reasonable amount. I do not think that that was the intention of the Legislature when it made that provision, and we are proposing in the present Bill to remedy the defect by giving the Commissioner discretion to determine what would be a reasonable distribution. It is also provided that, if a company has distributed two-thirds of its taxable income, the Commissioner is not entitled to require any further amount to be distributed.

SirRobert Best. - Two-thirds is pretty stiff.

Mr BRUCE:

– We shall have to consider this matter when the Bill reaches the Committee stage. There are a number of points which I shall then be able to elucidate.

Another alteration to the present Act is proposed. Under section 16.(2). If additional tax was assessedby the Commissioner because of an insufficient distribution, the tax was collected from the individual shareholders who would have been entitled to receive the distribution, but who, in fact, received nothing at all. Under the amending Bill, we are. providing that the amount of tax that is. assessed in respect of the individual shareholders shall be paid by the company that retains the money, and has the power to pay, which the individual taxpayer certainly has not. Certain cases have been assessed under the old Act, and certain cases are outstanding. A great deal of pressure is being brought to bear to suggest that there should be some limit, back to six months, in regard to the cases pending, but it appears to be quite inequitable to deal with the pendingcases in that way. There seem to be only two bases on which they can be dealt with. One is to make the proposed alteration retrospective and re-open every case that has been decided, and the other, to deal with all cases aris ing prior to the present financial year under the provision of the old section 16 (2), and with all future cases under the present Bill.

Mr Bowden:

– That will continue the injustice in relation to pending cases.

Sir Robert Best:

– I should think it willi

Mr BRUCE:

– The position of the Government with regard to this matter is this: Certain people have been assessed under section 16 (2), and have had to pay. There are certain cases pending, but if we are to do justice between taxpayers we cannot leave the old assessments that have been made and allow pending assessments in respect of the same period to be treated under a different Act. So there are only two ways of dealing with the matter - one is to make the Act retrospective, and the other is to deal with the old cases under the old law, and future cases under this Bill. If we deal with the old cases, re-opening them under this Bill, there are two objections, one of principle and the other of administration. One objection is that I do not think this House would welcome very readily a proposal to make this legislation retrospective. But the administrative difficulty is even greater; it is practically impossible now to re-open the whole of the cases that have been determined and finalized. Taking these two facts into consideration,, the Government have come to the conclusion that the proper course is to deal with all the old cases under the law as it was at the time when the liability arose, and to deal with all future cases under the law as amended by this Bill. But the Government feel very strongly that some finality of these old cases must be reached. I give the House the assurance that all cases which have not yet been dealt with under the old law, section 16 (2), will be dealt with prior to the end of the present financial year. That gives us nine months in which to clean up the whole position, and we are taking steps to see that it is done, so that all those cases may be dealt with prior to then. With regard to future cases arising under the Bill, the Government recognise that it would place many businesses in a very difficult position, if for an indefinite period they had hanging over their head the possibility of liability under that particular section. We have accordingly decided, and the Com missioner has been so instructed, that all cases arising under the Bill, when it becomes an Act, if it does, must be dealt with not later than six months after the company’s ordinary assessment has been issued to it. I think that that at least will give to trading companies and others some certainty as to what their position is under the power which is given for an additional assessment in respect of profits that have not been distributed.

The Bill also provides that the Commissioner’s decisions Under this section shall be subject to an appeal to the Board of Appeal; and this, I think, will give to the taxpayers a feeling of certainty that their cases will be fully and amply considered before they are required to pay additional tax on undistributed profits.

Mr Watt:

– Has the Minister any information to enable him to say how many cases would have to be dealt with retrospectively?

Mr BRUCE:

– I cannot quote the number, but I have seen the cases.

Mr Watt:

– They run into thousands.

Mr BRUCE:

– Oh, no.

Mr Watt:

– But there are a large number.

Mr BRUCE:

– They are a large number, but they cannot be described as thousands. The next substantial alteration to which I wish to refer, deals with what are known as “ walk-in- walk-out “ sales. Under the decision which was given in a case under the Western Australian income tax laws, and known as the Newman case, it was found that profits on sales of a “ walk-in-walk-out “ character were not liable to tax. That has been followed by a decision under the Federal law, in a case known as the Hickman case, that under our Act the profits on such sales are not liable to taxation. The result is that where a man disposes of the whole of his trading stock on 8 “ walk-in-walk-out “ basis he is not liable to a tax on the profits, while, if he disposes of the whole of his trading stock by degrees, in the ‘ ordinary course of trade, he is. I think that is a patent inequity, and the House will agree that it is one that ought to be removed. This Bill makes provision for the ‘taxing of profit on the sale of trading stock where the sale takes place on the “ walkinwalkout “ basis. If we do ‘ not amend the law in this direction there is absolutely nothing, in view of these two decisions, to prevent traders evading paying income tax on the realization of their trading stock, by carrying out annual sales of their businesses for no other purpose than to avoid the tax. By the provisions of this Bill the interests of the taxpayer are being strictly guarded so that they are only liable - and I wish honorable members to realize this - for income tax on the profit of the sales of trading stock. When we are in Committee we shall be able to examine this point a little more carefully; at present I merely desire to state the broad principles of the amending measure. From the decision of the Commissioner with regard to these sales there is also an appeal to the Appeal Board.

Mr Prowse:

– A man who sells the whole of his stock makes a very big profit, and, on the graduated scale, this proposed amendment would probably make the taxation much heavier for him than if he sold, as it were, by retail?

Mr BRUCE:

– That is quite possible. But no profit made on a single sale will be very much greater than the annual profit.

Mr Watt:

– It might be very much less.

Mr BRUCE:

– It might, and generally will be. Another provision refers to gifts of trading stock. A practice has grown up to some extent whereby gifts of trading stock are made, and these are very often gifts by a father to a son. When these gifts are made, the donor excludes the value of what he has given away from the asset side of his return, and the donee puts the value on the debit side of his return. Clearly that is hardly fair to the income tax authorities of this country. Therefore, provision is made in the Bill that such gifts shall be brought to account at the value when they are made. An appeal from any decision under this provision also lies to the Appeal Board, so that the interests of the taxpayer are guarded.

Mr Bowden:

– So that gifts of capital will be taxed as income tax by the value of the goods?

Mr BRUCE:

– It does not mean the taxation of the gift but it has to be brought into account; it is only the profit that will be taxed. But if these profits are excluded by the donor, and returned as a liability by the donee, the income and profit can be wiped out in the simplest way.

The double income tax provisions of the December Act are embodied in this Bill, but they are not modified in any way. Those provisions have certainly proved that there are going to be great difficulties with regard to the whole question of double income tax, and its adjustment between the two countries concerned, but the provisions are doing substantially what they were intended to do. It is clear, I think, that in the future we shall have to extend this system of relief from double income tax by a reciprocal arrangement throughout the Empire. For the moment, however, we shall be well advised not to take steps until we have a little more certainty as to the methods of administration, and the best method of giving effect to what we desire. We have gained experience already and are gaining more. As soon as the opportunity offers, we shall take steps to move, in the matter of reciprocal arrangements so that we can obviate, throughout the whole Empire, the question of double income tax.

The Bill also gives effect to the Budget announcement that the exemption is to be lifted to £200. I do not wish, at this stage, to deal with the suggestions made concerning the lifting of the exemption; but I desire to indicate to the House that it has been done because it is believed to be in accord with proper and sound maxims of income tax law. There are two reasons why it has been done, one of which is that taxation should never touch what is necessary for the existence of the contributor. If one recalls the ruling basic wage throughout the Commonwealth one will realize that what we have done is to endeavour to carry out exactly that old maxim of sound income tax assessment. The other reason is based upon another well-known maxim that every tax. ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible, over and above what it brings into the Treasurer of the State. By lifting the exemption to £200 we shall, probably, be relieving 200,000 taxpayers from the incidence of income taxation. Dealing with the second maxim, and the fact that 200,000 are to be relieved, I may mention that the total relief in respect of this exemption will be approximately £600,000. The relief in the administration is going to be very great indeed. The non-necessity to handle such a large number of returns is, I am very hopeful, going to enable us to place the administration of the Taxation Department on a better basis than formerly, simply because an adequate staff has never been available to do the work required. If the exemption were not lifted, and the Department had to deal with those 200,000 taxpayers who will be relieved of the obligation of submitting returns, I am certain that the Government would have had to include in the Estimates from £150,000 to £200,000 for additional administrative cost in the Taxation Department, in consequence of thevolume of work which is done and the additional task placed upon the Department in an endeavour to act equitably as between the individual taxpayers and the community! I shall deal with that question more fully a little later, and have now merely indicated it in passing.

The deductions have been slightly varied, but there is nothing of very great importance other than an alteration which has been made in connexion with the depreciation on machinery, implements, utensils, and rolling stock; but that point can be dealt with fully in Committee. There has been a considerable liberalization of the basis upon which, such depreciation is allowed and collected.

An increase from £50 to £100 is also proposed in the amount allowed by way of deductions for contributions to superannuation and similar funds.

Mr BOWDEN:
NEPEAN, NEW SOUTH WALES · ANTI-SOC; NAT from 1919

– Does that include life assurance also?

Mr BRUCE:

– No; it relates only to the contributions by wage-earners. Another alteration made in regard to this section is to include all persons whose taxable income does not exceed £800, in addition to the taxpayers in receipt of salary, wages, allowances, stipends, or annuities. This latter class only is included under the present Act, and we are now bringing in any one whose income does not exceed £800 and allowing deductions for payments made to superannuation and similar funds. The section allowing a deduction of 5 per cent. in respect of calls paid in connexion with businesses or similar enterprises has been deleted.

Mr Watt:

– Including mining calls?

Mr BRUCE:

– No. The section in regard to mining calls which allowed deductions of the whole amount paid has been amended by allowing only a deduction in respect of calls out of assessable income, and by limiting the provision to mining companies or syndicates carrying on mining operations , in Australia for gold, silver, base metal, or rare minerals.

Mr Prowse:

– What about oil ?

Mr BRUCE:

– That is not included. The existing Act includes every type of company, and I do not think that that was the original intention. A distinction is made between different types of companies, as I do not think it was intended that every mining company should benefit; and when the Bill is in Committee I shall be able to explain the necessity of limiting these deductions to calls paid out of assessable income. We have had some startling examples of the amazing ingenuity of taxpayers who desire to avoid the payment of income tax, and in this connexion some ingenious, schemes have been adopted.

Mr McWilliams:

– Why do you exempt coal?

Mr BRUCE:

– Coal mining is more in the nature of an ordinary general business. This provision is designed, not to assist in the carrying on of enterprises known and apparent, but has been framed with the idea of urging people to find new fields of development and to engage in new enterprises.

Provision is also made for the deduction of losses of one business from the profits on another, with the addition that the deductions can be made from any source of income at all. Under the present Act deductions for losses as in one business could be used as a set off; but it is now proposed to deduct losses from income from personal exertion, and after that is exhausted, from property income with a certain enlargement of that particular section.

The provision in relation to the maintenance of secrecy of officers employed by the Department has also been extended. This has been proved necessary by facts which I think, are fairly well known to, honorable members, and. I think, the alteration will commend itself to the House.

