House of Representatives
27 November 1930

12th Parliament · 1st Session



Mr. Speaker (Hon. Norman Makin) took the chair at. 2.30 p.m., and offered prayers.

page 770

QUESTION

BASIC WAGE ROYAL COMMISSION

Mr LATHAM:
KOOYONG, VICTORIA

– I ask the Acting Prime Minister whether the Government has decided to appoint a royal commission to investigate, amongst other matters, the basic wage? If so, does the Government consider it proper that such a decision should have been announced ax the course of argument in the Arbitration Court in Melbourne instead of on the floor of this House?

Mr FENTON:
Minister for Trade and Customs · MARIBYRNONG, VICTORIA · ALP

– The Government has appointed a royal commission to inquire into the basic wage. This action has been taken, if not at the actual request of the court, at any rate following its declaration that it was not able, with the information at present available, to come to a determination on the basic wage.

Mr LATHAM:

– Has the honorable gentleman seen the newspaper report that the court has declared that, notwithstanding the appointment of a royal commission, it will proceed with the consideration of the basic wage? If so, how does he reconcile that attitude with his statement that the royal commission has been appointed in accordance with a request by the court? Was not a royal commission appointed in 1920 to report upon the basic wage, and after it reported, did not the Government of the day discover that this Parliament could not carry out the recommendations of the commission because of constitutional limitations ?

Mr FENTON:

– As the question is technical, and involved, I ask the honorable member to give notice of it.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES

– Will the Acting Prime Minister state the personnel of the commission ?

Mr.FENTON.- That will be announced later.

page 770

QUESTION

DEFENCE BOARDS

Mr CROUCH:
CORANGAMITE, VICTORIA

– A cablegram from London, published in the Sydney press, states that no re-organization of the naval and military offices at Australia House can be effected by creating a joint board, because the Naval, Military and Air Boards in Australia are afraid that such a step would be regarded as a precedent for their amalgamation. Will the Minister for Defence state whether that is true, and why the Australian boards are not amalgamated in the interests of economy and efficiency if the neglect to amalgamate them is prejudicing London economies ?

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

– The amalgamation of the Naval and Air Boards has been under consideration for some time, but no finality has been reached in regard to it. I assure the honorable member that any contemplated economies at Australia House will not be prejudiced by the composition of the defence boards in Melbourne.

page 770

QUESTION

OIL ENGINES

Dr EARLE PAGE:

– I ask the Act ing Minister for Markets and Transport whether any oil engines of 150 horsepower and over are being made in Australia ; if not, until they are made locally will he admit free of duty those engines already ordered for various butter factories and electrical plants?

Mr FORDE:
Assistant Minister assisting the Minister for Customs · CAPRICORNIA, QUEENSLAND · ALP

– I believe that oil engines of more than 150 horse-power are made in Australia, but if the honorable member will place his question on the notice-paper, I shall have inquiries made.

page 770

QUESTION

GOLD BOUNTY

Mr GULLETT:
HENTY, VICTORIA

– I ask the Acting Prime Minister whether the Government has come to a decision with regard to the payment of a bounty on the production of gold; if so, is the payment to be conditional upon the inflation of the note issue?

Mr FENTON:
ALP

– The Government has decided to offer a bounty on the production of gold.

Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES

– Upon what terms?

Mr FENTON:

– Full particulars will be announced when the bill is introduced.

page 771

QUESTION

PARLIAMENT HOUSE LOUNGE

Mr CUSACK:
EDEN-MONARO, NEW SOUTH WALES

– Will you, Mr. Speaker, permit the use of the lounge room for lunch-time lectures by honorable members of this House to representatives of the press, to enable them, not only to discuss high finance, but also to deal with the insidious political creed of Niemeyer-ism ?

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– It is not within my province to grant permission for any such use of the lounge room, which is under the control of the Joint House Committee.

page 771

QUESTION

INFLATION OF NOTE ISSUE

Mr GULLETT:

– I wish to know whether the Government is, or is not, in favour of the inflation of the note issue?

Mr FENTON:
ALP

– All matters relating to banking and finance are to be discussed next week. When that discussion takes place, the public will be made fully aware of the Government’s policy.

page 771

QUESTION

RED HILL TO PORT AUGUSTA RAILWAY

Mr MORGAN:
DARLING DOWNS, QUEENSLAND

– Is the Government in negotiation with a private company for the construction of the Red Hill railway, and, if so, will the Acting Prime Minister say at what stage the matter now stands?

Mr FENTON:
ALP

– The Government is not in negotiation with any private com- company for the construction of a railway line.

page 771

NOTICE OF MOTION

Question to Private Member

Mr CROUCH:

– With reference to notice of motion No. 8, standing in the name of the honorable member for EdenMonaro (Mr. Cusack), I should like to ask him through you, Mr. Speaker, if he has any particular newspapers in mind, and, if so, will he give a list of them?

Mr SPEAKER:

– That question can be asked when the motion comesup for discussion.

Mr CROUCH:

– Standing Order No. 92 says -

After notices have been given, questions may be put to Ministers of the Crown relating to public affairs; and to other members relating to any bill, motion, or other public matter connected with the business , on the noticepaper, of which such members may have charge.

I wish, then, to know when I can ask my question, if not now.

Mr SPEAKER:

– I am fully conversant with Standing Order No. 92 ; but it is left to the discretion of the Chair to determine whether a question anticipates discussion on business set down on the notice-paper. I consider that the honorable member’s question, if asked now, would anticipate discussion on the motion to which he has referred. The information desired can. be asked for when the motion is before the House. The honorable member will not be in order in asking a question now in regard to it.

page 771

WHEAT INDUSTRY

Attitude of Farmers

Mr M CAMERON:
BARKER, SOUTH AUSTRALIA · LP; NAT from 1925; UAP from 1931

– Has the attention of the Acting Prime Minister been drawn to the paragraph in to-day’s press in which it is stated that at a meeting of 238 farmers, held at Minnipa, in South Australia, it was advocated that a smaller area should be sown in wheat next year, as a protest against the position in which the farmers find themselves because of the special appeal made to them by the Prime Minister. They feel that they have been betrayed.

Mr SPEAKER:

– Order I The word “betrayed” is distinctly out of order if applied here to any action of the Prime Minister.

Mr M CAMERON:
BARKER, SOUTH AUSTRALIA · LP; NAT from 1925; UAP from 1931

– I am repeating the statement of the farmers.

Mr SPEAKER:

-I cannot permit its application to anything that may have been done by the Prime Minister.

Mr M CAMERON:
BARKER, SOUTH AUSTRALIA · LP; NAT from 1925; UAP from 1931

– At all events, the farmers feel that they have not received a fair deal—-

Mr Forde:

– From the Senate?

Mr M CAMERON:
BARKER, SOUTH AUSTRALIA · LP; NAT from 1925; UAP from 1931

– From this Government, in view of the special appeal made to them by the Prime Minister to grow more wheat. Will the Government give further consideration to the proposal of Professor Perkins, of South Australia, to assist the farmers, or will it say straight out that it has no intention of giving any assistance to the farmers?

Mr FENTON:
ALP

– The Government and, I.think, the people generally, including members of Parliament, are in sincere sympathy with the fanners in respect of the position in which they and others find themselves. The Government is still considering the question, and is trying to devise means to afford relief to the farmers.

page 772

QUESTION

DUTY ON PETROL CASES AND DRUMS

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– Has the Minister for Trade and Customs received any report from the Tariff Board in respect of the application for duty on petrol eases and drums, and has the Government arrived at any decision regarding the deferred duty on those containers?

Mr FORDE:
ALP

– In the tariff schedule presented to Parliament on the 21st November last, a deferred duty of½d. per gallon on petrol in containers was inserted, but it was deferred until the 1st December, 1930, on certificates obtained from the Tariff Board. In the meantime, the whole matter was referred to the board for investigation and report. The inquiry was finished recently, and the report received by the Government. The board recommended that the duty be imposed on petrol in tins and cases, but not on petrol in drums. It also certified that the duty was deferred until the 1st March, 1931, to enable the whole matter to be fully considered by the Government. Its certificate and recommendation were adopted.

page 772

QUESTION

UNEMPLOYMENT

Mr MORGAN:

– Has the Government yet formulated a. policy to deal with the unemployment problem ?

Mr FENTON:
ALP

– The honorable member should be aware that a reply cannot be given in answer to a question touching upon government policy.

Mr LATHAM:

– I desire to be informed whether the Acting Prime Minister anticipates that the Government will ever evolve a plan to deal with unemployment ?

Question not answered.

page 772

QUESTION

BASIC WAGE INQUIRY

Mr WHITE:
BALACLAVA, VICTORIA

– With regard to the royal commission which the Government proposes to appoint to inquire into and report on the basic wage, can the Acting Prime Minister say when a report will be presented to this House?

Mr FENTON:
ALP

– It is anticipated that the commission, when appointed, will conduct its inquiry expeditiously, and present a report at the earliest possible date.

page 772

QUESTION

SUGAR

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

asked the Minister for Trade and Customs, upon notice -

  1. In connexion with the sugarembargo question, is it a fact that the Australian consumption of sugar, both direct and indirect, is approximately 115 lb. per head per annum, and is probably the highest in the world?
  2. Provided that the price of sugar were reduced to pre-war level, what would be the approximate effect upon the juices to consumers of the following food articles: - Jam, canned fruit, condensed milk, confectionery, sweet biscuits and cakes, jelly crystals, and other commodities ?
Mr FORDE:
ALP

– The information will be obtained as far as possible.

page 772

QUESTION

AUSTRALIA HOUSE

Mr ELDRIDGE:
MARTIN, NEW SOUTH WALES

asked the Acting Prime Minister, upon notice -

  1. Whether his attention lias been drawn to a press item of the 21st instant, as follows: - “ Although Australia House is withholding information pending a statement by Mr. Scullin, the Australian Press Association learns that the first definite action under Mr. Coleman’s report was taken to-day, when several members of the staff received notice of dismissal or return to Australia. Those ordered to return are stated to include ‘ the Chief Clerk, Mr. K. J. Carruean, and the Hospitality Officer, Mr. W. K. Ellison. A curious thing is that the note is signed by Messrs. Trumble and J. R. Collins, although the latter previously had no connexion with Australia House administration. This is taken to mean that no way has been found out of the difficulty created by Mr. Trumble’s agreement “ ?
  2. Is it a fact that certain Commonwealth public servants, who are at present, and have been for some time, employed at Australia House, London, arc being returned to Australia ?
  3. If so, can any economy result from such an arrangement; if so, in what direction?
  4. Arc the controlling authorities being hard pressed to provide work in Australia for those at present employed in Australia, and have suggestions of terminating the services of permanent officers been made?

    1. Will the Acting Prime Minister . take steps to ensure that no action is taken to return officers engaged abroad unless it is found practicable to provide them with employment in Australia ?
    2. Id it economical to effect reductions of staffs in Australia House if the consequences fall upon our own Commonwealth officers in Australia and not upon citizens Of Englaucl, who by continuing their employment sit Australia House would be provided with greater security in gaining u livelihood than, and at the expense of, members of tlie Commonwealth Public Service?
Mr FENTON:

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

  1. Yes.
  2. The matter is at present under consideration in view of tlie fact that the two officers named are no longer required on the London staff.
  3. Tlieir return to Australia will establish a saving in tlie cost of the High Commissioner’s staff. They are permanent public servants and their ultimate disposition must be eonsidered relatively with that of other officers. The question of their allotment to appropriate positions is under consideration.
  4. There are excess officers in some sections i>f the Service, particularly on thu manipulative side, but action is proceeding continuously for placing these officers.
  5. See answer to 3.

    1. Reductions arc also being made in the staffs employed under the High Commissioner Act who are not Australian officers.

page 773

QUESTION

CRUDE OIL AND GAS ENGINES

Mr MORGAN:

asked the Minister for Trade and Customs, upon notice -

  1. ls it a fact that recent decisions by him have had the effect of imposing a duty of 55 per cunt, upon crude oil engines between 90 and 1,000 horse-power, and upon gas engines between 90 and. 200 horse-power?
  2. ls it a fact that gas and oil engines within these limits were previously admitted free of duty under departmental by-laws?
  3. Has he considered thu disastrous consequence that this policy will have upon industrial undertakings operating their own plants, irrigation schemes and light and power stations in provincial towns throughout thu Commonwealth ?
Mr FORDE:
ALP

– The answers to the honorable niember’s questions ave as follow : -

  1. Yes.
  2. Yes, if entitled to British preference and at 10 per cent, ad valorem otherwise.
  3. It is not considered that removal of these engines from the by-law under item 174 will have any disastrous consequence, in view of the fact that local manufacturers are in a position to supply engines capable of supplanting the majority of the engines referred to. In the event of local engineers being unable to offer Australian engines suitable for any special purpose, tlie department will follow its usual practice and give favorable consideration to applications for by-law admissions.

page 773

QUESTION

DUNTROON MILITARY COLLEGE

AIajor-Gejtekal Bridges’’ Grave.

Mr D CAMERON:
BRISBANE. QLD · NAT

asked the Minister for Defence, upon notice -

In view of the Government’s decision to> transfer the Royal Military College from Duntroon to Sydney, will he give an assurance that the care and protection qf the late Major-General Sir V. T. Bridges’ grave at Duntroon will be recognized as a definiteobligation ?

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

– On the transfer of the Royal Military College to Sydney, the control of the college area at Duntroon will be relinquished by the Defence Department, and undertaken by the Department of Home Affairs. I will confer with my colleague, the Minister for Home Affairs, with a view to arrangements being made for the adequate care and protection of the resting place of this eminent soldier.

page 773

QUESTION

AGRICULTURAL IMPLEMENTS

Mr HILL:
ECHUCA, VICTORIA

asked the Acting Prime Minister, upon notice -

In view of tlie reduction in the cost of living and consequent reduction in wages of those engaged in the manufacture of agricultural implements, will the Government take action to amend the agreement entered into between the Prime Minister and the agricultural implement manufacturers, with a view to a further reduction in price of at least 10 per cent, on those implements covered by the embargo ?

Mr FENTON:
ALP

– The matter will be looked into, and the honorable member will be further advised in regard thereto as soon as possible.

page 773

QUESTION

WHEAT INDUSTRY

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

asked the Acting Prime Minister, upon notice -

Iii view of the importance of the wheat industry to this country and the parlous condition in which that industry is; will the Government appoint a royal commission to inquire fully into the disabilities and the causes of such disabilities under which . the industry is labouring, and to report as early as possible to this Parliament?

Mr FENTON:
ALP

– The Government fully realizes the serious position of the wheat industry and is considering the question of the re-introduction of the Wheat Marketing Bill as early as possible, so as to enable the industry to set up its own organization and deal with its own marketing and production problems.

page 774

QUESTION

CANNED FRUITS INDUSTRY

Mr HILL:

asked the Acting Prime Minister, upon notice -

  1. Is it a fact that the canned fruits industry is in a parlous position?
  2. Will the Government take such steps as may be necessary to safeguard this important industry, so that the whole of the canning fruits offered for sale to the canneries may be accepted and processed?
  3. Will the Government expedite the work of the Sugar Inquiry Committee, so that its findings may be made available at the earliest possible moment?
Mr FENTON:
ALP

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

  1. Owing to the fall in prices in oversea markets, and the depression existing in Australia, the canned fruits industry, in common with many other primary industries, is at present in a difficult position.
  2. The Government has already assisted the canned fruits industry in connexion with the export of its surplus this year by providing a subsidy, and by making a substantial contribution to the oversea advertising scheme. It will also examine the position when the surplus is available for export next year. The responsibility for the processing of the fruit is one which belongs to the States, and it is understood the State Governments are considering the best means of assisting the industry in regard to processing the coming season’s crop of canning fruits.
  3. The chairman of the Sugar Inquiry Committee is aware that the Government is desirous that the committee’s investigations should be completed at the earliest possible moment.

page 774

QUESTION

CONVERSION LOAN

Mr NELSON:
NORTHERN TERRITORY, NORTHERN TERRITORY

asked the Acting Treasurer, upon notice -

Will he inform the House what rate of interest was being paid on the £18,000,000 now being converted by the Commonwealth, and also the rate of interest on the £9,000,000 being converted on behalf of the States?

Mr LYONS:
Minister for Works and Railways · WILMOT, TASMANIA · ALP

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

page 774

QUESTION

NORTH AUSTRALIA COMMISSION

Mr MACKAY:
LILLEY, QUEENSLAND

asked the Minister for Home Affairs, upon notice -

  1. What are the names of the members of the North Australia Commission?
  2. What is (a) the term of their appointment, and (6) the amount of salary paid to each member?
  3. Is it a fact that the total amount of salaries, travelling and other expenses, for three commissioners, secretary and one clerk, amounted to £8,004 for the financial year ended 30th June, 1930?
  4. If so, how does the Minister expect to save £9,000 per annum?
Mr BLAKELEY:
DARLING, NEW SOUTH WALES

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

  1. J. Horsburgh, chairman; G. A. Hobler; W. R. Easton. 2. (a) Five years from 1st September, 1926. (6) J. Horsburgh, £2,500; G. A. Hobler, £1,500; W. R. Easton, £1,500.
  2. The sum of £8,004 represents the expenditure on what might be termed the commission’s head-quarters or central staffs. It does not include expenditure on out-door staff, such as surveyors, engineers, motor drivers, casual employees, Ac, which is considerable.
  3. In my speech on the second reading of the Northern Territory (Administration) Bill, I stated that I anticipated the abolition of the commission would result in a saving of. between £8,000 . and £9,000 per annum. It is difficult, at this stage, to estimate exactly what the saving will be, as some of the outdoor staff and technical officers at present employed by the commission will probably require to be employed by the Works Department, which will control works in the Territory. The two Commonwealth officers who reported on the question of the abolition of the North Australia Commission estimated that the salaries alone of the commissioners and officers whom it would not be necessary for the Home Affairs Department to retain was £13,898, although this amount would be offset by the salaries of any officers retained by the Department of Works. There will also be considerable saving in the cost of printing ordinances. Such expenditure will be reduced by almost 50 per cent.

page 774

QUESTION

STAPLE FOOD PRODUCT PRICES

Mr BLAKELEY:

– Yesterday the honorable member for Boothby (Mr. Price) asked the Minister for Home Affairs the following question, upon, notice -

Is he in a position to state the figures regarding the following staple food product prices for the financial years 1914 and 1930 respectively: - (o) Bread, 2-lb. loaf; (6) meat, per lb., average; (c) butter, per lb.; (d) milk, I am now in a position to furnish him

