House of Representatives
30 November 1927

10^th Parliament · 1^st Session

QUESTION
- COCKATOO ISLAND DOCKYARD
QUESTION
- WATERFRONT DISPUTE
QUESTION
- UNEMPLOYMENT
QUESTION
- TAXABLE VALUE OF IMPORTS
QUESTION
- APPLE EXPORT TRADE
COMPETITION IN THE APPLE EXPORT TRADE
- Increasing Foreign Supplies
QUESTION
- CLARENCE RIVER RAILWAY BRIDGE
QUESTION
- AVERAGING INCOME TAX
QUESTION
- APPOINTMENT OF ROYAL COMMISSIONS
QUESTION
- GEOPHYSICAL SURVEY
QUESTION
- GOVERNOR-GENERAL’S RESIDENCE
QUESTION
- PRODUCTION FIGURES
QUESTION
- MBS. LANE-POOLE
QUESTION
- CANBERRA
QUESTION
- PROHIBITED LITERATURE
QUESTION
- POSTAL DEPARTMENT
QUESTION
- POSTAL OFFICERS
QUESTION
- TAXATION
QUESTION
- CANBERRA-QUEANBEYAN ROAD
QUESTION
- TARIFF BOARD’S REPORT
QUESTION
- CIVIL AVIATION
NORTH-WEST ABORIGINES
- Dr. Cook’s Report
COTTON PRODUCTION
QUESTION
- IMPORTS OF TEXTILES
TARIFF BOARD’S REPORTS
INCOME TAX ASSESSMENT BILL
LEAGUE OF NATIONS
- Report of Australian Delegation to Eighth Assembly
INCOME TAX ASSESSMENT BILL
FORESTRY BUREAU BILL
INCOME TAX BILL
- Second Reading
HOUR OF MEETING
ADJOURNMENT
- Personal Explanation

page 2274

QUESTION

TAXABLE VALUE OF IMPORTS

Sir ELLIOT JOHNSON:
LANG, NEW SOUTH WALES

– On the 23rd instant I asked the Minister for Customs a series of questions relating to the taxable value of imports. Can the Minister tell me when he will be in a position to supply me with the information forwhich I asked?

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

– From memory, I think that the information asked for by the honorable member would take a considerable time to prepare, but I shall have enquiries made to see if the answers can be expedited.

page 2274

QUESTION

APPLE EXPORT TRADE

Mr FENTON:

– I ask the Minister for Markets and Migration if he has seen, in last night’s Melbourne Herald, the following article: -

page 2274

COMPETITION IN THE APPLE EXPORT TRADE

Increasing Foreign Supplies

A warning that the Argentine and America may soon attempt a monopoly of the Euro pean market for apples, with a view to the exclusion of supplies from Australia or the other Dominions, is issued byF. W. Moore & Co., London, fruit merchants, in their October review. This competition, they state, may be promoted by a skilful extension of the period over which United States apples are placed on European markets, and by a large increase of Argentine production, similarly handled.

As the vote of the apple growers of Australia is averse to the formation of an apple pool, is it the intention of the Minister to initiate some other form of organization among them to effectively meet the American and Argentine competition, and will he convene a conference to discuss the subject of organization?

Mr PATERSON:
Minister for Markets and Migration · GIPPSLAND, VICTORIA · CP

– It is not proposed at present to initiate a fresh scheme of organization. Obviously Australia must expect to have to enter into keen competition with other nations supplying the same market.

page 2274

QUESTION

CLARENCE RIVER RAILWAY BRIDGE

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I ask the Prime Minister if he has been in touch with the new Government of New South Wales with regard to the building of a bridge over the Clarence River, and if he has, I should like to know what is the present position in regard to the building of that bridge.

Mr BRUCE:
NAT

– I have not been in communication with the newly-formed Administration in New South Wales in regard to the building of a bridge over the Clarence River, but the honorable member will recollect that he asked a series of questions on this subject during the tenure of office of the previous Government of the State, and that that Government eventually gave an undertaking to proceed with the work.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Will the Prime Minister ask the present Government of New South Wales if it proposes to honor the undertaking given by the previous Government ?

Mr BRUCE:

– The matter to which the honorable member has referred is of vital importance, because when the railway from Kyogle to South Brisbane has been constructed, a link will be wanting in the coastal line between Sydney and Brisbane until the bridge over the Clarence River has been built. I can promise the honorable member that I will again take up the matter with the Government of New South “Wales.

page 2275

QUESTION

AVERAGING INCOME TAX

Mr ANSTEY:
BOURKE, VICTORIA

– In the absence of the Treasurer, I wish to ask the Prime Minister whether the reply given by the Treasurer to the honorable member for. Forrest, as reported in yesterday’s press, is correct. The Treasurer is reported to have said : -

Whore there had been any alteration of the rates of tax between the different years of assessment included in any five-years’ period, the tax which would have been payable in previous years been equal to the average income, would not be correctly ascertained by merely multiplying the tax on the average income for the subject year by the number of years for the period, but for each subject year the tax for each preceding year of the period must be calculated on the average income arrived at each year at the rate of tax applicable for each of such preceding years.

page 2275

QUESTION

GOVERNOR-GENERAL’S RESIDENCE

Mr COLEMAN:
REID, NEW SOUTH WALES

asked the Minister for Works and Railways, upon, notice -

Is it intended to provide a permanent residence for His Excellency the GovernorGeneral in Melbourne, and, if so, what amount is involved?
What is the (o) annual expense, and(6) capital cost involved in the maintenance of each of the existing Vice-Regal residences?

Mr HILL:
Minister for Works and Railways · ECHUCA, VICTORIA · CP

– The information will be supplied at a later date.

page 2275

QUESTION

PRODUCTION FIGURES

Home Consumption and Exportation

Sir ELLIOT JOHNSON:

asked the Minister for Trade and Customs, upon notice -

What was the value of wheat consumed in Australia, and the value of wheat exported from Australia, for the year 1926-27?
What were the values respectively of meat, wool, and butter consumed in Australia, and the values of the same products exported during the years 1924-25, 1925-26, and 1926-27 ?
What were the values respectively of metals and minerals used in Australia, and the values of the same products exported during the years 1924-25, 1925-26, and 1926-27 ?

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

– The information is being obtained, so far as is possible.

page 2275

QUESTION

MBS. LANE-POOLE

Mr COLEMAN:

asked the Minister for Home and Territories, upon notice -

At whose instance was Mrs. Lane-Poole commissioned to furnish the. residences of the Governor-General and the Prime’ Minister ?
Was she given a free hand with regard to the amount expended?
What were the terms of her appointment as regards (a) fees and (b) expenses?
How long was the period of engagement?
What was the total amount paid to Mrs. Lane-Poole under the headings of paragraph (3) of this question?

Mr MARR:
Minister of Home and Territories · PARKES, NEW SOUTH WALES · NAT

– The information is being obtained and will be supplied at a later date.

page 2276

QUESTION

CANBERRA

Cost of Hotels - Banks - Transport Service

Mr MACKAY:
LILLEY, QUEENSLAND

asked the Minister for Home and Territories, upon notice -

What is the completed cost of the following buildings at Canberra: - Hotel Ainslie, Hotel Wellington, and Beauchamp House?
What is the estimated total completed cost of the Assembly Hall (near Hotel Canberra) ?
Whose responsibility is it to see that the Federal Capital Commission submits proposals for works estimated to cost over £25,000 for inquiry by the Parliamentary Standing Committee on Public Works, as required by the Seat of Government (Administration) Act and the Public Works Committee Act?

Mr MARR:
NAT

– I am inquiring into this matter and shall advise the honorable member as soon as possible.

Mr CHARLTON:
HUNTER, NEW SOUTH WALES

asked the Minister for Home and Territories, upon notice. -

With regard to his reply to the question by the honorable member for Hunter on 4th November (Hansard, page 986), in connexion with banking facilities at Eastlake -

Are the Commonwealth Savings Bonk and the State Savings Bank of New South Wales permitted to have branches at Eastlake?

Have any other banks applied for permission to operate branches at Eastlake ?

Is it a fact that the largest business interests at Eastlake are branches of Queanbeyan firms; if so, is it a fact that if banking facilities at Eastlake are curtailed a good deal of banking business will be transferred from the Federal Capital Territory to Queanbeyan?

Mr MARR:

– The information required by the honorable member is being obtained, and I shall advise him this week.

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

asked the Minister for Home and Territories, upon notice -

Have any arrangements been made by the Federal Capital Commission with regard to the employment with the new ‘bus company of those at present engaged on the ‘bus service?
Will the transfer of such employees to the ‘bus company affect their occupancy of commission houses?

Mr MARR:

– I am having enquiries made and shall advise the honorable member during the next few days.

page 2276

QUESTION

PROHIBITED LITERATURE

Mr COLEMAN:

asked the Minister for Trade and Customs, upon notice -

Does the prohibition against the admission into Australia of certain publications apply to Parliament, and, if so, why was Where is Britain Going (published by George Allen and Unwin, Limited), admitted to the Library of Parliament?
Whether Parliament is exempted or not, will he make available to the Library all books, pamphlets and other publications which are prohibited, with passages and other parts, to which objection is taken, marked, so that honorable members can decide for themselves whether the exclusion is justified?

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

– I am making inquiries into the matter and will furnish the honorable member with a reply at a later date.

page 2276

QUESTION

POSTAL DEPARTMENT

Classification - Basic Wage Increase

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice. -

When will the classification for the clerical staff of . the engineer’s branch of the Postal Department be published?

Mr BRUCE:
NAT

– The information is being obtained and will be furnished as early as possible.

page 2276

QUESTION

POSTAL OFFICERS

Cost of Living Increases

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

asked the PostmasterGeneral, upon notice -

Will he moke available, before Christmas, to post and telegraph officers, the increases due to -

those officers who are entitled to the same on account of an increase in the index figure of the cost of living;

those officers who are entitled to an increase on account of the raising of their status to the assured maximum ?

Mr GIBSON:
Postmaster-General · CORANGAMITE, VICTORIA · CP

– Payment will be made as early as possible, and before Christmas if practicable.

page 2277

QUESTION

TAXATION

Mr DUNCAN-HUGHES:
BOOTHBY, SOUTH AUSTRALIA

asked the Treasurer, upon notice -

How many Commonwealth taxpayers were there of (a) Income tax, and (6) Land tax, for the years assessed as on 30th June, 1925 and 1920?
How many of the taxpayers for these years paid both forms of taxation?

Mr LATHAM:
Attorney-General · for Dr. Earle Page · NAT

– The answers to the honorable member’s questions are as follows : -

This information is not known. To ascertain it, the department in each State would require to examine each land tax and income tax account for the years mentioned. The work involved would be very heavy and lengthy.

page 2277

QUESTION

CANBERRA-QUEANBEYAN ROAD

Mr CHARLTON:

asked the Minister for Home and Territories, upon notice -

Has his attention been drawn to the remarks of Mr. John Gale, J.P., coroner, at a recent inquest, that the bad condition of the main Canberra-Queanbeyan road is such ‘as to demand immediate repair?
Will he, in view of thedangerous condition of this road, see that action is taken to repair it?

Mr MARR:
NAT

– The answers to the honorable member’s questions are as. follow : -

Yes.
Repairs have recently been effected to this road and it is not now in a dangerous condition.

page 2277

QUESTION

TARIFF BOARD’S REPORT

Mr MARKS:
WENTWORTH, NEW SOUTH WALES

asked the Minister for Trade and Customs, upon notice -

Whether the Tariff Board’s report upon the brushwork industry has been received, and, if so, when will it be laid upon the table of the House.

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

– The report will be tabled to-day.

page 2277

QUESTION

CIVIL AVIATION

Aerodromes at Bundaberg and Rockiiampton.

Sir NEVILLE HOWSE:
Honorary Minister · CALARE, NEW SOUTH WALES · NAT

– Yesterday the honorable member for Capricornin asked the following questions: -

In view of the large sum of money made available for civil aviation during the current financial year, will he have the request for an aerodrome at Bundaberg reconsidered?
Is it a fact that the celebrated aviator, Mr. Bert Hinkler, intends to fly to Australia in the near future, and that,as Bundaberg is his native city, it is his intention to land there?
In view of the importance of Bundaberg and district and the great impetus recently given to civil aviation, will he state who made the report on the proposed aerodrome at Bundaberg and what was the nature of such report ?
If the proposed site at North Bundaberg is not suitable, will he issue instructions that a suitable site be selected by an officer of the department?
What is the estimated cost of establishing an aerodrome at Bundaberg?
How many aerodromes has the Civil Aviation Department established in each State of Australia, and at what centres?

I am now in a position to furnish the following replies : -

The Government’s intention is to apply the proposed grant in the first place to the establishment of additional aerial services over certain approved routes, and at this juncture it is not considered expedient to incur expenditure on aerodrome sites that are not essential for the operation of these services.
Statements that Mr. Hinkler proposes to fly to Australia have appeared in the press but no official intimation to this effect has been received.
The Superintendent of Aerodromes (Captain E. C. Johnson), who reported that he did not locate any area which could be obtained and prepared as a permanent aerodrome at a reasonable cost.
If and when it is found that funds are available for the establishment of aerodromes that are not essential to the development of the present programme, an officer will be sent to further investigate the possibilities of obtaining a suitable site at Bundaberg.
No detailed estimate has been obtained of the cost of acquiring and preparing a site for a permanent aerodrome at Bundaberg.
Western Australia - 10, located at Perth, Geraldton, Hamelin Pool, Carnarvon, Onslow, Port Hedland, Whim Creek, Roeburne, Broome, Derby.

South Australia - 4, located at Adelaide, Swan Reach, Loxton, Renmark.

Victoria- 4, located at Melbourne, Echuca, Rochester, Milduro.

New South Wales - 14, located at Sydney, Harden, Cootamundra, Narrandera, Hay, Balranald, Deniliquin, Broken Hill, Newcastle, Grafton, Ballina, Parkes, Nyngan, Bourke.