The provision passed last December, dealing with non-resident persons, carrying on business here through residents, but in such a way as to avoid paying income tax in Australia, has been slightly altered so as to enable us to bring such people more easily into the taxation area.

Relief or benefit is to be afforded to partnerships and to those carrying on individual businesses. At present a private company, although it may be to all intents’ and purposes a partnership, has a considerable advantage over the individual or partnership carrying on business. The private company pays tax t the company rate only on any part of its profits which is- retained in the business and placed to a reserve, whereas individuals engaged in business, whose rate exceeds the company rate, are obliged to pay on the whole df their profits at whatever is the appropriate rate for their own income. The Government are desirous1 almost above anything of encouraging the expansion and stabilizing of business by the placing to reserves’ of amounts which will help to effect these two objects ; and in this Bill, in order to give some encouragement to the individual or the partnership, and to place both a little more closely upon the terms enjoyed by the- private company, provision is made by which 15 per cent, of the profits earned by the’ individual or the partnership can be taxed at the company rate’ of 2s. 5d., instead of at the rate appropriate to the individual or partnership if the latter is higher than the former.

Mr Prowse:

– If tax is collected on what ultimately becomes capital is it afterwards subject to further taxation?

Mr BRUCE:

– Once the 15 per cent, has. been charged at the particular rate appropriate to it, or at the company rate,, it has paid its tax for all time.

The Commissioner’s power to amend assessments is limited to three years, save in cases where the Commissioner has reason to believe, that there has been an avoidance of tax owing to fraud, or attempted evasion. In cases of fraud we cannot impose any limit. I do not think -that it would be the desire of honorable members to do so, but where that element is not present, the power of the Commissioner is limited to three years. I think i should point out, in fairness to the Commissioner, that he has voluntarily put that restriction upon himself for some time past,, and I, as. Treasurer, have concurred in what he has done, but so’ that the matter may be beyond all doubt,, we have now embodied the limitation in this Bill.

The provisions in regard to the Board of Appeal are exactly the same as they were in the measure passed in December last.

Certain exemptions are given. They are of a minor character, but are of some interest, because very real difficulties have occurred several times in the past. We are now exempting certain classes, such as visiting cricketers, and. similar persons; official representatives of exAustralian Governments and their entourage; representatives of societies or associations established, for educational, scientific, religious, or philanthropic purposes visiting Australia to attend international or Empire conferences, or to make investigations or research for such societies or associations; visiting pressmen, and any person visiting Australia and deriving income in respect of an occupation carried on by him while in Australia, whose visit, in the opinion of the Trea-surer, is primarily or principally directed to assist the Commonwealth Government, or a State Government, in the settlement or development of Australia.

Mr Watt:

– Those provisions are fairly wide.

Mr BRUCE:

– Many cases have occurred which certainly have not done Australia any good in which we have endeavoured to> levy income tax. We are now endeavouring to put the matter right without letting any people out of the net who justifiably ought to pay tax on what they have earned in Australia.

The only other alteration to which. I wish, to- draw attention is the fact that we have embodied in this Bill the provisions of the Customs Act, which apply in cases of fraud. This has been done on the advice of the Attorney-General and the Solicitor-General. and I believe, it is absolutely necessary if the revenue , is to be protected’. In the past, many cases, which were undoubtedly cases of gross fraud, have .been committed on the ;income , tax authorities; and, owing to the difficulties of establishing fraud in Court, it has been quite impossible for the Crown to maintain its position. The reason for that, of course, is that all the information which will determine the position of the individual is in the possession of the individual. It is almost impossible’ for the Commissioner of Taxation to obtain the necessary evidence. All I need say at this stage is that we are applying the provisions that are to be found in the Customs Act, and which I think have given general satisfaction in the past.

In this Bill, an attempt has been made to give effect to the recommendations of the Royal Commission. We have also attempted to give effect to the object for which that Commission was appointed, namely : -

To place the system of taxation upon a sound and equitable basis, having regard generally to the public interests, and particularly to the equitable distribution of the burdens of taxation, and the simplification of the duties of the taxpayer in relation to returns and in relation to objections and appeals.

We have done a substantial amount towards giving greater equity, but we have not done a great deal towards giving greater simplification. The Commonwealth system of taxation is new; it has been built up with a very great and almost alarming regard for equity; but the trouble is that we. cannot secure great equity and at the same time maintain great simplicity. The more we attempt to be just the more complicated the administrative machinery becomes. That is the greatest difficulty with which we are faced in regard to the whole of our income tax legislation. I have had innumerable examples of this. One deputation would wait on me and say, “ The one thing we want above everything in our income tax law is simplicity,” and I would cordially agree with’ them. But the next week another deputation, embracing a considerable portion of the same people, would come to me and demand that some little matter which was hurting their interests should be put right, when to put it right would mean a great addition to the complexity of our income tax law. I want honorable members to try to realize the effect of trying to be absolutely just, and I shall give an instance in the case of a company which earns’ profits both in Australia and overseas. I think that the average man would say that substantial justice had:>been done if we said to that company, “ We will not tax you upon the percentage of your profits that is earned overseas.” But we do very much more than that. Not only do we say that the company shall not pay tax on the percentage earned overseas, but we also follow the individual return of every taxpayer who is a ‘shareholder of that company, and give each the rebate to which he is entitled in respect of the part of the profits of the company earned overseas. I want honorable members to visualize for one moment a company with at least 2,000 tax-paying shareholders. The company pays dividends out of profits, 77 per cent, of which are earned in Australia and 23 per cent outside Australia. Every dividend in a taxpayer’s return, even if it amounts to only £5, has to be apportioned on the basis of 77 per cent, and 23 per cent, in calculating individual incomes. The same practice is followed with regard to non-taxable securities issued by the Commonwealth Government. Certain loans were issued by the Commonwealth Government free of income tax. If a company paid a dividend of £100,000, of which £1,000 was derived from interest on Commonwealth Government non-taxable securities, .that onehundredth part has to be followed into -every dividend that is paid to the individual shareholder, who is given a proportionate amount of relief. I ask honorable members to consider what a volume of work that involves. The Government does not suggest, nor do I, that we can alter that provision at the present time. If we did it would almost be a repudiation of our undertaking that we would not tax these securities; but I think the present practice is carrying one’s honour to a very refined point. It means an almost incalculable amount of administrative difficulty, and a great increase in the cost of administration. The two examples I have given will indicate to honorable members that there is great difficulty in securing simplicity if one really t ad truly demands absolute equity at the same time. As far as I. can see, the only hope we have of getting over many of these difficulties is that, in the future, our taxation may get on to such a low basis that we will be able to indulge in a little inequity without every taxpayer believing that something criminal is being done to him. To secure simplicity we must bring about closer co-operation with the State Governments throughout Australia. That is very difficult to accomplish owing to the complexity and justice of our system. An amalgamation of two taxation systems, which vary very greatly in their incidence, would not achieve very much. It might achieve a certain saving in administration, but it would do little to simplify the task of the taxpayer in sending in his returns; but if we can get on to a sufficiently low basis of income tax, and abandon some of our refinements of equity, I. believe we will be able to get a harmonized system of taxation for the whole of Australia, and there will then be no difficulty in having only one taxation authority. At the present moment, notwithstanding the difficulties with which we are faced, we are making very serious efforts to bring about an amalgamation. The States have received a draft of an Agreement which, after many alterations, represents an attempt to try to meet their views. It was prepared by the Commonwealth and submitted to the States for their consideration. Whether we will be able to effect anything on the basis of that Agreement I am not in a position to say, but I wish to assure honorable members that I am personally doing everything in my power, and so is the Government, to bring about an amalgamation.

The points which I have covered in this speech relate only to the broader issues that are raised in the Bill. Having heard my remarks, honorable members will appreciate my observation at the beginning that very few large and vital questions are involved. I do not minimize the importance of the questions, but I say they are limited in number. The other alterations are, to a great extent, drafting and machinery amendments, and I do not think the consideration of them need detain the House very long. The Bill, as I said before, could have been introduced as anamending Bill. The Government considered, however, that the balance of convenience would- be served by consolidating the eight Acts, so that the income tax, assessment laws of the Commonwealth wouldbe simplified as far as possible.

Sir Robert Best:

– Will the provisions of the Bill be applied to current assessments?

Mr BRUCE:

– Yes. The Bill has been introduced only after the fullest consideration by the Government of the recommendations of the Royal Commission. I wish particularly to stress that fact. It should go far to place the Commonwealth’ system of taxation upon a sound and equitable basis, and I think it will also discharge the other duty which was placed upon the Royal Commission of distributing the burden of taxation more equitably than it is distributed under the existing law. I think it will also do something, although not so much as I desire, in the direction of simplification.

Mr Maxwell:

– With regard to the taxation of undistributed profits, are there any principles laid down in the Bill for the guidance of the Commissioner in the exercise of his discretion ?

Mr BRUCE:

– The section is worded, “ in addition to all other facts,” which opens up the whole field as to what the Commissioner should consider. There are four points laid down, the first two being the principal ones, which should direct his mind in arriving at his decision.

Debate (on motion by Mr. Anstey) adjourned.

Sitting suspended from 6.28 to 8 p.m.

page 2973

PUBLIC SERVICE BILL

Second Reading

Debate resumed from 28th September (vide page 2846), on motion by Mr. Groom -

That this Bill be now read a second time.

Mr FENTON:
Maribyrnong

– I regret that the Government are not prepared to postpone the further consideration of this measure until to-morrow afternoon. As it is, we are asked to resume the debate in the absence of the Attorney-General (Mr. Groom), who initiated it. I presume that the honorable gentleman’s colleagues, however, are conversant with the provisions of the Bill ; that they do not anticipate being called upon to deal with questions relating to it on the motion for the second reading; and that the Attorney-General himself will have returned by the time that we reach the Committee stage. I protest against the change which has been made in the order of business on. the noticepaper. Every one anticipated that the debate on the motion for the second reading of the War Service Homes Bill would be resumed this afternoon, but as soon as we met a motion was submitted to vary the order of business. That, at the fag end of the session, is most unfair.

This is a very important measure, because, as the Minister explained when introducing it, it is to amend and consolidate the whole of the Public Service Acts of the Commonwealth. It consists of 113 clauses, as well as one or two schedules, and contains some general principles to which even at this stage we must devote our attention. I regret that the Leader of the Opposition (Mr. Charlton) is not here to resume the debate, and that, owing to the rush tactics adopted by the Government, I have had to take up the. discussion at, comparatively short notice.

Mr Brennan:

– Having regard to the way in which the Leader of the Opposition has been worked, it is a wonder that he is alive.

Mr FENTON:

– Those who consistently attend to their duties in this House know that it is necessary to have the week-end free in order that we may recuperate. The honorable member for Hunter (Mr. Charlton) had, however, to go to Sydney to attend the Eight Hours demonstration. This Bill was introduced only on Thursday last, and we have not had time to assimilate its provisions. We ought not to be expected to rush it through the House. It affects including permanent and temporary employees, nearly 40,000 public servants of the Commonwealth, and we should give it the most careful attention. I understand that it is similar to a measure that was introduced some time ago by the then Minister for Works and Railways, but was dropped owing to the antagonism displayed to certain clauses in it providing for the appointment of a Board of three Commissioners. This Bill contains the same provision, and provides, amongst other things, for reclassification and dual furlough.