KTj P^ito<BLw^PLri^(pBr^pP5 witt the desired information, which is the 1930 prices over those of 1914? contained in the attached statement - {: .page-start } page 775 {:#debate-22} ### AVERAGE RETAIL PRICE OF FOOD^-CAPITAL CITIES- 1913-14 AND 1929-30 AND PERCENTAGE INCREASE DURING PERIOD {:#subdebate-22-0} #### Second Reading {: #subdebate-22-0-s0 .speaker-JPV} ##### Mr BLAKELEY:
Minister for Home Affairs · Darling -- I move - >That the bill be now read a second time. The purpose of the bill is to enact that it will not be necessary for the Chief Electoral Officer to appoint an Enumeration Day, as provided for in the Representation Act. Section 3 states - {: type="1" start="1"} 0. The day on which any census of the people of the Commonwealth is taken shall be an Enumeration Day within the meaning of thiH act. 1. The Chief Electoral Officer shall appoint other Enumeration Days as follows: - {: type="a" start="a"} 0. The first Enumeration Day shall be appointed as soon as practicable after the commencement of this act. Under these provisions an Enumeration Day was fixed after the census of 1921, and as the act further provides that there shall be rests of five years the next Enumeration Day was fixed in 1926. The existing representation in this House is based upon the census of 1921. On the 3rd April, 1926, an- Enumeration Day was appointed by the Chief Electoral Officer, who, after an examination of the estimates of population in the sevetal States, supplied by the Commonwealth Statistician, issued a determination in pursuance of the act, and recommended that no alteration be made. The next census was to have, been taken in 1931, and in the ordinary course, an Enumeration Day would have been appointed next April; but, owing to the fact that the taking of the census has been postponed till 1933, it is recommended that we should put off the appointment of the Enumeration Day until then. The reason why it is deemed unwise to allow the appointment of the Enumeration Day to be made by the Chief Electoral Officer this year is that, while Queensland, upon an estimate of the present - distribution of population, is entitled to another representative, past experience of such estimates has shown that there is always some variation, and it is possible that the Queensland figures, which are only 059 above the quota of that State, would not be sustained by a census. According to the last quarterly return of the estimated population on the 30th June, 1930, the quotas of the various States should be as follows: - {:#subdebate-22-1} #### Quota {:#subdebate-22-2} #### New South Wales .. 27.848 {:#subdebate-22-3} #### Victoria - . . . . 19,981 {:#subdebate-22-4} #### Queensland . . 10.559 South Australia 6.50G Western Australia . . 4,091 Tasmania . . 2.415 New South "Wales now has 28 members, so there can be no alteration in the representation of that State. Victoria's quota of 19.981 entitles it to twenty representatives. Queensland is -059 above the quota which entitles it to ten members, and South Australia, .006 above the quota under which it enjoys seven representatives. New South Wales and Victoria are within their quotas, and no change will probably take place in the representation of those States for many years. The Western Australian quota is low, and that of Tasmania is exceptionally low; but, under the Constitution, each of those States, notwithstanding the smallness of its population, is entitled to the minimum of five seats. Since it would be unwise to deprive South Australia of a seat, or to give Queensland an additional seat, merely on an estimate, we ask for the postponement of, the appointment of the Enumeration Day, and that is provided for under this bill. In accordance with the latest enrolment figures furnished on the 15th November, the quota of electors for each division in Queensland is 48,009, while in South Australia it is 46,319. If Queensland gained and South Australia lost a member each, the quota of electors for each division in Queensland would be 43,645, while in South Australia it would be 54,039, a very great disparity. The bill is a small one containing only one clause, which is as follows: - >Notwithstanding anything contained in section throe of the Representation Act 1905, the Chief Electoral Officer shall not appoint an Enumeration Day at the expiration of the fifth year after the Enumeration Day last appointed prior to the commencement of this section. Debate (on motion by **Dr. Eable** Page) adjourned. {: .page-start } page 776 {:#debate-23} ### INCOME TAX ASSESSMENT BILL (No. 2). Second Reading. Debate resumed from the 6th November *(vide* page 94), on motion by **Mr. Lyons** - >That the bill be now read a second time. {: #debate-23-s0 .speaker-C7E} ##### Dr EARLE PAGE:
Cowper .- This small taxation bill delivers the most staggering blow to the taxpayers of the Commonwealth that they have received since the establishment of federation, and it seems to strike, particularly at the middle and poorer classes of the community. To indicate the severity of this proposal it is only necessary to indicate its effect on three particular incomes. In the first place, take an income of £350 derived from property. In this case the ' increase in taxation proposed under this bill is from £1 to £29, or 2,900 per cent. In the case of an income from property of £500, the increase is from £5 to about £51, or 1,000 per cent. If we take an income of £750, we find that the increase is 600 per cent. An anomaly caused by this measure is .that the further we go up the scale the smaller becomes the percentage of increase in the taxation. The increase is greatest on the small incomes which result from the frugality of the poorer classes of the community, who are most savagely hit by this bill. Apparently, the measure has been brought down in haste, because the Acting Treasurer **(Mr. Lyons)** has circulated a series of amendments that are practically as voluminous as the original bill. I have no intention to follow the Minister through the intricacies of taxation placed upon income derived from property or on income derived from personal exertion. I challenge the whole bill, and therefore move - >That all the words after the word "That" be omitted, with a view to insert in lieu thereof the words " this House is of opinion that the Government, instead of encroaching upon the State field of taxation contrary to the express undertaking given by the Government at the Melbourne conference, should reduce expenditure to an extent sufficient to obviate the need for increase of income taxation, and that the bill should be withdrawn." If any justification for my proposal were needed, it was furnished by the debate yesterday on the South Australia Grant Bill. The principal reason for the proposal to make that grant is that the South Australian Government has practically exhausted every avenue of taxation open to it in that State ; yet, although the capacity of its people is already overstrained, the Commonwealth Government comes down with this savage, vindictive and confiscatory legislation. The honorable member for Werriwa **(Mr. Lazzarini)** cares so little for the welfare of persons who receive an income of £250 a year from property, that he laughs at the idea of this legislation being termed confiscatory. There are five excellent reasons for the adoption by this House of the course ti i at 1 suggest. First, this legislation encroaches unduly upon the State's field of taxation. Secondly, it is vindictive and confiscatory legislation, and discriminates unfairly against small moonies. If the bill be not withdrawn at this stage, [ shall move in committee amendments that will remove some of the extraordinary anomalies that I have mentioned, and thus try to make certain that the smaller incomes will not be exposed to the savage attacks contemplated by this legislation. Thirdly, a proper survey of the position of Australia, and of the taxation that already is being levied by both the States and the Commonwealth, will prove that it is quite impossible for this additional taxation to be collected without causing great injury to industry and production. Fourthly, the imposition of this taxation will increase considerably the cost of administering the Taxation Department, because of the complexity of the procedure involved. The income of companies will have to be analysed as to ordinary trading profits and income from property, and there will need to be provision for making rebates to shareholders on dividends according as they are deemed from one or the other. An examination of the balance-sheets of companies will necessarily be involved, so as to make sure what profits are from property. In fact, such an analysis will need to be continuous, and must be made even in the case of those companies not making profits at all. Thus an enormous amount of dead work will have to be undertaken. The last reason for the withdrawal of the bill, and to my mind the. most important, is that this taxation would be absolutely unnecessary if the Government would l."203 reduce its expenditure, commensurately with the fall that already has taken place in the basic wage and in private and national income. If this Government were to follow, the example set by South Australia in connexion with the Public Service and expenditure generally, it would not need to impose this taxation. It is worth while recalling that this proposal is directly contrary to the specific agreement made- by the Commonwealth with the Premiers of the States in Melbourne, that there would be no encroachment by the Commonwealth upon the only field of taxation left to the States. The Acting Prime Minister **(Mr. Fenton)** then said that, in order to balance the budget, there would first be a reduction of expenditure by £4,000,000, and that not until that had been made would taxation be increased. He also gave the assurance that every effort would be made to avoid entering the States' sphere of taxation. This taxation is a breach of that understanding. The Commonwealth has spheres of taxation other than this which, because they have been worked too hard, are already obeying the law of diminishing returns. . There is the post office, which is being exploited to the fullest extent. The postage rate for letters was increased by -Jd. ; but it is unlikely that any greater revenue will he obtained as a result, while, on the other hand, industry and enterprise will be strangled. So far the postage revenue, despite the increase, is practically the same as it was at this time last year. The increased telephone charges have been responsible for a considerable reduction in the number of telephones in use. I venture to assert that the amount being spent at the present time in disconnecting telephones more than -offsets the additional amount that is being received from rentals. Many persons have told me that the increased rental is one of the principal reasons for their discontinuance of the service, or for their decision to refrain from adding to the number of telephones in use in their businesses. Customs duties have been increased to such an enormous extent that the revenue from that source has been materially reduced; and is nothing like what it was two years ago, when the rates were very much lower. It is now estimated that the sales tax will return £1,000,000 'less than was anticipated when the proposals of the Government were brought down in July. The whole of this additional taxation has tended, not to bring in more revenue, but rather to strangle industry, and to prevent the expansion of trade and the employment of our people. Yet it is now proposed to invade still further the field of the .States, by increasing the direct taxation from income derived from personal exertion and property. I urge honorable members to give very careful consideration to this matter. If there is one thing we should seek to do, it is to encourage our people to save, so that capital will be created, enterprise will be beneficially affected instead of discouraged, and a greater number of men will be employed. This legislation will destroy all incentive to save. An examination discloses the fact that this proposal will raise the taxation above the figure at which it stood in 1921-22, the peak period of federal taxation, when an endeavour was being made to meet our post-war commitments. It must 'be remembered, also, that customs taxation is now approximately £2 a head greater than it was then, and that the sales tax is responsible for a further 15s. a head. It is worth while placing on record the figures relating to some incomes, both Federal and State. It is useless to consider the question of direct taxation solely from the federal point of view; the impositions by the States also must be considered, because the same taxpayer is concerned in each case, and the taxation comes out of the same pocket. In 1921-22, a taxpayer' with an income of £10,000 derived from personal exertion, .paid federal taxation amounting to £2,726. The State taxation in that year - I am taking a New South Wales case - was comparatively low, only £919. The two combined totalled £3,645. By 1928, the federal taxation had been reduced by £1,000 to £1,725.; but, unfortunately, the State taxation then stood at £1,771, an increase of £870, making .& total of £3,476. Thus the State had almost covered the field vacated by the Commonwealth. This proposal will raise the federal tax to £3,287. The State taxation at the present time is £682, making a total of £3j969. That represents an increase of £325 compared with nine years ago ; and, as I have already said, the indirect taxation at that time was at least £2 15s. a head less than it will be this year. That means that there will be an impost of something like 8s. in the £1 on an income of £10,000 per annum from personal exertion. The position is even worse in connexion with an income of £10,000 from property. In 1921-22 the federal tax on such an income was £3,421, and the State tax £1,225, a total of £4,646. In 1928-29, the last year of the Bruce-Page Government, the federal tax on such an income had been reduced to £2,165, while the State tax had increased to £2,087, or a total tax of £4,283; a reduction of £360 on the 1921-22 figures. Under the proposed impost the federal tax on an income of £10,000 from property will be increased by £1,600 to £3,738. With a State tax of £1,983, the total assessment will be £5,721, or lis. Sd. in the £1 on a property income of £10,000. That does not take into account the unemployed, relief tax of 3d. in the £1. It is quite evident that there will be no incentive for persons to toil and moil in an endeavour to accumulate wealth, if more than half of what they earn goes to the Government in the form of income taxation. This bill will mean an increase of from 30 per cent, to 40 per cent, on previous rates of taxation on high incomes. The increase is almost confiscatory when applied to smaller incomes. It almost appears as if it were vindictive in its incidence. On an actual income of £750 from property, federal income tax has increased from £17 15s. Id. to £90 16s. 7d., while on a similar income of £350, the tax has gone up from £1 to £29 8s. 4d. In this case the rate has increased from 3 1/2d. to 2s. in- the £1. On *sui* income of £500 from property the impost has risen from £5 7s. to £53 17s. lid., ian increase of 1,000 per cent. On a similar income of £250, it has risen from nil to £24 19s. Sd. There has been an increase from £47 8s, to £134 19s. 3d. on a property income of £1,000. Such impositions are staggering, and without precedent in the history of the country. And, it must be remembered, that I am now referring only to federal taxation. Matters will be worse than they were at the end of the war, when indirect taxation was not nearly so high as it is to-day. It is also to be remembered that this terrifle taxation is being imposed at a time when property incomes are very much lower than they were twelve months ago. In many suburbs, rents are as much as 4.0 per cent, lower than they then were. A number of dwellings have been occupied for months without the tenants paying, any rent, and people owning three or four houses have had to be content with no rents from some, and with very much reduced rents from others. What little return a man will get from his property will be taken from him by this taxation. At present houses are available in great numbers because of the great difficulty that so many have in obtaining employment. Previously there was a house shortage. This huge impost must inevitably increase interest rates on first mortgages. I notice that an amendment is being circulated by the Government which will prevent, the extra tax being passed on to those who have already entered into contracts. But it is- apparent that when new contracts are made higher interest rates will be charged. Valuations ave rapidly decreasing, and this staggering taxation will still further, accelerate the decline. It will be .impossible to obtain advances on second mortgages. Instead of making more money, available for building purposes and so. creating employment, this- taxation will have the effect of. making people chary ab.out building. Even with the best will iai the world,, the community could not bear this tax. During the past eight ornine years the- Commonwealth Government has reduced taxation on incomes from both personal exertion and property. The States, because of their economic difficulties, principally caused by railway deficits, have found themselves forced continually to, encroach on the sphere vacated by the Federal Government. An examination of a. series of income tax assessments would reveal that the States have more than covered the field from which the Federal Government has withdrawn during the past ten years. So that this additional staggering impost will be greater than our taxpayers can bear. To give an indication of the position, I shall quote combined Federal and State assessments on incomes from property. The. State referred to is New South Wales. In 1921-22, an income of £500 from such a source had to meet a total tax assessment, Federal and State, of £.62 2s. lid. In 1928-29 that had. dropped to £37 19s. 3d. Under the new rates it will soar to £75, 10s. 2d., or £13 more than it, was- ten years, ago, during which period, costs have increased enormously. And those figures do not. take into account the 3d. in the £1 tax for unemployment relief purposes. I understand that that tax is ls. or more in. the £1, in South Australia. It is awful to contemplate what the position will be in that State. On an income of £750 from property, the combined taxation in 1921-22 was £105 19s. 4d. By 1928-29, it had been' reduced to £69 10s.; it will now jump to £131 18s. 3d. On an income of £1,000 from property, the combined tax was £159 in 1921-22, and £109 in 1928-29. Under the new taxation, it will be £194, plus unemployment relief tax. It is quite obvious to those who are prepared to. consider the matter dispassionately that it will be impossible to collect this tax.. I believe that the tax will have an even greater effect in crippling industry than some of the tariff stupidities that have been perpetrated by this Government. The fourth reason why this measure should be rejected is that it will add to the complexity of the Federal Income> Tax Act. There is a natural objection to the payment of income tax; but eversince the federal act became law there: has been, in addition to that natural' objection, complaint against the complexity of the legislation. Having started' off' on the wrong- foot, we appear not to* have been- able to get into- step. Theadditional complexity of the legislation will be noticed particularly in the case of incomes derived by companies from property. This legislation will necessitate an enormous amount of dead workboth in businesses and the Taxation Department. Indeed, some businesses' which, because of lack of trade, have had' to dismiss their employees, will be forced to, take on others to make, out their returns. When those returns reach the department, the work of analysing them will necessitate the appointnieut of additional clerks. The complexity of these returns, which will have to be analysed and dissected, will mean delay, difficulty, and annoyance. A considerable proportion of any increased revenue which might be obtained will be dissipated in paying for additional assistance. A shareholder in a company, on whose dividends be should be able to obtain a rebate ou account of the company having already paid a super tax on property income will not know his position unless he has an intimate knowledge of the internal working of the company. No ordinary shareholder can have that knowledge, because the balancesheets of a company cannot contain full particulars of every transaction, even if it were advisable to publish them in that way. The legislation places the taxpayer more than ever at the mercy of the Taxation Department. If the Government were to go thoroughly into the question of reducing expenditure, it would find that additional income taxation is not necessary. A close examination of the budget figures makes it clear that expenditure could be reduced. Every other government in Australia has been forced to reduce expenditure; and whether the Federal Government likes it or not, itwill be forced to do the same. The financial statement now before us is supposed to be a revision of the budget introduced by the Prime Minister **(Mr. Scullin).** I predict that within three months further proposals will be submitted - proposals even more drastic than have been suggested by the Leader of the Opposition. The introduction of new proposals will he unavoidable, because of the inability of the people to pay these imposts. Any attempt to collect this additional taxation must necessarily increase unemployment and destitution, and. by dissipating our wealth, destroy the confidence of the people, and min the industries of this country. If taxation is further increased, n crash is inevitable. The passing of this measure will tend to destroy the thrift of our people. Wc frequently hear it said that Australia should be more self-contained. How can Australia be self-contained unless Australian capital is invested in industry? In. order to build up capital for investment in industry, the savings of the people must be increased. This bill, instead of building up capital, will dissipate capital; it will discourage thrift, because it. treats as criminals those who have saved against a rainy day. What will be the effect of this legislation on the present conversion loan, the income from investments in which will be income from property? At the very time that the Government is urging the people to contribute to this loan, it imposes this savage taxation on income from property ! The result can only be to discourage investors. {: #debate-23-s1 .speaker-JWT} ##### Mr FRANCIS:
Moreton .- I second the amendment moved by the right honorable member for Cowper **(Dr. Page).** The taxation proposals of the Government strike a staggering blow at the community. The budget of the Acting Treasurer **(Mr. Lyons),** and these income tax proposals in particular, arc a breach of the agreement arrived at by the representatives of State and Commonwealth Governments at the Premiers Conference held in Melbourne in August last. The official report of that conference shows that the Acting Prime Minister **(Mr. Fenton)** intimated *inter alia* that the Federal Cabinet had agreed to the appointment of a sub-committee of the conference to advise, but not to dictate, in regard to policy. He further stated that the Federal Government had agreed that its budget should be balanced this year, that the position would be watched carefully, and that steps would be taken at the earliest moment necessary to adjust the position, first, by a reduction in expenditure, and, secondly, by an adjustment of taxation so that State fields of taxation would not be encroached upon. Yet every one of these proposals encroaches on State fields of taxation. There has been no effort at economy, and no attempt to carry out the arrangement entered into at, the Melbourne conference. I regret that the standard of public life in this country has fallen so low that definite agreements should he flagrantly dishonoured. " ' On the 3rd of October last, the Acting Prime Minister definitely promised that there would he a saving of £4,000,000 in the national expenditure this year A very slight alteration of the expenditure proposed in the budget of July last has been made - and that only after persistent efforts ,by the Opposition to prevail on the Acting Prime Minister to honour the agreement arrived at in Melbourne. This taxation is unjust and discriminating; ir strikes a heavy blow at the most worthy section of the community - those thrifty people who, instead of indulging in extravagances, have looked ahead and put aside some of their earnings. They are to be penalized under these proposals. The present Government came into office mainly because it hoodwinked the people with promises. It promised to do away with unemployment, and to ensure that there would be work for all. All that it has done during its twelve months of office has been to introduce three measures to increase taxation, with the result that, instead of unemployment being nonexistent, the volume of unemployment is greater than at any previous time in the history of Australia. I hope that there will soon be a change of government, or things will become worse. If governments continue to extract taxation from the people, the time will soon arrive when they will have no income to tax; if industry continues to be taxed as it is "now taxed, there will soon be no industry to tax. One can see that by continuing heavy taxation the position, instead of being improved, will gradually l>e made worse. The Government does not seem to realize that nothing so hampers trade and industry, increases unemployment, or reduces the standard of living as excessive taxation. Unfortunately, the most deserving section of the people will be the chief sufferers from the Government's proposals. The persons affected comprise, for the most part, those who by dint of hard work, thrift, care, and sacrifice, have made savings, and paid them into the savings banks, invested in the various loans which have been floated from time to time, bought government stock, taken out life insurance policies, joined friendly societies, or in some other way have provided for their old age, thus ensuring that they shall not become a burden on the Commonwealth. Obviously, these are persons who have not been extravagant. Many of them * have helped to extend and develop our secondary industries by taking up small parcels of shares in joint stock companies. They belong to what is, perhaps, the most deserving section of the community, having clone their part to. ensure the stability of the community. Instead of recognizing their merits, however, the Govern ment has practically taxed their incomes away from them. The value of industrial shares has fallen by over £200,000,000 since the Government came into office, and this property tax will still further reduce their value. It is evident that the estimate of revenue to be obtained from the tax will not be realized, because industry cannot afford to pay it. I have here a statement which shows the amount of tax paid on incomes ranging from £250 to £1,000 under the budgets introduced successively by **Dr. Page, Mr. Theodore, Mr. Scullin** and the Acting Treasurer **(Mr. Lyons).** The statement is as follows : - The revenue from income and property taxation in 1927-28 was £9,S00,000, and for 192S-29 it was £10,550,000, but for 1929- 30, although the rates have been materially increased, the revenue received was only" £10,000,000. The forecast for 1930- 31 'is £11,700,000. Property taxation is so high now as to amount almost to confiscation, and its adverse effect is reflected in the extraordinary increase in the number of applications for old-age pensions. 1 ' During the past year the number df "pensioners has increased by 18,000. The number of pensions granted up to the 31st December, 1929, was 200,575, while on the 30th September, 1930, the number had increased to 224,100, and the estimated payments will amount to £11,650,000 as against £10,791,000 for last year. It is evident, therefore, that the class legislation introduced by this Government is having a most adverse effect upon the thrifty members of the community, and is forcing men and women who have struggled all their lives to accumulate savings for their old age to depend upon the old-age pension. The increase in unemployment has been stupendous during the period that this Government has been in office. It must be remembered that 80 per cent, of the workers are employed by private persons, and if industry is taxed to such an extent as to be unprofitable, it can no longer afford to give employment. It is interesting to compare taxation rates under the first budget of the Bruce-Page Government with those under the present Government. In 1920-21 the basic rate of taxation had reached its peak, being 70f per cent, higher than the 1915 rate. In 1922-23, under the Bruce-Page Government, the rate was reduced by 10 per cent., making it 53£ per cent, higher than in 1915. In 1924-25 a further reduction of 10 per cent, took place, so that the basic rate was only 38 per cent, above the 1915 level. In 1925-26 it was again reduced by 12£ per cent., which brought it to within 20 per cent, of the 1915 level, and in 1927-28 it was still further reduced by 10 per cent., which brought it to within 8 per cent, of the 1915 level, and there it stood when the previous Government went out of office. But since this Government has been in charge of the affairs of the country, it has been increased tremendously. The budget introduced by the honorable member for Dalley **(Mr. Theodore),** when he was Treasurer, increased the income tax rate on incomes from £201 to £500 by 18.8 per cent., and on incomes from £501 to £l,500"by 36.2 per cent. The budget introduced by his successor in office **(Mr. Scullin)** left the rate on incomes from £201 to £500 untouched, but it increased the rate on incomes from £501 to £1,500 by 30.68 per cent., while the proposals now before us will still further increase it by 36.62 per cent. It must he obvious to every honorable member that the imposition of this additional taxation will add to the privations of the people. These proposals cannot possibly achieve the object of the Government, which is to improve the position of the country, and bring about a reduction of interest rates, because they will ruin the industry of the people, and take all the heart out- of them. If the country is to enjoy restored prosperity, we must not place heavier burdens upon people who are already living on greatly depleted incomes. In all the circumstances, I have no hesitation whatever in supporting the amendment. {: #debate-23-s2 .speaker-KXT} ##### Mr PATERSON:
Gippsland .- I intend to oppose the bill and to support the amendment, because I consider that an increase in taxation cannot be justified until some substantial reductions have been made in governmental expenses. It can be said, without any fear of truthful contradiction, that the Government has made no genuine effort to bring about substantial reduction in its expenditure. I believe that, in effect, the additional revenue which the Acting Treasurer **(Mr. Lyons)** hopes to obtain by means of this lowering of exemption from taxation could have been obtained without imposing hardship on any one, merely by reducing the cost of government. The imposition of heavier taxation along the lines proposed in this bill will, in my opinion, do much to still further increase unemployment in Australia, because it will involve the withdrawal from enterprise of money which otherwise would have been available for it. I oppose the bill, also, because it must lead to an encroachment upon the main sources of revenue of the States. As the honorable member for Moreton **(Mr. Francis)** has said, an undertaking of some kind was, undoubtedly, given by the Commonwealth Government to the State Treasurers that their particular field of taxation would not be unduly encroached upon by the Commonwealth in its effort to balance its budget. The right honorable member for Cowper **(Dr. Page)** has just pointed out that during the regime of the Bruce-Page Government the rates of income and land taxation were being steadily reduced by the Commonwealth, though the States, unfortunately, found it necessary, during the same period, to increase both income and land taxation. One reason for doing this was the tremendous losses incurred in the conduct of their railway systems. To-day the States are in an even more difficult position than they were in years ago. The passage of this bill would still further embarrass the States, and make it increasingly difficult, if not impossible, for them to raise sufficient revenue by income taxation to balance their budgets this year. The Commonwealth Government is, therefore, not merely disregarding its promise to balance its own budget, but is actually preventing the States from balancing theirs. I should like the Acting Treasurer to inform me, when he replies to the points raised in this debate, why, and on what principle, the Government has provided that the amount of exemption should be lowered, and should disappear so much more rapidly in the case of incomes obtained through the practice of thrift than in the case of those obtained from present personal exertion. I say " present " personal exertion because, to a very great extent, incomes obtained from property are really obtained from past personal exertion. I understand that the object of allowing an exemption from -taxation of a certain amount of income is to ensure that a taxpayer shall have sufficient income free from taxation to enable him .to meet reasonable household expenses. Under the present law the general exemption is £300, irrespective of whether the income is derived from personal exertion or property, and this disappears at the rate of £1 for every £3 of income over £300, and totally disappears when the income reaches £1,200. The proposal now before us is that the general exemption shall be reduced to £200, and that it shall disap- fear by £1 for every £1 above that figure, n other words, it would disappear, under this proposal, three times as fast as under the existing law. This means that there will be some exemption in the case of incomes from personal exertion right up to £1,200, but the exemption will totally disappear at £400 on incomes from property. Why has the Government differentiated in regard to the exemption in this way? Is it suggested that an in come of £400 from property is capable of providing the same standard of comfort as an income of £1,200 from personal exertion? Is there some special quality in money obtained in the one way that is not in money obtained in the other way? It is perfectly justifiable and reasonable for a taxing authority to impose a higher rate of taxation on unearned income than on earned income, and this is commonly done; but that is an altogether different thing from varying the amount of exemption and the rate at which the exemption shall disappear in respect to personal exertion and property income. Both classes of income should be treated on exactly the same basis in regard to exemption. In both instances the exemption was £300, and the disappearance of that exemption was comparatively slow. Under these proposals a person obtaining a comparatively small income from property is seriously affected, not merely by the additional rate, but by the lowering of the exemption, and by that exemption, such as it is, disappearing with much greater rapidity. The attack which is being made upon comparatively small incomes obtained as the result of thrift will do a very great deal to discourage thrift, and add to the feeling, which is too prevalent, that it is just as well not to save money but to spend it, and when old age is reached, to obtain the old-age pension. I believe that these proposals will still further stimulate that feeling, which undoubtedly is in the minds of many persons. To-day quite a number are practising the doctrine of spending what they have, and relying upon the oldage pension to assist them in their declining years. When treatment such as this is accorded to those who have been thrifty, the adoption of this idea will be encouraged. A person receiving an income of £350, obtained as the result of thrift, who formerly paid £1 a year in taxation, will now pay £29 8s. 4d. Some extraordinary cases have been brought under my notice of persons who have decided that it is not worth while being thrifty, and that it is preferable to take advantage of the old-age pension. I mention one' such authentic case. A man and his wife, who had succeeded in saving £1,500, realized that if they invested that amount in government bonds at 6 per cent., they would receive an annual income of £90. Instead of investing their money in that way, they went for a trip abroad, had a most enjoyable time, spent the whole of the £1,500, and on their return claimed and obtained an old-age pension of £104 a year. That is the kind of thing that is going on to-day, and such conduct will be encouraged by legislation of this nature, which absolutely destroys the incentive to save. I believe that the imposition of additional taxation is unjustifiable until such time as substantial reductions are made in governmental expenditure. For these reasons I oppose the hill, and support the amendment moved by the right, honorable member for Cowper **(Dr. Earle Page).** {: #debate-23-s3 .speaker-JVR} ##### Mr NAIRN:
Perth .- This measure represents the absolute highwater mark yet reached by any government in the matter of taxation. We have only to examine the proposed additional taxation to see that it is not based upon any idea of fairness, but has been framed with the intention of confiscating the savings of the thrifty. Under the existing law a person receiving an income from property - which, broadly speaking, includes interest, rent, and dividends - of up to £300 a year, is exempt; hut under this proposal will have to pay £18 13s. lid. The taxation of those receiving an income of £350 a year from property is to bc increased from £1 to £29 8s. 4d.; on £400 a year the increase will be from £2 4s. 8d. to £40 6s. 3d. ; on £500 a year from £5 17s. 8d. to £51 15s. 2d.; and on £1,000 a vear from £52 lis. to £134 19s. 3d. A person receiving £1,000 a year has to pay approximately £135 a year, irrespective of whether that' income is or is not earn: ing fair interest on capital, regardless of the additional taxation on property, and of State taxation, which in most cases is higher than the existing Commonwealth taxation. Most of the States are also imposing a special unemployment tax. Taxation has been increased to such an extent that the measure can be regarded only as confiscatory. The proposals are double-barrelled when Ave consider the additional ls. 6d. in the £1 together with a diminution of the exemption. At present there is an exemption of £300, which disappears at £1,200; but under this measure the exemption is £200, which disappears at £400. All taxpayers receiving an income between £400 and £1,200 have, in addition to being deprived of exemption, to pay a super tax of ls. 6d. in the £1. This will adversely affect, not merely the persons receiving income from property; but also a very large number who obtain income from personal exertion and also from property. *[Quorum formed.']* At present the person with an income of £500 from personal exertion is taxed on £266,' but this bill proposes that if the income is derived entirely from property, taxation must be paid on the full £500, and if it is derived partly from property and partly from personal exertion, for example, in the proportion of £200 and £300 respectively, the tax will be based on a taxable income of £360, the net result being that the individual will lose the benefit of the general exemption provided for in - the present act to the extent of £94, and will pay ls. 6d: in the £1 on the full £200 derived from property. Companies have been the sport of impecunious Treasurers for some years past. At present they pay a flat rate of ls. 4d. on their profits. The dividends are taxed in the hands of the shareholders. That is fair enough, but it seems to me that when the Taxation Department has finished with companies under the new proposal, very few of them will be in a position to pay dividends. A large proportion of the profits made by life insurance companies is derived from investments. The bill provides that these corporations will pay an additional ls. 6d. in the £1, or 7£ per cent., on all income they derive from property, including rents and interest, and as the dividends distributed by them to shareholders are also to be taxed at the rate of an additional 74 per cent., by the time these profits get into the hands of the shareholders they will be subject to a special taxation of 15 per cent., in addition to the existing flat rate, any State income taxation and any special unemployment levy that may be imposed. The case of a holding company in Queensland has been brought under my notice. Queens- land has an income tax, as well as a dividend tax on shareholders. The amount of income tax payable under the existing federal law on a company's income of £1,000 a year is £66 13s. 4d. The 7J per cent, additional impost proposed by this bill would increase that amount by £75. The Queensland State tax being 2s. in the £1, plus 20 per cent., amounts to £120; and the State dividend tax on the dividends in the hands of the company's shareholders amounts to £75. The total taxation, Federal and State, on a company's income of £1,000, is, therefore, £336 13s. 4d., which is equal to 6s. 8d. in the £1. There can be no revival of industry if such heavy taxation is permitted. In the past industry was largely in the hands of individuals, but now the tendency is to have combinations of capital. These are necessary if we are to compete successfully with other countries; but our income tax laws have treated them with great harshness; and if this additional 7£ per cent. - in the case of dividends it a mounts to 15 per cent. - is to be imposed we shall not find many people willing to risk their capital in the promotion of companies for the conduct of industrial enterprises. Ministers may think that by bringing down this taxation they are benefiting the class they are supposed to represent - the workers ; but, actually, the small amount of additional revenue likely to be secured as a result of the extra taxation can do very little to relieve the situation in Australia. Incomes are fulling, and income tax revenue must fall in sympathy. I appeal to the Government to try to realize that if it taxes industries out of existence the greatest harm will be done to the workers, and if industry is made utterly unprofitable more persons will be thrown out of employment. This measure is a long Step in that direction. Consider its effect upon companies and persons engaged in selling motor cars, machinery and. other articles on time payment. At present the interest received under a hire-purchase agreement is taxable as income from property. Hitherto the difference between the rates on income from property and income from personal exertion was not very great, and therefore the taxation of the interest at the property rate did not press very heavily. But the imposition of a further tax of 7^ per cent, will ruin people who are engaged in selling goods on time payment. Every hire-purchase agreement includes a - schedule of payments, showing the proportions allotted to principal and interest respectively. The profits from these transactions must be represented by the interest payments, and in future the seller will have to pay 7£ per cent, on all such receipts. I estimate that that will absorb the greater portion of the profits on nearly every hire-purchase transaction I quote another illustration of the effect of this proposed impost. The Midland Railway Company in Western Australia about 40 or 50 years ago built 300 odd miles of railway on the land grant principle, through what was then uninhabited country. It subdivided its land, and sold large areas on terms extending over fifteen years and upwards. The principal sums under the contract bear interest at 4 per cent, per annum. Over 500 of these contracts are still in force. The company never made any profits, but is carrying on in liquidation until the contracts are completed. By the federal taxation now in force, the 4 per cent, interest is reduced. to an effective interest of £3 14s. 8d. The new proposal will reduce it to £3 8s. 8d., from which will be deducted State income tax. If is absurd to suggest that approximately 3 per cent, is a fair remuneration on the capital invested by that company. Capital, like labour, is entitled to a fair reward, and if it is not assured of that, investments will cease. I do not contend that the holders of government bonds should not be required to bear a fair share of the national burden, but on the other hand, there is no justification for specially selecting income from property for punitive taxation. Hitherto, real estate in Australian cities has been giving no more than a fair average return on the capital invested, if one takes into account all outgoings and depreciations. But during the last . twelve months, rents throughout Australia have fallen considerably. It is true that the rents of residences have lagged behind others, but those engaged in the real estate business know that many shops and dwellings are untenanted, and that, the rents of those that are occupied have been substantially diminished. A building which eighteen months ago may have been returning 8 per cent, is now yielding much less than oan be regarded as a fair return on capital. Already investments in real estate are unprofitable, yet the Government proposes to take another 7-J per cent, of the gross returns, less the ordinary allowance for rates and taxes. Although a block of city offices may be earning pearly £10,000 gross, the net return on capital may be less than 2 per cent. Actually the investment is unprofitable. This bill, however, proposes to hypothecate a further 7$ per cent, of the gross returns. I think the instances I have mentioned are sufficient to show the unfairness of this tax. I cannot believe that the Government has fully considered what r. ill be its effects. It will inflict cruel injustice on many persons, and will press so heavily upon industry as further to increase unemployment. {: #debate-23-s4 .speaker-KXQ} ##### Mr ARCHDALE PARKHILL:
Warringah -- I cannot refrain from expressing my amazement at the methods adopted by the Government to raise money in accordance with the amended budget. I realize that the limited number of high, incomes in Australia may not yield all the money which the Government needs, and that it has, therefore, had to have recourse to lower incomes. Yet that does not justify the Government in imposing most crushing and merciless taxation on the middle classes. Had the Government the courage to reduce its expenditure by definite cuts, as it could readily and easily do, there would be no necessity for this extra taxation. The Treasurer said in his .budget speech in July - >Up to the present the chief sufferers through loss of income are the primary producers, the unemployed, and those in receipt of incomes from business profits, which have seriously declined or vanished. Later he said - >All fixed incomes from property, including interest, is in a relatively better position to-day than last year, because of reduced commodity prices. In those circumstances incomes from property may fairly be required to provide more taxation. First he stated that the greatest sufferers included those whose incomes had Deen reduced or had disappeared entirely, and then he made the erroneous assertion that those in receipt of incomes from pro perty may fairly be required to pay more taxation, because they are in a relatively better position than others to do so. If he had had knowledge of the actual circumstances of people dependent on income from property, he could not justly have said that they could fairly be required to bear a greater burden of taxation. Take for instance those people who have moderate or comparatively small incomes from rents. Any one who has any experience of city properties knows that rents have recently dropped 25 per cent. Take my own office in Sydney. I did not seek a reduction in rent, but the rents throughout the whole building were voluntarily reduced by 25 per cent. That is being done throughout Sydney, not only with respect to offices, but also with respect to shops, flats and private dwellings. Therefore, a most extraordinary diminution of incomes from rents has taken place during the past six or nine months. The position is further affected by the inability' of tenants to pay rents. Also a large number of tenants leave premises without paying rent, and thus involve the. owners in heavy loss. Then again many landlords, for humanitarian reasons, permit tenants who are out of employment to continue to occupy premises without payment. Take an instance within my own electorate. The landlords of Manly, during the winter months, permitted a considerable number of shopkeepers to remain in occupation of premises without payment of rent until the approach of the summer. Then again the excessive costs of repairs to property must be considered, and those have not come down to any extent. In addition the high municipal water and sewerage rates have not been reduced. {: .speaker-KDW} ##### Mr Jones: -- Have not water rates been reduced in proportion to the reduction of rentals? {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- Unfortunately, they have not. Those costs are still high, although the income from rent has dropped considerably. Consequently there has been a heavy reduction in incomes from rent for which no compensation can be obtained. I invite honorable members to consider the scale of taxation. A man who, by personal exertion, receives a salary of £300 a year, pays no income tax at all, whereas the man, or woman for that matter - and either may have dependants - who has saved and invested a few thousand pounds, and has an income of £300 from property, bonds or any other source, has to pay something like £30. I cannot understand how the supporters of the Government can face their constituents and answer the questions put to them on this subject. I myself have been asked a number of such questions in my electorate, and my questioners have been amazed to learn that the Labour party is imposing this inequitable and drastic taxation. Take an income of £500. If earned by personal exertion, the tax is £5 5s. 3d., but if derived from rents, bonds or dividends in industrial companies, the tax is £52 per annum. There can be no justification- for a system of taxation which falls so unfairly on the citizens of this country. Take an income of £600. If earned by personal exertion, a tax of £9 is paid; but if obtained from rents, bonds, or investments, the tax is £67. That is most unfair and unjust. In what way is this' Government encouraging thrift? Is thrift no longer a virtue ' in this country? One would think that it was not, judging by the_ way in which people are at times abused because their incomes are obtained from interest, dividends, or rent. One would think that they were doing an utterly wrong thing in saving money and investing it, although, had they not done so, they would have had to join the rapidly increasing number of applicants for old-age, widows' and invalid pensions. What justification is there for this heavy taxation upon people who endeavour to provide for their old age instead of seeking monetary assistance from the Commonwealth? Apparently, in the eyes of this Government, thrift is no longer a virtue, but merely a suitable subject for heavy and merciless taxation. This taxation must have the. effect of increasing the unemployment which is rampant in our midst. People have not large sums of money available just at the moment the Taxation Commissioner forwards a notice, with a peremptory note that the tax must be paid within two or three weeks. Some persons are fortunate enough to obtain overdrafts with which to meet their taxes. Others are not in that position, and, having reduced incomes consequently, have to sell some of their capital. Employers will not be able to continue their businesses when their incomes and capital are being so rapidly reduced by this punitive taxation. {: .speaker-KEQ} ##### Mr Killen: -- They cannot pay their taMr. ARCHDALE PARKHILL. - Quite so. They will be forced to reduce the number of their employees. I do not say that the Government is entirely indifferent to the increasing unemployment; but I do say that it has not properly considered the incidence of this taxation. What does this additional income taxation mean? There was no great drop in the national income up to the 30th June last year, on which this taxation will be levied; but there has been a tremendous fall in income since then, .and it is out of this year'n income that the money will be found to meet the tax on the previous year's income. {: .speaker-KEQ} ##### Mr Killen: -- This year's income has disappeared altogether. {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- In many cases incomes have vanished altogether. Under ordinary circumstances it would be difficult to meet the tax on last year's income; but, under existing circumstances, many people will find it practically impossible to pay their taxes. The burden is more than this country can bear, and I earnestly appeal to the Government to reconsider seriously the incidence of this taxation, and what it will mean to the most deserving class of our Australian citizens. Everybody is being urged to buy bonds. To-day, advertisements, inserted over the name of the Acting Commonwealth Treasurer, appear in all the newspapers, urging the people to " buy a bond of honour ". {: .speaker-L1T} ##### Mr Yates: -- Has the honorable member sent in his slogan? {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- I am speaking of this Government's slogan - " Buy a bond of honour." That slogan, is being published throughout the Commonwealth, and all I hope is that those words will always have the full significance and weight which they are intended fit. the moment to convey, and which the word " honour " implies. But, while we are urging people to buy this bond of honour, to subscribe to the loan and obtain income from interest, it is wrong to impose this punitive taxation upon the very citizens who are being asked to come to the assistance of the Commonwealth. I ask the Government to recognize that there are many small property-owners who, by thein industry and the exercise of the most rigid thrift, have saved a few thousand pounds. If we compare the amount of taxation which the Government proposes to exact from these people, with the taxation which it will obtain from those who, regardless of the future, spend their money at the races, or purchase pianolas, motor cars and similar luxuries, we shall find that the incidence is most unfair. The latter will escape almost entirely. But the worthy citizens in this community, the men and women whom we rightly regard as the fibre and sinew of the nation; tlio.se people who, by thrift and sacrifice, show the Australian character; they, it appears, are to be selected by this Government as suitable victims for a mostvicious attack upon their savings. I protest in the most emphatic .manner possible against the imposition of this heavy burden on this most deserving class of citizens, whose 'interests I am prepared, at all times, to champion. I shall never cease to attack the injustice which is being perpetrated in this hill. In addition to the objections which I have raised, the bill contains many inconsistencies which may more appropriately be considered in committee. For example, there are anomalies with regard to composite incomes. I have already directed attention to these in the public press. The bill provides that, in the case of a composite income, the exemption is £133; but on a composite income of £500 it is £140- higher than the exemption on a composite income of £400. On a composite income of £600 the exemption is £133 - exactly the same as the exemption in the case of a- taxpayer with a composite income of £400. {: .speaker-F4O} ##### Mr Lyons: -- Nevertheless, the man earning the higher income will pay more in taxation {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- Bui what is the justification for a lower exemption on a composite income of £500 as compared with an income of £400? And what is the justification for the same exemption in incomes of £400 and £600? Surely the Acting Treasurer **(Mr. Lyons)** will admit that some readjustment is necessary. {: .speaker-F4O} ##### Mr Lyons: -- If the taxpayers paid the same amount of taxation there would be something in the honorable member's argument. {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- I realize, of course, that since the Treasurer has the numbers behind him he may do as he pleases in this matter. We are informed that this new taxation will raise an additional £1,500,000. I submit, with the utmost confidence, that if the Ministry were really sincere in its desire to ease the burden on our taxpayers, it could reduce Commonwealth expenditure of £65,000,000 by £1,500,000 and so render this additional taxation unnecessary. I submit, further, that action in this direction would be in the best interests of the country. It would relieve individual taxpayers, and make easier the rehabilitation of industry and the reemployment in their several avocations of thousands of men who to-day are walking about the streets of our cities begging for work. Relief in taxation, as suggested, would mean a wider field of employment. Even if we regard the problem from the more sordid point of view of what is politic, I suggest that, while the Government may get away with increases in taxation through the customs, similar taxation imposed in a direct form will be resented. It has been truly said that it is comparatively easy to pluck a goose one feather at a time, because the bird does not pay particular heed to what is being done. So in the case of the taxpayer. It is comparatively easy to raise additional taxation through the customs a little at a time, because the process is almost imperceptible. But the case is quite different if a government makes a sudden and cruel demand of from £30 to £50 by way of direct taxation, from persons with limited incomes of, say, £300 and £400 a year. The resentment of these people will be long and bitter. I know of nothing that is more calculated to engender the most bitter feelings against this Government from among the worthiest of our people than this taxation measure. I know of nothing that will be more strenuously objected, to, or will cause greater antagonism among the middle classes, many thousands of whom may be ranked as Government supporters, than this vicious taxation scheme. If Ministers expect to get away with it, they are much more optimistic than I should be if I were a member of the Government. I therefore submit that, even on the sordid ground of political expediency, the Government would be wiser to. reduce expenditure until it hurts somebody, than to impose income and property taxation on the class pf persons that will be so vitally affected by this measure. Up to the present, the Government's retrenchment proposals have hurt nobody seriously. {: .speaker-KZO} ##### Mr Latham: -- Except employees in the Defence Department. {: .speaker-KFS} ##### Mr Gullett: -- And returned soldiers who have been discharged from the Postal Department. **Mr. ARCHDALE** PARKHILL.Unfortunately, a number of officers in the Defence Department - men who are not protected by powerful unions - and a percentage of returned soldiers who, for some reason, are anathema to the Ministry, have been drastically retrenched. This is about the extent of the Government's economy campaign; and I repeat that, having regard to the Public Service as a whole, it has hurt practically nobody. But it is seriously affecting the individual taxpayer. He is being cut to the very marrow by this taxation bill. If departmental economies were effected as I have suggested, they would be only temporary, and we should start on the rehabilitation of the nation much sooner than will now be possible. The situation will have to be faced in the end. I do the Acting Treasurer the justice of believing that if pressure had not been brought to bear upon him by his supporters he would have faced the situation manfully. Nevertheless, at present there is keen resentment among the people at the unfair incidence of the Government's taxation measures, as well as at the limited extent of its economy scheme. *[Quorum formed.]