Queensland - 13, located at Brisbane, Morven, Cunnamulla, Charleville, Tambo, Blackalt, Longreach, Winton, Mackinlay, Cloncurry, Mount Isa, Camooweal, Normanton.

In addition emergency landing grounds have been established as follows: -

page 2278

NORTH-WEST ABORIGINES

Dr. Cook’s Report

Sir NEVILLE HOWSE:
NAT

– On 23rd November, 1927, the honorable member for Kalgoorlie, (Mr. A. Green), asked me when I would be able to lay on the Table of the House the report of Dr. Cook on the inspection of natives in the north-west of Western Australia. I now inform the honorable member that it is probable that owing to pressure of work at the Government Printing Office, the publication of this report will be delayed until early next year.

Yesterday the honorable member for Capricornia (Mr. Forde) asked the following questions of the honorable member representing the Minister for Defence -

What was the date of the first representation made to his department by the honorable member for Capricornia for the establishment of an aerodrome at Rockhampton ?
What was the estimated cost of establishing the aerodrome?
Why was it not established?
In view of the large sum of money made available for civil aviation during the current year, and in view of the growing importance of Central Queensland in civil aviation, will he reconsider his decision and make a special , effort to have a suitable aerodrome established at Rockhampton in order to give the desired encouragement to civil aviation in that district?

I am now in a position to furnish the following replies : -

29th November, 1924.
The site, which is now considered to be most suitable for the purpose of an aerodrome is estimated to cost £1,000 for purchase. The clearing and levelling of the area would cost an additional £000.
It has been the policy to concentrate activities upon certain approved aerial routes none of which embraces Rockhampton.
The proposed increased grant to civil aviation is to be spent primarily in the development of certain aerial routes, but the Government will give sympathetic consideration to any request for reasonable financial assistance towards the cost of establishing an aerodrome at Rockhampton in collaboration with the local authorities.

page 2278

COTTON PRODUCTION

Mr. PRATTEN on the 29th November the honorable member for Lilley (Mr. Mackay) asked the following questions : -

What was the quantity of cotton production in bales and pounds weight in Queensland and North Australia for the years 1924-25, 1925-26, and 1926-27?

What was the price paid to the growers?

What was the quantity of cotton imported ?

I am now able to furnish the honorable member with the following information:

page 2278

QUESTION

IMPORTS OF TEXTILES

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

– On the 28th November, the honorable member for Yarra (Mr. Scullin) asked the following question : -

Will he furnish aturn showing the importations into Australia for the past five years of -

Wool tops.

Yarns - knitting and weaving.

Piece goods - woollen, worsted and cotton tweeds.

Hosiery.

Underwear, knitted.

Other knitted goods.

I am now able to furnish the honorable member with the following information. : -

Not recorded separately in official statistics prior to 1st July, 1925; 1925-26 747,820 lbs., £ 128,307; 1926-27, 1,148,468 lbs., £213,828.
1922-23, £2,533,942; 1923-24, £1,460,520; 1924-25, £1,884,104; 1925-26, £1,310,280; 1920-27, £1,851,860.
1922-23, £5,004,927; 1923-24, £3,516,810; 1924-25, £3,425,430; 1925-26, £2,534,152; 1926-27, £2,583,122.
1922-23, £2,071,703; 1923-24, £1,467,860; 1924-25, £1,701,032; 1925-20, £1,645,621; 1920-27, £1,652,928.
and (f) 1922-23, 638,548; 1923-24, £422,405; 1924-25, £462,469 ; 1925-26, £323,320; 1920-27, £229,377.

Item (d) covers socks and stockings only.

Items (e) and (f) cover underwear knitted and other knitted goods.

page 2279

TARIFF BOARD’S REPORTS

Mr. Pratten presented reports by the Tariff Board upon acetates for use in the manufacture of acetic acid, bounty on copper, brushware, doors of wood, undressed feathers, and tool handles of wood, and moved -

That the reports be printed.

Mr COLEMAN:
Reid

.- In view of the fact that the debate on the tariff proposals is to be resumed this week, I should like to know from the Minister when the many voluminous reports by the Tariff Board will be available to honorable members. It is unfair to ask us to give consideration to the various items in the tariff schedule unless we are in possession of the board’s reports and recommendations. I understand that many of the reports are already printed, but not circulated. I have previously complained of the inordinate delays that occur between the presentation of reports and their distribution to honorable members.

Mr Fenton:

– I understand the motion for the printing of the reports is only a formality, the reports being already in print. “Will the Minister ask the Government Printer to expedite the supply of copies to honorable members?

Mr THEODORE:
Dalley

.- No doubt the reports are available to those honorable members who ask for them; at any rate, I have secured copies of those in which I am specially interested. The convenience of honorable members, however, would be met if the reports were automatically circulated as soon as the order for their printing was given by the House. Will the Minister outline the procedure that will be followed in connexion with the forthcoming discussion on the tariff schedule? Will only a few speeches be heard before the discussion is closured, or will ample opportunity be given to all honorable members to set forth their views? The matter is of vital importance, and a full, and even protracted, debate may prove advantageous to the Minister and the subject generally.

Mr PRATTEN:
Minister for Trade and Customs · MARTIN, NEW SOUTH WALES · NAT

– So far as I know the usual procedure will be followed. I have made what is equivalent to a second reading speech on the tariff schedule and the general discussion will proceed nominally on item No. 1. After, that is disposed of, discussion will be confined to the individual items as they are dealt with seriatim.

For four or five weeks I have been anticipating the desire of honorable members by getting the Government Printer to print extra copies of tha Tariff Board’s reports. A few days ago, I paid a well-deserved tribute to the Government Printer, Mr. Fargher, and his staff for the very fine work they have done; I understand that most of the important reports of the Tariff Board are already printed, and 150 of each is available for the use of honorable members. There remains only one important report to be laid on the table, namely, that relating to the iron and steel industry. Honorable members will require to consider it in conjunction with the departmental reports and dissections, and as they cover certain confidential information, I cannot disclose them without the consent of the parties interested. I am trying, however, to obtain that consent, and as soon as possible I shall make the whole of the information available to honorable members. I shall consult with the the Clerk of the House to see what further can be done to meet the wishes of honorable members in regard to copies of reports.

Question resolved in the affirmative.

page 2280

INCOME TAX ASSESSMENT BILL

In committee (Consideration resumed from 29th November (vide page 2231).

Postponed clause 9. (What is included in income).

Section 16 of the principal act is amended -

Section proposed to be amended -

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

– The purpose of this clause is to amend section 16 of the principal act, in order to remove a flaw that was revealed by the judgment given this year by the High Court in the Weatherly case. Section 17 relates to what are known as walk-in and walk-out sales, and provides that a profit made by the sale of trading stock or live stock in a walk-in, walk-out transaction shall be taken into account for income tax purposes, as is quite proper. Breeding stock, however, were regarded as capital assets, and the proceeds of the sale of them were not to be included for income tax purposes. The section was intended to cover only walkin walk-out sales, but the High Court held that it had a general application. Sub-section 1 of section 17 upon which the High Court delivered its judgment, reads : -

The proceeds derived from the sale of the whole or part of the trading stock of any business after the thirtieth day of June One thousand nine hundred and twenty-one (whether on the sale of a business as a going concern or in any other manner for the purpose of discontinuing the business) shall be assessable income.

It was intended by Parliament that the words in parenthesis should impose a limitation, but the High Court held that they were not words of limitation, and that the section meant that the proceeds derived from any sale of live stock or trading stock should be assessable income, and that the exemption in favour of breeding stock should be allowed in connexion with every sale. In the Weatherly case portion of the land on which a pastoral business was carried on had been sold, and the proceeds of the sale of breeding stock were held to be exempt from income taxation. That was not the intention of Parliament, and the purpose of this clause is to make the intention clear. Perhaps it is desirable that I should state what are the proposed amendments. Clause 9 proposes to repeal section 16, which defines assessable income, and to substitute provisions which honorable members will find on page 4 of the bill. It is now proposed to add the following paragraph : - “and (h) in the case of any person who sells or otherwise disposes of to another person (otherwise and by way of testamentary disposition ) -

either as a whole or in separate parts. the whole of the assets of a business carried on by him for the purposes of putting an end to the whole of his business; or
part of the assets of his business, for the purpose of putting an end to a part of his business. . . .

The first amendment which I shall ask the committee to make is to leave out the words “ whole of his “ in paragraph a. The provision will then apply in the case of a person who sells either the whole or any part of a business carried on by him for the purpose of putting an end to the business. This legislation is principally of importance to those engaged in the pastoral industry, but it will apply also to other avocations. If this amendment is accepted by the committee the provision will then apply to a pastoralist who owns stations in, say, Queensland and Victoria, and desires to sell his Queensland property. I move -

That the words “ whole of his “, proposed new paragraph (h) sub-paragraph (a), be omitted.

Amendment agreed to.

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

– I move -

That the words “ his business “, proposed new paragraph (ft) sub-paragraph (6), bt omitted with a view to insert in lieu thereof the words “ a business carried on by hiin “, and that the word “ his “, second occurring, be omitted, with a view to insert in lieu thereof the word “the”.

Here again it is desired to make it clear that each separate business shall be treated separately.

Amendment agreed to. 1’rovided that the assessable income of the person who has so sold or disposed of assets for the purpose of putting an end to the whole of his business shall not include any amount in respect of any live stock, included in the assets so sold or disposed of which, in the opinion of the Commissioner or a Deputy Commissioner, wore ordinarily used by that person for breeding purposes except that when such live stock includes sheep in the wool there shall be included in the assessable income of that person the amount which, under the provisions of the next succeeding section, is found or determined as the price or value of the wool as distinct from the sheep:

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

– I move -

That the words “ his business “, be omitted with a view to insert in lieu thereof the words “ a business carried on by him or in consequence of the acquisition or resumption of land, used by him for a business carried on by him, under the provisions of any law of the Commonwealth or a State which contains provisions for the compulsory acquisition or resumption of land “.

This amendment proposes to extend the exemption to breeding stock to another case will apply in the case of a pastoral property that is resumed compulsorily or resumed under a notice to treat by agreement in an act providing for the compulsory acquisition of land. If part of. a property is resumed its carrying capacity is thereby reduced and stock are sold. This amendment extends the exemption of the act to breeding stock in such cases.

The proviso, however, makes an exception in the case of sheep in the wool. It states that there shall be included in the assessable income of the person owning the sheep, the amount which, under the pro- visions of the next succeeding section, is found or determined as the.price or value of the wool as distinct fr.om the sheep. Clause 10, which seeks to amend the next succeeding section, provides for the division of the sale of sheep in the wool into two transactions - a sale of sheep and a sale of wool. Since that provision was drafted, representations have been made on behalf of persons interested, and I propose, later, to move an amendment in that clause, the object being to substitute a new provision to make the division of a sale of sheep in the wool into two transactions optional at the desire of the purchaser. It will not affect the vendor. If the purchaser does not wish to have the transaction divided in the manner suggested, he can come under the present system. It is obvious that it would be exceedingly difficult to divide the transaction in every instance, because of the difficulty in assessing the value of two or three months’ wool on a sheep. To meet the views of those who have made representations to the government it is proposed to make the division of the sale optional so far as the purchaser is concerned.

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

– Why confine the provision to the purchaser?

Mr LATHAM:

– -Because the vendor brings his stock to account at cost or market value, and on the other side of his account shows his sale of both stock and wool, the vendor is not affected.

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

– I suggest to the Attorney-General that it is advisable that we should discuss both clauses in order to determine the principle involved.

Mr SCULLIN:
Yarra

.- The meaning of the first portion of the proviso is perfectly clear, but honorable members reading the latter portion of it will be in some doubt. All reference to what is intended to be done in respect of sheep in the wool should be included in a separate paragraph. It would be easier to read.

Mr Latham:

– I think that if the word “except” were altered to “ provided,” and a new paragraph begun, the difficulty would be overcome.

Amendment agreed to.

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

. - We now come back to breeding stock, and I have a verbal amendment to move. I move -

That the words “ under the provisions of the next succeeding section “ be omitted with a view to insert in lieu thereof the words “by applying the provisions of sub-sections 2 and 3 of section 17 of this Act.

. -The reasoning of the honorable member for Yarra (Mr. Scullin) is sound; but I should like the Attorney-General to say why his proposal applies only to walk-in - walk-out sales and compulsory sales. The necessity of assessing the wool, as distinct from the breeding ewes, should apply to every sale.

Mr LATHAM:
Kooyong, AttorneyGeneral · NAT

– Special provision for walk-in walk-out sales is necessary, because it is arguable whether in the absence of similar provision the proceeds of such sales are income at all. In the case of other sales, the ordinary provision as to sales applies; the clip from the whole flock, including the breeding stock, is taken into account. Unless there was a special provision dealing with walk-in-walk-out sales, the court might hold that taxation should not be imposed upon any moneys resulting from the sale of a business as distinct from the carrying on of a business. Income is earned in the carrying on of a business. If a man sells his business, then, prima facie, it is not an income-producing operation; it is a realization of assets. At least, it includes the sale of capital assets. It was held in the High Court that in a walk-in and walk-out sale no income tax was payable in respect of the year in which the sale occurred, although, of course, what was sold included the annual produce. Therefore, it is provided that after a walkinwalkout sale the proceeds from ordinary trading stock or live-stock shall be taxed; but a distinction is drawn between capital assets and other assets. The sale of capital assets is not an income-producing operation. If it is a profitable sale, it may make the seller wealthier than he was before; but only by a fortunate sale of capital assets. It is thought proper that, when trading stock of any description, whether sheep or the stock-in-trade of an ironmonger or any other trader is sold for the purpose of putting an end to a business, the proceeds should be regarded as income; but an endeavour is made in this clause to distinguish between sales of capital assets, such as breeding stock, and other sales, and to provide that any profit on the sale of capital assets shall not be regarded as income. This clause is based upon the view that the proceeds of the sale of wool growing on breeding stock is in the nature of income.