Officers of this House are also dealt with in this measure. It has been urged by some that officers of the Parliament, instead of being under the joint control of Mr. Speaker and the President of the Senate, should be brought under the jurisdiction of the Public Service Commissioner, since they would then enjoy the benefits that accrue from the right to approach the Public Service Arbitration Court. It may be a moot point whether they would fare better or worse, but one or two of our experiences in regard to the treatment of officers under the joint control have not been too pleasant. If you, Mr. Speaker, had sole control of the officers of this Parliament, I believe that something more like evenhanded justice would have been dealt out to some who have been unfairly treated, and whose services in one or two cases have been dispensed with. I have particularly in mind the case of a temporary employee, and I believe that if the officers of the Parliament had the right of appeal against an autocrat they would have better chance of securing justice. If brought under the Public Service Commissioner, they would have a right to join the Public Service Association, and through that channel could make proper representations to those who have control of affairs. There are grievances amongst the staff of the Parliament as to the payment, or lack of payment, for overtime.

Those responsible for the introduction of the original Commonwealth Public Service Bill of 1902 were wise in determining that there should be only one Commissioner. I think I am right in saying that the first State Government to introduce: the three-Commissioner system was the Service-Berry Coalition Administration of Victoria; but after an experience extending over many years the State resorted to the one-Commissioner system. While there are one or two States which still have three Commissioners, most of them, as well as the Commonwealth until the present time, have thought it sufficient to have one Public Service Commissioner. The Minister said that he had paid considerable attention to the recommendations of Mr. McLachlan, our first Public Service Commissioner, who, on the 6th January, 1919, furnished a report to the Government on the Public Service of the Commonwealth. I shall read what he says on the subject of control by three

Commissioners. because his experience was such that his opinion must be heeded by honorable members -

Consideration has been given to the question whether, in view of the ramifications of the Commonwealth Public Service, and the magnitude of the interests to be conserved, any advantage would accrue from the establishment of a Public Service Board of three members in place of the present system of control by one Commissioner. The New South Wales State Service Act is administered by a Board of three members. In Queensland, Public Service matters are dealt with by a Committee of the Cabinet, while in Victoria, South Australia, and Western Australia, the Public Services is managed by one Commissioner. In new legislation now before the Tasmanian Parliament, provision is made for appointment of a Commissioner and an Assistant Commissioner. The New Zealand Public Service is controlled by a Commissioner and two Assistant Commissioners. In Great Britain the Civil ‘Service Commission comprises two members, but the functions of this Commission relate mainly to the holding of examinations, and are not administrative. The Victorian Royal Commission on the State Public Service,, reporting in 1917, discussed the general management of that Service, and after full consideration of the arguments for and against the constitution of a Public Service Board, stated that, although a good deal might be said in favour of the appointment of a Board of three Commissioners, they (the Royal Commission) were not prepared to recommend any change in that regard. It may be mentioned that for many years the Victorian Public Service was controlled by a Public Service Board of three members, and that this arrangement was eventually superseded by the present system of control by one Commissioner.

In my opinion there are strong reasons against alteration of the present system of management of ‘the Commonwealth Public Service. Control by a Board of three members necessarily involves a more cumbrous procedure -than by <a single Commissioner, and consequent delays in settlement of questions of administration. In addition, the important factor of direct and personal responsibility would be sacrificed’ by the appointment of a Board. Moreover, the circumstances surrounding the Commonwealth Service differ very materially from those of a State Public Service, seeing that the former service is spread over all the States forming the Commonwealth, necessitating the location of. a Public Service Inspector in each State, exercising delegated powers of the Commissioner. In providing for the future administration of the Public Service Act, it would be disadvantageous to establish a Public Service Board, with the consequent inelasticity of control and the diminution of personal responsibility. The existing system of management by one Commissioner will undoubtedly better meet the requirements of 4he Commonwealth Public Service, provided that the necessary assistance is given him to carry out the duties and extended functions, to be conferred upon -Kim. f

The .Government proposes to appoint three Commissioners - no doubt a Chairman and two ordinary Commissioners - but we do not know what salaries are to be paid to them, because ria amount is stated in the Bill. If we agree to the appointment of a Board of three Commissioners, the Public Service should have representation on that Board. There is a Public Service Association, which concerns itself with matters of interest to public servants, and I am sure that the public servants would be more satisfied if they were represented on the Board of control. They might well be asked to submit halfadozen or a dozen, names to the Minister administering the Act, and the Minister would do well to select from that list a man to represent the public servants. It may be the intention of the- Government to give the Public Service representation, such as the returned soldiers nave on the Boards which deal with gratuities, pensions, and other matters of interest to them. I have here the Whitley report, of which I have heard members opposite, speak in terms of commendation. The Committee which prepared that report’ recommended that employers’ and employees should be represented on all Boards having to do with wages and conditions in various industries. I understand that an- extension of this principle allows the Public Service of Great Britain to be administered in a large degree by a series of councils, on which officers have equal r&presentation with the Departments, the Government appointing independent chairmen; though on this subject the Minister will be more authoritatively informed than I am. At all events, on the Board which sits for the adjustment of differences between the Railways Commissioners of Victoria and their employees the latter have representation, and that system, I understand, has operated satisfactorily. It has given the employees confidence in the justice of the railways administration, because they know that their representative will fairly represent their case should any question arise affecting wages or conditions. Even though the decision of the Board may not be in their favour, they aire better satisfied if the merits of their claim have been argued pro and con than they would be if they had no representation on the Board.

I understand that permanent hands are sometimes dismissed at the same time that temporary hands are being employed. I could give illustrations of this from the experience of the Victorian Public Service. This course has sometimes been followed in order to lead to the impression that retrenchment is being carried out, and money is being saved. In view of the measures [which have been introduced, and the powers assumed by Ministers under those measures, I am inclined to think that there has been some foreshadowing of retrenchment in the Federal Public Service. Some people are under the impression that once a person secures an entry into the ranks of permanent officers of the Service, he can remain in it practically for life, provided he’ behaves himself decently. That is not the case; and I can give an illustration from the experience of the Victorian Service in connexion with which notices have been sent out that, owing to the imperative necessity for retrenchment, the services of certain officers would not be required after a certain date. Men and women have been dismissed from the Service without recompense, although some of them were promoted only a few months previously. I know that, in some departments of the State Service, temporary hands have- been employed year after year. I believe that in the Government Printing Office there are thirty or forty men who have been employed as temporary hands for fourteen, fifteen, and even twenty years, and except in case of sickness they have not lost any time in all those years. I ;remember that’ the late Honorable James Munro, when Premier of Victoria, said that it was undesirable that there should be so many temporary men employed, and if their services were continuously required, they should be appointed permanently. Many temporary hands have qualified for the positions they hold, and have spent years in equipping themselves for the efficient discharge of their duties.

It is claimed that it is desirable that men should not be appointed to the Public Service without an entrance examination. Provision is made for appointments to the Fourth Division without examination. I am quite prepared to admit that there are occasions when it is desirable to secure the services of men who, are not already in the Public Service. The Victorian Government recently took in hand the supply of electricity for power and lighting. They made provision for a great scheme, and a Bill dealing with it was passed by the State Parliament. Naturally, the Victorian Government desired to obtain the services of a suitable man to organize and carry out the scheme, and they selected a man from outside the State Public Service in the person of Sir John Monash, who is eminently qualified to discharge the onerous duties of controlling so big an undertaking. Though there may be many eminent men in the Public Service, it may not always be possible to select from the Service a man possessing all ‘the qualifications necessary for a particular office. Complaint has, however, been made in this regard, and I think that blame particularly attaches to the Prime Minister (Mir. Hughes) for the appointment of men to the public Departments of the country without any entrance Examination. Where the Prime Minister has considered that the employment of a certain man is essential, the law has been practically over-ridden, and that man has been appointed.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Oan the honorable member give me a specific instance of that?

Mr FENTON:

– I heard that when the Prime Minister wanted the services of a certain man, he said he was going to have him despite the Public Service Commissioner ,or any one else. Instances of the kind will be given when we come to the consideration of clause 39.

It is suggested that the Commissioner should not be permitted to transfer officers from the State Railway and other Departments without an entrance examination. I believe that the Federal Public Service has been enriched as the result of the transfer, especially at the initiation of Federation, of many officers from the State Services. The head of one of the State Departments in Victoria complained to me that the Federal Service was robbing the. State Service of some of its best men. I am very glad to know that in the larger sphere of the Federation we have the benefit of the wisdom, experience, and, in .some cases, expert knowledge, of those men. I can agree with the Minister that in view of the multifarious duties which have to be performed, and the manner in which those duties are carried out, the Public Service of the Commonwealth is one of which we have every reason to be proud. Here aDd there a man may be found who does not efficiently discharge the duties of his position, but speaking of the Federal Public Service as a whole, I think we can say that it compares more than favorably with any Public Service in any other part of the world.

It is not my intention to speak at length on this stage of the measure. It contains 118 clauses, every one of which must be carefully scrutinized if the Bill, when it passes, is to be satisfactory to the House, to the country, and to the Public Service. I trust that this is not a measure which the Government will desire to rush through. It cannot be expected for a moment that we can deal with a Bill of this magnitude, practically remodelling our Public Service Acts, without very careful consideration. This is the second consolidating measure which we have been considering this afternoon. I remind honorable members that the way in which the work of the Public Service will be carried out in the future will depend on the way in which they perform their task in the consideration of this measure.

Mr Watt:

– Would the honorable member not like to hear the Minister for Defence (Mr. Greene) declaiming against this procedure, if he were in Opposition?

Mr FENTON:

– I can remember that in 1910 and 1913 there was ‘a much younger looking gentleman than the Minister for Defence who occupied a seat on the bench directly behind me. There were no standing orders limiting honorable members’ speeches in those days.

Mr Wise:

– Speeches lasting three hours and four hours were common in those days.

Mr FENTON:

– That is so, ;md the honorable gentleman who 3 now Minister for Defence always did his duty in that regard. We know, too, how his leader performed when in Opposition, although, as I have said, honorable members had then plenty of time to consider the measures submitted to them. We are asked, practically without a moment’s notice, to go on with the consideration of a Bill, containing 113 clauses, for the control of the Public Serv-i«a of the country.

Mr Watt:

– And the Minister who moved the second reading is not in the chamber.

Mr FENTON:

– I referred to that at the commencement of my remarks.