* {: #debate-23-s5 .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP .- This bill may be regarded as panic legislation. No one will forget the lesson in arithmetic which the Acting Treasurer **(Mr. Lyons)** gave honorable members when he moved the second reading. The honorable gentleman informed us that drastic action was necessary to obtain more income from property incomes. The Government may obtain an additional £1,500,000 from this- source, but the tax will do incalculable harm to the cormunity. In his financial statement, the honorable gentleman said that, in the new income tax proposals, the object aimed at would be to secure an increase from property taxation which, with the increases to be imposed by State Governments, would result in property bearing a fail1 share of the burden in the plan of budget re-adjustment. "What did the honorable gentleman mean by that? Honorable members on this side consider that the burden proposed to be placed on property incomes is grossly unfair. The implication is that property owners have been leniently treated La the past, and, apparently, the Minister is now determined to tax them severely. He said, in the course of his statement on the Government's financial proposals - >Income from property, broadly speaking, consists of interest, dividends and rents. The States themselves have no power to tax interest on Commonwealth loons, and therefore the Commonwealth is the only authority which can effectively tax income from property, including interest on Commonwealth loans. The Government is now inviting the public to subscribe as liberally as they can to the present conversion loan. The Acting Treasurer has sent telegrams of congratulation to all large bondholders who have agreed to convert their stock. Efforts have been made to induce various organizations to subscribe to the loan. I believe that Public Service organizations have been approached, and it has been suggested that large employers of labour should ask their employees to allow *£1* out of every £10 to be deducted from their salaries for so many weeks, in order that they may subscribe to the Commonwealth loan. Having done all this, and having freed money invested in the loan from- State taxation, .the Minister now pro* poses to place additional 'taxation upon the people. Investors, therefore, will not actually receive the 6 per cent, interest promised to them. Action of this kind very nearly approaches political juggling. The "Minister can hardly regard this as fair treatment of the taxpayers. {: .speaker-KIO} ##### Mr Hunter: -- It means that investors in the loan iget 5$ per cent, interest instead of 6 >per 'Gent. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- Probably so; the return will certainly be well under 6 per cent. Reference was made by the Acting Treasurer to dividends. At the present time many companies are hot paying dividends at all. A business man recently informed .me that the majority of the larger firms considered themselves lucky indeed if they were able to pay their way, dividends being out of the question. It is unfair that those who have invested their earnings in various- 'manufacturing and other companies, without which the wheels of industry cannot revolve, should be called upon to bear the additional taxation proposed under this bill. With the curtailment of loan expenditure, governments' will have to 'look chiefly to private enterprise in the future for employment for the people. Rent was mentioned 'by the Acting Treasurer as part of the .income from 'property. The honorable member for Warringah **(Mr. Parkhill)** spoke of the harsh effect of the bill on those who owned houses in metropolitan areas. The Commonwealth and various State Governments have given consideration to housing schemes at different times, and those who have been assisted under them will suffer under this measure. I am concerned more particularly, at the moment, about the position of the >men who have worked hard all their lives in the back country, and have turned patches of scrub into farms. Having left the backblocks and established homes, perhaps, at the seaside, the rent from their properties enables them to live quietly. Throughout the greater part of their lives they have paid (Commonwealth and State taxation of various kinds, and now it is proposed to tax them heavily with respect to the rents that .they derive from their farms. The proposed heavy taxation of such properties is most unfair. The States were promised at the conference with the Premiers that the Commonwealth would not encroach upon their field of taxation. Since the late war the Commonwealth has entered the field of income taxation, and during the life of the Bruce-Page Government every effort was made to evacuate that field. Year after year, reductions in income taxation were made by that Government, and the statement was frequently repeated by the right honorable member for Cowper **(Dr. Page),** both in this House and in the country, thatfhat Government desired to evacuate the field df income taxation. Its bona fi'des in that respect was shown by the various reductions made. {: .speaker-L1T} ##### Mr Yates: -- That was repudiation. The income tax was imposed to meet the cost of the late war. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- That Government reduced the dead-weight war debt by a substantial amount, and, so far as it was able, evacuated the field .of income taxation; but the present Government has repudiated its promise not to encroach on that field. The tax imposed on a pn> perty income of £300 in New South Wales is £2 ls. 5d., while under this- bill it will amount to £29 8s. 4d. I admit that the Minister has agreed to a reduction of the rate, which would bring that amount down to '£18 13s. lid., but the Commonwealth *rate* 'will still be nine times greater than that imposed in New South Wales. How can the Minister claim that such a tax is fair? The impost on an income of £500 from property held 'in New South Wales is £11 17s. 9d., and -under the hill, as proposed to be amended, it will he £51 15s. 2d., or four and a half times as much as in New South Wales. The property tax on. an income of £750 in that State amounts to £27 10s. 6d., as compared with the proposed tax by the Commonwealth .of £90 16s. 8d. The comparison that I have given shows -the grotesque character of the Government's proposal. On this income the highest State taxation is that of South Australia, which amounts to £48 4s. 9d. That of the other States is as follows : - Queensland, £47 16s.; Victoria, £39 Ils. 8d. ; New South Wales, £27 10s. '6d.; Tas- mania, £25 6s. 3d., and Western Australia, £13 12s. lid. It will thus be seen that the highest , State taxation, is only a little more than half of this proposed, tax, whereas the lowest is approximately one-seventh of it. The taxation imposed in Western Australia on an income of £500 is only £6 13s. 4d. That is the lowest in the States, the highest again being South Australia with £27 ls. 8d. This Government has the effrontery to propose to impose more than twice the taxation imposed in the highest of the States, and eight times that of the lowest. I have given the figures that relate to moderate incomes only. The Government itself must regard £750 as a moderate income, because a salary of only £25 less 'than that , sum is exempt from taxation under another measure which this House has recently discussed. The proposed rates are so absolutely absurd that whoever was responsible for suggesting them must have allowed his exuberance to overcome him for the time being; either that, or he could not have considered the taxation imposed in the States. It must not be forgotten, also, that the super tax of 10 per cent, that was brought down only a few months ago to apply to those persons who have an income of more than £500 per annum, is by this measure to be increased to 15 per cent. Had this Government followed: the example set by the last Government, and made an. effort to reduce taxation, this country's escape from its present financial embarrassment would, have been accelerated. There should be a lightening of the load, by the reduction of expenditure, not a bolstering, up of th& gross and crass inefficiency in administration that we have witnessed during the last, twelve months. The drift has been appalling, yet the only remedy suggested, by the Government is. to place a heavier burden on the people, to whom we . are looking- to improve Australia's position. If. the Acting Treasurer does not feel disposed to accept the amendment, of the right honorable member for Cowper, which I intend to, support; to; the uttermost, I. suggest that he- withdraw this measure, and introduce another, that, will be less harsh in its effect upon, the people. This proposal is neither fair nor sensible, and it: will have a crushing effect upon the people. Instead of being overloaded, governmental expenditure should be reduced wherever possible. The Government, however, lacking a policy, is merely drifting along. Whenever- the Acting Prime Minister **(Mr. Fenton)** is asked a difficult question, he replies that it involves a matter of policy; The Government has no- policy, unless it be to impose crushing burdens of taxation. If that can be called a policy, thank God I do not sit on the government benches at the present time. {: #debate-23-s6 .speaker-JUB} ##### Mr D CAMERON:
BRISBANE. QLD · NAT -- I rise to support the amendment of the right honorable member for Cowper **(Dr. Page).** I realize that, in the present unhappy financial and economic state of the country, it is extraordinarily difficult for either this or any other Government to balance its budget without the most definite reduction of its expenditure, and probably an added measure of taxation. I maintain, however, that there is no justification for increased taxation unless the most definite and determined effort has been made to bring about a reduction of administrative and governmental expenditure. All Governments, State and Federal, must face the present position in the way that ordinary business men are being compelled to face it. to-day. The Acting Treasurer **(Mr. Lyons),** in introducing his amending budget proposals, said - >The new income tax proposals relate principally to income from property. The object aimed at is an increase in property taxation, which, with increases, by the States, will result in property bearing, a fair burden in the plan of budget re-adjustment. > >Income from property, broadly speaking, consists- of interest, dividends, and rents. > >The States themselves have no power to tax interest on Commonwealth loans and, therefore, the Commonwealth is. the only authority which can effectively tax income from property, including interest on Commonwealth loans. Taxation of interest by itself is- impracticable, and would only defeat the- restoration of national credit, as it.might.be regarded as a breach of the loan contract; This has already been clearly demonstrated by the abrupt fall in market prices- of government, stocks in August and September arising from fears- of special taxation of interest. I draw particular attention to the following statement : - >All fixed income from property, including interest, is in a. relatively better position to-day than last year because of reduced commodity prices. In these circumstances, income from property may fairly be required to provide more taxation. 1 ; 1111 totally at a loss to understand the Acting Treasurer's contention contained in that paragraph. Surely we must all realize that many small incomes to-day are seriously affected by the diminution of dividends and rents. It has been pointed out during the course of this debate that many persons in the past have lived thriftily, so as to have some money invested in property to enable them in their old age to exist without having to appeal for a pension or any other assistance. It appears to me that they are the persons who will be particularly affected by this proposal. "We have to admit that, as originally brought down, the bill was altogether too drastic, and I am very glad that the Government realized that that was so. In a circular that it has issued it points out that - > >Since the new taxation proposals of the Government were announced on the 5th November in the financial proposals of the Treasurer, the Government has received representations from various quarters as to the effect upon taxpayers having small incomes derived exclusively from property, of the proposed reduction of the general exemption to £100 diminishing by fi. for each fi by which the net income exceeds £100, thereby disappearing when the net income reaches £200. > >The Government has considered those representations., and hag decided to exclude from the taxable field all persons whose total income (whether from property exclusively or partly from property and partly from personal exertion) does not exceed £200. I hope that when this measure is in committee the Acting Treasurer will allow himself to be persuaded to make even more generous provision in that direction ; because, undoubtedly, this taxation will have a most disastrous effect upon many people, including widows and others, who are least able to bear it. As I have already said, every avenue for the reduction of government expenditure should be explored before taxation is increased. Honorable members on this side have indicated very clearly 'during the last few weeks that they do not consider that the Government has made any definite or adequate attempt to bring about a real reduction of administrative or governmental expenditure. All honorable members are honest in their desire to solve the haunting problem of unemployment, because of the misery and suffering that it entails. An addition to the burden of taxation imposed upon those who are engaged in industry and commerce must surely have only the one effect of increasing unemployment. The honorable member for Macquarie **(Mr. Chifley)** is reported to have made the following statement at a meeting which he addressed not long ago in his own electorate : - >So far as industry is concerned, it can be crushed by taxation. He went on to say - >He thought we were reaching the limit, because we were crushing the things we ought to help. We can take it that that is a correct report of what the honorable member said, because, to my knowledge, he has not Contradicted it in any way. I entirely agree with his views on that point. Surely all must agree that taxation in Australia is getting close to, if it has not already reached the point, when it can no longer be productive: that the imposition of further taxation can but cripple industry and make it still more difficult to maintain employment. The Acting Prime Minister recently said that the aim of Parliament should be to relieve industry from burdens in order that employment might recover in a natural way. We must appreciate the difficult position that confronts this and practically every other government, and I feel that the taxpayers of the Commonwealth would not complain about increased taxation at the moment if they were satisfied that every possible economy was being exercised by the Government. I listened recently with particular interest to the Deputy Leader of the Opposition, and I agree with him that, if the Government shows real determination to do its utmost to reduce .administrative expenditure, we shall go a long w.ay towards overcoming existing difficulties. Already many of the State Governments have made a determined effort to bring about the reduction of administrative costs. The need for co-operation between all sections of the community, and united effort, is just as urgent to-day as it was during the years 191.4-1S.. Each must make his or her sacrifice, in accordance with his or her ability to bear the burden, if we are to surmount the present crisis, and cope with the dreadful problem of unemployment. . Criticism, to my mind, is always very easy, and very seldom helpful. I hold that the nation's position is far too serious for any indulgence in ordinary party political bickering. When delivering his budget speech on the 9th July last, the Prime Minister, outlining the Government's financial proposals for the year 1930-31, said that " the Government was faced with a financial depression without parallel in i lie 30 years' life of the Common wealth." Those who did not appreciate that fact then do so now. The honorable gentleman added that the loss in Australia of real income for the financial year which closed on the 30t.h June last, was estimated at between £50,000,000 and £70,000,000; that that was due in great measure, to an economic disturbance which was practically world-wide, which had seriously affected the prices of wool, wheat, metals, and other products constituting the major portion of Australia's exportable production. There is no doubt that our embarrassed position is duc to reasons both external and internal. Although external reasons are world-wide, and are probably beyond our control as a nation, it is the duty of every government to do all . that it possibly can to remove the internal causes of the trouble. The Prime Minister also referred to the cessation of the flow of loan money from overseas, and the drought conditions in some parts of the Commonwealth, which had their adverse effect by reducing the volume of our primary production. All these things, the right honorable gentleman maintained, had resulted in the curtailment of credit, reduced trade, increased unemployment, and deranged government finance. The Prime Minister stressed the Government's determination to balance the budget, and to take all measures possible to ensure the honouring of our obligations both at home and abroad. He gave an assurance that if it were found that the proposals then brought down were inadequate, further action would be at once taken. It is necessary to realize that the value of our exported goods has declined from £145,000,000 to £100,000,000 a year, perhaps to an even smaller amount. Australia has practically gone back ten years in her trade position, and the millions previously made available by overseas borrowing no longer are obtainable. That must necessarily cause an enormous decline in our national income, by reducing the amount available for taxation. It is estimated that for the present financial year the drop in our national income will reach the huge sum of £100,000,000. Again, government expenditure has increased greatly during the past ten years. In 1919 the expenditure of the Commonwealth Government amounted to £38,665,347, and State expenditure to £58,962,524, a total of £97,627,871. In 1929 the figures had increased to £72,306,8S8 for the Commonwealth and £120,925,565 for the States, or a total of £193,232,453, exclusive of expenditure on new works, &c. In that ten-year period our taxation increase to assist to maintain that expenditure was as follows: - The amounts were practically doubled in a decade, It is quite obvious that, with such tremendous reductions in income, the taxpayers cannot continue to pay taxes on. an increasing scale without bringing about further stagnation in industry and greatly increased unemployment. The one really effective remedy is a definite reduction of the cost of government expenditure on the part of both the Commonwealth and the States. During recent years public expenditure has advanced with great rapidity, and there has been a hig expenditure of loan moneys on unproductive work. I recently read the following most interesting report in the *Sydney Morning Herald* of the 21st May last : - > *A* recognition of economic truths is embodied in a report of a sub-committee of the British General Federation of Trade Unions, dealing with the effect of taxes upon prices. In view of the need for all available capital to be directed to the reconstruction of British industry, the comment in the report that excessive taxation has psychological consequences and weakens the will to save is particularly apt. The sub-committee reported, " The conclusion that present stocks of reproductive capital' are insufficient for national needs, and that taxation is too high,, appears inescapable; as. is also1 the further conclusion that all taxation, in varying, but certain degrees, raises the costs of production and selling prices, and by limiting the number of purchasers, increases unemployment, especially in those trades- which manufacture for export." As to the 'source from which expenditure on social services is derived, the report states that " it is foolish to expect that the social improvements for many millions can continuously be paid for by exactions from the wealth of a few thousands. However desirable it may be to secure fairer distributions of wealth, it is fatal to national prosperity to eat up that capital, which is necessary to finance present and future production./' The report continues - ' It proceeds to condemn those who would endeavour to mislead the workman into thinking that "all his insurances, pensions, housing, and education expenditures, can be extracted from capital without endangering his. industrial existence. . . . The fact is that these things have to be earned by the cotton operative, the wool worker, the engineer, the shipwright, and even the agricultural labourer. It is the industry of these and others similarly engaged which produces that wealth out of which the costs of social improvements are met." The concluding passage of the report emphasizes the importance of " the workers of Britain, realizing where the burden of all taxation ultimately falls, and to what extent it prevents the accumulation of that capital which is necessary to maintain and expand the industry by which they live." I hope, - though with no degree of confidence, that the Treasurer will accept the amendment moved by the right honorable member for Cowper **(Dr. Page).** Failing that, I hope that the honorable gentleman may be persuaded, 1 iq view of the position disclosed during this debate, to agree to some amendment which will at least lighten the burden that this measure will undoubtedly impose upon many people in this country. Otherwise, I fail to see how they will be able to bear it. {: #debate-23-s7 .speaker-KMU} ##### Mr MARKS:
Wentworth .- I desire briefly to address myself to the bill before the House, and to the amendment moved by the right honorable the Leader of the Country party. In view- of the disastrous effect that this measure will have in increasing unemployment, I am surprised that its discussion should be taking place in practically an empty and listless House. I should have thought that; every Minister and member would be in his place. It is: necessary for us to take things as they are, and to face the frightful crisis that confronts the nation. I am extremely pleased to reflect that, as a young man, I was active in inducing my brothers and sisters to invest many thousands of pounds in great city buildings, naturally for what profit we could get, but more especially with a view to beautifying our' great city of Sydney. I am, perhaps, one who, fortunately, has more than the average share of city and suburban- property. For the last two days I have been absent from my place in this chamber, in consultation in Sydney with managers, financial experts, and advisors, examining the position that confronts .us. This legislation affects me not only as a beneficiary, but also as a trustee of Australian estates and of money from Prance and other countries. The outlook is appalling. I am a rich man if judged by my holdings, but a poor man if judged by my income. In the light of this bill I cannot visualize the future with optimism. There are those who tell us to " keep our end up " and not to be pessimistic. But how can a man be optimistic when faced, with heavy charges for rates and other dues to governments and municipalities? These authorities are not satisfied with optimism; they want hard cash. Yesterday afternoon,' during the conference to which I have referred, a cheque for £1,300 for water and sewerage rates on one building in Sydney in which I am interested, was placed before me for my signature. In addition, that property has to pay the harbour bridge tax, the- federal unimproved land tax, and the municipal unimproved rates, to say nothing of the upkeep of the building itself. When these items have been deducted from the revenue from the building there is practically nothing left. Now, on top of all these other imposts, comes this *1* per cent, super tax on a rate of 15 per cent. In the past the interests with which I am associated have subscribed to Commonwealth loans. At the conference yesterday, we considered whether we could subscribe to the present loan, and finally decided that we could not subscribe Id. to it. We shall have to sell industrial stocks to the value of many thousands of pounds to meet this new taxation. I am only one of thousands of persons in Australia who are in the same position; we cannot pay taxes and subscribe to loans. I recognize 'that the position of the Government is one of extreme difficulty; the Acting Treasurer is confronted with an appalling task. But a bill of this nature will destroy things, lock, stock and barrel. From figures supplied by the Commonwealth Statistician I have made a comparison of governmental expenditure for the years 1928-29 and 1929-30. It is as under:- The revenue collected in 1929-30 was approximately £2,000,000 more than the receipts for 1928-29 ; the., disbursements for 1929-30 exceeded the amount for the previous year by over £1,000,000. The excess of expenditure over revenue for 1929-30 was 4s. 7d. per head of the population, notwithstanding that, in that year, the receipts from income taxation were more than £1,000,000 in excess of 'the amount received from that source in the previous year, and that the -additional revenue fr-om customs and excise was £70,000 more than that of '1928-29, with a similar increase in the revenue from the post office. In other words, notwithstanding an increase -of revenues from the sources mentioned, amounting to £2,400,000, we went -back in 1929-30 to the extent of 4s. 7d. per head of the population. More and more am I being forced to the conclusion that the remedy lies in decreased expenditure. Every £1 that we take from the people in taxes makes £1 less available for industry, and throws some one out of work. Again, let us take .the case of the interests to which I have referred. We have had to call our employees - liftmen, cleaners and others - together, and tell them that we cannot pay them award rates. For nineteen years we have not had an empty room - indeed, there has always been a long waiting list of prospective tenants - but now we have 50 or 60 rooms vacant. The result has been the dismissal of a number of cleaners. We have had to sell our industrial stock through the stock exchange on a bad market. In my speech on the financial statement I referred to a communication which all honorable members have received from a number of real estate agents in Sydney - firms which are concerned with property worth millions of pounds. In the city of Sydney alone, they control £20,000,000 of British money. Those real estate agents include such well-known films as Stanton and Son Limited, .Peach Brothers, the Australian Land and Agency 'Company, P. N. Slade and Company, Walker Brothers, J. A. Somerville and Company, R. T. Forsyth Limited, O'Brien Brothers, N. J. Buzacott and Company, D.. Ritchie and Company, Richardson and . Wrench, Raine and Horne, Horning and Company, Hardie and Gorman and suburban representatives. The President of the Real Estate Institute of New South Wales - with which ,the firms mentioned, are associated - in a letter to me refers, not .so much to the 15 per. cent, tax, although that is bad enough, .as to the super tax of *Hi* per cent. He writes - >I have been instructed by the Board of Management of the Real Estate Institute of New South Wales to communicate with YOU and to lodge a formal protest against the proposed additional property tax of 7i per cent. >now before the House for consideration. It is felt ;by the members of my institute, that while all sections of the- community have to- day to bear their share of taxation, the proposed further property tax is most unfair in its incidence, and , that it would press unduly upon a very large number of people. There are thousands of property-owners, both small and large, .whose incomes to-day have 'been reduced in some cases almost to the point of extinction, through the existing depression, which 'is .responsible -lor a .large number of houses becoming vacant. In addition to this, which is a direct source of loss of revenue and income, returns from their property have been materially affected for the following reasons : - > >The inability of tenants to pay rent. > >A large number of tenants leaving without paying, involving heavy loss to the owners. > >The necessity, from a humanitarian point of view, of letting tenants who are out of employment and consequently unable to pay any rent, romain in possession at possiblv a nominal rental, or no rent at lill. > >The excessive cost of repairs gene rally, which, it might be stated, has not been reduced in any way. (a) The continuing high municipal and water and sewerage rates. On every one of those points I am in absolute accord with him; the statements are all true. I have already given an instance of the high municipal and water and sewerage rates. In buildings of fourteen or fifteen stories, repairs are always being carried out - at the present time at the maximum cost for both wages and material. Such repairs will have to be cut down to the minimum, if they are effected at all. That means throwing more men out of work. It is true, as pointed out in the letter, that many landlords allow tenants to remain in their building at very greatly reduced rentals, or at no rentals at all. Rents in Sydney for shop and office chambers are down nearly 50 per cent, from what they were a short time ago. Possibly, the position is worse in Sydney than in the other capital cities. Trade is depressed, and consequently carpenters, plumbers, painters, and other artisans have. been thrown out of employment. The prospects for the future are not bright. This direct attack on property will scare investors from investing their money in buildings. When I read the Acting Treasurer's **(Mr. Lyons)** financial statement, I could not refrain from smiling, notwithstanding its serious effect on myself. I could imagine the honorable gentleman saying to himself, "Ah, here is another source of income - property. Look how property has gone up in recent years. We must have a go at it". *[Quorum formed/.']* The combined taxation imposed by Federal and State Parliaments reaches figures which can only be described as staggering. In the federal sphere, the taxation on income from personal exertion is 89.4d. in the £1; State taxation in New South Wales from personal exertion is 57d. in the £1, a total of 146.4d., or 12s. 3d. in the £1. The federal tax on property is 107 .4d. in the £1, which, with ;>7d. in the £1 imposed by the State, makes a total of 164.4d., or 13s. 9d. in the £1 from property. In the case of income from property, all but 6s. 3d. in the £1 is paid away in taxes. What will be left of the income from both sources when **Mr. Lang** helps himself to most of it I leave honorable members to imagine. What a bright outlook lies before us! Imagine how unemployment, must decrease, and industry prosper ! How optimistic we should be ! We know that the position is serious; but are we, in fact, facing the realities of the situation? Are we not rather drifting in the hope that something will turn' up? In supporting the amendment moved by the right honorable member for Cowper **(Dr. Page),** I make an urgent appeal to the Government to consider the interests of the people represented by the firms that I have mentioned. There are in the big cities and in the suburbs real estate firms which are handling millions of pounds worth of property. They are not complaining about the imposition of the 15 per cent, tax, but they do ask the Government for relief from the 7-J per cent, super tax. Their appeal to the Government is, " Give us a chance to breathe. Let us see if we can save something to put into the Commonwealth loan, instead of having nothing to put into anything, as is the case at present." I sincerely trust that the loan is going to be a succesSj but I have very grave doubts of it, because everybody I meet seems to be in the same position; everything he makes is being taken away in taxes. Business people are hoping that, before this bill is finally passed, something will be done to lighten their burdens, and the best way of doing that is to lessen this super tax and raise the exemption for the small property-holder. I have already pointed out that the cost of government, departments went up by over £1,000,000 for 1929-30 as compared with 1928-29. Despite the fact that the Government collected £1,000,000 in extra taxation, and £1,400,000 more by way of customs, excise and post office revenue, our expenditure was still £1,000,000 more than the revcuue. Why is the Government bludgeoning property-owners by imposing taxation which really amounts to confiscation? The amending clause as regards mortgages is worth nothing at all, as was pointed out by the right honorable member fo» Cowper **(Dr. Page).** A higher rate of interest will be charged on loans, and the average rate at present is anything from 7 per cent, to 8 per cent. {: .speaker-KWC} ##### Mr THORBY:
CALARE, NEW SOUTH WALES · CP -son. - Is it possible to get *u* loan now? {: .speaker-KMU} ##### Mr MARKS: -- It is very difficult. There are plenty of applicants for loans, and they would not mind paying as much as S per cent, for money, but money cannot be had. Some time ago I invested a large parcel of money here on behalf of some French interests. It was invested mainly in industrial real estate, and the returns from that investment now are just about sufficient to pay tax, plus the exchange. There will be little at all to send back. The Government should endeavour to encourage the investment of money from overseas, so as to increase employment for our people; but instead of doing that it is discouraging such investments in every way possible. My French friends would possibly not mind paying the 15 per cent, tax, but what will they say when they learn, that this extra burden of 7-i per cent, has been imposed? It is not fair. This heavy taxation, more than anything else, will tend to bring about a serious financial crash. {: #debate-23-s8 .speaker-KZR} ##### Mr WHITE:
Balaclava .- If ever a man was hoist by his own petard, the honorable member for Wentworth **(Mr. Marks)** has been. He, perhaps, more than any one else, was responsible for the return of the Labour party to power, and he and his friends are now suffering in consequence. He, better than most, knows the full incidence of this taxation. The proposal now before the House is merely another instance of the unfair, discriminatory class taxation for which this Government has been responsible. Yesterday we discussed the taxation of public servants, and I pointed out that many thousands of public servants drawing salaries of between £300 and £700 are escaping the special tax altogether. Now we are called upon to impose a tax directed at one of the most" reputable classes of the community. No one, I presume, will deny that thrift is commendable. The persons who will suffer as a result of this taxation are the hard-working citizens who have saved something, and invested it so that in their old age they may not be thrown upon the State for support. The modest competence for which they worked and denied themselves will be taken from them, and they will be forced into penury. Some may own a cottage or two, from which they are drawing rents, but the Government prefers that they should lean on the State rather than that they should provide for themselves. Recently, the Postal Department withdrew all stamp licences, and, when it was pointed out that the holders of these licences, many of them elderly women, would be deprived of their means of livelihood, the reply was that they could draw the old-age pension. My own opinion is that the State should not be burdened with the entire support of a great army of pensioners. Persons who can do so should be compelled to contribute to the supporr of their aged relatives as was the case in the early days of the payment of the oldage pension. The Government appears to have a more tender regard for strikers who, out of a spurious sense of loyalty, leave their employment with a total disregard for what will happen to their women and children, than for hardworking, thifty sections of the community. It is not so long ago that the coal-miners went on strike and stayed out for over a year. {: .speaker-KE4} ##### Mr Keane: -- That was not a strike, it was a lockout. {: .speaker-KZR} ##### Mr WHITE: -- The honorable member may call it a lockout if he likes, but the fact is that the men refused to work when work ,was available for them at good wages. Now there is no work for them to do. Whether it be agitators and communists, or the more reputable officers of the Trades Hall, who later graduate as members of Parliament, their interests are all carefully guarded by this Government, but the thrifty and hard working people are not so articulate, and for them the Government has no consideration whatever. It is for us who stand for decent citizenship to speak for them. I hope, at least, that some honorable members on the other side of the House will demand an amendment of this measure, so that it will not press so hardly upon the small property-owners. It is, evidently, in the Government's mind, that large numbers of persons are drawing interest, whether directly on money 'lent, or in the form of dividends on shares, and it means to have some of that money. Owing to the inflexibility of the Arbitration Court, it is difficult to effect reductions of wages, but if it is true that wages are continually dropping, it is only fair, of course, that a tax should be levied on unearned increments. Still, this should be done in a reasonable way, and should not amount almost to confiscation, as this does. These adjustments, however, tend to rectify themselves automatically. Interest rates are based on trade; when trade is bad, interest is high, and when trade is good, interest rates are low, because there is plenty of money available for investment. In the final analysis, of course, the personal element becomes of great importance. No doubt, some honorable members opposite who have been many years in this House, have banking accounts, and, if approached for a loan, would consider what rate of interest they wanted. They are not philanthropists, and the rate of interest they would charge would be determined, in some measure, by the character and financial standing of the prospective borrower. Banks, and other lending institutions, also consider the bona fides of the applicant for a loan. If he is worth a loan, he will get it, but if he is not,, the loan will, be refused, no matter what rate of interest he offers. *Sitting suspended from 6.15 to 8 p.m.* {: .speaker-KZR} ##### Mr WHITE: **- Mr. Deputy** Speaker[Quorum *formed.]--* Before the dinner adjournment I had pointed out that this bill, like the Income Tax Salaries Assessment Bill, with which we dealt yesterday; was born of class consciousness. This Government would sooner oppress the aged, those who are dependent upon the income earned from property bought by the careful savings of a lifetime^ and children dependent upon income from property, than interfere with a sheltered class of civil servants. For this reason, this heavy and ruthless taxation has been proposed. There are between 4,000 and 5,000 federal public servants who draw salaries ranging from £300 to £700 who will be entirely free from the additional taxation provided for in the bill with which we dealt yesterday, and in this bill unless they are property owners. I consider that if a percentage tax were levied upon the salaries of these people - it could be small on the lower salaries - it would be quite unnecessary to pass this bill. I realize, of course, that the Government feels that there is a class of people who live on interest and dividends and that as much money as possible must be got out of these people who are supposed to be receiving something for nothing. But it must be remembered that capital has .already been heavily hit by the depression. Numerous bankruptcies have occurred, and businesses are being wound up every day throughout Australia. Work is being rationed and unemployment has increased from 12 per cent, to 20 per cent, since this Government came into power. The whole community is suffering from the general depression. I do not attribute all these troubles to the fact that a Labour Government is in office,, but this Government has certainly done a great deal of harm in the twelve months in which it has been administering, the affairs of the country. The depression is world wide; but bad government can undoubtedly make things worse. If this proposal of the Government i» agreed to, it will dry up at their source' the funds from which all taxation is paid. The imposition of this taxation will mean that the number of old-age pensioners will greatly increase. {: .speaker-JWT} ##### Mr Francis: -- There was an increase of 18,000 pensioners last year. {: .speaker-KZR} ##### Mr WHITE: -- That is so. If this bill is passed, small property owners will be hit so heavily that they will feel that they cannot afford to hold their property. Many aged and infirm people are too proud to apply for the pension, and maintain themselves instead, by a very small income from the little property they possess, but a measure like this will make it impossible for them to continue to do so. I feel' that this bill will not have the result that the Government anticipates. The following instances will show how severely small property owners' will be hit by this taxation. Under existing conditions a person with an income of £350 from property would have to pay £1 in income taxation, hut under the provisions of this bill, he would have to pay £29 8s. 4d. Comparative figures for a person with an income from property of £400 are £2 4s. 8d. and £40 6s. 3d., or a twentyfold increase. A person with a property income of £450 would have to pay £45 19s. 5d. against £3 13s. lid. to-day, and a person with an income of £500 would have to pay £51 15s. 2d. against £5 17s. 8d. to-day. {: .speaker-KE4} ##### Mr Keane: -- From where did the honorable member obtain those figures? {: .speaker-KZR} ##### Mr WHITE: -- They are given in a pamphlet which I am quite prepared to show the honorable member. They have been compiled from an official return issued by the Taxation Department. The complete tables show the effect of the original proposal of the Government and the effect of its amended proposal, and indicate clearly how excessive the taxation is upon small incomes. It would do honorable members good to study the class of person who will be hardest hit by this bill. I know that honorable members opposite profess to stand for the working class ; they shout from the platform about their desire to protect the proletariat. But I have no doubt that many of them own some property. I am not looking particularly at the honorable member for Corio **(Mr. Lewis).** He is a property owner in only a small way; there are many larger property owners than he. The people who will be hit by this taxation will also have to pay additional State income tax, taxes for the relief of unemployment, and municipal and other local government imposts. The unfortunate people who live in New South Wales do not know the extent to which the new and rabid Premier of that State will inflict taxation upon them. It appears that they will have very little income left with which to buy the bare necessaries of life. I propose to quote an extract from a letter which has been sent to me by the Real Estate Association of Victoria. {: .speaker-L1C} ##### Mr Lewis: -- We all received a copy of that letter. {: .speaker-KZR} ##### Mr WHITE: -- I hope that the honorable member will study it in order to see how this taxation will affect some very worthy people. The best people in the community are not those who are most articulate - those who cause and take part in strikes, and who head industrial insurrections. Australia is suffering to-day from a top-heavy industrial system. We often say that Australia is overgoverned. I agree with that statement. But we are also over-governed industrially by a very large army of union secretaries and officials. It is only necessary to think of the officials of the Australasian Council of Trade Unions, the Australian Labour Council, and other organizations in which honorable members opposite are interested. {: .speaker-L1C} ##### Mr Lewis: -- The Australasian Council of Trade Unions does not pay any salaries; its officers act in an honorary capacity. {: .speaker-KZR} ##### Mr WHITE: -- All these organizations are a tax upon industry. Do we know of any one who is deeply interested in these bodies - and I include honorable members opposite - who has done anything except to apply obstructive tactics to industry? I know that these persons sit in conference with employers, and some use their ability in trying to smooth over the difficulties that arise, and in doing their best for the members of their unions; but what have been the net results? There is no real co-operation between capital and labour. The net result of the top-heavy industrial system which has grown up around our Arbitration Court's system - a system which is absolutely inflexible and incapable of dealing with our rapidly changing economic situation - is' that our national income has dropped by something like £150,000,000, taking into consideration both internal and external income. The Arbitration Court cannot deal with these matters effectively. Only to-day we were informed that the Government had appointed a royal commission to inquire into the basic wage. This commission will give problems to the statisticians to keep them busy for a year or two, and so stave off the evil hour. But wages will have to come down. Economic laws are inexorable, and not all" the puny effort of the Labour unions will be able to keep wages from going up or down according to whether times are good or bad, or whether the country is prosperous or otherwise. The letter from the Victorian Real Estate Association states *inter alia -* >It is felt by the members of my association tliat while all sections of the community have to-day to bear their share of taxation, the proposed further property tax is most unfair in its incidence, and that it would press unduly upon si very large number of people. > >There ure thousands of property-owners, both small and large, whose incomes to-day liiivc been reduced, in some cases, almost to thu point of extinction, through the existing depression, which is responsible' for a large number of houses becoming vacant. {: .speaker-F4O} ##### Mr LYONS:
WILMOT, TASMANIA · ALP; UAP from 1931 -v-The landlords will not have to pay this taxation if their houses are empty. {: .speaker-KZR} ##### Mr WHITE: -- That is true, but whether their houses are empty or not, their rates and taxes will go on. A slight rate concession is, of course, made when properties are vacant for some time; but, speaking generally, water, sewerage, and municipal rates and repairs go on, and the income of the landlord becomes less and less. We cannot shut our eyes to the fact that it is probable that the imposition of additional taxation of this kind will force more and more small property-owners to apply for the old-age pension. The Real Estate Association refers to the inability of many tenants to pay rent. The Victorian Labour Government is at present considering the introduction of a Rent Moratorium Bill. Although that may be very necessary in some instances, honorable members must recognize that there are unscrupulous persons who will repudiate anything. I am not referring now to the honorable members opposite who want to repudiate our national debts. That is wholesale repudiation. I am referring to retail repudiation! sts who repudiate their private debts, and will not pay their rents and other charges of the kind. As a matter of fact, certain people, in anticipation of the introduction of a Rents Moratorium Bill, are already rofusinp to pay their rent. I have been approached by many poor people with reanests that I should intercede with their landlords to prevent them from being evicted. It is only right, however, that I should say that many instances have come under my notice in which landlords have been most generous. {: .speaker-L1C} ##### Mr Lewis: -- That is quite true. {: .speaker-KZR} ##### Mr WHITE: -- In some cases poor people have been unable to pay rent for months and months, but they have been allowed to remain *in* possession of their houses. The State Governments, too, are doing their best tofeed the people who are without work. No one in Australia should bc allowed to starve. There is no need foi- that. The measures which have been taken are, I believe, adequate to provide rations for the people to keep them alive until they can get work. Where will the imposition of taxation, such as that proposed in this bill, lead us? If, instead of bringing down legislation of this kind, the Government would cut down its own expenditure, it would be doing something worth while. After all, is not the business of the Government only a big business? The problem with which this Parliament is faced, is how to makes ends meet. If the revenue has dropped and cannot be increased, the Government must cut down its overhead costs .and reduce its expenditure. The previous speaker pointed out that £60,000 more was being spent on the Prime Minister's Department this year than was spent on it last year. {: .speaker-L1C} ##### Mr Lewis: -- The comparison was between last year and the previous year. " **Mr. WHITE.-** I am sorry if I misunderstood the honorable member. The fact remains, however, that expenditure is not being diminished. The problem with which we are faced is not being tackled ici a proper way. I realize that honorable members opposite have scruples against tackling men's wages. They feel that it would be against their principles and opposed to their ideals of industrial reform. But would it not be kinder if only a certain amount of money is available for wages to ask the men who are in employment to accept a little less ici order that the men who are now out of work may be given some. It is better that all the people should have some work than that some of them should have none. {: .speaker-L1C} ##### Mr Lewis: -- That policy does not work out in practice. {: .speaker-KZR} ##### Mr WHITE: -- As an employer of labour I say quite definitely that if the Arbitration Court would reduce wages by, say, 20 per cent., I could employ more men, and so could every other employer of labour. Mi". Lewis. - To whom would the honorable member sell his locks, lawnmowers, and other manufactures? {: .speaker-KZR} ##### Mr WHITE: -- The houorable member does not seem to realize that if more veople are put to work, trade will be rehabilitated. When men get wages, they can spend them, and this must stimulate industry. {: .speaker-009FQ} ##### Mr Curtin: -- Even if more men were employed in the way the honorable member suggests, the wage fund would not be increased. {: .speaker-KZR} ##### Mr WHITE: -- But if the wages were earned by the breadwinners of more families more money would go into the grocer's shop and the butcher's shop, mid trade generally. Houorable members opposite either ciiimot, or will not, see this. I sometimes feel that they see it all right, but will not admit it. It must be perfectly obvious to every thoughtful person that when trade is booming employment is Available and the country is prosperous. What is wrong with Australia at present? It is that, the splendid spirit of her pioneers, who believed in individualism, enterprise and hard work, is being^ subordinated to the flabby and un-British idea of getting something for' nothing. Those who expect something for nothing spend a good deal of their time leaning against posts or holding stopwork meetings, and say that when they get into Parliament they will see that the workers receive higher wages. That is the sort of thing that is pulling Australia down until it is becoming like a degenerate South American republic. The Government should endeavour to restore confidence in the minds of the people, rehabilitate trade, devote its attention to the absorption of the unemployed, and check the foolish reasoning of honorable members opposite. The honorable member for Flinders **(Mr. Holloway),** who appeared to be earnest - I do not know that he lias not said the same thing a dozen times before - said there is a great world conspiracy to decrease the value of money and force people out of employment. I suppose there are some who still believe this fantastic theory of the honorable member for Flinders, but if there are I am surprised they do not pos sess more common sense. We have a definite problem before us. As we have Jost a great portion of our national income we must accommodate govex'nmental and private expenditure to circumstances. Honorable members who have reluctantly assisted in reducing their parliamentary allowance by £100 a year have probably discussed their financial matters at home and decided how to live on a reduced income. They should realize that what is necessary in private life is also essential in our national existence. Let me remind honorable members opposite that while 'these industrial Neros go on fiddling while Australia burns, we are getting a most pathetic form of government. It would be ludicrous, were it not serious, that caucus should have squabbled for days, and that the left wing should have submitted such ridiculous propositions. Have honorable members opposite realized the effect which inflation would have on old-uge pensions? It would result in a marked reduction in the purchasing power of the present pension of £1 a week and in the value of the workers' wages to such an extent that they would have to keep approaching the Arbitration Court for higher rates. Claims would be made even more ridiculous than the present plaint of the Clerks Union, who are seeking a 35-hour week, morning and afternoon tea, anc! cushions to sit on. Yet the Minister for Repatriation and Health **(Mr. Anstey),** who has some advanced, or alleged advanced, ideas, contends that our financial and economic problems can be solved by printing additional notes. I noticed in the Melbourne press that some one suggested that that gentleman should open an emporium in his electorate and supply goods to the unemployed on promissory notes, and thereby put the principles in which he believes to the test. If he did so he would soon see the result of the indiscriminate use of the printing press. The proposed increased taxation on property and on dividends is quite wrong; it will riot have the results the Government anticipates. The anticipated revenue of millions of pounds from the sales tax has not been realized, and increased postage rates have also been a failure. It is wrong to think that the Commonwealth is a kind of widow's cruse which will continue to pour out wealth, despite the constant piling of taxation upon it. Sources of taxation are drying up and unless the Government gets down to real economics and endeavours to balance its budget, there will be a serious national disaster in the very near future. If the Government will get away from these nostrums, this squabbling in caucus, operate on sound business lines, and be a real government, we shall begin the march back to prosperity. I support the amendment moved by 'the right honorable member for Cowper **(Dr. Page).** I earnestly appeal to the Government to withdraw the bill and to reconsider its taxation proposals, so that they will be reasonable in their incidence and fair to the Australian people. {: #debate-23-s9 .speaker-KYI} ##### Mr PROWSE:
Forrest .- Heavy taxation results in decreased production and additional unemployment. It is a great mistake to bring down proposals involving additional taxation when the incomes of the people have been considerably reduced in consequence of the general financial depression. Parliament should recognize that capital can be more, profitably employed by individuals than by the Government. The more money people have at their disposal, the greater will be their capacity to find work for those who are now unemployed. I noticed some chuckling and giggling amongst honorable members opposite when this measure was introduced and one honorable member remarked "It will tickle you up a bit." That is not the spirit in which to discuss important subjects. Australia, because of its insular position, is now almost powerless to compete in the markets of the world, and its people are taxed more heavily than those in any other country. The standard of living, which we have enjoyed cannot be retained, particularly when we have borrowed millions of pounds from a country in which people are living under a much lower standard than we are. It would be vulgar to do so. For some years we have been flashing borrowed money, but it is now our duty to live within our means. The action of the Government in endeavouring to extract more and more from an already overtaxed people, when every endeavour should be made to develop the country and increase production, is to be regretted. One way in which to relieve the burden which has been placed upon the people would be to dissolve this Parliament for 25 years. The proposals embodied in this measure are contrary to the decisions reached at the financial conference held at Melbourne which was attended by **Sir Otto** Niemeyer and Commonwealth and State Ministers. At that gathering the Acting Prime Minister **(Mr. Fenton)** said - >That the Federal Cabinet had agreed to the appointment of a sub-committee of the conference to advise, but not to dictate, in regard to policy. He further stated that the Federal Cabinet had also agreed that the budget should be balanced this year, that the position would be watched carefully, and that steps would be taken at the earliest moment necessary to adjust the position, firstly, by a reduction in expenditure, and secondly, any adjustment of taxation required to be made so as not to encroach on the State field of taxation. The Government is now appealing to the people's patriotism to subscribe to the conversion loan, but how will that be possible when many of those, who usually invest in Government loans are being so heavily taxed? Many persons, who, through leading a thrifty life have been able to save sufficient to prevent them being a tax on the State by drawing old-age pensions, will now be pounced upon to provide money for the Government to spend in its own uneconomic way. There are to be no inducements for those with capital to invest it in Australia. The present taxation provides for a graduated scale, but it is now proposed to tax income from property, as distinct from personal exertion, to such an extent that it would appear to be a crime to receive income from property. Parliament has been sitting nearly the whole of the year, and, although it has been called together on this occasion to deal with special legislation, we cannot get on with even the ordinary business of the country because of the factions and divisions there are among honorable members supporting the Government. In order that the result of a State election might put some backbone into some Government supporters, the interests of the Commonwealth had to be deferred. In fact, they have been deferred so long that, at the request and on the motion of the Government whip, one very meagre saving proposed in the bill to reduce salaries has had to be postponed for a month. Under the pretence of preventing an injustice being done to public servants, the honorable member saved £12 for himself. The Government has dilly-dallied and delayed so long that the revenue will be the loser to the extent of a month's taxation on salaries. Honorable members lay grasping hands on every penny they can get for themselves, but because they have the political power they do not. hesitate to impose taxation upon the hard-working people of this country, whose earnings, through the depression, have diminished by anything from 50 to 75 per cent. It is a retrograde step which will only serve to increase unemployment, and I hope that the Government will accept the amendment moved by the Leader of the Country party. {: #debate-23-s10 .speaker-KFS} ##### Mr GULLETT:
Henty .- This bill is another deliberate blow at the credit of Australia by the .majority of honorable members opposite, and another first class contribution on their part to unemployment. It makes still clearer their obvious determination to pursue a course leading to the inflation of the note issue rather than to practise sound economy. Bead in conjunction with yesterday's bill and the financial statement, the measure before us to-night shows plainly that the Government has abandoned the old conventional lines of balancing budgets. Despite the adjustments proposed, we shall still have a deficit this year of anything between £4,000,000 and £8,000,000, but this year's deficit will be nothing compared with that with which we are certain to finish up next year. It was originally estimated that the revenue from income taxation this year would be £10,100,000 compared with the actual receipts last year, which were something like £11,120,000-, but as it became evident that the taxable income of the people of Australia, on the existing rates of tax, would not be sufficient to yield the estimate of £10,100,000 we have had placed before us a supplementary provision to raise another £1,500,000, or, with the exemption indicated by the Acting Treasurer, a little over £1,000,000. Personally, I think, we shall be lucky if we get £S,000,000 or £9,000,000 from income taxation this year, and still luckier if next year we get £5,000,000. If the Government will not face economies with a view to squaring the budget this year, I am justified in asking what it proposes to do next year. "What have honorable members opposite in their minds in respect of next year? {: .speaker-KZO} ##### Mr Latham: -- Nothing. {: .speaker-KFS} ##### Mr GULLETT: -- Tes. They will issue paper money: This afternoon I asked the Acting Prime Minister if he would frankly indicate whether the Government was or was not in favour of an inflation of the currency. {: .speaker-009FQ} ##### Mr Curtin: -- What did the honorable member mean by that? {: .speaker-KFS} ##### Mr GULLETT: -- The printing of additional notes without adequate security behind them. Is the honorable member for Fremantle in favour of doing that? {: .speaker-009FQ} ##### Mr Curtin: -- No; no one is in favour of that. {: .speaker-KFS} ##### Mr GULLETT: -- Is the honorable member in favour of increasing the note issue? {: .speaker-009FQ} ##### Mr Curtin: -- I favour adopting what **Mr. Wickens** has recommended. {: .speaker-KFS} ##### Mr GULLETT: -- In regard to **Mr. Wickens,** the Commonwealth Statistician, who is claimed as the inflationists' latest recruit, I deeply regret that a public servant of his distinction should so far forget the best traditions of the Public Service as to take a prominent part in a most important political controversy. I trust that it is a lapse which will not become general with the public servants of this country. {: .speaker-JPV} ##### Mr Blakeley: -- What about Professor Copland? {: .speaker-KFS} ##### Mr GULLETT: -- He is not in the Public Service. {: .speaker-JPV} ##### Mr Blakeley: -- He occupies the Chair of Commerce in the University of Melbourne. {: .speaker-KFS} ##### Mr GULLETT: -- A professor of economics in a university is in a different position from that of a public servant. It is exceedingly regrettable and unfortunate that **Mr. Wickens** should have acted as he did, but going headlong as they are for the debasement of the currency, a course utterly lacking in political principle, I can understand the rejoicing of honorable members opposite at getting something in the nature of support from him; not that his opinion on the matter is entitled to the faintest respect. I can understand the joy they feel at having recruited **Mr. Wickens** to their side. If honorable members opposite were candid they would tell us plainly what i hoy intend to do. We are facing a deficit this year of anything up to £3,000,000. and next year an appalling amount; because this year's taxation is based on last year's' incomes, and next year's taxation will be based on this year's declining incomes. There will be little or no income tax revenue from the wheatgrowers or from people engaged on the hoo! side of the pastoral industry, and. as we all know, our secondary industries and business generally will reflect, the failure of the broad countryside. I am very much afraid that next year we shall he faced with a deficit of something like ti 6,000,000. We should have some statement from the Government on the point, and in the absence of any indication that it proposes to follow a policy of sound finance, we are justified in assuming that the use of the printing press will be its only means of bridging next year's trap. Honorable members opposite do not deny it. They know that my statement is true. Of course, there must be preliminary stages before they can come to the straight-out use of the printing press to meet payments for wages and interest. For instance, there is to be some high comedy on Monday next. All the members of the Cabinet in Australia, accompanied, no doubt, by ten or twelvepantechnicons, are to move down to the office of the Commonwealth Bank and interview the Commonwealth Bank Board upon the prospective or possible release of £20,000,000. As honorable members opposite know, the bank has not at the present time £20,000,000 of credit. They have already tried the banks for an extension of credit, and know that, owing to the overdrafts already drawn by various governments in Australia, the Commonwealth Bank and the associated banks have advanced up to the fullest extent of their resources. The Ministers are going down to Sydney in strength, no doubt with the Minister for Health **(Mr.** Anstey) on the box seat of the first pantechnicon and the Assistant Minister **(Mr. Beasley)** on the little dicky-seat at the rear. But it is all bluff to prepare the way for an inflation campaign that is to be forced upon this country. They know very well that they will get a straight-out refusal from the Commonwealth Bank. They know that the board of directors, being a true bankers' board, will follow true banking principles; the directors of the bank are not members of a wretched political party out to serve a narrow political end. Yet, in face of this knowledge and in face of a certain deficit of between £5,000,000 and £S,000,000 this year, Ministers have announced that it is their intention to pay away a great sum as a bounty on the production of gold. Fancy paying £5 hh ounce for gold that is worth only £4 an ounce. {: .speaker-KZO} ##### Mr Latham: -- And they do not know how they will be able to get the money. {: .speaker-KFS} ##### Mr GULLETT: -- Of course they do not. I understand that they have also agreed to carry out one or two big public works, although they have no money with which to undertake them. They want the bank to refuse their request so that they can say to the gold-mining industry, " We would do this for you if we could get a release of credit, but these great banks will .not give us the money." Or they want to say, " We should have carried out this railway or public work if the banks would have given us the money." It is all preparation for an election - for what will prove to be the shabbiest and dirtiest election Ave have ever had in this country. This manoeuvring is the inevitable alternative to a sound policy of economy. Before the Government can put into circulation even the valueless paper' money it propases to print, from six to nine months must elapse. The Labour party was returned to office on a promise to provide work for all. Are the more moderate and sympathetic of honorable members opposite willing that unemployment shall continue in its present proportions for another six months when there is money available within a month for the relief of unemployment, if the Government will adopt the old, honorable, and sensible course? I have said before, and it cannot be repeated too often, that if the Government would, instead of introducing a rubbishy bill like that before the House, embark on measures of true economy which would impose no hardship on any one, it could, within a fortnight, get from £5,000,000 'to £10,000,000 for sound public works, which would relieve unemployment. {: .speaker-L1C} ##### Mr Lewis: -- Why did not the honorable member's Government get that money? {: .speaker-KFS} ##### Mr GULLETT: -- There was not the necessity in our time. When the present Government assumed office unemployment was about 12 per cent. The Commonwealth Statistician accepts 5 per cent, as normal; therefore, there was at that time 7 per cent, of real, abnormal unemployment. To-day, the total unemployment is 20.5 per cent., so that there is 15' per cent., *or* more than double the real unemployment that existed at the time of the general election. {: .speaker-009FQ} ##### Mr Curtin: -- Mainly due to the decline in the prices of wheat and wool. {: .speaker-KFS} ##### Mr GULLETT: -- Some of it is due to that, but more to the shrinkage of the credit of this country caused by the extreme measures and proposals of honorable members opposite. The number of unemployed in Australia to-day has been estimated to be 400,000, and this House is doing nothing to find work for them. Certainly £.1,000,000 was voted for that purpose several month's ago; but somehow it has gone astray. Do ministerial supporters propose to continue the unemployed in their present terrible condition for several months pending the launching of some meretricious inflation scheme? Will they pass by easy and sure money that they could get this side of Christmas if they would adjust the budget? {: .speaker-KYV} ##### Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- Where is that money? {: .speaker-KFS} ##### Mr GULLETT: -- The credit of the Commonwealth could be restored to-night by a few hours of sound work on the budget, which would demonstrate to the people inside and outside Australia that the Government intends to live within its income. Honorable members are deliberately shutting their eyes to that sound and obvious course, because it involves economy, which they are for bidden by their controllers outside to exercise. If **Mr. Lang** had not won the New South Wales elections, the financial statement delivered by the Acting Treasurer would have been very different. I know that the statement he made was not the one originally drafted. Will honorable members opposite deny that? {: .speaker-L1C} ##### Mr Lewis: -- We do. {: .speaker-KFS} ##### Mr GULLETT: -- By straightening up the budget the Government could obtain, without difficulty, £5,000,000 to £10,000,000 for public works, and thus do something tangible and immediate for the unfortunate unemployed whom they profess to represent. But they are so wedded to that other wretched course of repudiation, which they believe will give relief, that they are blind to the sufferings of hundreds of thousands of their own people. Other money is easily obtainable. The supporters of the Government have adopted their present policy largely because they believe that schemes of economy would press too heavily upon the workers, and that Commonwealth finances should obtain some relief in respect of interest payments. A big relief 'on the interest bill is possible. If the budget were properly adjusted, we could immediately fund the £40,000,000 of debts due in London. Of that sum, £23,000.000 is due to the London branches of the Australian banks, and the money available for finance in Australia is decreased to that extent.. If the £40,000,000 of debt were funded, the the Australian banks could immediately release £23,000,000. {: .speaker-L1C} ##### Mr Lewis: -- Who would lend the money ? {: .speaker-KFS} ##### Mr GULLETT: -- The British people. {: .speaker-L1C} ##### Mr Lewis: -- They would not do anything for even the last Government. {: .speaker-KFS} ##### Mr GULLETT: -- If the Government will square the ledger, and then frankly ask the British people to fund from £5,000,000 to £10,000,000 of interest into loan for five years, they will do it. If honorable members opposite think that my advice is wrong, let them nut it to the test. I invite them to move an amendment to this bill which would show a disposition to put the Commonwealth into a position to obtain loan money and interest relief. An individual whose credit has almost disappeared, and who yet continues on a spendthrift course, cannot obtain money from any source, but if be resolutely determines to live within his income^ and square his accounts, he can get further backing. So can the Commonwealth. I do not know what is the attitude of the authors of the financial statement, but the majority of members sitting behind the Ministry are clearly rushing headlong into the foolish and hazardous course of printing notes. Their attitude is inexplicable and indefensible. The present note issue is only £45,000,000. If it be increased by nearly 50 per cent., what good can be done with £20,000,000? More than haK of it will be required to satisfy next year's deficit, leaving less than £10,000,000 for all other purposes, j Inevitably, the printing of £20,000,000 worth of notes will be only a beginning. Before the Government knows where it is, it will want another £20,000,000 or even . £100,000,000 worth of notes. Within three months after that step has been taken, the £1 note of to-day will be worth 15s.; within six months, 10s.; and within a year, less than 5s. The Minister for Health **(Mr. Anstey)** is very keen on this policy. I understand that he is part-owner of a very rich gold mine in New Guinea. If that is true, I rejoice in his good fortune. I ask him whether, if the note issue is inflated, he will enter into a contract on behalf of his company to sell its gold for Australian notes at their face value for the next ten years? {: .speaker-JLY} ##### Mr Anstey: -- Certainly. {: .speaker-KFS} ##### Mr GULLETT: -- Will other ministerial members contract to accept, for the next ten years, their allowance of £1,000 a year in notes at their present face value? {: .speaker-L1C} ##### Mr Lewis: -- Yes. {: .speaker-KFS} ##### Mr GULLETT: -- They surely know whither this course of inflation will lead. Certain interests will be artificially stimulated for a few weeks. Some honorable members speak of a "safely controlled " increase of the note issue, but those who are readers and thinkers know that there can be no such thing when a nation's credit has become shaken and suspect. Such an expedient has always led to- disaster and chaos, and has caused ruin to the workers, especially those on fixed award wages, because no, arbitration court ever created or dreamed of can keep pace with the depreciation of the currency after it has commenced to collapse. In Europe, during the period of inflation,- wages had to be- adjusted from day to day, and almost from hour to hour. Men went to work on Monday morning at a given wage, and by Tuesday morning had spent the whole of their week's wages, so rapidly had the value of money depreciated. Yet honorable members solemnly regard this policy as a solution of our financial and economic problems. They talk disrespectfully anc harshly of those who have loaned money to this country to enable us to build our railways and to bring this nation into being. If it were not for overseas money in this country most of us would not be here, because our parents would have had no opportunity to migrate to Australia. Honorable members supporting the Government may, in prosecuting their war upon capitalism, think that it would be a good thing to pay our interest commitments in depreciated currency; but would the workers of this country think it a good thing to be paid La depreciated currency? Honorable members cannot have it both ways. They cannot pay bondholders with depreciated paper without ruining and wrecking the workers of this country. This bill, like the measure that was before us last night, like the whole financial policy of the Government, is, as far as adjusting this year's budget is concerned, a wretched sham. {: #debate-23-s11 .speaker-K8G} ##### Mr CUSACK:
Monaro · Eden -- This bill meets with my approval. The only suggestion that I wish to make is that the exemption in respect of incomes from property should vanish, not at £400 as is proposed, but at £800. If that were done the tax would fall more equitably upon those who are living on the income from property that they have acquired after many privations and struggles during life. The disappearance of the exemption at £400 appears to me rather too drastic! Honorable members opposite talk of balancing the budget, that hackneyed term that, because we have heard it so often, has become nauseous to us. What did our predecessors do to balance budgets? Is it worse to have an unbalanced budget than to have an overdraft of £36,000,000 in London? The previous Government balanced its budgets by obtaining overdrafts. That could by no means be called sound finance, because overdrafts cannot balance budgets. The balancing of budgets with borrowed money was the policy of the previous Government, the supporters of which now constitute the Opposition. In doing that it did this country a great injury at a time when we were receiving sufficient revenue to enable the budget to be balanced. The people were so sorry that such a poor type of men were' governing Australia, that they dealt with them- to their own satisfaction on the 12th October last year, and they are waiting to deal with them again. Honorable members opposite have indulged ' in sophistry and clap-trap about this Government wishing to increase the paper currency. Any person with a knowledge of political economy must realize that the paper currency that we have at present is more than sufficient for our requirements. The trouble is that it is not being kept in circulation. Recently I went into a bank in my home town, and I saw the teller placing £5 notes into packets of £500. He was sending them to headquarters, because there was no use for them. There is no credit in this country. The banks refuse to give credit on security which is here in abundance. Because that security is lying idle, and the people cannot obtain advances upon it, we are suffering a fictitious depression. It is this party's desire that the Commonwealth Bank should step in and release credits so as to encourage our industrial activities, and to enable this country to recover financially. So far as paper currency is concerned we could easily bura, at least, £20,000,000 worth of it without feeling the loss, because it is lying idle in the bank vaults in Melbourne, and £1,000 notes to that value have never been put into circulation. If a business man pulled out a drawer in his office and found that for years he had a bundle of notes in it, he would want to know why it had not been profitably invested. Of what use is it to keep paper currency out of circulation unless it is to serve as an excuse for holding more gold than is necessary in this country? I defy the Deputy Leader of the Opposition **(Mr. Gullett),** who has talked so much about the inflation of the note issue, to go into my home town and buy with 50 sovereigns more than I 'can buy with a piece of paper bearing the figures £50 and my signature. I can use my cheque book just as easily and cheaply as the Deputy Leader can use gold. All his clap-trap about paper currency being inflated is mere humbug. There has been no suggestion on the part of -the Labour party to print more notes. We must have sufficient notes to meet our requirements. If a 'business man were given ;a £10 note in payment of certain goods, and he had no change in his till his trade would be dislocated. That applies universally. There must be change in the national till to meet the requirements of the people, and there must be sufficient notes printed for that purpose. Past governments made our notes legal tender. If I were given the right to make paper currency legal tender I should soon make Australia a prosperous nation despite' the financial editor of the *Guardian* - or the black Guardian, as I call it - who talks so glibly of financial intricacies. I have had 39 years' experience as a' business man, and if honorable members visited my office, I could show them records of payments made year after year in my paper currency, currency with no gold and no bank notes as a basis for its issue. They comprise my paper currency, and bear my signature. They enabled me to become a successful business man. At one time in my home town I employed more men than any other business man in the locality., I paid my employees with pieces of paper, which bore my signature. That system has never yet failed. Why talk about the depreciation of paper' currency when this nation can make its own paper currency legal tender ? The honorable member for Henty **(Mr. Gullett)** instanced the plight of countries that had inflated their currencies, but we must have the necessary quantity of paper currency in our till to enable this country to progress. The honorable member cannot fool the people all the time. They have become alive to the necessity for the banks to step in <and release the necessary credit so that our industries can carry on. If there were a shortage of labour in this country the Opposition, if it had the opportunity, would not hesitate for a moment to import labour from Europe or any other part of the world. Why not import banks? Our private banks, we are told, have loaned out 100 per cent, of their deposits and have no money on hand with which to meet the extraordinary demands of industrialists and property-holders. Why not import banks to meet our requirements? The Opposition would not hesitate to import workers to make labour cheap, but it would strongly object to importing banks to make money cheap. The very suggestion is 'anathema to the members of the Opposition because they stand for the Shylocks who to-da.y have made this country a nation of depression. There are among the Opposition, disciples of Niemeyerism. They wish to depress the depression, but that policy was rejected by the people by a decided vote cast on the 25th October last. It was also rejected by a vote in this House. Niemeyerism is the root of the evil from which we are suffering, and we need no more of it. There is really no necessity for the Government to balance the budget. Our predecessors showed us how to carry on the Government of this country during a period of prosperity. They had large revenues and they remitted taxes; but they did not balance the budget. They simply further mortgaged the country and worked on overdrafts. Why then should we, in this time of depression, make our workers suffer? Our people are. clamouring for advances and money should be made available for the employment of our workers. That could be clone even if we were £1,000,000 short of balancing the budget. The men, women and children of Australia are our first charge and we should take no heed of Shylocks, Niemeyers, or any section that lends money. One would think that there was something sacred about the man who has money to lend, but the man who has made this country a great nation is the man who has worked; the man who has developed the land and created wealth. We need not commiserate with the man who has an income of £8,000 or £10,000 a year. Our sympathy should be with the poorer classes and their dependants in this time of depression. I therefore hope that the Government will accept my suggestion that the exemption on incomes from property should disappear at £800 instead of at £400 as is now proposed. If that is done it may mean that the budget will not be balanced this year, but have the State Treasurers who signed the Melbourne agreement balanced their budgets? No greater failures as Treasurers have ever existed than some of those who signed that agreement. I regret that it was signed, but the State Premiers and Treasurers put it over the Prime Minister when he was too ill to. be able to give full and proper consideration to their proposals. He was converted to Niemeyerism at a time when he should have been in bed. Fortunately, the forces of Niemeyerism have been routed. Honorable members opposite are despondent and have become a rabble. They have no footing in the public life of this country. I am glad that the Government is standing to its obligations. It is necessary to meet our requirements, and the Government should make every effort to get the Commonwealth Bank to function and to make credit available to the people who require it. We want the bank to function only on the best of security, and not to inflate the note issue unless that is absolutely essential. If a man came to me and proffered a £20 cheque in payment of goods, if I had not sufficient till money I should probably give him in change a piece of my own paper currency. I have done that on many occasions and the cheque has been accepted. That has always been a sound business principle. We do not want to bother about currency. Our efforts should be in the direction of extending credit on the best of security; if that could be done the depression would be lifted. The private banks, like those in America, instead of looking for second mortgages at 10 per cent., would be glad to accept an interest rate of 2?) per cent. The banks in America have been put in their proper place. The paper that I am afraid of is not currency but newspaper. The newspapers have done more damage and injury to this nation than anything else. We have in this country the most anti-Australian and cockeyed press that ever existed. If we make our currency legal tender it cannot depreciate. :It has happened that the people who have invested in foreign countries have, because of the depreciation of the currency in those countries, had to be satisfied to accept 20 per cent, or even 10 per cent, of the value of their securities. Any one, by becoming bankrupt, could depreciate his assets to such an extent as to be able to pay only ls. in the fi and so satisfy all his obligations. Australia does not want to do that. It is a nation of honour. It has always met its obligations and the Australian Labour party has been truer to our traditions than any other party in public life. It has guided the destinies of Australia with greater success than any other political party, and has had a greater regard for the honour of this country. The present Labour party will compare favorably with any other party that has been in charge of the treasury benches and guiding the destinies of the Commonwealth. I am convinced that it will be true to the Australian spirit; that it will hot allow the Commonwealth to remain in its present position merely because the private banks have been endeavouring, by restriction of credit, to oppress the nation. {: #debate-23-s12 .speaker-KVU} ##### Mr THOMPSON:
New England -- I am supporting the amendment moved by the right honorable member for Cowper **(Dr. Earle Page)** because I consider that he has struck the right note in this debate. All honorable members must realize the gravity of the Government's action in imposing further direct taxation upon the people. I do not wish to underrate the intelligence of Government supporters even after hearing the speech of the honorable member for EdenMonaro **(Mr. Cusack)** ; I feel sure that they are not very enthusiastic about this latest proposal of the Government to levy more taxation upon property income. I believe that the Government is taking this step because it cannot' see daylight. Because it has explored so many uncertain and wrong paths and has refused to follow those paths which offer better prospects of a final solution, it is now following the line of least resistance. In this respect it is doing what all Governments, Commonwealth and State, have been doing for the last ten or fifteen years. All have been giving their attention to the imposition of further direct taxes. When I addressed honorable members the other day I ventured to prophesy that, before long, there would be a revolution in this country; not a revolution of violence, such as reported to have taken place from time to time in other countries, but a passive revolt by taxpayers driven to desperation by the continual exactions of seven governments in Australia. I listened attentively to the speech delivered by the honorable member for Wentworth **(Mr. Marks)** this afternoon, and I could not help a feeling of regret that there were not more honorable members present. He spoke straight from the heart as a taxpayer who had been bled white. The honorable member spoke with great earnestness, but we must do him the credit of believing he was not using his place in this House to state his own case so much as to place before honorable members the position of thousands of other property owners, who, like himself, are in the very last ditch, so to speak, and are so desperate that they cannot carry a further taxation burden. I know that little or no attention is given ' to the warnings sounded by honorable members on this side of the House. I am aware that we are accused of being Jeremiahs and calamity howlers, and that we merely excite the derisive laughter of honorable members, like the honorable member for Eden-Monaro who, so often in this House, has solved Australia's financial problem to his own satisfaction' if not to the satisfaction of any one else. We are forced to appear in a role that is unpopular, but it does not follow that, because we are in opposition, our chief purpose is to serve party ends. I am one of those who refuse to be stampeded by party considerations. Whatever contributions I offer to the debates - I assure honorable members that I do not overrate my ability in this respect, and that I can do no more than express my own ideas on any particular subject - are made with a full sense of my responsibility as a member of this Parliament and with the idea of striving to throw some little light on a situation that appears to all parties to be impenetrable. It appears to me that the position which this Government is creating is likely to he the last straw which will break the camel's back. This must happen sooner or later. Some day the patient and long-suffering Australian camel - the taxpayer - will have his hack broken. Whether . the last straw is laid upon it by. some act of the Federal or a State Parliament is beside the point. After hearing the honorable member for Wentworth **(Mr. Marks)** I am inclined to think that we are very close to that fatal day. I do not see how the danger is to be avoided if this Government does not face the issue. In my opinion it is not purely a Commonwealth problem. I refuse to put all the blame for the present financial position of Australia upon the Commonwealth. The States are, to a greater extent, to blame. For many years now they have been exploring every avenue of taxation almost to the limit, although the situation has altered so radically in recent years that it has been obvious to every intelligent man that governments could not continue the process indefinitely. Let us examine the distracting load of taxation which the people of Australia have to bear. One aspect, which is generally overlooked, is the fact that the burden, of direct taxation is not laid on the masses of people - the small wage earners. The great majority of them are exempted from all forms of direct taxation. Consequently, the burden is borne by a very small percentage of the income earners. I think it is safe to assert that the bulk of the direct income and land taxation levied by the Commonwealth and State Governments is contributed by very little more than 10 per cent, of the large taxpaying interests of this country. Most of these tax-paying interests are companies which consist mainly of tens of thousands of small investors who have, probably, ventured their life's savings in these concerns. It appears to me, therefore, that we should try to avoid pushing this form of taxation beyond the margin of safety, because if we force it beyond that point we may bring about a shoal of bankruptcies among the smaller income earners in the Commonwealth, and may bring down many large companies which have been built up by the savings of thousands of small income earners. Even now there is a great increase in the number of bankruptcies, Particularly in the capital cities of the Commonwealth. But the evil is not confined to our cities. It is reported throughout the country districts. All honorable members representing country constituencies know that large numbers of small storekeepers are becoming bankrupt. Several have been reported in my own district during the last few months, and, I daresay, the same thing is happening in other parts of Australia. Taxation itself may not be forcing so many people out of business, but it is, undoubtedly, a heavy contributing factor. No one will deny that an increase of taxation, at a time like the present, must have disastrous results. I, therefore, suggest that if we admit the truth of this assertion we should approach the consideration of a measure such as this in a spirit of caution, if not of fear, as to its consequences. Certainly we should not accept lightly a proposal to impose further taxation upon the people at this time, without giving it the very closest consideration and without being satisfied that it is not possible to spare the taxpayers this further scourge which the Commonwealth Government seeks to lay upon them. Another, thing which I notice about the attitude of this Parliament - probably it is due to the fact that we are isolated in Canberra and cannot visualize the position in other parts of the' Commonwealth - is that we are not fully cognizant of the attempts that have been, and are being, made by State Governments to follow in our footsteps by exploring every avenue of direct taxation to the limit; to a point beyond which even the Commonwealth is not inclined to go. For example, the States have imposed unemployment relief taxation upon the great majority of the wageearners. This is a heavy item, particularly in New South Wales, where recently the Government has increased direct taxation upon the larger income earners, upon property, and, in fact, upon everything that is. likely to produce revenue. As a result, the prospect in that State, apart from anything which the Commonwealth may do. is gloomy in the extreme. The States, I think, are justified in contending that the Commonwealth is not assisting in the general solution of the problem. They complain that by rushing1 in ahead of them the Commonwealth has practically closed up avenues of taxation which they had set apart for themselves. If we examine the figures relating to State taxation we must admit that the position is getting out of hand, and, unfortunately, this- latest proposal of the Commonwealth Government will make it worse. In the five years from 1924 to 1928, State taxation from income and dividends has risen from £10,500,000 to £15,500,000, an increase of 50 per cent. Federal taxation on income and dividends in the same period has been practically stationary until the last twelve months. It has maintained a steady average of about £10,000,000 per annum; but, if the present bill is passed, it will be increased to over £11,000,000, and probably will be in the vicinity of £12,000,000. The seven governments of Australia will be attempting to take from the people of the Commonwealth, at the worst stage in our financial and economic history, at least £27,000,000 in taxation on income and dividends. With incomes falling and dividends dropping in every direction, it is calamitous to attempt to do this. It is bad enough to continue to take the amount of tax that has been collected in the last five years; but it is doubly calamitous to increase those rates at the present time. Nothing could do more to prevent an early recovery from the widespread depression. I submit to honorable members on both sides of the House that the worst gesture this Parliament could make would be to increase the income and dividend taxation - income from property, call it what you like. Far from being a contribution to the balancing of the budget, or a means of relieving the present situation, it will be almost a deliberate contribution to the consummation of national disaster. Every honorable member who realizes the seriousness of the situation should warn the Government of what is likely to happen if the present heavy burden of taxation is increased. The taxation of income and dividends is not the only burden that the people of this country have to endure. There is a shoal of other taxes. The amount derived from the federal land tax, for instance, has been increased, and this year it will be in the vicinity of ' £3,500,000, although the income of the man on the land has been reduced by more than half. On top of that, there are State land taxes. The six States, between them, took £1,800,000 in land tax in 1928, and, including the federal tax, the amount collected was £5,250,000, which has to be added to the taxes on incomes and dividends. The land tax is collected chiefly in the big cities, and from those who pay most of the taxes on incomes and dividends. Then, again, the federal estate duty in 1927-28 yielded £1,752,000,' and the six States in the same year took £4,000,000 in probate and succession duties, or a total Federal and State exaction from those sources of- £5,752,000. Thus, in 1928, the Commonwealth and the States together collected in land tax, estate duties, and death duties, the sum of £11,000,000, which must be added to £27,000,000 paid as tax on incomes and dividends. On top of all that, the Commonwealth has imposed various forms of new taxation, such as the sales tax and the primage duties, which have much the same incidence as other forms of direct taxation. So it is practically impossible for the various governments to turn to any other avenue of taxation. I am satisfied that the situation is so grave that the abandonment for the time being, at all events, of the party war that is going on in this Parliament and in the State Parliaments would be justified. In no other way, in my opinion, can we start to emerge from our present troubles. If the two opposing parties would come together in the interests of the people, and put all their cards on the table, good might result. I may be an idealist; but I venture to stand in the role of prophet, and say that, until this is done, we shall make no headway. I have heard honorable members opposite declare repeatedly that other countries are facing the same problems as those confronting Australia; I have already disagreed with that view, and I do so again. I maintain that no country in the British Empire, at any rate, is faced with problems of the nature of those with which we have to deal. For instance, we have stupendous non-paying railway systems. Our railways are divided into six competitive departments, controlled by the respective State Governments, and there are also the Commonwealth railways. The debts on the railways of Australia are responsible for the principal part of our interest burden, and we are doing nothing to tackle that phase of the situation. I shall not deal with other problems, such as that presented by our tariff policy. I admit that unemployment and the slump in the value of exports, which have contributed largely to the present economic position, are factors that have contributed to the depression overseas; but problems such as that presented by the losses on our railway systems enormously complicate Australia's difficulties, when our predicament is compared with .that of other countries. We should explore every avenue whereby we might find escape from the morass into which we have stumbled, and, even if a proposal seems to be idealistic, we should consider whether it is not worth placing before the people. We are merely tinkering with the position by increasing taxation. The States are also dallying with the problem by imposing unemployment relief taxes. The final solution, I believe, will depend on a pooling of all the governmental brain power of the Commonwealth. We may even have to throw our whole governmental system into the discard, and evolve something new in order to bring about the economic salvation of the country. If the Commonwealth and State Governments continue to heap taxes upon taxes at the present rate, it will probably be necessary, within a very few months, to consider means of avoiding national bankruptcy. I suggest that the time has arrived when the Government, instead of forcing the issue, as it is foolishly doing by increasing taxation, should avoid doing that. It has admitted that it cannot balance the budget this year. It was decided at the Niemeyer conference .that all the Governments of Australia should straighten out their finances by balancing their, budgets; but they were suffering from an optimism which **Sir Otto** Niemeyer said was one of the greatest obstacles in the way of the solution of our problems. Despite the announcement, amidst national acclamation, that our budgets were to be balanced, the first party to that agreement to tell the people that it could not be done was the Federal Treasurer. {: .speaker-KXT} ##### Mr Paterson: -- I believe that he could do it if his party would let him. {: .speaker-KVU} ##### Mr THOMPSON: -- I do not think that it could be done this year. I am afraid that it is practically impossible to do it within the next six months. It might have been done, if the matter had been taken seriously in hand five or six months ago. As a parliament, we have accepted the inescapable situation that our budget cannot be balanced this year. Would it not be courageous for the Acting Treasurer **(Mr. Lyons)** to say to all the States : " If you also cannot balance your budgets, let us adopt some expedient to tide us over the next few months, for the purpose of relieving unemployment and saving the States from bankruptcy " ? Some of them are on the verge of financial collapse, particularly South Australia. The Minister should ask the State Treasurers to confer with him with the object of immediately evolving a policy for not only the stabilization of the financial position, but also the relief of the taxpayers from the further burdens that are being piled upon them. Nothing can he more agonizing to the overburdened taxpayer than to realize that there is no escape for him. Every month some government announces that further taxes are to be imposed. Then the taxpayer realizes that his surplus will disappear, and he abandons hope. This merely intensifies the inertia which the Acting Treasurer has deplored, and has pointed to as the real cause of our present difficulties. He said that unless this Parliament boldly faced the position, and gave a lead to the people, there was no hope of a solution; but he now brings down legislation which is bound to precipitate the crisis which he told us was imminent. Why should not the Commonwealth take the lead - the Acting Treasurer is big enough to do it - by calling together the representatives of the States, not for the purpose of advancing another proposal for the balancing of budgets, which cannot be done this year, but to evolve a scheme to deal Avith the incidence of taxation as a preliminary to tackling such problems as that which is presented by our railways. The real problem that confronts the taxpayers of Australia is, not so much what they have to pay as the general uncertainty in which they are placed. They are taxed by the Commonwealth to-day, and by the States to-morrow. The people of New South Wales are trying to steel themselves against the attack that they know is about to be made by the new Labour Government in that State. They have every reason to fear it, because they have been warned that it is going to be fairly severe. What must be the feeling of those people when they get a slug like this, which will reduce enormously the value of their property and practically make it a drug on the market, and when they know that a bigger slug is threatened by their own State Government? The Acting Treasurer might take this opportunity of proposing to the States a definite evacuation of certain fields of taxation. It is about time that the Commonwealth Parliament led the way in abolishing duality of taxation. There are two sets of income tax, two sets of land tax, two sets of probate and succession duties, and two sets of entertainment tax. It is enough to drive the taxpayers mad, if not into absolute revolt against the exactions of the tax-gatherers. What are the respective fields of taxation? It is generally conceded that the Commonwealth should take a share, and the States theirs, out of the income tax; that the two authorities must raid the land-owner; and that both must attack executors of estates. But is that a reasonable proposition? The Commonwealth field of taxation surely is large enough to enable it to meet all its commitments without encroaching on the fields of the States!' An enormous field is covered by customs and excise alone. The excise field is illimitable; that is proved by the fact that additional duties are proposed practically every year. An enormous . new field, with illimitable possibilities, has been opened up by the sales tax. The Commonwealth also has the land tax, the income tax, the entertainments tax, post office revenue, coinage, defence revenue, quarantine, territories, patents, lighthouses, and the note issue. That is quite a formidable list of sources from which it can derive revenue. The States have probate duty, stamp duty, land tax, income tax, licences, racing taxation, motor taxation, and miscellaneous taxation such as lotteries. All the States are now exploring what one would consider should be last field of taxation - the promotion of lotteries. If any other field is left untouched, it would be interesting to know where it is. Is it not possible to afford relief to the taxpayers by the Commonwealth surrendering certain fields and the States others? That matter could easily be settled if we would place our cards on the table and abandon political warfare, even if only temporarily, with a view to seeing if we cannot do something for the people. We are doing very little for them now; but, on the other hand, are bleeding them white. It is hardly to be wondered at that they regard their politicians, both Federal and State, as their greatest internal enemies. I said in the earlier part of my speech that I regarded the railways as the outstanding problem, and as the main cause of the inability of Australia to balance its budgets and to right the economic situation. Recently in this House, I pointed out that the problem could easily be solved if we had the courage to tackle it. The capital invested in the railways of Australia amounts to £300,000,000, upon which £15,000,000 must be- paid every year, mostly overseas, on account of interest. That interest payment is the .heaviest burden that the direct tax payers have to bear. I have made the suggestion that the Commonwealth should take over, if not the actual control of all the railways, at least the responsibility for the payment of that interest, and that the States should in turn surrender to the Commonwealth their income tax collections, which total exactly the same amount, £15,000,000. That seems a practical proposition, involving very little more than a mere matter of bookkeeping. We should then have only one authority in Australia for the collection of income tax. {: .speaker-L1C} ##### Mr Lewis: -- The Deputy Leader of the Opposition **(Mr. Gullett)** has suggested that next year the collections from income tax will total only £5,000,000. {: .speaker-KVU} ##### Mr THOMPSON: -- That is quite possible. It is because the collections are decreasing that the different governments are raising their rates; they wish to gather in- the amount that they consider they must have to balance their budgets. {: .speaker-L1C} ##### Mr Lewis: -- How would they 'be balanced next year ? {: .speaker-KXT} ##### Mr Paterson: -- If the Commonwealth could not collect it, the States would be in no better position. {: .speaker-KVU} ##### Mr THOMPSON: -- The immediate advantage would be that there would be only one authority collecting income tax in Australia, and that would afford relief to the people even if they had to pay more than they are paying at the present time. What makes them most angry and vindictive is that two authorities with different rates, exemptions and conditions, tax them simultaneously. It would be quite a simple matter for the Commonwealth to evacuate the land tax field, from which it receives, at the present time, only about £3,500,000 per annum. The States could be left to tax their own land-owners according to their system of valuation. One of the most iniquitous things in the financial economy of Australia is the existence of Commonwealth machinery for the fixing of valuations throughout Australia side by side with similar State machinery. It has been responsible for serious complications, and upon it must be laid the blame for the dissatisfaction which is felt by land-owners with the Governments of both the Commonwealth and the States. I suggest that it would be a simple matter for the Commonwealth to hand over to the States the whole of the land tax field. It is essentially their field of taxation, for the reason that they are burdened with big capital cities which contain nearly half their population, and the bulk of their wealth. In every capital city there are immense buildings which represent a vast capital expenditure. If the States had complete control of the land tax field, they would be in a better position to tax those cities on an unimproved land value basis, for the carrying out of such works as the North Shore bridge, the burden of which, at the present time, is distributed over the whole of the taxpayers of the State. {: .speaker-KZO} ##### Mr Latham: -- There is a special scheme of taxation for the North Shore bridge. {: .speaker-KVU} ##### Mr THOMPSON: -- I am aware of that. But the honorable gentleman surely is aware that the bulk of the taxation is being contributed by the taxpayers of New South Wales, because the railway commissioners obtain from the taxpayers as a whole the revenue that enables them to discharge their liability of one-third. That, however, does not vitiate my argument that the land tax field is essentially one for the States. {: .speaker-L1C} ##### Mr Lewis: -- If the legislative councils could be induced to agree to . the transfer. {: .speaker-KVU} ##### Mr THOMPSON: -- There may not be many legislative councils in a few years' time. Probate and succession duties also could be collected solely by the States; there is no reason why the Commonwealth should exploit that field of taxation side by side with the States. This field would bring to the States revenue amounting to about £6,000,000 per annum. That is not a very big item, and the Commonwealth would not be made bankrupt by foregoing it, especially if it retained the amount that it now pays into the national debt sinking fund. If it took over responsibility for the payment of interest on the railway debt, it would have a fair claim to retain what it is now paying for interest and sinking fund, and special advances to the States, averaging something like £9,000,000 per annum. {: .speaker-KXT} ##### Mr Paterson: -- An amendment of the financial agreement would be necessary. {: .speaker-KVU} ##### Mr THOMPSON: -- We shall have to amend many things, if we are to escape from our present troubles. I admit that the proposals, which I have put forward, favour the Commonwealth to the extent of about £3,000,000. That, however, could easily be adjusted if the States and the Commonwealth would agree to there being a uniform field of taxation, the Commonwealth being the sole collector in the income tax field, and the States the sole collectors of land tax, probate and succession duties and entertainments tax. It might be possible for the balance to be so adjusted that the taxpayers of Australia would pay only one lot of taxation to one authority, instead of two lots to two authorities as they are doing at the present time. This may appear to be a far-fetched, and probably a quixotic proposition, to place before the House just now. The reason I have brought it forward is that the taxation which this Parliament is imposing is both wicked and cruel in the circumstances that exist in Australia today, especially in view of the fact that all of the States are about to impose taxation that will be much heavier than ours. The small minority of the people, which is earning anything like an income, and which is responsible for the trade, the industry, and the enterprise of this country, is being attacked from two quarters by two savage sets of taxgatherers, who are becoming more savage almost every week. {: .speaker-KXT} ##### Mr Paterson: -- Voracious. {: .speaker-KVU} ##### Mr THOMPSON: -- I prefer the term, " savage." Our Governments are becoming absolutely ruthless and savage in the manner in which they fleece the taxpayers of Australia. If those taxpayers are prepared calmly to endure being bled white in this fashion without demanding that all the political brain-power that is being dissipated in this and our six State Parliaments shall be concentrated on the task in hand, beginning by dispensing with the dual control of tax gathering, they are lacking in the spirit which is generally found in every British community, and there is no hope for them in the future. {: #debate-23-s13 .speaker-009FQ} ##### Mr CURTIN:
Fremantle .- In discussing the alternatives to this measure the Deputy Leader of the Opposition **(Mr. Gullett),** went quite improperly and gratuitously out of his way to make an attack upon one of the most distinguished public servants that has ever served the Commonwealth. I feel that I should be lacking in my obligations to myself as a member of this Parliament if I did not say that I consider that attack was most uncalled for; that it is entirely undeserved, and that the manner in which it was made did not, in any way, enhance the dignity of this Parliament. So far as my knowledge of public servants go, whether it be of eminent men of the capabilities of the Commonwealth Statistician, or of those holding subordinate positions, I believe that not one of them has ever felt that he should participate in political disputes or engage in any controversies that are incidental to the settlement of public problems. I feel that all of them, from the highest to the lowest, gives to the government in power the utmost loyalty. I shall say no more, except to express the hope that never again will a public officer, in the performance of his duties, be attacked by any member of this Parliament, particularly by so representative a one as the Deputy Leader of the Opposition. {: #debate-23-s14 .speaker-KIT} ##### Mr MACKAY:
Lilley .- The remarks of the honorable member for New England **(Mr. Thompson)** should serve as a reminder to the Government of the huge amount of money that is collected from the taxpayers of Australia, and also of the danger attaching to this proposed further imposition. I am surprised that only one supporter of the Government has risen to defend its proposals. Up to the present only the honorable member for Eden-Monaro **(Mr. Cusack)** has made pretence of doing this, and I do not think that any body would suggest that his speech should be taken seriously. Some of the honorable member's theories are so absurd that they do not warrant inclusion in *Hansard.* I am particularly surprised that some responsible person on the Government side has not attempted to defend the proposals of the Acting Treasurer **(Mr. Lyons).** The Acting Prime Minister **(Mr. Penton)** and the Minister for Home Affairs **(Mr. Blakeley)** have listened to some most serious criticisms being levelled at the Government, yet neither has attempted to justify its taxation proposals. Admittedly, the Acting Treasurer explained the exemptions under the measure, during his second-reading speech, but I do not think that any honorable member learned from that explanation what was the real reason for the introduction of this bill. I register an emphatic protest against the adoption of these drastic proposals, and should like to know what was in the minds of honorable members supporting the Government when they approved of them in caucus. Supporters of the Government endeavoured to justify public servants who receive less than £725 per annum being exempted from special taxation, yet they approve "of this vicious attack on the propertyowners of the Commonwealth who draw trifling amounts from rent and interest! I have gone to the trouble of taking out figures to show how this tax will operate. Those figures will indicate that the object of the Government in introducing this measure is specifically to penalize those who obtain incomes from property and similar sources. A person with an income of £700 per annum derived from personal exertion will pay £15 3s. 6d. in federal taxation, while one with a similar income from property will be penalized to the extent of £82 15s. 6d., the rate being 28.4d. in the £1. Without doubt, that is a penalty on the thrifty and deserving citizens of the community, and it should not be tolerated by this Parliament. It would appear that the proposal emanates from a certain section of the Ministry. For weeks past we have known that it is the intention of the Governmen to impose a special tax on loan interest. I cannot understand what the bondholders of Australia have done to arouse such a desire in the minds of honorable members opposite to victimize them. Those bondholders have conferred a favour on the country by lending their money at lower rates of interest than could be obtained elsewhere, and now they are to be penalized by the extremists of the Labour party. A considerable amount of money has been loaned to both the Federal and State Governments at rates of interest as low as 3J to 4 per cent., and the loans are still current. {: .speaker-L1C} ##### Mr Lewis: -- Very little money was raised at those rates in Australia. {: .speaker-KIT} ##### Mr MACKAY: -- A great deal of it was raised here. Why are honorable members opposite prepared to go to any lengths in order to penalize those people? In September last the Federal Cabinet met in Melbourne, and the following is an extract from the press report of the meeting : - >Ministers who were strongly opposed to a special session of Parliament, it is understood, are now more or less reconciled to that action, owing to consideration which may .be given to the tax upon interest. They are believed to favour the view that bondholders, since they have made no voluntary move to reduce costs by accepting a lower rate of interest upon their invested capital, should be forced to take the lower rate through the operation of the tax. I can quite understand that the Government realized that, if it had reduced interest rates on current loans, there would not have been the slightest possibility of raising money in Australia in future, and I presume that this vindictive tax on income from property is being offered as a consolation to the supporters of the Government. It is an iniquitous proceeding which is intended to deprive investors in government stocks of their legitimate reward. A supreme effort is being made by both the business and private interests of the community to keep the wheels of industry going, and to keep men employed. The additional taxation proposed in this measure will cause despair in industry. It will certainly reduce the capacity of industry to maintain its present number of employees. These, proposals may be regarded as an attack on private enterprise and an attempt to achieve the objective of the Labour party - socialization and the nationalization of industry - by heavy taxation on property. A wealth census taken some time ago showed that if all incomes in excess of £500 were distributed among those whose income was less than £500, the effect would be to give only about 3s. a week more to each breadwinner. So small a result would not justify putting such a policy into operation. Some- weeks ago the Acting Prime Minister **(Mr. Fenton)** appealed to private enterprise to assist in lifting the country out of its difficulties. The Melbourne press reported his remarks in the following terms: - {: .page-start } page 816 {:#debate-24} ### QUESTION {:#subdebate-24-0} #### PRIVATE ENTERPRISE Real Solution of Problem Melbourne, 21st September Speaking at the Wesley Church this afternoon, the Acting Prime Minister **(Mr. J. E. Fenton),** in the course of an address on problems of unemployment, said : " It can be seen clearly that we are dependent to-day for the employment of the people upon private