Mr PROWSE:
Forrest

.- It seems to me that, in a walk-in and walkout sale, not only the sheep but also the wool on the sheep’s back is part of a pastoralists capital assets. I cannot conceive of separating the wool from the sheep, because, on the average, the wool on the sheep would represent 40 per cent, of the value of the animal, if it were in full wool. Purchasing a sheep is like buying a store and paying, say, £1,000 for the building, and £500 for the stock that is in it. It would be necessary for the seller to - debit his wool account 40 per cent., and credit his sheep account by that amount, in order to keep his accounts in perfect order and see that he was taxed in an equitable manner. If in a walk-in and walk-out sale, a man sells his sheep in full wool, he disposes of part of his capital assets. If he realizes on the wool, he gets a return for it while he is in business; but when he sells his sheep he sells the sheep and wool. Therefore, I say unhesitatingly that he sells part of his capital assets.

Mr DUNCAN-HUGHES:
Boothby

– I have with interest heard the learned discussion on this matter, and I cannot help wondering what the ordinary breeder of sheep would have made of it if he had been listening. A number of honorable members know something about sheep, and I do not think that even they are too sure of the effect of the provisions under consideration. It .seems to me that the provision at the end of clause 9 is proposed to be inserted in the act merely with the object of seeing that, in the case of a walk-in-walk-out sale, the seller shall not escape paying a certain amount of income tax, which may easily be a negligible sum. That principle is carried into the next clause, which makes a distinction in detail as between wool and sheep. I should like the AttorneyGeneral to make it clear whether this distinction is the result of definite recommendations to the Government by any authorized and reliable body of pastoralists, graziers, or sheep-breeders. If it is not, I am opposed to it. If there is reputable authority for considering that the provisions are workable, and that any authorized body of sheep breeders supports them, I shall be prepared to consider them. But, otherwise, it seems to me, after listening to what has been said, and after reading the clause myself, that they are highly legal provisions, which are simply the despair of the man on the land. Goodness knows, he has to make enough returns already. He has to declare the- number of fruit trees growing on his property, and I am not sure that he has not to estimate the number of eggs that his fowls will probably lay .in the next year! Men at sales in the country know little of legal details. Their business is simply to buy or sell stock. It seems most unwise to pass any law the effect of which we are not quite certain, and which may embarrass them. I must say that, on the whole, I think that the amendment suggested by the Attorney-General is an improvement on the bill as originally drafted. Clause 10 provides for the repeal of section 17 of the principal act and the insertion of a new section. Subsection 1, as. proposed to be amended, will read -

When sheep in the wool are sold or otherwise disposed of* by one person to another person, the sale or disposal may, at the option of the purchaser to be declared upon making his return, for all purposes in connexion with the assessment of the income derived by the purchaser, be deemed to be a sale of sheep and wool as distinct from each other.

– I am not contesting that question for the moment. We grant that the breeding stock, when sold at a winding-up sale, shall be regarded as an asset free from taxation. We also permit the pastoralist who purchases that stock to deduct from the sale price of his wool the value of that which was on the backs of the sheep at the time that he purchased them. If that principle is fair and sound - and I submit that it is - you must say to the pastoralist who sells on a walk-in walk-out basis “ You cannot claim an exemption from taxation in respect of the wool on the breeding stock.”

Amendment agreed to.

Clause, as amended, agreed to.

Sitting suspended from 12.49 to 2.15 p.m.

Mr GREGORY:
Swan

.- Before the luncheon adjournment I was waiting to move an amendment to clause 9. I heard the Chairman put to the committee the amendment that was then before it, but I had no knowledge of the clause being passed. I had previously given notice that I intended to move an amendment at the end of clause 9.

Mr Latham:

– Could not the clause be re-committed?

The TEMPORARY CHAIRMAN (Mr Makin:
HINDMARSH, SOUTH AUSTRALIA

– I suggest that clause 9 be re-committed later, so that the honorable member for Swan may have an opportunity to move his amendment.

Postponed clause 10 -

Section seventeen of the principal act is repealed and the following section inserted in its stead: -

– 1.) Where sheep in the wool are sold or otherwise disposed of by one person to another person, the sale or disposal shall, for all purposes in connexion with the assessment of the income derived by those persons, be deemed to be a sale and purchase of sheep and wool as distinct from each other. . . .

Section proposed to be amended -

– (1.) The proceeds derived from the sale of the whole or part of the trading stock of any business after the thirtieth day of June One thousand nine hundred and twenty-one (whether on the sale of a business as a going concern or in any other manner for the pui1pose of discontinuing the business) shall be assessable income.

Clause verbally amended.

Mr LATHAM:
AttorneyGeneral · Kooyong; · NAT

.- I move-

That the following new section be inserted - 16a. Where any person acquires any trading stock or live-stock, otherwise than by purchase, in any manner specified in paragraph(h) of section sixteen of this act he shall be deemed to have purchased that stock and the purchase price shall be deemed to be the amount which under that paragraph is found or determined as the price or value at which that stock was disposed of.

The amendment relates to disposals of trading stock other than by way of sale and purchase, and provides that they shall be brought into account in the subsequent year in the ordinary and normal manner. Supposing, for example, there was a gift of stock, it is plain that there would be difficulty in accounting for it unless it was required to be brought in at its value.

Amendment agreed to.

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

.- I move-

That proposed new sub-section 1 be omitted with a view to insert in lieu thereof the following proposed new sub-section: - “ (1) Where sheep in the wool are sold or otherwise disposed of by one person to. another person, the sale or disposal may, at the option of the purchaser to be declared upon making his return, for all purposes in connexion with the assessment of the income derived by the purchaser, be deemed to be a sale of sheep and wool as distinct from each other.”

Mr SCULLIN:
Yarra

.- The honorable member for Wannon was entitled to make his protest, and let his view be known; but I would advise him not to make himself look ridiculous. He gave an indication this morning that he did not understand this section, and he has proved it this afternoon. If he understood the first principles of the proposal he would know that itwas specially designed to benefit the pastoralists;

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

– I am not going to accept the principle in one case and reject it in another.

Mr SCULLIN:

– The honorable member should know that this provision was a special concession to the pastoral industry, and, when I support it, it cannot be said that I am assailing the industry. I throw the lie back in his teeth. I regard the pastoral industry, and all the other industries of this country, as interwoven one with another. I look upon wool-raising as one of the staple industries that will keep this country solvent. If the honorable gentleman was not obsessed with some strange illusion, he would not have given utterance to the stupid charge which he made this afternoon. This is a concession to the pastoralists to save them from being doubly taxed on their wool clips. I have given it my warm support because it is just, but I would not support any attempt, whether by pastoralists, agriculturists, joint stock companies, or private individuals, to avoid paying their just share of taxation. When taxation is evaded it always means that somebody else has to pay more.

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

– The honorable member does not know any instance- in which the existing system has worked an injustice.

Mr SCULLIN:

– I know that it would be possible for it to do so. I pointed out to the honorable member that this clause is a concession that had to be balanced by the conditions in the previous clause. Whatever he might say about my attitude in regard to these clauses, it is absurd to say that this one will inflict anyinjury on the pastoralists, when, as a matter of fact, it is specially designed to save them from being doubly taxed. It gives him the right to choose under which system he is to be assessed. It is evident from his remarks that the honorable member does not understand the clause.

Amendment agreed to.

Clause as amended, agreed to.

Postponed clause 11 (Taxation of companies).

Section twenty of the principal act is amended -
1. by inserting at the end of sub-section
1. 1 ) the words “ or as rebates basedon purchases by shareholders from the company “;
2. by omitting paragraph (b) of subsection (2.) ; and
3. by omitting the first proviso to subsection (2.).

Section proposed to be amended -

– (1.) In calculating the tamable income of a co-operative company there shall be deducted……. so much of the assessable income of the company as is distributed among its shareholders as interest or dividends on shares. (2.) In addition to any other income tax payable by it, a company shall also pay income tax on -
1. the interest paid or credited by the company to any person, who is an absentee, on money raised by debentures of the company and used in Australia or on money lodged at interest in Australia with the companyand
2. interest paid or credited in respect of debentures payable to bearer the names and addresses of the holders of which are not supplied to the Commissioner by the company as if the total amount so paid or credited were the income of an individual :

Provided that a company shall be entitled to deduct and retain for the use of the company from the amount payable to any of the persons referred to in paragraph (6) of this sub-scatwn such amount as is necessary to pay the tax which becomes due in respect of that amount.

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

– The first amendment of the principal act provided for in this clause, is designed to deal with cooperative societies. The amendment will rectify anomalies brought under the notice of the department in regard to distributions among their members by co-operative societies. The definition of income in section 4 of the act lays it down that income does not include any rebate received by a member of a cooperative society or company, based on purchases made by that member from the society or company. Rebates are excluded from the income of a member because they are regarded, not as income, but as reimbursements of overpayments made for goods. Under the law, as it now stands, however, a company or a co-operative society is not at liberty to deduct the amount paid in rebates from its income. The object of this amendment is to allow that

Mr BRUCE:
Prime Minister and Minister for External Affairs · Flinders · NAT

– Paragraphs b and c.of clause 11 link up with the proposals that were contained in clause 23 of the bill which was very fully discussed last night. The debate was adjourned until we had an opportunity of taking this clause and considering the whole matter in the light of the wider issues raised under these two paragraphs. Before dealing with these particular paragraphs, however, I wish to make a personal explanation as to certain views I expressed with the greatest possible confidence last night, and which I now find do not represent the actual position : I refer to my exposition of the law of Great Britain with regard to the taxation of absentee shareholders. I can only plead in extenuation that I concluded my remarks on that occasion by saying that I “ understood” that the position was as I had outlined, or I hope I did so. The position is not as I indicated last night. In Great Britain they do take very much more definite action in regard to the income of absentees than I gave the committee to understand. The need for inserting paragraphs 2 and 3 of this clause arose out of the process of expansion going on in regard to the dividends of companies owned and controlled outside Australia, those owned outside Australia, but controlled here, and those registered and controlled inside Australia. In the case of the external company, that is, the company with its capital owned abroad and controlled abroad, the position is that up to the present time we have not been getting taxation from absentee shareholders. In the second case, that of the company registered abroad, with a good deal of the capital owned abroad, but controlled in Australia, and declaring its dividends here, we have not in the past utilized one of the sections of the act so as to make it pay the tax of those shareholders who are resident abroad unless the dividends were declared in Australia. Recently an English judgment showed that the dividend had to be paid in full to the absentee shareholder and the company had to bear the tax instead. It is considered unfair to levy from the company for income tax payable by its shareholders money which could not be recovered by it from them. Having come to the conclusion that exemptions should be allowed in those two cases, we are now faced with the case of a company registered and controlled in Australia, which has shareholders who are resident outside Australia. “We believe that if the other classes of absentee shareholders are to be exempt from taxation, the absentee shareholder in the Australian company should not be placed in a worse position than they. Having decided to exempt shareholders of this type, Ave had to consider the position of persons who lent money to a company on debentures or on deposit. After considerable thought, the Government decided that it was desirable to exempt also those lenders for the sake of encouraging the investment in Australia of capital which would assist in the general promotion of industry. We would not have gone to this length in regard to interest on debentures but for the unjustifiable anomalies that exist in regard to share interest. During this discussion many honorable members have indicated that their object is to take the maximum toll of people who are investing capital in this country. The Government, on the other hand, regards such investment as essential to the opening up of the country and the promotion of new industries.

Mr Coleman:

– Nobody said otherwise.

Mr BRUCE:

– Although at first sight it may appear that the exemption of certain capital from income taxation means a loss of revenue and a resultant heavier burden on the Australian taxpayer, that is not the ultimate effect, if a greater inflow of capital is stimulated. Such money will be utilized for the establishment of industries and the creation of employment, and will cause a general increase in prosperity. And as new industries are established, and employment is found for more people, the volume of revenue flowing into the Treasury will increase. In the long run the actual effect would be to relieve the local taxpayer.

Mr THEODORE:

– Would not that apply also to locally provided capital?

Mr BRUCE:

– Certainly; but if Australia is to develop at the rate which its national circumstances demand, its capital requirements cannot be provided from the annual excess of income over expenditure. We must get money from abroad to accelerate development and the influx of new population. I agree that all monies employed in industry and creating new avenues of employment will be of great advantage in reducing the burden of taxation upon the people as a whole. But there is another angle from which to view this problem. Very often the question is asked, “Why should foreign investors take toll of Australia in the form of interest and dividends on the capital they have invested ?” It is suggested that all the benefits that arise from such investments are reaped by the people outside Australia, and that we are entitled to recover from them as much as possible. Sight is lost of the fact that the great bulk of the money is employed in the creation of new industries or the extension of existing ones; these will increase the wages bill, and the money will circulate throughout the country to the benefit of all sections. Only a small percentage will be utilized for the payment of interest or dividends to the foreign shareholder. Money sent into Australia from abroad is of benefit to the country, and not detrimental, as some short-sighted people seem to believe. ‘ We all feel considerable resentment against foreigners who trade in Australia, and by the manipulation of subsidiary companies appear not to earn any profits and so escape taxation. These unscrupulous methods are applied nearly always in distributing businesses; it would be difficult to apply them in manufacturing and productive enterprises. If people do resort to these methods, it is clearly our responsibility to find means of defeating their machinations. Cases of this kind do not, however, affect the fundamental fact that the investment of new capital is of benefit , to the country. Recently I prepared an estimate of the capital requirements of Australia. The figures disclosed that, if we could afford to be content with the present growth of population by natural increase - and the excess of births over deaths in Australia compares favorably with the natural increase in any other country - and the corresponding expansion in trade, commerce, production, and industry, we should be able to provide out bf surplus wealth the whole of the capital -we need. But, unfortunately, possessing an enormous continent and being faced with the necessity for populating it and accelerating its development, we cannot be content with what in an older country would be considered a very satisfactory rate of progress. Consequently, having regard to the inequalities that arise under the taxation law as between absentee shareholders in different classes of companies, the Government came to the conclusion that all should be placed on the same basis. It then decided to extend the concession to moneys lent by way of debentures or on deposit to companies. However, the discussion last night made clear a consensus of opinion in the committee against the action proposed by the Government in regard to shareholders. The committee apparently is not prepared to go so far as the Government proposes in the direction of bringing absentee shareholders into line irrespective of the type of company in which they are interested. The Government accepts that decision. It would be unwise, therefore, to take the further step contemplated in regard to debenture interest. I do not reflect upon the views expressed by honorable members, but I repeat that the basis of the Government’s proposals was the necessity for attracting capital into the country. This legislation appeared to the Cabinet to be one justifiable method of accelerating the inflow of new capital to develop our industries and increase our capacity to absorb new people. I recognize that our attitude may be misrepresented; the suggestion may be made that the purpose of this legislation is to favour the big companies and the wealthier sections of the community. I hope that that course will not be adopted, and that this issue will not be clouded with prejudice, for, whilst the Government recognizes the will of the committee, it is convinced that at some future time this Parliament will adopt action of the nature suggested in the bill. If, in the meantime, the matter is surrounded with prejudice and political animosity, the task of any government not necessarily the present Government - that may attempt similar action to that proposed on this occasion will be made more difficult. The Government does not propose to press paragraphs b and c of clause 11, nor will it, when clause 23 is reached, persist with its proposal.