On the subject of arbitration for the Public Service, it is claimed that the practice of the Federal Arbitration Court should be followed. That Court has laid it down as a rule that only members of unions shall be permitted to take advantage of the benefit of awards. The Court holds that persons outside the unions, who contribute nothing to the cost of an investigation resulting in the redress of grievances or the betterment of wages and conditions, should not participate in the benefit of awards. It is claimed that in the same way members of the Public Service who are not members of the association within the Service, and do not contribute to the cost of applications to the Public Service Arbitrator, should not benefit as the result of his awards. I know that the Prime Minister would say that if a man did not belong to a union he should not have the right to participate in any of the benefits secured by that union, and at its expense. I quote the following from a communication addressed to the Prime Minister upon thiB subject of the extension of awards to nonmembers of an association : -

For some time my association lias been urging the repeal of Public Service Regulation 166 (formerly 1a), which permits of the benefits of awards made under the Arbitration (Public Service) Act being participated in by officers who arc not members of associations registered with the Commonwealth Court of Conciliation and Arbitration. This regulation has been greatly extended by a notification in the Commonwealth Gazette of 18th March, 1920, to the following effect: - “Approval has been given to the Public Service Commissioner granting war bonuses of amounts not exceeding those granted by the Commonwealth Court of Conciliation and Arbitration to members of Public Service organizations, to officers who arc not members of relative organizations.”

The broad principle that those who take no action and are under no burden, either financial or otherwise, in connexion with the obtaining of awards from the Arbitration Court should not derive advantages accruing therefrom, applies with special force to my association.

As I just remarked, that argument should appeal to the Prime Minister, remembering, as I do, his words and actions practically throughout his political career. Parliament should refuse to sanction legislation by regulation. I do not know whether the Government have the power, or whether it is consistent with the provisions of the Act, to frame such regulations as are here referred to.

I again express regret that greater opportunites have not hitherto been afforded for studying the measure; but I hope that full and free discussion may be permitted in order that where the defects of the Bill are revealed they may be amended in Committee. As the result of our legislative care I trust that there may be brought into existence an Act under which the Service will be able to work efficiently and happily, both under Ministerial and departmental heads. We should make the perfection of the Service our aim, for I know of no more important body in the land, starting with the officers of Parliament and embracing all those under the dozen other heads of Departments. If we are to do the fair thing ‘by the Service this Bill must not be rushed. It requires most careful consideration before it can be moulded into a measure which will make for contentment within the Service and satisfaction to the general body of taxpayers outside of it.

Sir ROBERT BEST:
Kooyong

– I share with the honorable member for Maribyrnong (Mr. Fenton) regret that the Government should have seen fit to spring this measure on the House practically within the last few minutes. We have not had an opportunity to study this important measure, and it is idle to suggest that it is purely and simply a Committee Bill. It introduces principles of a fundamental character, principles demanding the thoughtful attention of Parliament. The AttorneyGeneral (Mr. Groom) spoke with strong approval of the recommendations of Mr, McLachlan. The Minister stated that, by reason of the former Public Service Commissioner’s great experience, Parliament would be justified in accepting his re commendations with confidence. I am prepared to say the same. I hold the highest opinion of Mr. McLachlan, who occupied his very important post with ability and distinction. I have managed to procure a copy of his report on the Public Service, and I had intended to read the same excerpt therefrom as has been already quoted. Mr. McLachlan in his report deals with the appointment of a Board of Commissioners for the management of the Public Service. It is singular that although the Government have given the fullest consideration and weight to Mr. McLachlan’s various suggestions, they have now accepted all his proposals save that relating to the management of the service.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The Attorney-General told you why.

Sir ROBERT BEST:

– The AttorneyGeneral told us that a Board of Commissioners had been recommended by the Economies Commission, but as ‘ Mr. McLachlan had infinitely more experience in the management of the Public Service, the Government would have been justified in accepting his advice for the appointment of a single Commissioner.

Mr Gabb:

– I call attention to the fact that there is not a quorum present.

Mr Higgs:

Mr. Speaker, I should like to know if I have any redress. An important deputation from Queensland is waiting for me this evening, and I am interrupted by this frivolous call for a quorum.

Mr SPEAKER:
Hon. Sir Elliot Johnson
Sir ROBERT BEST:

– During this last few minutes I have been looking through the duties which are assigned to the Board of Commissioners and I do not find any that could not, with equal efficiency, be discharged by the Public Service Commissioner. My objection to the appointment of a Board is confirmed by the experience of the Victorian Public Service. At one time, there was a Board of Management of three, but the Government appointed a Commission for the purpose of inquiring into and reporting upon the working of the system. That Commission reported that whilst same advantages attached to the control of the Service by a Board of Management greater advantages might be expected from the appointment of a single Commissioner. This is the system adopted in other countries. The results following Mr. McLachlan’s administration justify a continuation of that method of control. Since Mr. McLachlan left the Service, it has been controlled by an Acting Commissioner whose full efficiency in administration has been interfered with to a large extent by the temporary nature of his appointment; a condition that is most unfair to him. If it is suggested that any falling off in efficiency in the Public Service has been noticed of recent years - I am not aware of it - in my opinion it is directly due to the fact that the Acting Commissioner, who is an able and experienced officer, has not been at liberty to make the alterations in management which he could have made were he occupying, the position permanently. Control by a Board of Commissioners is not likely to lead to greater efficiency than control by a single Commissioner. I am quite certain that the; outcome will merely be the creation of another Department of the Public Service, and that lt will rapidly drop into the same rut or routine as other Departments.

Mr Maxwell:

– Would the proposed functions of the Board be within the compass of a Commissioner ?

Sir ROBERT BEST:

– Quite. All the functions of the Board which, I think, are elaborated in clause 16, could be performed quite as well by a Commissioner.

Mr Watt:

– I should, like to see the man who would be’ able to do the work with the big Departments of the CommonWealth under his sole control.

Sir ROBERT BEST:

– There is no reason why a strong; man could not discharge all the duties satisfactorily.

Mr Maxwell:

– The Board do not want to stay in Melbourne all the time.

Sir ROBERT BEST:

- Mr. McLachlan points out in his report that owing to the great expanse of Australia it is very desirable that in addition to a Commissioner there should be .an inspector in every State. The Board of Management who are proposed to be substituted for the Commissioner would have their head-quarters somewhere, but it would not be possible for all three to travel to the various capitals and remain there for any length of time, and perform the duties of their office; they would, no doubt, travel singly to various States. Mr. McLachlan thinks that the work could be best done by having an inspector at the head in each State reporting to the Commissioner at head-quarters.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Does not the report of the Economies Commission show that a single Commissioner has not been able to do all that was required ?

Sir ROBERT BEST:

– The Economies Commission’s suggestion that a Board of Management should be appointed is directly opposed to Mr. McLachlan’s opinion that a Board is not an efficient means of controlling the Public Service.

Mr Wise:

– And he had infinitely more experience of the working of the Commonwealth Departments than had the members of the Economies Commission.

Sir ROBERT BEST:

– No man has had the same experience of Commonwealth Departments as Mr. McLachlan has had, and no man’s advice in regard to its management is as valuable as his. We should have no hesitation in accepting his recommendation, for it is founded on the experience of other countries as well as his own. The Mother Country, with its vast Public Service, has a system of control by one Commissioner with an assistant. Mr. McLachlan reviewed the systems and experiences of other countries, and his considered judgment is that the Commissioner system is the best method of managing a Public Service.

Mr Fenton:

Mr. McLachlan organized the Federal Public Service.

Sir ROBERT BEST:

– He had all the responsibility of organizing the Service at the inception of Federation, and he discharged his duties with singular skill and ability. He made a thorough investigation of the management of the Service, and the views embodied in his report should not be disregarded by this Parliament.

I understand it is provided that the proposed Board will make certain recommendations to the permanent head of a Department which he will be requested to carry out. The recommendations may be very valuable, but the permanent head may refuse to accept them. They will then be submitted to the Minister, and if he rejects them the Board of Management may, in the final resort, have the recommenda-tions laid on the table of the House, and it Will be competent for the House within a certain number of days to deal with them. That is a most inconclusive method. Possibly all the work and study by the Board of Management to bring about certain reforms may go. for nought, because when their recommendations are laid upon the table of the House, the prospect of their being dealt with by the House would be very remote indeed if the Minister controlling the Department concerned were hostile.

Mr Richard Foster:

– How often would that happen?

Sir ROBERT BEST:

– We cannot say how frequently it would happen, but it is possible that on occasions all the work of the Board may go for nought because of the inability of that body to enforce its recommendations. Honorable members may be relying upon very effective work being done by the Board, but as the Bill is drafted that body will have no power of enforcing its will.

I wish to refer to a matter that ‘has been the cause of very great soreness to old and tried public servants. During the last four or five years many men retired after having been in the Service of the State and the Commonwealth for from forty to upwards of fifty years. The Public Service Act made provision for double furlough, the first leave to be taken at the end of twenty years’ service, and the second period of furlough at the end of another twenty years’ service, but as a result of the opinion of the Acting Attorney-General, in 1916, those men who had served forty years without taking the first period of furlough could be granted only one period of furlough of six months, or compensation for that period Other men who, at the end of the first twenty years, had taken six months’ furlough would be entitled, if they remained in the Service another twenty years, to a second period of six months, or, alternatively, six months’ pay upon retirement. Some extraordinary anomalies were created by this interpretation of the law. A number of public servants had, in consequence of the exigencies of duty or to meet the convenience of the Government, refrained from taking their first period of furlough, believing that at the end of forty years’ service they would be eligible for twelve months’ furlough or, alternatively, twelve months’ pay, but they discovered that they had lost the first six months’ furlough, and at the end of their forty years’ continuous service were eligible for only six months’ furlough or its equivalent in salary. This unfairness has provoked much complaint from time to time. The Acting Attorney-General, in 1916, did not consider that an officer who had continued in the Service for forty years without taking furlough was eligible at the end of that period to twelve months’ leave on full pay, because the second period of twenty years would only commence from the end of the furlough taken in respect of the first period of twenty years’ ser.vice

Mr Richard Foster:

– In 95 per cent, of those cases it was in the public interest that the officer did not take the first six’ months’ furlough.

Sir ROBERT BEST:

– That is what I am pointing out. Men holding important positions gave continuous service for forty years without furlough, often because their services were so important that they could not be spared. The Acting Public Service Commissioner, in commenting upon the opinion of the Acting AttorneyGeneral, said -

It will thus be seen that, to avoid invidious distinctions, and to secure equal advantages to all officers, provision is urgently required in the law to enable an officer who has served at least forty years to qualify for two periods of furlough, to be taken together, and to admit of an officer who has served twenty years, but less than forty years, being granted furlough for the first period, plus a proportionate amount of leave for the balance upon his retirement after reaching the ,age of sixty years; in either case, the monetary equivalent to be paid to an officer upon retirement, or to his dependants upon his death. I think the circumstances call for an amendment of the Public Service Act on the lines suggested, and suggest for your consideration that early action in that direction should be taken.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– That is what we are doing.

Sir ROBERT BEST:

– No; _ the Government are only partly doing that. What the Government are doing is in regard to those officers who retired with upwards of forty years’ service, after the 30th November, 1919. I intend to give three or four typical instances in which men who have rendered as much as fortyseven and fifty years’ service have not received their second furlough.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– How far back would you got

Sir ROBERT BEST:

– I should say that at least any officer living, who retired after having servedfor forty years or upwards, should be entitled to the second portion of his furlough.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Do you know what that would cost?