Mr SCULLIN:
Yarra

.- The Government displayed very much greater wisdom in withdrawing from an untenable position, than it did in inserting this provision in the bill. The withdrawal proves that the criticism of the Opposition last night was justified. I remind the committee that it required continual hammering from the Opposition before the Government “ saw the light.” I am glad that the Government has displayed greater wisdom at this stage than it did earlier in the debate; but we cannot allow the matter to remain where it is. The Prime Minister endeavours to make it appear that the provision is withdrawn merely because he has a majority against him, but that he is right and we are wrong. The Prime Minister spoke of the different angles from which he approaches the subject. I suggest that his argument was triangular. First of all the right honorable gentleman spoke of the difficulties of collecting the tax, and of ‘ the companies from whom it is impossible to collect it. He concluded by stating that the whole principle underlying the clause is the great need to attract capital to Australia, and he gave us a lecture on the desirability of encouraging imported capital to develop the country, urging that the money that comes from abroad is very beneficial. That is arguable. Some investments from abroad have certainly assisted to develop Australia, and to that extent are beneficial; but others have merely exploited the country and drained our resources. I suggest that we set aside all considerations as to whether imported capital is beneficial or otherwise. Surely the right honorable gentleman does not contend that Australian capital invested in this country is not as beneficial as that from overseas! Yet he proposed to tax profits on local investments and exempt those on investments from abroad. It is impossible to advance a sound argument in favour of exempting profits made on investments of foreign capital in Australia and at the same time taxing the profits on local capital invested in this country. We have had to thresh this matter out since last

– In view of that statement I shall not discuss the matter further than to . say that the experiment, which the Lang Government made in attempting to tax the profits made by these foreign companies, was justified. Doubtless, the measure will be the subject of litigation before the Privy Council. As to the practicability of imposing taxation upon these interests, honorable members are surely aware that there are more ways of killing a cat than by choking it with cream. I suggest that the Government should introduce a federal company law in spite of declared constitutional difficulties, either with or without consultation with the States. Foreign companies, which make profits on business which they do in Australia, should undoubtedly contribute towards the cost of government here, and legislative control over companies is a means to that end. That seems to me to be the most effective method of taxing the profits of companies. In regard to a company law, Sir Robert Garran, when giving evidence before the Royal Commission on the Constitution, said -

It is not at all certain, in view of later decisions’ of the High Court, that a law regulating companies would be held to-day to be invalid.

Enormous sums are being taken out of

Australia by picture companies, motor car companies, oil, and other interests every year, and it is very necessary that some action should be taken by the Government to levy income tax upon them. I am pleased that the supporters of the Government have seen the wisdom of bringing pressure to bear upon their leaders to drop the vital provisions of the bill now before the Committee.

Paragraphs b and c omitted.

Clause, as amended, agreed to.

Postponed clause 22 -

Section sixty-two of the principal act is amended by inserting after sub-section (3) the following sub-section : - “ (3a). Where, in respect of the estate of any deceased taxpayer, probate has not been granted or letters of administration have not been taken out within six months of his death, the commissioner may cause an assessment to be made of the amount of tax due by the deceased, and that assessment shall be conclusive evidence of the indebtedness of the deceased to the commissioner, and the commissioner may issue an order in the form in the second schedule to this act authorizing any member of the police force of the Commonwealth or of a State or of a Territory of the Commonwealth or any other person named therein to levy such amount with costs by distress and sale of any property of the deceased, and upon the issue of any such order, the member or person so authorized shall have power to levy such amount accordingly.”

Upon which Mr. Latham had moved by way of amendment -

That all the words from and including “ and that assessment” to the -end of- the clause be omitted, with a view to inserting in lieu thereof the following: - “ (3b) The commissioner shall cause notice of the assessment to be published twice in a daily newspaper circulating in the State in which the taxpayer resided. “ (3c) Any person claiming an interest in the estate of the taxpayer may, within forty-two days of the first publication of notice of the assessment, post to or lodge with the commissioner an objection in writing against the assessment stating fully and in detail the grounds on which he relies; and the provisions of this act relating to objections and appeals shall thereupon apply in relation to the objection as if the person so claiming an interest were the taxpayer. , “ (3d) Subject to any amendment of the assessment by the commissioner, or by the board of review or by a court, the assessment so made shall be conclusive evidence of the indebtedness of the deceased to the commissioner. (3e) The commissioner may issue an order in the form in the second schedule to this act authorizing any member of the police force of the Commonwealth or of a State or of a Territory of the Commonwealth or any other person named therein to levy the amount of tax due by the deceased, with costs, by distress and sale of any property of the deceased. “ (3f) Upon the issue of any such order the member or person so authorized shall have power to levy that amount accordingly in the prescribed manner. “(3g) Notwithstanding anything contained in the last three preceding subsections, if at any time probate of the estate of the deceased is granted to, or letters of administration of the estate are taken out by a person, that person may, within forty-two days after the date on which probate was granted or letters of administration were taken out, lodge an objection against the assessment, stating fully and in detail the grounds on which he relies, and the provisions of this act relating to objections and appeals shall thereupon apply in relation to the objection as if that person were the taxpayer.”

Mr LATHAM:
Kooyong · NAT

– This clause provides a method of collecting tax when there is no executor or administrator of a deceased person’s estate. I stated yesterday that it was necessary to make some amendments to improve the provisions of the clause. I have added to those amendments a subclause to meet the point raised by the honorable member for Batman (Mr. Brennan ) .

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

.- I have had barely time to read the amendments proposed by the Attorney-General, but I understand that action respecting the enforcement of an assessment will be deferred, and the estate saved from realization or forced sale, which frequently sacrifices the equity, a thing which we all wish to protect.

Mr LATHAM:
Attorney General · Kooyong · NAT

– The point mentioned by the honorable member is met in the initial words of the clause, which enact that “ “Where, in respect of the estate of any deceased taxpayer, probate has not been granted, or letters of administration have not been taken out within six months of his death, the commissioner may “ take certain action.

Amendment agreed to.

Clause, as amended, agreed to.

Postponed clause 23 -

Section 65 of the Principal Act is amended -

by adding at the end of sub-section (1.) the following proviso: - “ Provided however that a company shall not be required under this section to pay any tax in respect of a dividend which is or may become payable to a shareholder who is an absentee.”

Section proposed to be amended.

– 1. The Commissioner may require -

any person to pay to him forthwith . . . the money or so much thereof as is sufficient to pay the tax due by the tax-payer or the fines and costs (if any ) imposed by a court on him, in respect of an offence against this act.

Amendment (by Mr. Scullin) agreed to-

That paragraph e be omitted.

Clause, as amended, agreed to.

Postponed clause 29 (Application of Act).

Mr LATHAM:
Attorney General · Kooyong · NAT

– This clause was postponed because it referred to other provisions in the bill which had not then received the approval of the committee.

Clause agreed to.

Amendments (by Mr. Latham) agreed to -

That the following new clauses he inserted - “ 1a. Section two of the Principal Act is amended by inserting before the word schedule ‘ the word ‘ First ‘ “. “ 2a. Section five a of the Principal Act is amended by omitting from sub-section (1.) the words ‘Northern Territory by a resident of that Territory prwr to the first day of July, One thousand nine hundred and twenty-seven ‘ and inserting in their stead the words ‘ Territory of North Australia or of Central Australia by a resident of either of those Territories prior to the first day of July, One thousand nine hundred and thirty-two’ “. “27a The schedule to the Principal Act is amended by inserting after the word ‘the’ the word ‘ first”.

Title agreed to.

Rill reported with amendments.

Motion (by Mr. Latham) agreed to -

That the bill be now recommitted to a committee of the whole House for the reconsideration of clauses 9, 12, and 16.

page 2300

LEAGUE OF NATIONS

Report of Australian Delegation to Eighth Assembly

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

– (By leave) - I desire to lay upon the table the report of the Australian delegation to the Eighth Assembly of the League of Nations which has been laid upon the table in another place, and to move -

That the paper be printed.

Mr LATHAM:

– I ask leave to continue my remarks at a later date.

Leave granted; debate adjourned.

page 2300

INCOME TAX ASSESSMENT BILL

In committee (Recommittal).

Clause9 (What is included in income).

Mr GREGORY:
Swan

.- I move -

That the following paragraph be added: - and (i) Income derived by any person resident in Australia from investments outside Australia-

I am sure that honorable members must have been impressed with the statement made by the Prime Minister to-day that there was great necessity to encourage capital “to come to Australia. We cannot have progress in a huge country like this un less we have capital to help us. I agree with the honorable member that everything possible ought to be clone to encourage the investment of capital within Australia. When our people become wealthy, and amass capital, they should, if. they invest that capital outside Australia, be subject to taxation by the Commonwealth; of course, with such limitations as might be necessary on account of taxation imposed elsewhere. Australia should obtain some benefit from incomes earned overseas by Australians resident here. Millions of pounds lave been invested in tin mines in the Malay Peninsula, and in the timber resources of Borneo and elsewhere, and from the profits made out of those investments not one penny is collected in income tax from shareholders in Australia. About twenty companies - of which the paid-up capital exceeds £100,000 - are operating in this way, and , their dividends paid range from £542,200 down to £95,000. Millions of pounds are being paid to Australian shareholders by tin-mining companies alone, and yet the Commonwealth obtains nothing by way of income’ taxation from those dividends. The Royal Commission on Taxation stated in its report -

In preference to any general increase in income taxation in Australia, or the introduction of new forms of taxation, we recommend the taxing of incomes derived from abroad.

There is nothing new in that proposal. In Great Britain, any person residing in the United Kingdom must pay income tax in respect to his “ profession, trade, employment or vocation, whether carried on within the Realm or not.” Similar provisions operate in Canada and India. I agree that if taxation is imposed on incomes in the countries in which they are earned, it would be reasonable to make some reduction on account of that taxation, but I do not think that people who believe so little in their own country as to invest their money outside it should be entirely free from income tax simply because they derive their incomes from abroad. We need to bring capital into Australia. I come from a large State - one that requires an enormous amount of money for its development. I would rather see money coming into this country to develop it and build up our industries, than

Lave the Government borrowing money for that purpose. Tremendous sums were borrowed for soldier settlement, and already £10,000,000 has been written off. Better returns are always secured from money spent by private corporations. The coming of additional capital to this country would induce more production which, in return, would lead to greater prosperity and more employment.

Mr ATKINSON:
Wilmot

.- There seems to me to be one objection to this amendment, and that is that it embodies the principle of double taxation. If the honorable member for Swan could see his way clear to allow concessions to be made in respect of taxation paid abroad, his amendment would be less open to objection. I do not think we should discourage people from investing their money abroad, even if they do live in Australia. If people who invested their money abroad did not pay any income tax to the country where the money was invested, there would be no double taxation; but if “they do pay such taxation abroad, the amount of it should be deducted from that collected in Australia. I have no objection to the amendment if the honorable gentleman will agree to such an alteration. I am opposed to the system of double taxation. Ever since I can remember there has been an outcry against double taxation, as it operated between Great Britain and Australia. We have now adjusted that matter to some extent, and we do not want to introduce the principle elsewhere. I cannot agree that, because an Australian is drawing his income from another country, he should pay full income taxation in that country, and pay full taxation again in Australia. Such a provision as that would hinder the free flow of capital. Supposing a man drew income from India, and was taxed there on that income; it would not be fair that he should be assessed here at full income tax rates in respect of the same income. If he is paying no taxation in India, there would be no objection to his being taxed here. That is a fair proposition, and if the honorable member for Swan is prepared to admit it, I will support his amendment.

Mr KILLEN:
Riverina

– I am surprised that the honorable member for Swan (Mr. Gregory) should have proposed an amendment of this kind. We have, I think, always been opposed’ to the principle of double taxation, and yet he is deliberately proposing to introduce it here. I cannot understand why any one in Australia who invests his money abroad - as he is perfectly entitled to do - should be compelled to pay taxation both in the foreign country and in Australia. The adoption of this pro-, posal would amount to a most iniquitous grab on the part of Australia for money to which it was not entitled. We should be most inconsistent if we supported this amendment, and I hope the committee will turn it down.

Mr GULLETT:
Henty

.- I cannot agree with the honorable member for Riverina (Mr. Killen). If a man lives in this country and invests his money outside, no matter what taxation he may pay to the country in which he has invested it, he has no right to enjoy the benefits of Australian citizenship without meeting his obligations , in the way of taxation. If he enjoys the privilege of Australian citizenship, he must accept his responsibility in regard to Australia’s war debt, and the maintenance of the governmental services.

Mr Killen:

– He does that from his investments in Australia.

Mr GULLETT:

– Not necessarily. A man may live here and enjoy the privileges of citizenship, and not have one penny invested in Australia. I think we ought to devise a system such as that operating in Great Britain. Double taxation would then be prevented within the Empire; but if a man invested his money in a foreign country he would be subjected to double taxation, and rightly so. It seems an extraordinary thing to me that Australia should abstain from this system of taxation. We are practically the only advanced country in the world which does so. The honorable member for Swan (Mr. Gregory) has quoted instances in which this form of taxation has been adopted, and in practically all other parts of the Empire, and in most foreign countries, residents are taxed on incomes drawn from abroad. Our omission to do so is a blot on our taxation system and an injustice to Australians who invest their money in the country, and endeavour to promote local industries and maintain Australian rates of pay and standards of living. The honorable member for Swan (Mr. Gregory) has pointed out that millions of pounds of Australian capital is invested in tin dredging enterprises in coolie countries. Persons who thus invest their money and draw huge dividends from cheap labour enjoy all the privileges of living here without contributing anything towards the maintenance of government. I hope that the amendment will be seriously considered.

Mr MARKS:
Wentworth

– I agree with the honorable member for Henty (Mr. Gullett) and the mover of the amendment. Although I am against double taxation as a general principle, particularly as I suffer so much from it, I do not think Australians should be encouraged to send their money abroad. My sisters, brothers and I have spent hundreds of thousands of pounds in erecting mammoth buildings in Sydney. We pay Federal and State land taxes, municipal taxes, and State and Federal income taxes. Somebody living alongside us may be drawing huge dividends from the capital they have sent to foreign countries, and they pay not a penny towards the government of Australia. It is a sound principle that all profits a man re-, ceives shall be subject to taxation. Let us treat all citizens on an equal footing. If a man invests money in a foreign country he deserves to “ get it in the neck “ - to pay the foreign tax if one is imposed, and the Australian tax also. Let each of us pay something for the protection we enjoy under the flag and for the services we receive in the country in which we live.

Mr BRUCE:
Prime Minister and Minister for External Affairs · Flinders · NAT

– The amendment is of a farreaching character, and, if carried, would have a tremendous effect upon the finances of the Commonwealth. The principle it embodies received very serious consideration from the Government when the draft of the bill was before Cabinet. Certain proposals in the measure were designed to attract capital to Australia, and obviously it is illogical to allow simultaneously native capital to flow out of the country. The two policies are irrecon cilable. We were faced with the increasing exodus of capital from the Commonwealth, and had to consider whether steps should be taken to check it. The effect of this is illustrated by the manner in which government securities have been almost hawked in Australia, the Government being obliged to make the income from them tax-free as an extra inducement to the Australian people to lend their money to the Commonwealth. The Government realized, however, that a fundamental alteration of the system could not be proposed without very much greater investigation. The Commonwealth income tax law, when originally framed by a Labour Government, was based on the logical and just principle that taxation should be levied on income actually derived within the country. Abandonment of that principle would be a very radical change, especially at a time when the principles that govern income taxation are being exhaustively considered by all the nations of the world. The matter was dealt with at Geneva, and whilst finality has not been reached, the trend of opinion is towards recognition of the principle that taxation on investments should be levied only by the country in which the capital is controlled. There is another consideration that must be thoroughly investigated before we completely reverse our taxation policy in this regard. Australia is vitallyconcerned in increasing its import trade, of which all us would like the secondary industries to contribute a bigger proportion. To illustrate the probable effects of the proposed amendment, I remind the committee that H. V. McKay and Company have, by their enterprise and initiative, succeeded in establishing themselves in a paramount position in the South African market. The profits ‘derived from that trade are not now subject to Australian income taxation, and we should hesitate before doing anything that . would be calculated to discourage them and other Australian manufacturers from building up a profitable market abroad. There are also grave questions involved in connexion with the export of wool and wheat.

Mr McGrath:

– Would the amendment apply to them?

Mr BRUCE:

– It would apply to all profits earned anywhere.

Mr Latham:

– It should in principle, but according to the wording of the amendment it would apply only to income from investments. Therefore, traders would be free. I assume that that is not the intention of the honorable member for Swan.

Mr BRUCE:

– The word used in the amendment is “ investments.” I discussed this matter with the income tax commissioner, and, contrary to the legal opinion we have just heard, he expressed the view that the amendment would apply to all moneys invested outside Australia, irrespective of the nature of the investment. So much is involved in the amendment that the Government cannot accept it

Without further investigation. I assure the mover that the point he has raised has already been exhaustively examined by the Government, and that it will be further probed. Australia cannot afford to allow its own capital to drain away to other countries when it is so hardpressed for money that it has to offer special inducements to foreigners to subscribe to its loans. “We all are agreed as to the desirability of keeping as much of Australia’s surplus wealth in the country for the development of its resources as is practicable; but I urge the committee not to make, by this simple amendment, a fundamental and farreaching change in the taxation system. Moreover, the adoption of the proposal would completely upset the finances of the Government. Nobody can say what would be its effects.

Mr Brennan:

– The Government might even get too much revenue.

Mr BRUCE:

– It is perfectly certain that it would enormously increase the revenue.

Mr Gregory:

– The Government could then reduce the tariff duties.

Mr BRUCE:

– The honorable member for Swan cannot be allowed to achieve his freetrade objective by a side wind. The Commissioner of Taxation has informed me that it would be impossible, without careful research, to estimate the effect of this alteration upon the revenue. I appeal to the committee not to accept the amendment. The matter is being carefully examined by the Government, and, in view of the necessity for retaining Australian capital for internal development, it may be necessary, when all the facts are ascertained, to take some action to achieve that result.

Mr SCULLIN:
Yarra

.- The Prime Minister was right in saying that the amendment involved a change of a fundamental and far-reaching nature. I am sorry that the honorable member for Swan (Mr. Gregory) did not circulate it some days ago. The Prime Minister said that the amendment, if carried, would probably lead to an enormous increase in revenue from income taxation. That proves that the Commonwealth is losing a lot of revenue now. The only sound argument that can be urged against a government having too great a revenue is that it is taking from the pockets of the people an undue amount of money, which might be put to better use. That objection does not apply in this case, because, if we tax the profits of those who have invested their money abroad, we leave them less money with which to carry on that undesirable policy, and we do not lessen the amount invested in Australia. %

Mr Prowse:

– We might chase them out of Australia altogether.

Mr SCULLIN:

– There is a very strong case in favour of the amendment. I certainly agree that if we did impose this class of taxation, which could be subjected to reciprocal arrangements similar to those now in force between Great Britain and Australia, it would be beneficial. The Prime Minister expounded an argument that was exploded when the subject was discussed before the royal commission on taxation, that the provision would penalize men who were making products locally, and sending them abroad .to Argentine, Africa, and other countries, to exploit their market, such as Hugh Victor McKay. The difficulty could be overcome by introducing a proviso to exempt such profits. The right honorable gentleman also mentioned wool exported for sale on the foreign market. We tax that wool producer on his full income.

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

– There are companies who purchase wool on consignment and sell it at an enhanced price.

Mr SCULLIN:

– That could be overcome by the operation of section 18 of the principal act. We should certainly tax the man who is resident in Australia and has his capital invested abroad, particularly the man who has his money invested in tin-mining and other ventures in cheap labour countries. The principle upon which we impose the rate of taxation is ability to pay. There are two main considerations governing the collection of taxation ; one the service that the country renders the individual as a member of the community. The Prime Minister refers to it as the “ protection of the flag.” The other and greater consideration is the protection that the country gives to the industry from which the individual makes his income. We have the right to impose a tax on the resident of Australia who earns his money in this country, and that also gives us a claim on the absentee who earns a portion of his income, in Australia. That justified, too, the stand taken by the Opposition in regard tothe proposals that were to be applied to absentee shareholders. We haw an even greater claim on those individuals, who, while resident in Australia, are exploiting undeveloped countries, where government may not be solid. Great Britain has frequently taken responsibility for the safeguarding of persons engaged in such ventures. It is right that those people should contribute to the revenue of the country that protects them, and in which they reside. The royal commission on taxation was very guarded in its report. It made some recommendations, but hedged later. It indicated that it would prefer to see a tax imposed on profits earned abroad rather than increase the existing tax in Australia. I suggest that that was not considering the principle, but rather the expediency, of the matter. To-day, whilst Ave are reducing income tax and other direct taxation, our general taxation per head of population is increasing. It would be possible for us to relieve our people from indirect taxation to the extent of many millions of pounds

Avithout affecting the protective effect of the tariff except to improve it, leaving revenue duties frankly imposed as such. On thewhole, I find myself in agreement with the amendment. This committee can only affirm general principles, and a principle is affirmed in clear and definite language by the amendment. If the amendment is carried, the Governmentwill have to consult its advisers, and probably in another place, insert the proviso necessary to meet objections that may be raised on such points as the taxing of exports. It may be necessary to alter the verbiage to include capital expended abroad for trading purposes, as well as investments. When one considers that theflow of capital from Australia abroad is groAving, one realizes the need to impose a check. The honorable member for Swan instanced “ shadow “ companies that are exploiting Australia and evading taxation here. We have peoplewho are shareholders in such companies, actually making profits here, but crediting those profits in another country. I instance the operations ofan American film company, producing films in Australia. Those films are sold in Australia at such a price that the Australian section of the business makes no profit. But profits are made by the parent company, and the shareholderswho are resident in Australia receive their proportion of those profits. Why should Ave encourage that sort of thing and penalize Australian taxpayers? If Ave imposed a tax on such activities, itwould at leastwake up Australian shareholders and make them fight for their end of the stick, probably resulting in the introduction of reciprocal taxation arrangements between Australia and the United States of America. I appreciate many of the points raised by the Prime Minister, but the right honorable gentleman is responsible,with his Government, to see that these provisions are extended in such a way that they will increase our revenue enormously. That will reduce the taxation that falls so heavily upon ourown people, and will still allow us to put into effect protective dutieswhich will encourage and stimulate our industries.

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

– I direct the attention of the committee towhat is involved in the amendment in relation to the drafting of the bill and the form of our present act. The honorable member for Yarra (Mr. Scullin) said that the amendment might properly be carried by the committee, and that it should then be left to the Government to produce other amendments to fit into the scheme of the act. I consider that the committee should appreciate the real significance of the amendment in that regard. Our act was deliberately drawn upon the basis of the taxation of incomes derived from sources within Australia. The definitions in the act are based upon that principle. The governing sections of the act are based upon that principle, as are the description of income, in section 16, and the deductions. To accept this amendment and to combine with the principle of taxation upon income derived in Australia, the principle of taxation upon income received in Australia from investments abroad would involve a re-casting of a very large portion of the act. For example, income from personal exertion is defined as certain moneys -

Derived from sources in Australia, consisting of earnings, salaries, charges, commissions, fees, &c. . . . Income from property means “ all incomes derived from sources in Australia and not derived from personal exertion.”

And so on through the definition section. Section 13 is the governing section of the act, and it provides - “ Subject to the provisions of this act, income tax shall be levied and paid for each financial year upon taxable income derived directly or indirectly by every taxpayer from sources within Australia. . . .”

Section 16 provides that assessable income shall include certain specified matters. It occupies more than four pages of the statute. As an. example of the difficulty that arises, I mention the trouble there is in dealing with profits which have been distributed in Australia in the form of bonus shares. A complicated set of provisions has been worked out to deal with that subject, which depends in part for its administration upon the date on which certain profits were earned by the companies concerned. The provisions are being applied to Australia, but to apply them to foreign companies would be impracticable. It could not be done, except by sending inquiry officers abroad to ascertain whether and when and out of what moneys foreign companies distributed bonus shares. Provision is also made for the deduc tion of certain losses and outgoings’; but this likewise has been devised to meet Australian conditions, and could not be applied to ex-Australian income. Everything in the act has been put there with the object of collecting tax on income derived from all sources in Australia, and the measure would have to be entirely re-cast to make its provisions applicable to income earned outside Australia. It is, of course, open to the committee to adopt an entirely different system. I have not risen to speak on the merits of the amendment. I suggest that the wise course for the committee to pursue would be to allow the Government to continue its examination of the question, and not create difficulty, and perhaps chaos, by inserting in the act an isolated amendment of this character.

Mr WEST:
East Sydney

.- I listened with attention to the remarks of the honorable member for Swan (Mr. Gregory). His proposal is fundamental in character. This subject has been considered recently in Great Britain, the United States of America, and Canada. The Senate of the United States of America has been specially concerned about the practice of certain Southern Europeans who migrate to America of hoarding their savings until a time of depression occurs, and then taking them back to their native land. It has also given consideration to ways and means of meeting the financial problems which arise from the practice of wealthy Americans of taking large sums out of the country when they go abroad on holidays. Australia is not greatly concerned with that aspect of the matter, for we have numerous visitors from other countries who bring considerable wealth here. The discussions that have arisen in Great Britain have turned on a different aspect. On Monday last I asked the Prime Minister, upon notice -

Is it a fact that recently in the House of Commons, in reply to a question as to whether Great Britain can continue to lend her resources to develop the enterprises of foreign countries. Mr. Winston Churchill (Chancellor of the Exchequer) replied that he had always been lead to believe that such loans leave the country in the form of British goods?
If so, will the Prime Minister state whether the reply by the Chancellor of the

Exchequer is in accordance with economic facts, and whether it would apply in the case of Australian loans?

The right honorable gentleman replied that he had no information on the subject, but in spite of that off-handed way of dealing with it, he will have to give some earnest consideration to it before long. The question was raised at the Economic Conference at Geneva, but as that was a freetrade body it also evaded the issue. It appears to me that something along the lines of the proposal of the honorable member for Swan will have to be done sooner or later. At present a large amount of capital is being taken out of Australia annually, by persons resident abroad. It is well known that the members of the Tooth and Allen families draw very large incomes from their interests in Australia. They are not consumers, and do not assist in relieving the cost of government. This money should be taxed. “We shall eventually have to treat this question as one of major importance.