Sir ROBERT BEST:

– I do not think it would be much. I am assured that there are precedents for the granting of the furlough, or its equivalent, in the shape of full salary for twelve months. An officer in the Customs Department, who had had furlough after twenty years’ service, claimed that upon his retirement he was entitled to six months’ full pay in lieu of furlough not taken for a second twenty years’ service. The claim was acknowledged. Another officer of the Customs Department received six months’’ furlough upon his retirement, and also two months’ full pay, being the proportion in lieu of a second period of furlough.

Mr Bayley:

– There are several cases of the kind.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I think the honorable member for Balaclava paid some of those double furloughs, and that is why the Bill is dated back to cover them.

Mr Watt:

– This Bill is only dated back to the 30th November, . 1919. Any payments I authorized would probably have been made before that.

Sir ROBERT BEST:

– The principle has already been acknowledged in some cases, but not in others. If the Minister was unprepared to make a proportionate allowance in regard to service under forty years, then I would limit the payment to those men who have upwards of forty years’ service. The spirit, if not the letter, of the Act was that such officers should be entitled to double furlough, or compensation in lieu thereof. Those officers should be treated in the same way as it is intended to deal, under the Bill, with officers who retired after the 30th November, 1919.

Mr Watt:

– Would that not create another anomaly? Take the case of a man who served for thirty-nine years, but did not quite complete forty years.

Sir ROBERT BEST:

– The law clearly was that men with forty years’ service and upwards should receive double furlough. Among the typical cases, of which I have particulars before me, is that of an officer of the Customs Department, who retired on the 1st May, 1919, after over forty-seven years of continuous service. No furlough was taken by him during the whole period. This officer’s work during the war period was of a particularly onerous character. It was in the interests of the Public Service, and not of the officer himself, that the furlough was not taken. In many cases, it was felt by officers that, under the law, they were bound to receive their double furlough at the end of the period of forty years. Some of the old public servants have naturally put their cases to me. I have an instance of another Customs officer, who retired on the 6th January, 1917, after continuous service amounting to forty-four years eight months. No furlough was taken by him during the period. Another public servant, whom honorable members know well, retired from the Customs Department on the 26th June, 1918, after continuous service extending over forty-nine years five months, and no second furlough was taken by him. To place a purely technical construction on the law would mean real hardship in these cases. Two Attorneys-General have given opinions that differ as to the legal interpretation. One said that the officers were entitled to the furlough, and the other declared that they were not.

Mr Watt:

– What do you think about legal opinions by Attorneys-General?

Sir ROBERT BEST:

– We have opinions by two Attorneys-General - one for, and the other against - and I should say that there is safety in numbers.

There is one division in the Bill that I do not quite understand. We have already passed a Superannuation Bill, which, amongst other things, seeks to do away with the old system of life assurance. Now, however, by Division 12 of this. Bill there is a revival of that system. Officers are called upon to effect life assurance, and there are a great number of clauses dealing with officers who are unable to do so, and so forth. It seems extraordinary to me that this part of the Bill should be so completely inconsistent with the Superannuation Bill, and I can only suppose that the explanation is that the Bill now before us was introduced and passed in the Senate before it had been determined to introduce the superannuation measure.

Mr Mathews:

– Is this Bill not intended for men who are already insured, and who will not come under the Superannuation Bill?

Sir ROBERT BEST:

– The Superannuation Bill provides for all that.

Mr Watt:

– This Bill was introduced in the Senate last year.

Sir ROBERT BEST:

– And I presume the idea now is to delete Division 12 from this Bill.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– There is no question that, to whatever extent the two Bills are in conflict, they will have to be brought into line.

Sir ROBERT BEST:

– Quite so.

I think I have made my position clear in regard to this Bill. Personally, I think that the Government are making a mistake in proposing a Board of Management. That idea is in defiance of the advice of Mr. McLachlan, the man most experienced and able to give advice on the subject. I urge that the suggestion I have made in regard to double furlough should receive the sympathetic consideration of the Government, and that justice should be done to the men I ‘have mentioned. The Bill generally is founded on the advice of Mr. McLachlan, and no doubt is a very able and comprehensive measure. While it provides for some valuable reforms, it will have to receive the most thoughtful and careful consideration in order that justice may be done.

Mr Maxwell:

– Had Mr. McLachlan before him the proposed powers with which it is suggested the Board shall be invested ?

Sir ROBERT BEST:

Mr. McLachlan’s report is dated, I think, the 6th January, 1919, and it was presented in 1920. At the commencement of his report, Mr. McLachlan says: -

In commencing my investigation into the matters remitted to me for consideration and report, it was realized that the task involved a wide survey of Public Service administration, covering not only the organization and management of the various Departments constituted under the provisions of the Public Service Act, but also the numerous Governmental activities for which legislative authority had from time to time been granted under special Acts of Parliament dealing with territorial services and services established in connexion with Defence measures, or matters arising out of the war. In addition, it was seen that, in reporting upon the action necessary to secure a proper co-ordination of Public Service powers and authorities, consideration must necessarily be given to the effect of legislative recognition of Public Service Associations and the issue of awards under the Arbitration (‘Public Service) Act upon the efficiency of the public Departments and the conservation of the public interests.

He gave the fullest consideration to the proposal for the establishment of a Public Service Board of three members in place of the present single Commissioner.

Mr Watt:

– As a matter of fact, both these inquiries were going on simultaneously, and Mr. McLachlan finished his report and presented it before the other report was presented. If the proposal is for a Boardof Commissioners it ought to be thrown out, but if it is for a Board of Management, it is good.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– It is for a Board of Management.

Sir ROBERT BEST:

- Mr. McLachlan gave special consideration to a comparison of the probable efficiency of a Public Service Board as against a Public Service Commissioner, and he most definitely says that the existing system of management by a Commissioner will undoubtedly better meet the requirements of the Public Service, provided that the necessary assistance is given the Commissioner to carry out the duties and functions to be conferred upon him. His deliberate opinion is that a Public Service Commissioner, particularly for a continent like Australia, is far more effective than would be a Board of three. I do not wish to quote all the reasons on which he came to that conclusion, but they are to be found in his report, and his advice cannot be lightly set aside by this House.

Mr MATHEWS:
Melbourne Ports

– I desire to address myself to the point mentioned by the honorable member for Kooyong (Sir Robert Best) in relation to double furlough, and in doing so may mention that, for nearly nine years, I have been entreating different Treasurersand Prime Ministers to give effect to what, in my opinion, would be only a fair concession. The present PostmasterGeneral (Mr. Poynton), and the right honorable member for Balaclava (Mr. Watt), when holding the portfolio of

Treasurer, were approached by me in connexion with this matter, and I almost entreated the honorable member for Balaclava to grant double furlough in certain specified cases; but, unfortunately, in consequence of Ministerial action, I suppose, nothing was done. According to the Bill certain officers will gain some advantage in this respect; but its retrospective provisions should be further extended.

Mr Poynton:

– Where would the honorable member draw the line?

Mr MATHEWS:

– All those at present living should be included, and if that were done the cost involved would not be great, while, at the same time, only due consideration would be extended to men who have rendered long and faithful service.

It is the intention of the Government to provide for the appointment of a Board of three Commissioners in place of a Public Service Commissioner; but it is reasonable to assume that if a Board is appointed the Government will select the chairman, and consequently its work will not be as valuable as if the chairman wore appointed by the members of the Board. It appears that one member is to be appointed for a term of five years, another for four years, and one for three years, and thereafter each appointment i9 to be for a term not exceeding five years.

Mr Watt:

– It means a rotating Board?

Mr MATHEWS:

– Yes; arid it will mean that the chairman will have greater power than the other members. In Victoria we have three Railways Commissioners, but every one knows nhat the Chief Commissioner “runs the show.’’

Mr Watt:

– That is quite different, as the Commissioners have separate departmental duties.

Mr MATHEWS:

– That may be so; but I think even the right honorable member for Balaclava will admit that the Chief Commissioner is in control, particularly as regards the fine points which determine the manner in which the Service shall be conducted. According to the Bill, the Governor-General will appoint the chairman of the proposed Board, and two other members will be appointed at lower salaries, which means that the chairman will be in a stronger position than his colleagues and able to dominate the Board. In view of these circumstances it would be just as well to have one Commissioner instead of a Board of three, although those who favour the latter will not make such an admission. I am quite satisfied that when the Government have appointed the Chairmen of Parliamentary Committees that the product of such Committees has not been the same as it would have been if the Chairman had been appointed by the Committee. If the members of the proposed Board had equal power its work would be carried out more harmoniously, because a chairman appointed by the Government, particularly when he receives a higher remuneration, naturally assumes greater authority than the other members. A Board, appointed in the manner I have suggested, should be able to Tender effective service, because, on all decisions, the majority would rule, and I cannot see the necessity of utilizing the brains of three men when the chairman is likely to be a controlling factor. Such a suggestion is not likely to receive much attention by the Government, merely because it has been made by a member of the Opposition; but the Minister will admit that it is one that should be considered. I am, however, not particularly concerned in this matter, because I believe the proposed Board will be a failure whatever is done, and that it will work in the interests of a particular section, instead of on behalf of the great body of public servants.

Clause 30 is an old provision, and one which has caused more trouble in the Service than any other. Sub-clause 2 reads -

The right to receive an increment in any year shall depend upon the good fmd diligent conduct and efficiency of the officer and the period of attendance for duty during that year.

That means that the head of the Department shall have the right to say whether a public servant shall receive an increment or not.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Does the honorable member suggest that increments should be automatic?

Mr MATHEWS:

– Yes, because ‘we are told that a contented and efficient Service will produce the most desirable results. Promotion should also be automatic, and although there may be difficulties in that regard I am certainly in favour of public servants receiving annual increments, because there is notthe slightest doubt that in many instances favoritism is shown. The members of the staff at the Department of Trade and Customs admitted that three officers who have not been granted increments have been unfairly treated, but nothing could be done. An officer is either efficient or is unworthy of the position he occupies, and it should not be left to any one to have the right to jeopardize his prospects for personal reasons. An officer may be punished because his gait is not altogether what his superior officer favours, or because he does not take sugar in his tea and the head of the Department does. Those are, of course, extravagant illustrations, but they are sufficient to indicate what I mean in saying that some officers are penalized merely because they do not please the departmental head, although their work may be in every way satisfactory.

Mr Fenton:

– Influence is also brought to bear.

Mr.MATHEWS.- Yes, social and other influences are considered. I could give the Minister (Mr. Greene) the names of threeofficers who were in the Department of Trade and Customs when he was the Ministerial head, and could prove that the action taken in their cases was most unfair. The departmental head knew that these officers had been unjustly treated. I am strongly opposed to any man having the right to say whether an efficient officer shall receive an increment or not. If a man is inefficient, or endeavours to carry out his work in a state of intoxication, he should be told that his services are no longer required.

I do not wish to set up any class hate, but there is a clause in the Bill - clause 60 - which is likely to spread such a feeling in the community. This clause reads as follows: -

Mr SPEAKER:

– (Hon. Sir Elliot John son). - Order! The honorable member is not in order in reading the clause at this stage.