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

– I was pleased to hear the Prime Minister express the opinion that there was a good deal to be said in favour of the amendment of the honorable member for Swan on the grounds of national sentiment, necessity and obligation. This country is badly in need of capital, and we should do all that we can to see that Australian capital is kept here to develop our resources, establish our industries, and provide employment for our people. That the principle underlying the amendment is sound cannot be denied, for it is a principle upon which .British and Canadian taxation rests. I was not impressed by the statement of the Attorney-General, that from the machinery standpoint the amendment is impracticable. I have noticed frequently that while one man is busy saying that a thing cannot be done, another comes along and does it. I can see no reason why we should not provide machinery to impose taxation of this character.

Mr FENTON:
MARIBYRNONG, VICTORIA · ALP; UAP from 1931

– It could almost be done by a regulation.

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

– It should be easy to do it. We could include another part in our act to deal’ with it, and make it practically independent of the taxation of income earned in Australia. I was impressed with the statement of the Prime Minister that the proposal was equitable and would enlarge the field of taxation. In my opinion it would exploit a wide and legitimate field which we have a perfect right to exploit. I know of an Australian citizen who, shortly after the outbreak of the war, removed practically the whole of his capital from Australia, although he remained under the shelter of the Australian navy and army and the protection of the British flag. It is no part of our business to shelter individuals of that description from dual taxation. The amendment moved by the honorable member for Swan has much to commend it, but at the same time it would not be prudent at this stage to graft it upon our present act. That would be a somewhat precipitate and almost a clumsy method of dealing with this proposal, because it certainly requires more consideration than we can give it to-day.

Mr Lazzarini:

– The honorable member is raising the difficulty that was mention by the Attorney-General.

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

– Not at all. There are no insuperable machinery difficulties in respect to this amendment, but it would be unwise at this stage to graft it upon our taxation laws without giving it mature consideration. I have not the slightest doubt that the Commissioner of Taxation could soon frame new machinery to make the amendment workable, and I suggest that he should prepare a measure to give effect to it. With reference to duality of taxation upon Australian manufacturers who export, the Prime Minister has given one of very few instances in the whole of Australia, and that is the Hugh V. McKay Manufacturing Company. That case, of course, can be met by a special provision dealing with such export products. There is the possibility that, unless we carefully frame our legislation,, we may tax capital employed in our primary industries, and therefore legislative machinery must be specially drafted. But if the principle is right, the details are a minor consideration. The overwhelming sentiment of the Australian people is that we should exploit every legitimate field of taxation before we increaseits incidence upon our already heavily burdened community. I am aware of another citizen holding vast properties that are to-day almost unproductive, and he is paying high land taxation, both Federal and State, and other imposts, including municipal rates. His holding cannot be further developed at present, and there it remains as his monumental investment in Australia. Could he use capital that has been put into his property, say, in America, he would be receiving nearly treble the return that he is getting from his Australian investment, but he is content to go through this difficult stage of Australia’s finances until conditions improve. There is little profit to-day to the man who is controlling industry. Our economic conditions are bad, and we are passing through a difficult stage. This is the time when we should see that those who are controlling liquid funds do not take them out of Australia to be used in countries in which’ there is a big reward for investment in industry. Our first obligation is to Australia, and we should do all we can to safeguard its interests and keep capital in this country so as to build un our resources, increase our population and protect our people from the increasing incidence of taxation, by first exploiting this legitimate field of income taxation that is now available to us.

Mr McGRATH:
Ballarat

. - I hope that the honorable member for Swan will persist in his amendment and that it will be carried by the committee. The AttorneyGeneral raised some technical difficulties under the present act respecting the amendment, but I venture to say that they could be overcome by delaying the bill for 24 hours so that it might be redrafted. The operation of this amendment it has been estimated would bring in a revenue of £2,000,000 a year. It is a large sum, and well worth collecting, and not one argument has been advanced impugning the wisdom of imposing this form of taxation. It is remarkable that it has not been proposed before. Those who derive income in Australia from investments abroad have enjoyed the benefits of citizenship in Australia. They had the protection of our army and navy during the war, and yet have contributed little or nothing toward the revenue of this country.

We have now the opportunity to make them bear their fair share of taxation. If it were possible, I should go further and make the taxation retrospective for a few’ years. I certainly would not delay levying the tax for another year. These . people have not been good citizens. Rather than assist to develop Australia, they have invested their capital in other countries, and are receiving large profits from the employment of black labour. They care not who won the war, or who paid for it. Australia is to-day badly in need of revenue. There are thousands of returned soldier settlers in this country who, unless they receive immediate assistance, will be forced to leave their holdings. Here we have an opportunity to assist them. The Prime Minister said that there was a difficulty in levying this form of taxation, especially in respect of the firm of Hugh V. McKay. I have no wish to tax that firm in respect of its export trade, but, after all, its founder, when he died recently, left nearly £2,000,000. The difficulty mentioned, by the Prime Minister could easily be overcome; and as for the technical difficulties enumerated by the AttorneyGeneral, they are not worth a moment’s consideration. I commend the honorable member for Swan for bringing this proposal before the committee, and I sincerely hope it will be given effect.

Mr FENTON:
Maribyrnong

.- I do not know whether the honorable member for Swan (Mr. Gregory) intends to persevere with the amendment, but I trust that, in view>of the support that he has received from both sides of the committee, there will be no backing down. Revenue is badly needed in this country, and we have to meet many liabilities. The honorable member for Forrest (Mr. Prowse) has shown that in the next five years we must redeem half of our national debt, close on £500,000,000. Therefore, we cannot afford to allow the opportunity to pass to obtain revenue from persons who can well afford to pay for it. The honorable member for Yarra (Mr. Scullin) has indicated that this is a method by which we can relieve the great body of the people of a portion of taxation, and at the same time not affect the protective policy of this country. Duties have been imposed for revenue purposes only, and it is the mass of the people that bear them indirectly. The honorable member for East Sydney (Mr. West) has intimated that this form of taxation has been receiving attention in other countries. I have with me an American record of various taxation systems. The Congress of the United States of America authorized an inquiry into the forms of taxation in operation in various countries, Including Great Britain, and no difficulty has been found in imposing a tax upon residents who invest their capital in other countries. Why should we not follow such an excellent example? It may be said that this tax will injure our manufacturing export trade, but that difficulty is easily overcome. I quite agree with the honorable member for Yarra that there should be no duality of taxation, particularly within the Empire. Great Britain has already made provision for that, because it has a reciprocal arrangement with the dominions.

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

– That provision is embodied in our own act.

Mr FENTON:

– There is at Newark a company that manufactures and exports dredging machinery. The firm of Thompson’s, at Castlemaine, manufactures boilers, and other machinery. We have no wish to injure that trade, but rather to develop it. Vast sums of money have been invested overseas by wealthy Australians, and we should be recreant to our trust if we did not impose a tax upon them. The Government may say that there is notime to graft this amendment upon the bill, but I suggest that between the time the bill leaves this House and is received by the Senate, the proper machinery provisions could be drafted. The precedent for this tax has been established in other countries. Some of these moneys invested outside of Australia employ black labour on tin-fields in various countries and on mining fields in South Africa. When our own kith and kin receive large profits from overseas through the employment of black labour, it is time that we imposed a legitimate tax upon them. I hope that a vote will be taken upon the amendment, and that it will be carried.

Mr PROWSE:
Forrest

.- I compliment the honorable member for Swan (Mr. Gregory) upon having brought forward this amendment, but I’ agree with the Prime Minister and the Attorney-General that it oannot be incorporated in the legislation of this country in a moment. I feel sure that the honorable member for Swan will recognize that, having introduced the amendment, and having secured from the Government an intimation that it is considering the matter seriously, it is not necessary for him to go further with it just now. The question is not so simple as it appears. We do not possess that measure of control over our citizens and their investments outside Australia which some honorable members seem to think. This system of taxation might prove to be a two-edged sword. I believe that people with plenty of money, even if they are living privately, are of advantage to Australia, and they are taxed in other ways than through the income tax. If we impose such taxation as is here suggested, we might drive such people out of the country, and thus do more harm than good. However, I feel that much might be done along the lines suggested in the amendment. There are oil companies operating in Australia under conditions which would bear very close investigation. I think it will be possible to frame legislation so that we might tax those whom we wish to tax; and avoid taxing those whom we do not. By this means relief might be afforded to the heavilytaxed citizens of the country.

Mr BRUCE:
Prime Minister and Minister for External Affairs · Flinders · NAT

– We cannot treat this proposal for altering the whole basis for levying taxation in quite as casual a way as certain honorable members seem to suggest. We did not start out on a’ system of income taxation in Australia without very exhaustive inquiries being made as to the best method on which to base taxation. I would point out to honorable members opposite that it is not quite fair to their predecessors that they should treat the existing system of taxation as one which is obviously defective. The system which appertains in Great Britain to-day and which it is suggested we should adopt, namely, that of taxing a resident onhis income, no matter whence it is derived, was in existence when a Labour Government instituted our present system of taxation. I agree that the British system was probably examined, and that due consideration was given to other systems before the present one was adopted. After such consideration, the Labour Government came to the conclusion that the best system was to tax incomes derived in Australia. But circumstances have altered, and I have already indicated that the Government has given serious consideration to whether, without criticism of those who framed the present system, i’: might not be extended to cover investments of Australian citizens abroad. Before this Parliament could commit itself to such a principle, however, we must have much more information as to the possible repercussions of such an alteration of the law. This idea of taxing incomes derived from abroad was not, I presume, brushed aside as unworthy of consideration when the original system was evolved, but it was not thought wise, at that time, to adopt it. We are now considering whether it is not necessary to make some alteration, and we are collecting facts as to the probable effects on revenue if such an alteration were made. When we are in possession of those facts, it may be possible to recast our whole system of taxation. I suggest that, until we have that information, it would be extremely unwise for this committee to pledge itself to a principle which might not produce the advantages that a great number of people believe now it would. The Government fully recognizes the necessity for considering this matter, and has already taken definite action. Therefore, I would suggest that the honorable gentleman withdraw his amendment which, I agree, is one of very great importance.

Mr CHARLTON:
Hunter

– The honorable gentleman seems to be familiar with the way these things are done.

Mr LAZZARINI:

– I am too familiarwith the methods of this Government. The honorable member for Boothby argued that if we adopt this proposal we shall probably drive capital out of* the country. I cannot understand how he arrives at that conclusion. The Government a few hours ago withdrew a proposal not to tax absentee shareholders. It appears to me that persons abroad who derive wealth from investments in Australia, and persons in Australia who derive wealth from investments abroad should be taxed. The Royal Commission on Taxation dealt with the subject of taxation of the income of Australian residents derived outside Australia. Paragraph 35S of its report reads as follows -

The Federal Commissioner of Taxation, in the course of his evidence on the subject of double. income tax, expressed the opinion that “ With’ the disappearance of the double income tax there is no reason why Australia should limit its tax to incomes arising from sources in Australia.” (See also paragraphs 109 and 170 of this commission’s first report.) The Commissioner considered that, upon the elimination of double taxation in respect of incomes taxed both in the United Kingdom and the Commonwealth, Australian residents should be taxed on their total incomes whereever derived on the basis of their ability to pay. He said - “ It would mean that, instead of the Commonwealth losing income tax on large revenue derived by Australians - using the term in a general sense - from such countries as Japan, China, America, and South America, we should get the tax on it. There is no reason, to my mind, why that revenue should not contribute towards the cost of government in Australia.”

NOES: 34

Majority . . . . 14

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Sitting suspended from 6.20 to 8 p.m.

Clause 12-

Section 23 of the Principal Act is amended.

by inserting in sub-section 1 after paragraph (p) the following paragraphs : - “ (r) In the case of a person who acquires, in any manner provided by paragraph (i) of section sixteen of this act, any trading stock or live stock (not being live stock whioh in the opinion of the Commissioner was so acquired for use as beasts of burden or as working beasts - the amount which under that paragraph is included in respect of the trading stock or live stock so acquired in the assessable income of the person from whom that trading stock or live stock was acquired.”; and

Section proposed to be amended.

– (1) In calculating the taxable income of a taxpayer the total assessable income derived by the taxpayer from all sources in Australia shall be taken as a basis, and from it there shall be deducted - (a) all losses and outgoings (not being in the nature of losses and outgoings of capital) including commission, discount, travelling expenses, interest and expenses actually incurred in gaining or producing the assessable income.

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

– I intend to move the amendment as it appears on the printed sheet providing for the omission of certain words, and the insertion of other words in their stead. Clause 12 amends section 23 of the principal act, which provides for deductions. It provides that there shall be deducted from income all losses and outgoings not being in the nature of losses or outgoings of capital, including commissions, travelling expenses, interest or expenses actually incurred in gaining or producing the assessable income. It is proposed to alter the order of the words so as to make it quite clear that the losses and outgoings which are included amongst the items which may be deducted from the assessable income must be actually incurred in gaining or producing it. This is rendered necessary by a decision of the High Court in 1921, which held that the section, as now worded, did not provide for this. Therefore I move -

That after “ amended “ the following be inserted - “ (aa) by omitting paragraph (a) of sub-section 1 with a view to insert in lieu thereof the following: -

all losses and outgoings (including commission, discount, travelling expenses, interest and expenses and not being in the nature of losses and outgoings of capital) actually incurred in gaining or producing the assessable income: ‘”

Amendment agreed to.

Amendment (by Mr. Latham) agreed to.

.- If some declaration of partnership were to be the determining fact I should not object, but there is nothing in the act to define for the guidance of the commissioner a partnership between husband and wife. It is quite common for a wife to hold land in her own name and to work it with her husband, but without any deed of partnership or annual balance-sheet, or distribution of profits. If this taxation is to be left entirely in the discretion of the commissioner a loose family partnership might lead to a charge by the commissioner of attempted evasion of taxation. Frequently it will be found that partnerships do not exist, and the commissioner’s demand for evidence in the form of a deed, an annual balance-sheet, and a statement of profits distributed, might make the partners liable to the highest penalties under the act. The clause is too vague.

Mr Latham:

– The commissioner has not uncontrolled and arbitrary discretion. His decision is subject to review by the board.

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

– That is so, but 98 per cent._ of the taxpayers accept the decision of the commissioner rather than appeal to the board. We should require some substantial evidence of partnership - for instance, information as to the terms on which the land has been held previously, or, in the case of a business, the terms on- which the capital of the parties has been invested.

Clause agreed to.

Bill reported with further amendments.

By leave report . adopted, and bill read a third time.

page 2318

FORESTRY BUREAU BILL

Bill received from the Senate and (on motion by Mr. Bruce) read a first time.

page 2319

INCOME TAX BILL

In Committee of Ways and Means :

Motion (by Mr. Latham) agreed to -

That a tax be imposed on income derived from sources in Australia at the following amounts and rates, namely: -

– Rate of Tax upon Income Derived from Personal Exertion.

For so much of the whole taxable income as does not exceed £7,000 the average rate of tax per pound sterling shall be Threepence and three eight-hundredths of one penny where the taxable income is One pound sterling, and shall increase uniformly with each increase of One pound sterling of the taxable income by three eight-hundredths of one penny.

The average rate of tax per pound sterling for so much of the taxable income as does not exceed £7,000 may be calculated from the following formula: -

For every pound sterling of taxable income in excess of £7,000 the rate of tax shall be Sixty pence.

In addition to the tax payable under the preceding provisions, there shall be payable, in the case of incomes in respect of which the tax is calculated under Subdivision A, B. or C, an additional tax equal to eight per centum of the amount of the tax so calculated.

Notwithstanding anything contained in the preceding provisions, where a person would, apart from this provision, be liable to pay income tax of an amount less than Ten Shillings, the tax payable by that person shall be Ten shillings.

For every pound sterling of the taxable income in respect of which a trustee is liable to be separately assessed and to pay tax, the rate of. -tax shall be at the rate which would be payable under Subdivision A. B. or

C, as the case requires, if one individual were liable to be separately assessed and to pay tax on that taxable income.

Subject to the last preceding subdivision -

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Bruce and Mr. Latham do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Latham, and read a first time.

Second Reading

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

.- I move-

That the bill be now read a second time.

This is a bill fixing the rates of income tax, and reducing the prevailing rates by 10 per cent. in the case of taxation payable by individuals. No reduction is made in the rate payable by companies. The minimum amount of tax payable has been reduced from £1 to 10s. The bill also makes special provision for the rates to be paid by trustees. A difficulty has arisen in the case of a trustee receiving income from the estate of which he is a trustee, and retaining it. The trustee and not the beneficiary is assessed in respect of that income. It has been held in litigation, under the War Times Profits Tax Assessment Act, that a distinction exists betweenthe case of an individual trustee and a company trustee. The rule is that a beneficiary in a trust estate pays income tax according to the ordinary provisions of the act in respect of the income which he receives, but sometimes the income is retained in the hands of the trustee. The act then provides that income tax is payable by the trustee upon the’ income which is not going to a beneficiary. In a case which came before the court under the War Times Profits Tax Assessment Act, it was necessary to consider and apply legislation from the Income Tax Act, and the court held that where the trustee was a company, the company rate was to be paid, but that where the trustee was an individual, the individual rate should be paid. Obviously that is quite wrong. It brings about the result that, in two precisely similar estates, with identical amounts paid into the hands of trustees, one sum would bear taxation at the company flat rate of Is., and the other sum, because it was paid to an individual instead of a company trustee, would pay either more or less than Is., according to the amount involved. The bill proposes to make the position equitable by making the rate of tax payable by a trustee, as set out in the fourth schedule -

For every pound sterling of the taxable income in respect of which a trustee is liable to be separately assessed and to pay tax, the rate of tax shall be the rate which would be payable under the First, Second, or Third Schdules as the case requires if one individual were liable to be separately assessed and to pay tax on that taxable income.

Apart from the specific alterations to which I have referred, this is an ordinary income tax rates bill.

Mr SCULLIN:
Yarra

– I do not intend to discuss the second reading of the bill at length. I must concede that we had a very thorough discussion of the Income Tax Assessment Bill, which covers the whole range of this subject, including the rates to be imposed. That exhaustive debate proved that if we have a reasonable time to discuss a measure a useful result is achieved for the country. Our debate on the Income Tax Assessment Bill produced some good results, although I regret that our remarks in opposition to the -proposal to make a general reduction of 10 per cent., which is embodied in this bill, did not bear fruit. It is not a very popular thing to oppose a reduction of taxation, as is now being done by the Opposition. We take the stand that our financial position is not at all promising. The signs are all around lis that we shall probably have to face a financial stringency, and that we shall need all our available revenues if we are to cope with it successfully. We should be applying our surpluses to the reduction of our debt or to preventing an increase of it. It should be our endeavour to relieve the people where we can from the existing revenue imposts. I refer not to the protective, but to purely revenue duties by which so much indirect taxation is raised. That is the basis of our protest against this reduction, and it has already been discussed at considerable length. We have not met with much success, but the debate has not been altogether ‘ useless. We certainly saved the country at least £200,000 in connexion with, the Income Tax Assessment Act. We cannot move to increase the rate of taxation to the original standard, because that would be against the Standing Orders, and we cannot vote against the second-reading of this bill, because if we were successful, it would result in no income tax being collected. We can merely reiterate what we said on the Income Tax Assessment Act, so far as it applies to this bill. There is one thing which I urge the Minister in charge of the bill to consider, and that is the minimum tax charged. It may seem a very small matter, but the minimum of £1 operated harshly against many taxpayers. The reduction to 10s. will give a measure of relief, but I understand that some of the States collect a minimum of only 5s., and I suggest that we should reduce our minimum to a similar amount. A man may come into the taxable area with perhaps only £1 above the exemption. Legally speaking, under the terms of the scheduled rates, he should pay only a few pence, but ‘the minimum compels him to pay 10s. I suggest that 5s. would be reasonable.

Mr PROWSE:
Forrest

.- For a considerable; time I have felt that this country would do well to impose the same rate of tax upon income from property as that which applies to income derived from personal exertion. No doubt when the differential rate was fixed it was felt that those people who earned their income by the investment of their capital - either by placing it out on loan, or by erecting buildings and collecting income in the form of rent - should pay a greater revenue than the man who works hard for his money. That may appear to be very reasonable, but when we examine it from an economic stand-point, we realize that it merely .causes trouble and places the nation at ‘a disadvantage. An increased taxation on revenue derived from investments in this country means that the interest rate must go up, which is detrimental to the progress of the country. I also submit that under the present scheme the money invested in houses for letting purposes is unduly taxed, so that it is the working man who actually has to meet the higher rate of taxation. Instead of being an advantage to Australia, it is a disadvantage. Foreign investors in Australia are not similarly penalized. Yesterday we had an instance of the considerable cost which is incurred by the Taxation Department in having separately to reckon and compute the averaging system now operating in Australia. It confuses the existing system just about as much as would the system proposed by me, to which the Treasurer took exception. I have no ulterior, motive in urging my contention, but have in mind only the detrimental effect that the present system has upon Australia. I am merely asking for something that would be a great convenience to many taxpayers.

Mr Scullin:

– Would the honorable member apply the scheme to all income tax?

Mr PROWSE:

Mr Thompson:

– There are not many in that class.

Mr THEODORE:

– Queensland represents about one-eighth of the population of the Commonwealth and, as there are a number of taxpayers in that State with a taxable income of £50,000 a year, there must be a much greater number in the Commonwealth. To examine thoroughly and to understand the incidence of taxation and its consequent effect, we should have more statistics thau are available at present. It will be within the recollection of honorable members that the. Commonwealth ordered an examination of the position of private wealth in Australia in 1916. That was a war measure known as the wealth census. A lot of valuable information was obtained. The census was probably costly, and could not be undertaken every year, but it could, I think, be undertaken during each quinquennial period. In that way useful information would be furnished to the Federal Parliament and to every one interested in taxation and the economic progress of the century. Data could be collected which would be a guide as to the consequent effect of the incidence of taxation, and in respect of a great many other matters bearing upon wealth production and the economic situation of Australia.

Mr SPEAKER (Hon Sir Littleton Groom:

– I ask honorable members not to attempt to cross-examine the honorable member who is addressing the House, but to allow him to deliver his speech in his own way.

Mr THOMPSON:

– If a royal commission composed of those honorable gentlemen could arrive at a. unanimous conclusion as to the best way out of our difficulties, I feel sure that a majority of the members of this chamber would adopt their proposals. But seeing that the honorable member for Henty desires to increase direct taxation -

Mr Gullett:

– That is not what I said.

Mr THOMPSON:

– I heard the honorable member say distinctly that it would be better to raise more revenue by direct taxation and less by indirect taxation. The honorable member for Dalley, a high protectionist, said the same thing, and I believe that he meant it. I draw attention to the fact that the honorable member for Perth, a freetrader, said “ Hear, Hear “ to the speech which the honorable member for Dalley delivered this evening.

Mr Mann:

– I rise to a point of order. During the course of my speech you, Mr. Speaker, prevented me on various occasions from discussing the fiscal policy of the Government. I should like to know whether the honorable member for New England is in order in following that line of discussion.

Mr SPEAKER (Hon Sir Littleton Groom:

– The remarks .of the honorable member for New England have so far been in order. He has criticized in turn each honorable member who has spoken on the bill, but he has not entered into a discussion of the merits or demerits of the fiscal policy

Mr THOMPSON:

Cheapening and extending production by a reduction of duties on the staple necessities of the primary producer, and the admission of their implements and tools of trade free of duty when made within the British Empire.

The constitution and rules of the Australian Farmers’ Federal Organization, provide that among the objectives of the organization is one -

To put into practical effect the platform as promulgated from time to time by the conference of delegates.

Honorable members will recognize that during the eight years I have been a member of this Parliament, I have acted consistently with that platform.

Mr BRENNAN:
Batman

.- I do not desire to make a lengthy speech so late at night. In fact, I come into the debate, as has so often happened recently, as a peace-maker, to pour oil on the troubled water stirred on the other side of the chamber by the course of the debate. The honorable member for New England (Mr. Thompson) has succeeded admirably in saying very little in a long time. He has proved to demonstration what I have long suspected in connexion with this Income Tax Bill - I mention the bill so that my remarks shall not be irrelevant: - namely, that the Country party is not pledged to high duties, to low duties or to middle class duties; to an alliance with the Nationalist party, to its separate entity, to its conjunctivity ; or, indeed, to anything on earth or in the heavens above. In that happy position I am prepared to leave him. The position of members .of the Country party is as understandable as it is deplorable. They are as uneasy as they deserve to be. It satisfies me, Mr. Speaker, that they have the redeeming virtue -

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I rise to a point of order. I understand that we are dealing with a bill for an act to impose taxes upon income. I fail to see the relevancy of the honorable member’s remarks.

Mr SPEAKER:

– So far, the honorable member for Batman has simply been criticizing the attitude of certain honorable members to the bill before the House. If the honorable member for Richmond (Mr. Green) had been present during the whole of the debate, he would have heard other honorable members address the House in a similar strain. So. long as the honorable member for Batman confines himself to that - and I assume he will - he will be in order.

Mr BRENNAN:

– I had not intended to confine myself to that, sir, because I had contemplated saying something about the merits and demerits of the bill. I understand that you, sir, with your usual perspicacity and keen observation of the essentials of debate, pointed out that the honorable member for New England had not up, to that point, which was considerably distant from the point of COmmence.ment, touched either the merits or demerits of the measure. The honorable member seems to be suffering from a fatal congestion of mental pabulum. In a moment of inexcusable weakness he admitted that in connexion with taxation bills and all other matters, he studiously reads all the newspapers. In that regard he reminds me painfully, of the chameleon which changes colour according to the colour placed in juxtaposition to it. If that colour is blue, it becomes blue; if the colour is red, it becomes red. Unfortunately somebody, testing it beyond its strength, placed a tartan alongside it and it burst. That has been the fate of the honorable member. I notice that the Prime Minister has entered the chamber, and I feel very uneasy, because I conclude that he intends either to make a speech or to stop one, and neither prospect is very pleasing to me.

Returning to the bill, I am against the reduction of direct taxation - especially that class of taxation which falls, as it should, upon those who by reason of their financial standing are peculiarly able to bear it; - at a time when taxation is being added and super-added by the indirect method to those least able to bear it. “When the budget was under discussion we made frequent requests, backed by strong arguments, for a declaration by the Government” of what it proposed to do to relieve an admittedly most unsatisfactory financial position. And the answer was, “ Not yet.” Since then, and, indeed, before then, the Government has taken certain definite courses of action which have been deliberately designed to pile up the burdens of the poor and lift the burdens from the rich. f

Mr Latham:

– I object to th’a’t statement, and ask that it be withdrawn.

Mr SPEAKER:

– The honorable member for Batman is within his rights of criticism. What he has said may’ be an entire misstatement of the facts$ but he is entitled to state what in his opinion will be the general effect of the Government’s policy.

Mr Latham:

– The honorable member used the words “deliberately designed.”

Mr SPEAKER:

– Even so, I think the Attorney-General is being rather hypersensitive.