Mr MATHEWS:

– It is sufficient for me to say that by this clause the “ chief officer may “ allow a man to be absent for the “ purpose of attending Arbitration Court proceedings. Another clause says that an officer may be given leave to pre pare evidence for the Arbitration Court. There should be no “ may “ about it. In such circumstances the provision should be that an officer “ shall “ get the necessary leave.

Mr Watt:

– The furlough right depends on the word “ may.” In fact, right through the Bill “may” is used.

Mr MATHEWS:

– I am aware of that fact, but, unfortunately, in the matters to which I have drawn attention there is every possibility that the head of a Department, who may have some illfeeling towards, or may be politically opposed to, a subordinate, may refuse to grant him leave of absence for the purposes covered by the provisions to which I have just drawn attention. In the circumstances, I think that he should be compelled to grant the necessary leave. I do not know that there has been any case in which such leave has been refused, but on at. least one occasion such a happening nearly did take place. In this respect I hope the Minister will listen to reason, and make an alteration which will enable officers of the Public Service to secure leave to absent themselves in the interests of their fellow servants.

Mr WATT:
Balaclava

.- When I was listening to the eloquent and irresistible appeal of the honorable member for Melbourne Ports (Mr. Mathews) I was thinking of the condition of the House to-night as being a very unfavorable commentary upon the procedure adopted by the Government in submitting this Bill, which, after all, is a very important measure, not only to the community, but also to the vast and growing organization known as the Public Service.

Mr Brennan:

– Hear, hear ! I call attention to the state of the House. [Quorum formed.]

Mr WATT:

– I am sorry that honorable members have been disturbed from their slumbers or their labours elsewhere in the precincts of the House.

Mr Hector Lamond:

– Our slumbers have not been disturbed.

Mr WATT:

– I expected from the Honorary Minister one of those interjections for which he if noted.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– We have had to receive two deputations.

Mr WATT:

– According to the ruling of Mr. Speaker, Ministers are not entitled to receive deputations in the precincts of the House. That is a matter that will have to receive attention. I was saying that this was an important Bill, worthy of the sustained consideration of Parliament; yet. owing to the lassitude that has fallen on Parliament, we are dealing with it as if it were of no consequence whatever. The moment this measure was launched - it contains 113 clauses and several schedules - the Attorney-General (Mr. Groom) gave us a sheaf of amendments. I have counted them. There are, roughly, ninety-five amendments, not yet notified but circulated for the information of honorable members, to a Bill containing 113 clauses.. Public Service legislation, is highly technical; it involves years of study; and although this Bill is, doubtless, founded upon the recommendations of one of the most expert and experienced administrators in Australia, Mr. McLachlan, an ex-Public Service Commissioner of the Commonwealth, I take it that this House ought not to accept the dicta of anybody on matters so important as this.

I have tried to understand the clauses of the Bill since the Attorney-General circulated and introduced it. My attention has been directed, for example, to one thing which I think would puzzle a Philadelphian lawyer. It is in the definition of a title that runs right through the Bill. “ Chief Officer “ means “ the chief officer in a State or part of the Commonwealth, of the Department in connexion with which, or wherein is employed, any officer in connexion with whom the term is used or is applicable.”

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– That is as clear as mud !

Mr WATT:

– This chief officer is created for the first time in the history of Public Service legislation - at any rate, in the Commonwealth - and what is exactly intended I would not venture to say without a reference to Mr. McLachlan’s report, but I believe it is desired to create a kind of subordinate or branch chief, upon whom will be cast certain delegated or new responsibilities hitherto borne by the permanent head. If one had time to put the microscope on this Bill and follow the derivative recommendations of Mr. McLachlan, I venture to think that it would give rise to considerable discussion in this House, not only in the interests of the Public Service, from which stand-point it has been discussed at some length to-night, chiefly but not wholly, but also in the interests of the community.

The broadest principle in this Bill is the introduction of a Board of Management. The honorable member for Kooyong (SirRobert Best) paid special attention to that phase of the question, but according to my mind misjudged the object of the Government. 1 say this with great respect to one who has had so much administrative experience and has made a complete study in this part of Australia of Public Service administration. IfI were asked to judge as to whether one Public Service Commissioner would be better than three Public Service Commissioners, I would select one. If it were merely a question of commissioning the Service. I think that baldly the experience throughout Australia favours control being under one hat, the discretion being centred in a single mind. But that is not the object, apparently, which the Government had in view in the Bill. To ascertain that, we would only have to compare the powers proposed to be given to the Board of Management provided for in the Bill with the powers enjoyed by Public Service Commissioners in the Commonwealth, or in any of the States of Australia. They are widely different; so great is the difference that it is perfectly clear that the proposed Board of Management is supposed, intended, or designed to perform much wider powers of administration. The Public Service Commission to-day does not administer the Service. There are appointments of a routine kind, examinations,, transfers, incremental recommendations, and important leaves, which come as recommendations from the Public Service Commission; but the administration of the Service is in the hands of the permanent heads of the Service. The Economies Commission, which investigated this particular proposition, said that, apart altogether from the Public Service Commissioner, there ought to be a Board of Management of the Civil Service and of the expenditure of government. Ministers cannot check every recommendation for expenditure. They cannot test every procedure or every method as to its efficiency or economy, and we cannot have strolling strangers constantly going as Commissioners through the Departments. The only way to devise efficient, business-like methods for the discharge of departmental activities, and to have continually operative businesslike minds in charge of Departments, is to appoint, for the first time, a Board of Management. The Economies Commis-sion recommended, in their report, that this Board should be given very large powers, somewhat larger, I think, than are provided for in the Bill. The members, it was suggested, should be strong, and well paid, who would not be immersed in the routine of Departments or the Civil Service, but whose duty it would be ‘ to confer with Ministers and departmental heads, and generally to act as a useful, check, so that if the Minister had before him a proposition to spend £10,000, £20,000, £30,000, or £100,000, he could refer it to the Board for consideration and report.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– If it operates that way, it will be of great assistance.

Mr WATT:

– And if it does not, it will be a mistake. I suggest that to the Minister, and confirm the idea embodied in the speech of the honorable member for Kooyong (Sir Robert Best). If it is to be a Public Service Commission, we had better appoint a good, strong man, like Mr. McLachlan, as he proved himself to be, than have an organization created for the purpose the Minister baa in mind. The Ministry has taken the recommendations of Mr. McLachlan and the Economies Commission, and has said, “ Let the Board of Management, in addition to the functions suggested by the Economies Commission, also have the control of the Public Service.” My experience in Commonwealth Departments justifies me in believing that Ministers cannot properly check expenditure and discharge their public responsibilities as efficiently as Parliament or the country would wish. It was difficult enough in my days in the State Departments, which, after all, were local and comparatively easy to understand. One could travel in a State like this, inside one day, to any point from the capital; but, even then, it was almost impossible, in Departments like those of the Railways, the Lands, the Mines, or Education, for a Minister to grapple with the facts from personal knowledge. In probably all the Commonwealth Departments, and certainly in most of them, it is impossible for the Minister, no matter how far he may travel, or how wide his knowledge of the geography and development of Australia may be, to understand much of the actual facts with which he has to deal. He must take from the recommendations of subordinate and senior officers much of the information he requires, and he must take it for granted. The territory of the Commonwealth is so wide that if a man travelled all of his time and Parliament never sat, he could not compass most of the ‘things he wants to know and understand. Take, for, example, the Navy Department. How is it possible for a layman - such a man as was called during war time from ordinary civil ideas of administration - to understand all the activities of that important Department, to learn its technique right from the kindergarten stage upwards, and to be competent to discuss it intelligently, and make decisions intelligently on the recommendations of technical officers of the Naval Board ? How is it possible, I ask the PostmasterGeneral, for the Minister to know personally the telephone requirements, the mail necessities, and the demand for conveniences that are justified in every part of the Commonwealth? He cannot do it. He knows his own State, if he is a traveller within that State, but he does’ not know whether he should approve or not of requests from other parts of the Commonwealth. Therefore, he takes for granted, on the certificate of his officers, requests for huge expenditure. Without derogating from the motives that influence important and responsible men in the Departments, it is a legend and tradition of Departments that officers like to see their projects go through. They like, sometimes, to aggrandize the importance of the organization of which they are in charge. Their advice, although given in a public spirited way, is unconsciously biased, and the Minister has to accept or reject it without personal knowledge. If we had, on the other hand, outside this organization of the Department and the Minister, a strong body with plenary powers to test propositions at the request of the Minister, or on its own initiative, I venture to think we could save in the appropriations of this country many thousands of pounds in every Department of the Commonwealth.

Mr Mathews:

– It would be a dangerous departure to give them too much power.

Mr WATT:

– Is there any danger? Cannot Parliament revoke what it does? Should not Ministers have the courage to judge of the experiment when it is in operation? My honorable friend, as one of the roaring Radicals of this State, ought not to be afraid of experimental innovations. I, as one whom he is pleased to call a Tory or Conservative, would face the risk quite freely, because I know from experience the weakness of the present system. I urge that the House give the proposition of the Government a trial, but put upon the Government the responsibility for seeing that the personnel of the new Board is strong, and that the Board is invited to function freely and fearlessly. If the Board does not have strength of personnel, and is not invited to function freely, it will rapidly degenerate into a routine organization, which will be expensive and useless, and will have to be abolished in the near future. I am somewhat in doubt whether, with the duties of the Public Service loaded upon them, as is proposed in the Bill, we shall get precisely the right type of men and the right class of effort to effect efficiency in the business-like administration of the Departments, and economy in their public expenditure. At any rate, that is the responsibility of the Government, and although I am not getting the matter quite in the shape I had hoped for, I am prepared to take it as it is, putting upon the Government the task of seeing that the Board functions properly.

Mr McWilliams:

– It is a big risk to take if the honorable member entertains all those doubts.

Mr WATT:

– I cannot see any risk, but in any case life is a risk, and so is politics. My honorable friend has to take a risk in a few weeks. The fact that there is a risk ought not to deter us from taking certain action if the balance of advantage is on the right side. It is our duty, and the dutyof Governments which preside as Executives in this House, to make more efficient the rapidly growing Services of the Commonwealth.

I agree with the honorable member for Maribyvnong (Mr. Fenton) that we have in the service of the Commonwealth a considerable number of very able men; but I also know that it is very difficult to induce Departments to follow business-like methods. A man who, as the Treasurer (Mr. Bruce) has recently done, comes out of a big business house into a Government Department notes at once the routine, the red tape, thecircumlocution that tend to grow in Departments because of the regulations under which they operate.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– And some of which is inevitable.

Mr WATT:

– I admit that it is, but it should be reduced to the lowest possible minimum consistent with safety and the preservation of the public interest.

Mr Mathews:

– Ordinary business methods would not do in a Government Department.

Mr WATT:

– We could have, with great advantage to the officers of the Service and the public affairs they are administering, 90 per cent. more of ordinary business methods than we have in our Departments to-day.

Mr Mathews:

– The Departments would soon be “ on the rocks.”

Mr WATT:

– My honorable friend is in a very pessimistic mood to-night. He must be having trouble in his constituency.

Mr Fenton:

– We reached far beyond the Service in connexion with the War Service Homes Department and made an awful mess of it. There are Commonwealth public servants who would have done far better.