Mr BRENNAN:

– I certainly had no intention to be offensive to Ministers, and least of. all to my fellow unionist, the Attorney-General. Whatever may be the intention of the Government, it is a curious and almost sinister fact that ever since this Parliament has been sitting in Canberra, the course of legislation has been directed along the lines I have indicated. Now, in the first definite measure with which the House has been asked to deal since the budget was so summarily and ignominiously disposed of by a deliberate declaration, the burdens are being taken off the rich and retained on the poor. I have heard, as the honorable member for New England Heard,, public demands voiced.’ in? the- press- and. elsewhere for- a reduction-, of. taxation, and ¥ ha-v/e heard, in justification of: those- demamds;. references’ to> overflowing revenues.. I am one who would welcome a reductionof all- classes of taxation;, but,, after all, taxation of any kind is> the penalty we have- to impose on. ourselves- for the privilege of. luring, as an ordered commanity. I would cheerfully see taxation- reduced ;. but those people who in the press.and out of it clamour for a- reduction of taxation,, put the- ca-ut before the horse.. What, we have- to do is; to> create conditions whichi will make it possible equitably to reduce taxation. We have to meet- our obligations. If a. man is. confronted, in. hit? personal and private relationships” with, a huge debt,, he has to meet it by labour and sacrifice. Similarly in. public affairs, if we earnestly desire to reduce the terrific burden that is. now saddled, on the ‘Australian- people, we must do it by labour and. sacrifice1 - by rolling up ovfli sleeves and perspiring over the jpb.. It cannot be done by the simple method of passing an act of Parliament which will redli’ce’ a certain class- of taxation,, while, through the medium of borrowing on the credit of Australia,, we are pilingup an ultimate burden which- the people of Australia, will have to bear. I said, on another occasion, and I. repeat it. now,, that Australia, is shirking its obligation’ to meet its indebtedness. It piled upthis burden upon itself during, the war. I was one of those who were against it. but as the majority were against me I am prepared to do my share with that majority in shouldering the burden. I do not wish to be associated with those who1 are - spealeing in a- general and not a’ personal sense - guilty of the craven policy of shirking the duty of meeting this debt?, by handing it d’own. to our children and our children’s children. Posterity will not be responsible for it, and, Yoolcmg hack along the course of history will say; “‘You built: up this debt in your fbfly and fury;, and’ in your cowardice have left us to meet It.”

Mr GREGORY:
SWAN, WESTERN AUSTRALIA · CP

.- I had no- intention/ of speaking- on, this bill- tOriiight,,. bu4 the.- debate.- has< been, oft such »r character that. I cannot refrain-, from making- my position: perfectly clear:. I had. intended- to- reserve my rev maasksi on the fiscal issue, until the tariff ‘ came- up for consideration^, and I assure the: committee, that, those! remarks, would have been wholly unq.ualified.. I do- not suppose that- an.y persona is displeased that direct taxationis to< be: reduced, but here is a-, bill brought’ forward to,- reduce taxation,, while- a couple of days ago the Minister for Trade and> Customs- placed an increased) burden? upon, the primary producers; audi workers of Australia, through the: mediumi of additional tariff imposts. I ami more- than astonished at the attitude adopted: by the Government.. The honr orable member’ for New England (Mr:. Thompson) brought up. at very peculiars subject for debate, the policy- o£ the Country party in. matters’ of this. sort. Might I remind! the Government and! honorable’ members’ that at the last election every member of the Senate, supporting; the. Government was elected on the. clear and; well! defined issue that’ he would* oppose1 increases- in tariff… Anyone who has. visited1: Western- Australia and studied, its condition* mustrealize how impossible it is- to. carry on> with the cost of production that, existsthere,, as. the result of our heavy tariff. The policy of the Victorian, section of the party is also clearly opposed’ to fur-‘ ther increases. At. the. last conferenceof the Australian Country party I tabled1 a resolution which, was discussed at that meeting,, making, it clear that, if. that resolution were agreed’ to, the policy of the party would be tb f avour a big, reduction of customs duties as they affect production in this country.

Mr.R. Greene. - I rise to a. point of order. I again draw attention to. the* fact that we. are. discussing, an. act that proposes to regulate the rates of incometax. The tariff. wil-L come, on later, for.discussion..

Mr SPEAKER (xHon Sir Littleton Groom:
DARLING DOWNS, QUEENSLAND

– The honorable member isawarethat, this: is bill- to- reduce,- direct taxar tion,, and. that, it? raises-, tha issue of indirect as opposedi tor direct, taxation-.. Some- honorable . members are’ opposing the bill, because they feel that th’erer is. nor necessity- for av re* duction. of diaseefe taxation;, in view of” the recent-: increase- of indirect taxation!

I understand the honorable member for Swan (Mr. Gregory) to be simply stating bis views generally with regard to direct and indirect taxation, without entering specifically into the merits or demerits of either.

Mr GREGORY:

– My resolution at that meetin’ was camouflaged by another resolution to the effect tbat a committee should be formed for the purpose of considering the necessity for such a resolution. 1 have definite ideas with regard to the matter, and I have very little confidence in or respect for one who endeavours to hide his opinions. I express my deep dissatisfaction at the notion of the Government in. reducing direct taxation and tit the” same time imposing additional indirect taxation of such a heavy nature that it will be seriously felt by the community, i endorse the remarks, of the honorable member for Perth (Mr. Mann), who pointed out that all ‘the leading citizens -of Australia have drawn attention to the dangerous position into which we are drifting. Week after week 1 have been hoping against hope that the Government would show courage, realize our position, and adopt a more satisfactory policy than it has done during the last few vears.

Mr PARSONS:
Angus

– I support this bill, because having regard iO the Federal ‘Constitution, direct taxation should not be imposed except in cases of grave national emergency. That had to be done during the war. During my election campaign at the last general election I drew attention to “the ‘Fact- -that ‘this KSrovernment hud made -several reductions -m direct, taxation, and 1 expressed the opinion that the -electors had a right to expect still ‘further cuts because that Was the policy of the ‘Government. In view of those facts, and because the Treasurer m ‘his ‘budget -speech showed that we can ‘afford this reduction, I support the bill.

Question resolved in th»j affirmative. Bi’ll read n second time and passed

T-hr-ough its renfainTng stages without amendment or debate.

page 2339

HOUR OF MEETING

Motion (by Mr. Bruce.) proposed -

That (he House at iits . rising adjoui-Jl until “11 o’clock a.m. to-morrow.

page 2339

ADJOURNMENT

Personal Explanation

Motion (by Mr. Bruce) proposed -

That the House do now adjourn.

Mr STEWART:
Wimmera

.- Last week, in my absence, several honorable members, particularly the honorable member for Gwydir (Mr. Abbott), and, by interjection, the honorable member for Richmond (Mr. R. Green) made observations concerning myself, and, by way of personal explanation, I take this, the first opportunity I have had, to Tefer to them. I have no desire to indulge in personalities, as did the honorablemember for Gwydir. Most of his remarks were beneath notice, but he asserted that I had made charges against the honorable member for Rivori-wa (Mr. Killen), the honorable member for ifew England (Mr. Thompson), and other honorable members individually. The records of the House, whioh I am not permitted to quote, show clearly what I said, and I well remember my statement. It was that those honorable members had been returned ou the new State issue, and the tactics of their leader had been such that their efforts were barren of achievement. Later in my speech I said that I did not Maine honorable members in the Corner, because they had been unwillingly dragged along the path. The honorable member for -Gwydir inferred that I had made . personal attacks on the honorable member for New . England : and himself:-, but the records do not bear out that assertion. I understandthat the ‘honorable member for Richmond called me a:” rat.” That is beneath my notice; but it is rather strange -that the remark . should have been allowed to pass -unchaillenged. If I bad heard an honorable member so descri’be-1 . in ‘his absence, I should have protested against it. *The onfly other -matter ‘that I desire to mention is tfuut the honorable member for Gwydir -referred >to -my “ infrequent visits “ to : this chamber, and inf erred that >I was neglecting my constituency. I think that the records : of the House, and the -observation of honorable members ‘on both sides, are sufficient to show that I have certainly not neglected the people whom I represent, and that I have displayed no lack of energy in carrying out my Parliamentary duties.

Mr Mann:

– That is a matter between the honorable member and his constituency.

Mr Fenton:

– It is known that the honorable member has been absent giving a very valuable demonstration in the interest of the farmers of northern Victoria.

Mr STEWART:

– I thank the honorable member. My main reason for rising was not to follow the honorable member for Gwydir down the path that he chose, but to deny emphatically the assertion that I had made a personal attack. I thank the House for the opportunity given me of denying the statements attributed to me.

Question resolved in the affirmative.

House adjourned at 11.0 p.m.

Cite as: Australia, House of Representatives, Debates, 30 November 1927, viewed 22 October 2017, <http://historichansard.net/hofreps/1927/19271130_reps_10_117/>.

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House of Representatives30 November 1927

QUESTION

COCKATOO ISLAND DOCKYARD

Mr THEODORE:DALLEY, NEW SOUTH WALES

Mr BRUCE:Minister for External Affairs · FLINDERS, VICTORIA · NAT

QUESTION

WATERFRONT DISPUTE

Mr R GREEN:RICHMOND, NEW SOUTH WALES · CP

Mr BRUCE:NAT

QUESTION

UNEMPLOYMENT

Mr FENTON:MARIBYRNONG, VICTORIA

QUESTION

TAXABLE VALUE OF IMPORTS

Sir ELLIOT JOHNSON:LANG, NEW SOUTH WALES

Mr PRATTEN:MARTIN, NEW SOUTH WALES · NAT

QUESTION

APPLE EXPORT TRADE

Mr FENTON:

COMPETITION IN THE APPLE EXPORT TRADE

Increasing Foreign Supplies

Mr PATERSON:Minister for Markets and Migration · GIPPSLAND, VICTORIA · CP

QUESTION

CLARENCE RIVER RAILWAY BRIDGE

Mr R GREEN:RICHMOND, NEW SOUTH WALES · CP

Mr BRUCE:NAT

Mr R GREEN:RICHMOND, NEW SOUTH WALES · CP

Mr BRUCE:

QUESTION

AVERAGING INCOME TAX

Mr ANSTEY:BOURKE, VICTORIA

Mr SPEAKER (Hon Sir Littleton Groom:DARLING DOWNS, QUEENSLAND

Mr ANSTEY:

Mr BRUCE:NAT

QUESTION

APPOINTMENT OF ROYAL COMMISSIONS

Mr ANSTEY:

Mr BRUCE:NAT

QUESTION

GEOPHYSICAL SURVEY

Dr NOTT:HERBERT, QUEENSLAND

Mr BRUCE:NAT

QUESTION

GOVERNOR-GENERAL’S RESIDENCE

Mr COLEMAN:REID, NEW SOUTH WALES

Mr HILL:Minister for Works and Railways · ECHUCA, VICTORIA · CP

QUESTION

PRODUCTION FIGURES

Sir ELLIOT JOHNSON:

Mr PRATTEN:MARTIN, NEW SOUTH WALES · NAT

QUESTION

MBS. LANE-POOLE

Mr COLEMAN:

Mr MARR:Minister of Home and Territories · PARKES, NEW SOUTH WALES · NAT

QUESTION

CANBERRA

Mr MACKAY:LILLEY, QUEENSLAND

Mr MARR:NAT

Mr CHARLTON:HUNTER, NEW SOUTH WALES

Mr MARR:

Mr BLAKELEY:DARLING, NEW SOUTH WALES

Mr MARR:

QUESTION

PROHIBITED LITERATURE

Mr COLEMAN:

Mr PRATTEN:MARTIN, NEW SOUTH WALES · NAT

QUESTION

POSTAL DEPARTMENT

Mr A GREEN:KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

Mr BRUCE:NAT

QUESTION

POSTAL OFFICERS

Mr A GREEN:KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

Mr GIBSON:Postmaster-General · CORANGAMITE, VICTORIA · CP

QUESTION

TAXATION

Mr DUNCAN-HUGHES:BOOTHBY, SOUTH AUSTRALIA

Mr LATHAM:Attorney-General · for Dr. Earle Page · NAT

QUESTION

CANBERRA-QUEANBEYAN ROAD

House of Representatives
30 November 1927

Mr THEODORE:
DALLEY, NEW SOUTH WALES

Mr BRUCE:
Minister for External Affairs · FLINDERS, VICTORIA · NAT

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

Mr BRUCE:
NAT

Mr FENTON:
MARIBYRNONG, VICTORIA

Sir ELLIOT JOHNSON:
LANG, NEW SOUTH WALES

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

Mr PATERSON:
Minister for Markets and Migration · GIPPSLAND, VICTORIA · CP

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

Mr BRUCE:
NAT

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

Mr ANSTEY:
BOURKE, VICTORIA

Mr SPEAKER (Hon Sir Littleton Groom:
DARLING DOWNS, QUEENSLAND

Mr BRUCE:
NAT

Mr BRUCE:
NAT

Dr NOTT:
HERBERT, QUEENSLAND

Mr BRUCE:
NAT

Mr COLEMAN:
REID, NEW SOUTH WALES

Mr HILL:
Minister for Works and Railways · ECHUCA, VICTORIA · CP

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

Mr MARR:
Minister of Home and Territories · PARKES, NEW SOUTH WALES · NAT

Mr MACKAY:
LILLEY, QUEENSLAND

Mr MARR:
NAT

Mr CHARLTON:
HUNTER, NEW SOUTH WALES

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

Mr BRUCE:
NAT

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

Mr GIBSON:
Postmaster-General · CORANGAMITE, VICTORIA · CP

Mr DUNCAN-HUGHES:
BOOTHBY, SOUTH AUSTRALIA

Mr LATHAM:
Attorney-General · for Dr. Earle Page · NAT

Mr MARR:
NAT

Mr MARKS:
WENTWORTH, NEW SOUTH WALES

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

Sir NEVILLE HOWSE:
Honorary Minister · CALARE, NEW SOUTH WALES · NAT

Sir NEVILLE HOWSE:
NAT

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

Mr COLEMAN:
Reid

Mr THEODORE:
Dalley

Mr PRATTEN:
Minister for Trade and Customs · MARTIN, NEW SOUTH WALES · NAT

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

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

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

Mr SCULLIN:
Yarra

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

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

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

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

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

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

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

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

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

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

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

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

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

Mr SCULLIN:
Yarra

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

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

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