Mr WATT:

– “One swallow does not make a summer.” On some occasions we have reached outside the Service and have captured men who have given us invaluable service. That was especially so during the war. I take one case, that of the administration of the wool scheme. Had we not. harnessed up the brains of the whole wool trade for service in that great scheme it would have been impossible to carry it through with anything like the satisfaction that it gave, not only to the wool-growing interests, but to the whole nation.

Mr Mathews:

– That was a wool scheme, not a Public Service Department.

Mr WATT:

– It became, for the time being, a giant Department of the State, and has only recently been transferred to “ Bawra.”

Mr Bowden:

– At the head of that scheme we had a £10,000-a-year man.

Mr WATT:

– He got nothing at all.

Mr Bowden:

– I am merely alluding to hie high qualifications. He received £10,000 later on.

Mr WATT:

– After, I suppose, something like six years of public service.

Mr Bowden:

– Still, that shows the type of man he is.

Mr WATT:

– I admit that Sir John Higgins is a high-class business man. I am speaking, however, not of him alone, but of all the men who constituted the Central and Local Committees and who voluntarily, and with great ability, gave their services to the Commonwealth and successfully handled a problem which no one in the broking, shipping, or using houses thought could be done by any one Pool. The wonderful celerity with which the scheme was carried out was regarded by all in the trade as being littleshort of a miracle, and it was successful only because it had business instinct and method behind it.

I notice that under this Bill one of the first duties the Board of Management will have to perform is the reclassification of the Public Service. I do not know how long that will take them. I have seen a like work attempted in some of the States. In this State we have had within my own recollection two Reclassification Commissions. One of them, which took two years to: complete its task, consisted of a Judge as chairman and two other capable men, one from outside the Service, and one from inside it. The work done by it was laborious, irksome, and important, but, after all, gave little orno satisfaction to any one. Each Commission cost the State a considerable sum. In the other case the work was done by a man with a more intimate knowledge of the Service, such as I presume the members of this Board will have, and it was done much more swiftly. If the Public Service is expecting a rapid reclassification, with the benefits in the way of increased pay which are to follow from this Bill, they will probably be disappointed. The one comfort which, I think, the average member of the Service will derive from the Bill is that under it he is to get annual increments. How far that system has been operating under present conditions I do not know.

Mr McWilliams:

– Automatic increases ?

Mr WATT:

– Yes. Clause 30 provides that-

Increments of salary which are prescribed within the limits of a class or in respect to any particular office shall be annual, except where otherwise prescribed, and no increment shall accrue to any salary until the officer in receipt of the salary has received the salary for a period of twelve months.

That is to say, this system of increments is to be automatic and annual.

Mr Mathews:

– No one can block them.

Mr WATT:

– Only on the ground of misconduct, or other reasons set out in the Bill, or on grounds of prescription. The Governor-General in Council may say that the increments of a particular office which are prescribed shall not be annual, but where that is not done, I take it, the increments with respect to all other officers will be annual. I do not know whether the Minister has made any estimate of what this provision is likely to cost, on the assumption that the increments will be a certain percentage on the ruling rates of wages in the Service; but I venture to think it will cost a considerable sum. The Attorney-General (Mr. Groom), in introducing the Bill, did not furnish us with an estimate.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I do not think it will cost us appreciably more than the present system.

Mr WATT:

– Why not?

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Because the increments up to certain stages in the lower ranks of the Service are very largely automatic under the present system.

Mr WATT:

– But the Public Service Commissioner, according to my recollection, declines to grant increments in classes of cases when he feels that he is not justified in recommending them. The granting of increments is within his discretion. We are now, for the first time I think, making the increments statutorily automatic and beyond any discretion at all, except the prescription of a particular office, or on the ground of offence by a particular officer. I think it must lead the Treasury officials to calculate a considerable increase in Public Service salaries. These increments, I presume, will go to those in the lower grade.

Mr Mathews:

– A man cannot get an increment above the maximum of his grade. He can only go to the maximum of his class.

Mr WATT:

– But we do not know what the grade is to be when this measure becomes operative. In the old Public Service days of the States the minimum and maximum salaries with the increments attaching to a particular class were prescribed in the schedule to the Act. Under this Bill they are to be subject to regulations, and honorable members may never know, unless they read carefully the reports of the Board of Management, what salaries Public Service officers are receiving. I think it is somewhat dangerous for the Parliament, either for reasons of justice or economy, to allow the determination of what the Public Service of the Commonwealth shall get to go into other hands. I do not think that any other Parliament in Australia would do so.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Is the honorable member taking into consideration the right of public servants to appeal to the Arbitration Court to fix the rates of pay?

Mr WATT:

– No, the Bill itself practically cancels that right. The arbitration conditions are clearly being limited. So far as certain sections of the public servants are concerned the Public Service Arbitration Act is being repealed.

Mr Richard Foster:

– The great, bulk of the public servants will still be under the Act.

Mr WATT:

– I am not stressing that point except to show that in this Bill we are not providing what the salaries of the Public Service shall be. We are leaving them to regulation, which in its turn will, in respect of a considerable proportion of the Service, be alterable by a decision of the Arbitrator, over whom we have no control. The Government may fix by regulation, and the Arbitrator may alter by award, the salaries of classes and grades, and fix increments which we say shall be automatically annual. Thus we lose entire control. We have not had much control, it is true, since the arbitration provisions came into operation, but when this Bill becomes law we are going to have less control over that branch of the public expenditure than we have had before.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Does the honorable member suggest that the schedule to this Bill should set out what we think should be payable to our public servants, and that the Public Service Arbitrator should be free to make those rates higher or lower, as he thinks fit?

Mr WATT:

– I am not suggesting that. My honorable friend has naturally a logical mind, and no doubt wants to understand what other people are thinking. I am at present showing only what I think is the effect of this Bill.

Mr Brennan:

– That is the work, not of logicians, but of seers like the honorable member for Wentworth (Mr. Marks).

Mr WATT:

– All Ministers are seers. A man cannot live in a Government unless he is a “ seer,” but the things you sec from the Opposition side of the table are in shape and outline altogether different from what they appear to be when seen from the Government side. That also is my experience. If I may digress for a moment, it is for all the world as if from the Opposition side you were looking through the small end of a telescope, with the big end pointed this way, and then, when you came round to the Government side, you reversed the telescope. Things which look very large from the Opposition side look very small from the Ministerial side of the House.

Mr Fenton:

– What do they look like from your position in the House?

Mr WATT:

– From here you see them in their true proportion. There is neither mist nor glamour to misrepresent them in outline or proportion. This is the only place where you get the true sense of perspective. On the Ministerial side responsibility weighs down a man and dwarfs his mind. On the Opposition side Bohemian irresponsibility is a disgrace to any Parliament.

Ministers should carefully consider the proposals for reclassification and annual increments in relation to the arbitration clauses, and after obtaining the opinions of their expert officers, should tell us what they think is likely to be the extra cost of the measure compared with what would have been the cost had we kept to the old system.

I join with the honorable member for Kooyong (Sir Robert Best) in thinking it strange thatthe Bill should make life insurance compulsory on all members of the Service, seeing that last week in dealing with another Bill we made life insurance unnecessary, and provided for the absorption of existing life insurance policies in a superannuation scheme.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– This Bill came to us from another place, into which it was introduced a long time ago.

Mr WATT:

– But being later than the measure to which I refer, it will be held to be the more recent expression of the will of the Legislature.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The final stages of the Superannuation Bill in another place will not be taken untilthe consideration of this Bill has been completed.

Mr WATT:

– That is all very well if the Government has control of its business in another place but I have known one branch of the Legislature to disregard the wishes of the other branch.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I think that wehave control of our business there.

Mr WATT:

– I understand that in fact the position of the two Bills is that of the hare and the tortoise at the conclusion of their race, the tortoise having passed the hare while he slept; but I should like to know why in the list of nearly 100 amendments which has been circulated by the Minister in charge of the measure, there is none providing for the excision of Division 12, which dealswith life insurance. Indeed, in this list of amendments which has been circulated so carelessly, there are proposals for amending clauses in that division ; as, for instance, “Clause 85, line 8, after the word ‘ assured ‘ insert ‘ without further medical examination ‘.” ‘

Mr Prowse:

– This state of affairs is due to the pace at which we are going.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The amendments were prepared quite a long time ago.

Mr WATT:

– But surely there is some one in the Solicitor-General’s Office, or in some other Department, whose duty it is to keep Ministers advised on these matters and to point out the absurdity of proposing to amend provisions which are altogether unnecessary now that the Superannuation Bill has been passed. We should have had notice of an amendment for the cutting out of these provisions.

I do not think that the arrangement for the admission of territorial officers has been satisfactorily explained, and in Committee we shall be entitledto ask how many men will be affected; how many new men will beadmitted to the permanent Servicewithout examination. These men are beingallowed to enter by a side door, and their admission into the Service in this way may cause a good deal of heartburning among the present members of the Service, unless the door be guarded in some way; I do not say that it should be barred. The same remarks apply to the radio men and men of other now temporary branches of the Commonwealth Service who, for the first time, get some permanent rights. As tothe provisional Service, I should be loath to accept the proposals affecting it were it not for the recommendation of Mr. McLachlan. As I read the clauses providing for the appointments to the provisional Service, the old namefor which is the temporary Service, these are to be made by the Board, the difference between the old temporary Service and the new provisional Service being mainly this, ‘that there is no limit to the time a man may serve in the provisional Service. The provisional Service may grow as an excrescenceon the permanent Service.

Mr Fenton:

– The temporary Service is an excrescence on it now.

Mr WATT:

– In the olddays, in most of the State Public Services, as in the Commonwealth Public Service, the number of months that a man might serve as a temporary officer was limited unless he was specially exempted. Ministers had to bear the responsibility of accepting recommendations for exemption. But under the Billthere seems to be no limit to the length of service of provisional officers.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– Read clause 82, paragraph 4.

Mr WATT:

– The provision is too long to deal with now. I take it that the provisional Service is a kind of auxiliary Service, of transient value, and possibly impermanent condition. But unless proper safeguards are provided in regard to it, there will be possibilities of abuse.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Sub-sections 4 and 5 of clause 82 impose a definite time limit.

Mr WATT:

– There is a special part of the Act which deals with the provisional Service, and it was not very carefully explained by the Minister who. introduced the Bill. It deals with the classification of, and salaries to be given to, officers of the provisional Service, who seem to be a cross between the permanent classified officers, with statutory rights, and the temporary officers who have not an abiding, foothold in the Service, being partly under one regime and partly under another. There are all the possibilities of this crossbred branch of the Service growing, to the disadvantage of both permanent and temporary branches, and especially the permanent branch.

The honorable member for Kooyong (Sir Robert Best) and the honorable member for Maribyrnong (Mr. Fenton) have put their fingers on different phases of the leave question. The old furlough arrangements were inadequate to meet the case of extended and meritorious service, and this is an attempt to patch them up, or to build a bridge between the twenty-year-service and the forty-year-service men. A difficulty occurs in regard to those who have gone out of the Service. I was discussing the matter last week with two men who, to my knowledge, gave excellent service for well-nigh half-a-century. They feel justly aggrieved because they are left outside the 1919 clause. I presume that that date was fixed because it is the date when the Cabinet decided the matter.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Yes.

Mr.WATT. - It seems to me that this might be done. The Minister will be in a position to ascertain how much expense would be involved in extending the provision backwards for any of two or three periods that might be suggested. The honorable member for Kooyong (Sir Robert Rest) gave some examples of men who retired earlier than 1919. They complain that, under this Bill, men who have retired since 1919, or are still in the Service, will be entitled to six months’ pay in lieu of furlough whilst they are to be given nothing, though they may be older men, may have been longer in the Service, and may, perhaps, have better records. That is not the way in which the matter should be settled. That method leaves some men smarting under a sense of injustice who have given long periods of distinguished service.

Mr Richard Foster:

– We must draw a line.

Mr WATT:

– I admit that. There must be an arbitrary line drawn if the provision is to be made retrospective at all. Under this Bill it is. being made retrospective by the volition of the Government, and if a different, course had been followed, and the provision were to operate only from the time the Bill was introduced there might be no complaints, or not such definite complaints as are made to-day. The Minister on inquiry could inform honorable members what it would cost to carry this provision back to the beginning of the war, or to cover cases of officers who, as has been admitted by the Minister, continued to hold their positions without furlough at the request of the Government. I should like, to ascertain the conditions under which such men might be given the benefit of the furlough provision for a period of service of twenty years, or of forty years. I hope we shall be able, in Committee, to arrive at some equitable settlement of the question, and I recommend the matter to the Minister as one worthy of consideration.

Mr ANSTEY:
Bourke

.- My first objection to the Bill is that we are asked to consider at this stage a measure containing a very great many clauses covering provisions almost every one of which has been amended at least once, and some four or five times. The principal purpose for which Irose, however, was to deal with the fundamental injustice of the whole of our Public Service legislation. This Parliament originally passed the Public Service Act to prevent; the Service being subject to political influence. It was placed under a Commissioner in order that justice and fair play might be given to every member of the Service, and that promotion should be made in accordance with merit or seniority. My protest is that the Act at present is administered in such a way as to defeat its spirit, and letter, and the intention of Parliament. We set out to preserve the Service from political influence, and it has been subjected to official influence. Instead of political favoritism we have official favoritism exercised by a few official oligarchs who break the letter and spirit of the law, and make a farce of the Act, and of the regulations. Under the Act any man in the Service, who regards himself as unjustly treated, has a right of appeal. The law is clear and distinct on that point. The law says that any officer affected by any report or recommendation made, or any action taken, may, in such manner, and within such time as may be prescribed, appeal to a Board, and that all such appeals must be taken before reports and recommendations are dealt with by the Governor-General in Council. In order that that provision may be carried out, the regulations are also clear and distinct, and they provide that appeals shall only be considered if made within one month, of the date on which the report or recommendation affecting an officer is communicated to him directly, or is made known by public advertisement. But the Public Service Commissioner always renders the law a dead-letter, and makes a farce of the regulations, in two ways. He does not communicate with the man concerned directly, and does not make what is being done known to him by public advertisement. The way in which the law is got round and the intention of Parliament is defeated is by making a recommendational report, and the victim knows nothing of the matter until such time as the recommendation goes before the Governor-General in Council. If he desires any information before that, it is absolutely refused to him. The regulations provide that -

An officer, in his appeal, shall set out concisely grounds of his dissatisfaction with the action appealed against, and shall forward the same to the chief officer of his Department, in the State, who shall forthwith transmit it through the Permanent Head to the Commissioner.

But it is absolutely impossible for an officer to lodge an appeal within one month unless the report or recommendation made by the Commissioner is made known to him in the manner prescribed by the regulations. Under the existing practice, he is given no intimation of the recommendation of the Commissioner. I have before me a case that is typical of thousands of cases in the Public Service, and, apparently, of twenty years of the history of the administration of the Act. It is the case of a man who knew in May last that he was going to be supplanted. He was an inspector, and he had obtained some information, though not officially. He got it “ under the lap.” He was informed that his job was to be taken from him, or that a position for which he was an applicant was to be given to a junior. He wrote to the Commissioner on the 5th May last that, in the event of its being proposed to appoint to the position for which he was an applicant an’ officer junior to himself, he desired to lodge an appeal in the terms of section 50 of the Act, and he said that, in such an event, he would be glad if the Commissioner would regard his communication as an appeal under that section. No notice of this communication was taken until the 4th July, and the officer was then told that his appeal was not an appeal at all, and was “not in an acceptable form.” He was informed that if he had any complaint he must mention the person whose treatment he appealed against. He could have no knowledge of the person unless some one gave him the information “ under the lap.” He had some idea of what was proposed, and he knew that under, the law he had a right of appeal if he regarded himself as being unjustly treated. I have said that he was told that his appeal was not in an acceptable form, because the appellant “ must state specifically the grounds of his appeal, naming the officer appealed against, and claiming greater efficiency for the duties to be performed, if junior to such officer, or at least equal efficiency if senior to the officer appealed against.” All this information, however, was kept secret. He was given no intimation of what was proposed, either by direct communication or by public advertisement. The officer to whom I refer, in his reply to the Commissioner, said -

I desire to point out that, owing to the want of knowledge as to what action may be proposed, it is manifestly impossible for me to make the appeal in any other form.

He subsequently found out that he was to be supplanted by an officer who was junior to himself. He claimed to be entitled to the position by merit and seniority. He was told in the next communication that, in consequence of his appeal not being in the prescribed form, no further action would be taken in connexion with it. I remember dealing with a similar complaint in this Chamber as long ago as in 1910 and 1911. No provision, however, has since been made to give members of the Public Service the right of appeal. There is another direction in which the Act is urgently in need of amendment. The Service to-day is run by a few men, in whose hands lies the welfare of every public servant: a few men who have constituted themselves an oligarchy, and who, by means of their power and unquestioned sway, have lifted their friends to the highest positions and have suppressed those who have come into unfortunate contact with them. These things they are doing to-day, in defiance of the law; for they realize that they can do practically anything. In some cases, they have desired to place in a position of importance and pay a man who is not in the Public Service. The way in which they proceed is simply to announce that there is nobody within the Service qualified to occupy the position. Then they go outside and bring in the particular person for whom they are working their designs, and they give him the post without any question of an examination. I brought a specific case before this House years ago. A certain office was to be filled and there were applications from experienced men in the Service. They turned them’ all down, however, on the ground that there was no applicant who held the necessary qualifications; and they appointed a certain person from outside. Later, unhappily for their schemes, complications arose because this man whom they had appointed died. and they .were then compelled to appoint one of those from within the Service whom they had previously spurned as being incapable of occupying that post since he had not the qualifications.

The law requires that a man, in taking his promotions, shall pass from grade to grade upwards in the Service, with experience and merit. But the way with this oligarchy is to hoist a man high up into a class over the heads of all others, to jump him up two or three grades and lift him over seniors who have had. greater experience and whose record is of far more merit. These latter unfortunates are turned down with the statement that if they possessed the seniority they had not the merit, and that if they had the merit they were disqualified because they had not the seniority. If any man objects to the form of ad ministration as observed by this gang, he has no chance of appeal. I remember one case which was fought out for years. A certain public servant had been turned down by these people; but he, at any rate, managed to secure an appeal at last, and he was so successful that the Board of Appeal not only said he was justified, but awarded him £25 against the Commissioner with which to defray his costs. However, he did not get much out of his victory. F;rom that day to this he has failed to make one single step of advancement. He has no hope of promotion, and there is now no Court of Appeal available to him. If he remains in the Service for another twenty-five years he will get no further. He will get nothing from the Commissioner or the little gang of oligarchs who constitute the inner circle, and officially run the administrative services of this country. This Bill should embody the principle that the law shall be carried out; that the regulations shall not be treated as a dead letter’; that both the spirit and the letter of the Act shall be obeyed ; that the intentions of Parliament shall no longer be flouted; and, finally, that the Service shall have the right of appeal.

Among the almost innumerable amendments proposed in the Bill - and they are so many as to make the measure almost beyond comprehension - provision is made for the reclassification of the Service. Why should that be necessary after so many years? And even if a reclassification is brought about, so long as the Bil) does not also provide the right of appeal, the public servant who feels that he has been improperly treated, whether by the process of reclassification or for any other reason, will be just as badly off as to-day. He will get no relief from injustice at the hands of the autocrats. One thing I must say in favour of the Bill i9 that the provision for automatic increments is infinitely better than that which exists at present, bad as the proposal may be in its principles. Before everything else, this measure should clearly state that the. Board of Commissioners shall not be permitted to break the law. The Commissioners are to be given autocratic powers to say. when and whether they regard an officer as having acted illegally or improperly. . The Board may deal with this man off-hand, and dismiss him without a chance of protest. In his behalf, therefore, I wish now to protest by moving -

Thatall the words after “ That “ be left out with a view to insert in lieu thereof the following : - “ it be an instruction to. the Government to make provision in this Bill to compel the Public Service Commissioner or Commissioners, as the case may be, to obey the law, to give every public servant the right of appeal as prescribed by the law, and not to act in such manner as to make a dead letter of the law and of the regulations, and by so doing defeat the intentions of Parliament in the spirit and letter of the Act.”

The Bill is fundamentally bad. There can be no hope for justice within the Service. We cannot look for peace and good order, contentment and general satisfaction, if, while the rank and file of the Service are called upon to obey the law, those in charge are permitted to remain above the law.

Mr Higgs:

– On a point of order, is not the amendment of a satirical character, and should it not, therefore, be ruled out upon that ground?

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I suggest that as Mr. Speaker has not had an opportunity to examine the amendment, the debate be adjourned, and that the point of order be dealt with to-morrow.

Debate (on motion by Dr. Earle Page) adjourned.

page 2994

SPECIAL ADJOURNMENT

Motion (by Mr. Greene) agreed to -

That the House, atits rising, adjourn until 1 1 a.m. to-morrow.

page 2994

ADJOURNMENT

Order of Business - Postal Department : Private Letter-boxes.

Mr GREENE:
Minister for Defence · RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– In moving -

That the House do now adjourn,

I desire to intimate that to-morrow we will proceed with the consideration of the War Service Homes Bill, and go straight on with the Public Service Bill. When that is disposed of I hope to go on with the Income Tax Assessment Bill.

Mr POYNTON:
PostmasterGeneral · Grey · NAT

.- On 29th September, the honorable member for Angas (Mr. Gabb) asked the following questions: -

  1. Whether metal fronts are now available, so that private letter-boxes may be installed in country towns in South Australia?
  2. Ifnot, can he say when they will be available?

I promised the information would be obtained. The following are the replies : - 1 and 2. Sufficient private letter-box fronts are now in hand and on order to meet all existing requirements of country towns in South Australia.

Question resolved in the affirmative. House adjourned at 10.32 p.m.

Cite as: Australia, House of Representatives, Debates, 2 October 1922, viewed 22 October 2017, <http://historichansard.net/hofreps/1922/19221002_reps_8_101/>.