enterprises." He added that we must all play our part. A government could legislate, regulate, and do many things which would assist in creating employment, but private enterprise was the real solution of the unemployment problem. Notwithstanding that appeal made by the Acting Prime Minister, many honorable members opposite do all they can to discourage private enterprise. There would be a great deal more development in various directions but for the vindictive taxation imposed on industry. The extreme statements by some of the supporters of the Government make it impos- sible to lessen unemployment by investment of capital in productive enterprise. In the correspondence column of the Melbourne *Argus,* the following letter recently appeared: - > **Sir, -** Owing to the increased tax upon property, three large buildings about to be commenced between now and June next have been deferred indefinitely, two in Flindersstreet, and one in Swanston-street, and probably other smaller ones, not mentioning other States. The approximate cost of the erection of the three buildings in Melbourne is nearly £3,000,000, apart from the furnishings. Cannot the Federal Government foresee the number of workmen that these buildings would employ? Employing the unemployed should be the Labour party's first thought, and consider the moral effect it would have. Taking all the property-owner's rent in taxes will not give employment. {: #subdebate-24-0-s0 .speaker-KIT} ##### Mr MACKAY: -- The honorable member for Herbert **(Mr. Martens)** knows that throughout Australia there is a want of confidence in the Government. It is true that the Acting Treasurer in his financial statement appealed for a restoration of confidence ; but how can he expect the people to have confidence in a government which inflicts heavy taxation on them, and whose left wing is prepared to destroy that security which thrifty people have set aside against their time of need? I do not think that the proposals of the Government have the approval of the whole of its supporters. There is such disagreement among the members of the Labour party that they cannot come to a definite conclusion on anything. I hope that in committee the Acting Treasurer will take notice of the criticism offered by honorable members on this side - criticism offered in the best interests of Australia. Hitherto the most deserving section of the people have regarded it as a duty to make provision for their old age. They must read with disgust the Government's intention to tax their savings. During the last twelve months there has been an increase of 18,000 in the claims for old-age pensions. If the belief become general that the Commonwealth Government intends to penalize the thrifty section of the community, people will make no provision for their old age, and consequently, they will become a burden on the Commonwealth. I hope that in committee the exemption on income derived from property will be raised to £300 and that the rate of taxation on incomes up to £500 or £600 per annum will be modified. {: #subdebate-24-0-s1 .speaker-KLM} ##### Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936 -- In these sad times we are still travelling along the old road followed in the past by Nationalist governments and before them by Liberal governments ; again it is a case of tax, tax, tax. Instead of the complicated taxation proposals of the Government I should like to see a much simpler form of taxation. I suggest that there should be a minimum income of, say, £5 a week, which would be free of income tax, and that thereafter the tax should be graduated according to the amount of income until it reached 50 per cent. Why should not those persons who have gained most from the country contribute most to its needs? Twenty-nine years ago, when a bill dealing with probate duties was brought before the Victorian Parliament, by the present Chief Justice of the High Court, **Sir Isaac** Isaacs, who was then Attorney-General for Victoria, 32 members voted that the probate duty should be 20 per cent, on estates valued at £200,000 or more, while some members were willing to go to 30 per cent, where the value of the estate was £300,000 or more. The goodwill of the people can be gained best if we adopt simple methods. Without exception, the members of the Labour party are in favour of the initiative, referendum, and the recall; they are prepared to trust the people. The Australian Natives' Association also believes in the principle. The Melbourne *Age* has supported it; the *Bulletin* has done so for many years. Both **Mr. Gladstone** and Lord Salisbury - that great exponent of conservatism - - supported the referendum. Before long the Government may give the people the initiative, referendum, and the recall, and then the citizens of this country will indeed have control over its finances. This afternoon the Deputy Leader of the Opposition **(Mr. Gullett)** forgot the good manners that he sometimes exhibits in this House. I regret his words this afternoon, for I cannot forget that on one occasion he lost an important position because of his then democratic principles. For his action on that occasion, I admire him. I am afraid that the sweets of office changed his views somewhat. This afternoon he saw fit to make an attack on the Commonwealth Statistician, **Mr.** C. H. "Wickens, one of the most learned men Australia possesses, a man almost without peer in any statistical office in the world. He ranks equal to the world's greatest statisticians in the United States of America, France and Germany, where his name is known and revered. Let rae read the list of distinctions which have been conferred upon him. These are not decorations lightly earned, and bestowed by the touch of a sword, and the words, " Arise, **Sir Knight** " ; they have been honorably earned in the competitive field of science. His honours include I.S.O., F.I.A., F.S.S., and Hon. M.S.S. (Paris), It is an education to spend an hour in his company, and I have to thank him for much information received in years gone by. I am particularly indebted to him for introducing me to a course of reading which I had previously missed. Although I had always been interested in statistics, this particular field of knowledge had not previously been opened to me until it was brought under my notice by **Mr. Wickens** in the kindest and most gentlemanly way. I trust that the readers of *Ilansard,* when they come across the speech of the Deputy Leader of the Opposition **(Mr. Gullett),** will go on to read the remarks I am now making, and will follow it up by studying the *YearBook* for which **Mr. Wickens** is responsible. In this way they may come to know something of a great man, whom a smaller man has attacked. {: #subdebate-24-0-s2 .speaker-L1T} ##### Mr YATES:
Adelaide .- The honorable member for Lilley **(Mr. Mackay)** took ministerial supporters to task because of the little support which had been forthcoming from this side of the House for the measure now before us. He need not concern himself on that score. So serious is the position of the country to-day that we know this taxation to be unavoidable. The alternative offered by honorable members on the other side is to attack the wages of the workers who have in the past made possible the prosperity of the nation. The workers to-day are producing as much as they did then, and the public servants are doing their duty effectively as far as it is possible for them to do it. Nothing will satisfy honorable members opposite, however, unless the Government - to use their own phrase - savagely attacks the wages and living conditions, not only of the manual workers, but also of the brain workers as represented by the members of the Public Service. The honorable member for Lilley may rest assured that the Government's policy has the full endorsement of its supporters in caucus. When an unorthdox alternative to this policy is advanced by honorable members on this side, it is ridiculed, misrepresented, misreported and misconstrued as being calculated to undermine the stability of the Commonwealth. Then, when we do not speak at all, we are blamed for failing to stress the obvious, which is that the Government must do at least something towards meeting the country's obligations. The honorable member for Lilley particularly wanted to know why the Government should single out for taxation the receivers of interest. I suggest to him that he should view the interest receivers in their proper perspective, and consider just what share they, and the borrowing system of which they are a part, have had in bringing about the present depression. Honorable members opposite have said that the bondholders lent their money to the Commonwealth at the request of the Government. That is true, and that has been my complaint ever since the first war loan was floated in 1915. I have always opposed such borrowing, and I still oppose it. The party to which I belong came into existence for the purpose of putting an end to the system by which posterity is burdened with a never ending obligation to go on paying interest. As a matter of fact, the burden on posterity is heavier now than it was 30 years ago, when the Labour party first became a factor in politics. In my opinion, these taxation proposals are a step in the direction of apportioning that hurden equitably. Never before in its history had Australia revelled in such an era of prosperity as during the ye'ars following the war. Never before had we been better off from the point of view of material wealth. In 1901 the number of sheep in Australia reached the record total of 106,000,000, but last year that number was again reached. In 1901, however, we shore only 600,000,000 lb. of wool from 106,000,000 sheep, whereas last year we shore 900,000,000 lb. of wool from the same number. The yield of wool per sheep has been steadily increasing, and during the years following the war the price of wool reached very high levels. During the time I was out of Parliament, I remember reading in *Hansard* a statement by the late **Senator E.** D. Millen, in the course of which he justified the selling of our wool during the war at a flat rate of lod. per lb. I can quote almost his exact words as follows: - "I have grown a little wool in my time, and if we got 6d. a lb. for it we thought we were doing well, but if we got 8d. a lb., we began to fancy ourselves. No one in his wildest dreams ever thought that we would get a flat rate of 15d. 'per lb. for fleeces, bellies, pieces, and locks." Since the war the price of wool has, according to market reports published in the newspapers, gone as high as 5s. per lb. for picked lots. All that is over, however. In 1914, Australia had one of the worst harvests in its history, when only 2.1,000,000 bushels of wheat were produced. The highest reaping in Australia prior to the year that I have just quoted was 103,000,000 bushels. That dropped in 1914 to 21,000,000. But in 1915-16 the figures rose to 179,000,000 bushels, a record beyond the imagination of even the wheat-growers. But it is more remarkable still that that wheat was sold at 5s. 6d. per bushel, a price far in excess of any that we had ever known in our history. The price for home consumption at that time was 4s. 9d. per bushel. It will be remembered that there was a good deal of trouble taken at that time to see that the people Here were not penalized because of a record harvest. While I was in France the wheat crop of the Commonwealth was sold to the British Government for 5s. 3d. per bushel, though I received a letter from my wife which informed me that she was paying 13s. 3d. per bushel for fowl wheat in Australia. The ordinary consumer here could not get wheat for 5s. 3d. per bushel, but the British Government could get it for that price. I mention these facts with the object of indicating where this additional taxation should be placed. I have quoted wheat and wool; but the same remarks apply to sugar, and, in my own State, to wine. We have never had the great production of wine that we have to-day. **Mr. Wickens** informed the Peace-in-Industry Conference in 1929 that we had reached the top of our production in eggs, butter, cheese, hams, pork and other dairy produce. But in spite of these facts honorable members opposite keep telling us that Australia is in a parlous condition. The fact is that, materially, we were never better off than we are to-day. When an Aussie sets his mind to do a thing he does it. I read in the Melbourne *Herald* a few days ago an article on the Australian rice industry, in which it was pointed out that, while seven years ago we had not an acre under rice, we are to-day producing 30,000 tons of rice annually, and have to face the problem, not of supplying Australia with rice, but of disposing of our surplus. The article also stated that our rice was better than that grown in Sumatra and equal to that grown in the East. In view of all these facts, who should pay the additional taxation that must be imposed? Surely it ought to be the people who have garnered the record harvests for which they have obtained top prices, and not the workers who have been obliged to chase prices through the Arbitration Court with the object of getting just a little of what they are entitled to receive. Honorable members opposite have been talking on this subject with their tongues in their cheeks. They are squealing because an effort is being made to obtain for the Commonwealth in these times of stress a little of the wealth that was wrung out of our people when things were easier, and when we went mad with our borrowing policy. We became' drunk with borrowing. Borrowing became a fetish with honorable members opposite and the Government that they supported. But now that trouble has occurred they want to rob the working man who helped to make our bountiful production possible but did not enjoy much benefit from it. If I were to suggest that we should adopt the reasonable and legitimate remedy for the troubles which face us, namely, make use of our own currency to get out of the hands of the interest monger, I should be told that prices would be inflated. I do not care about statements of that kind. Our plain duty is to face the facts. Do honorable members opposite recollect what happened after the war? I remember very well that it was necessary for ;his Parliament to pass a war-time profits cax act. If I had had my way I would have taken the whole of the wartime profits without any compunction whatever, for these profiteers cook advantage of the circumstances in which the nation found itself and bled the country white. After the passage of that measure we forced these commercial thugs, who had pur. their talons into the Commonwealth, to return millions of money, that they had illegitimately obtained. But the trouble was that we condoned the making of these illicit gains. The Wartime Profits Tax Bill caused one of the most protracted debates in the history of the Parliament. Honorable members who were opposed to the Labour party at that time defended the profiteers just as honorable members opposite are to-day defending f.hose who obtain their wealth from property. [ wish to make some reference to the position in which South Australia finds herself to-day. An inquiry is to be held into her financial position, but any money that may be granted to assist her must be taken out of the common pool. It is simply a matter of shifting the pieces on the chess board.' Just as the castling of the King ends in a stalemate, io the continuance of this financial game, under existing conditions, must end in our getting nowhere. I am sick and tired if the whole business. I have been a member of this Parliament since 1914, with a short break, and all my life I have :aken a keen interest in politics. During all that period things have gone along in much the same way as they have gone in recent years. Periods of plenty have been succeeded by periods in which sacking has been the order of the day, though the sacking was called retrenchment in my youthful days. " Sack, tax and borrow " have been the rules of the game, and honorable members opposite would borrow to-day if they could do so. No ess than 41 per cent, of the total revenue of South Australia has to be used to-day to pay interest on borrowed money. Practically half the wealth produced in the Commonwealth is used for the same purpose. Yet the people who have lent this money to the nation take no risk whatever. It does not matter whether the country is passing through famine, drought, or any other trouble, these people hold out their big paws for their interest. {: .speaker-KXQ} ##### Mr Archdale PARKHILL: -- Do the honorable member's remarks apply to the loan which the Government is at present seeking to raise? {: .speaker-L1T} ##### Mr YATES: -- Of course they do. I shall have a little to say presently about the " rake off " that will be made in connexion with the present loan. Tt is entirely wrong that 41 per cent, of the revenue of South Australia should be paid in respect of idle capital. When we have converted a few more loans it will be found that 50 per cent, of the revenue will have to be used to pay interest. But this cannot go on for ever. The people of the Commonwealth will not starve in order to pay interest. Something will happen if the present financial policy is carried too far. {: .speaker-KXQ} ##### Mr Archdale PARKHILL: -- The people will not be robbed by members like the honorable member. {: .speaker-L1T} ##### Mr YATES: -- The honorable member knows very well that I would not rob any one. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- I know nothing of the kind. {: .speaker-L1T} ##### Mr YATES: -- I believe in giving back to every individual the whole of the money he loaned. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- Valueless money. {: .speaker-L1T} ##### Mr YATES: -- No; I shall show the honorable member how the value of their money was increased when this loan business commenced. The honorable member for Richmond **(Mr. R. Green)** suggested that the Commonwealth should vacate the field of income, taxation, which, he said, should be reserved for the States. As a returned soldier, the honorable member should not repeat that statement. Does he not realize that federal income taxation was first imposed to meet the cost of the war, and that so long as our war debt remains undischarged federal income tax will have to be imposed? {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- Borrowing has nothing to do with income taxation. {: .speaker-L1T} ##### Mr YATES: -- Federal income taxation was first imposed to meet the cost of the war. I do not wish to go into detail- {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- The honorable member had better not do so. {: .speaker-L1T} ##### Mr YATES: -- Facts can be taken from *Hansard* which clearly show that federal income taxation was first imposed to meet our war commitments. I do not wish to go into that aspect of the qiestion, as it is unarguable. When the Commonwealth first 3ommenced borrowing, the rate of interest was 4-£ per cent., the highest rate which, up to chat time, had been paid. When the first war loan of £20,000,000 was to be raised, it was anticipated that the duration of the war would be brief, and that the £20,000,000 would be sufficient to meet our commitments. The proposal of the Fisher Government, at that time, was to borrow £20,000,000 in instalments of £5,000,000 every few months. The Adelaide *Register,* in dealing with the Fisher Government's loan proposals, let the cat out of the bag; it disclosed the trickery of the whole business. It was stated in that newspaper that **Mr. Fisher** was well advised to raise the loan in £5,000,000 instalments, for the simple reason that it would be used locally in victualling and equipping the soldiers, and that after passing through the ordinary trade channels would again be in the banks before the next £5,000,000 was required. The honorable member for Richmond ridiculed the honorable member for Eden-Monaro **(Mr. Cusack)** when lie said he could pay a cheque to his tenant- Mi-. R. Green. - One could not help ridiculing him. {: .speaker-L1T} ##### Mr YATES: -- Perhaps the honorable member for Richmond does not appreciate the ability of the honorable member for Eden-Monaro, and the only way he can hide his lack of knowledge is by ridiculing him.. It cannot be denied that the honorable member for Eden-Monaro was right. The subscriptions for the first instalment of £5,000,000 totalled £7,000,000, and for the loan of £27,000,000, £40,000,000. The rate of interest of 4£ per cent, was unheard of at that time. When the ex-honorable member for Balaclava **(Mr. Watt)** was. discussing the loan, the honorable member for Melbourne Ports **(Mr. Mathews)** interjected that it was a double giltedged security, which the ex-honorable member for Balaclava admitted. The only policy which could have saved the nation from the burden under which we are now struggling was that of the present Minister for Health and Repatriation **(Mr. Anstey).** The soundness of the scheme he then advocated cannot be denied now we know how matters have turned out. The rate of 4^ per cent., which we then had to pay the moneybugs for the use of their money, gradually increased until it reached 6 per cent. That *is* why we are in our present position. Production has never been more prolific than it is to-day; but the country cannot stand the incubus of interest. Reference has been made to the loss on our railway systems; but honorable members should know that our railway systems are paying propositions. It is true that a foolish policy of constructing roads parallel to railway lines has been adopted in some of the States, until the burden of interest has become exceedingly heavy. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- Our railway systems are not paying. {: .speaker-L1T} ##### Mr YATES: -- I am surprised that the honorable member for Richmond **(Mr. R. Green)** should make that statement. I shall give some figures which I quoted on previous occasions from the evidence obtained during the inquiry into the disabilities of Tasmania from **Mr. McFarlane,** a Treasury official, who said that, up to 1929, the profit on the working of the New South Wales railways was £4,637,566; but the loss, after paying interest, was £1,039,386. Will the honorable member for Richmond deny the accuracy of that statement? {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- Australian railways are not even paying working expenses. {: .speaker-L1T} ##### Mr YATES: -- I cannot accept that statement. The figures I quoted are up to 1929, and the honorable member cannot dispute them. This taxation has to be imposed, not because of the inability of our workers to earn what they receive, or the ability, of the railways systems to return working expenses, but because of our inability to meet the incubus of interest which is burdening the Commonwealth to breaking point. That is why this legislation, which honorable members opposite are objecting to, has to be introduced. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- The honorable member knows that the railways are not paying working expenses. {: .speaker-L1T} ##### Mr YATES: -- All that I have to guide me are the latest figures submitted to the Public Accounts Committee by **Mr. McFarlane** in 1929; and I must accept them until I get a fresh table reversing the position. {: .speaker-KVU} ##### Mr Thompson: -- In 1929 the New South Wales Government paid £800,000 from Consolidated Revenue towards meeting the losses on the State railways. {: .speaker-L1T} ##### Mr YATES: -- The figures relating to the railways of Australia, as supplied by **Mr. McFarlane,** of the Commonwealth Treasury, are as follows: - The total profit on the railways in Australia, excluding the Commonwealth railways, was thus £9,90S,326; but the position altered when the idle capitalist came in and had to be paid his interest. I spoke the other day of magpies sitting on the fence and squawking for meat which they must have, though they are never satisfied. After the capitalist had drawn **Ms interest** the railways showed {: type="i" start="ii"} 0. loss of £4,S00,239, the total interest bill being £14,70S/565. In that we have the reason for the losses on our railways. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- The figures are not correct. {: .speaker-L1T} ##### Mr YATES: -- Does the honorable _ member impugn **Mr. McFarlane** as an authoritative witness before the Public Accounts Committee? {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- It is the honorable member who is incorrect; ho has not given the full facts. {: .speaker-L1T} ##### Mr YATES: -- I have given the detailed facts furnished by an officer of the Commonwealth Treasury. That officer went on to point out what the position would be in the coming year, and, as matter of fact, there has been a very drastic change since 1929. When by means of taxation to pay interest we are drawing the life-blood out of the community, and putting nothing in its place, the railways must go from bad to worse. The biggest incubus on them is, not working expenses, but the dead weight of interest. If we could take away that dead weight, and at the same time provide profitable employment for 250,000 men who are now unemployed, so that they could make use of our railways, the latter would be an asset to the community and not a drag upon it. To-day the honorable member for Northern Territory **(Mr. Nelson)** asked a question relating to the conversion loan and the interest offered by the Commonwealth, We ought to be ashamed that the best we can do for those who come after us is to put on them a hurden, of- interest, charges for which they will get no service in return. {: .speaker-KVU} ##### Mr Thompson: -- Is it not a fact thai, the Commonwealth Commissioner of Railways stated the other day that for five years the accumulated, losses on. the railways had totalled £31,000,000? {: .speaker-L1T} ##### Mr YATES: -- **Mr. Gahan** possibly did make that statement. At any rate, he said that out of every £1 of revenue earned by the Commonwealth railways, 7s. went in interest. I have already shown that in 1929 the interest bill on Australia's railways amounted to £14,708,565, but there was no loss on working expenses. Every railway employee earned more than the Arbitration Court had awarded him. The railways actually made a profit of £9,908,326; but, when the demands of the interest-monger were met, they showed a loss of £4,809,239. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- And I suppose that the only way to get out of the difficulty is not to pay the "interest-monger." {: .speaker-L1T} ##### Mr YATES: -- The only way to get out of the difficulty is to adopt my suggestion - that the loan now falling due, instead of being converted, should be met out of the currency, backed by the country's credit, and utilized in the manner provided for in the Constitution. *No* further interest would have to be paid, because we would no longer be a borrower. At any rate, the interest and sinking fund required to liquidate the debt would be payable to ourselves. That is my way out of the difficulty, and I challenge any honorable member opposite to say that it is not logical. It has been tried out and tested. As every loan falls due, it should be met out of the currency of the Commonwealth. {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES · NAT; UAP from 1931 -- It is utterly dishonest. {: .speaker-L1T} ##### Mr YATES: -- The honorable member may draw that deduction, but the best test any one can apply is to try it out on one's self. I am a bondholder. Let me loll my honorable friend the test that I suggested to a neighbour of mine. He was speaking of the conditions existing in South Australia, and saying that it was pitiful to see a queue of men receiving ration tickets when nearly all of them were capable of doing work if only it could be provided for them. I replied " Yes, it is pitiable, but it would be more so, in your opinion, if you were in the line yourself. When one feels the pinch, he appreciates the troubles of others." If one presents a ration order the grocer or the butcher will supply anything; he does not insist on actual cash because the order is its equivalent. I apply that principle r,o the loan. If I, as a bondholder, am paid off with the currency of the nation, and for every £1 I lend receive £1 worth of value, what ground have I for complaint? What is dishonest or wrong in that transaction? If the present borrowing policy is pursued, the course I am advocating will eventually have to be adopted. **Mr. Wickens** was under fire this evening, and subjected to unmerited criticism because he agrees to some extent that my suggested remedy is the only logical and reasonable cure for our present troubles. The flotation of another loan, instead of relieving the distress, will only accentuate it. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- Does the honorable member object to reverting to the bill? {: .speaker-L1T} ##### Mr YATES: -- The honorable member for Lilley **(Mr. Mackay)** said this evening that no man on the Government side would justify the introduction of this bill. I am justifying it ; I am stating the reasons for the Government's proposal to put the burden of taxation on those best able to bear it instead of on the railway workers whose labour has returned a profit to the State. To-day, the honorable member for the Northern Territory **(Mr. Nelson)** asked the Acting Treasurer **(Mr. Lyons)** what rate Of interest was being paid' on the £18,000,000 now being converted by the Commonwealth and on the £9,000,000 being converted on behalf of the States. The answer he received was: - Those rates represent a yearly interest bill of £1,596,000. The annual interest charge on the new loan will be £1,620,000. and to that must be added the cost of conversion. Most of the State railways were built with loan money bearing an average rate of interest of from 3£ to 3f per cent. To-day, I doubt if the average rate of interest on money borrowed by the Government is less than 5J per cent. The return from gilt-edged securities has been almost doubled, and the people are paying. When honorable members say that standards should be reduced to normal, and that the railways should be put on a pre-war footing, what is wrong with reverting to the old interest rate of 3£ per cent? The Acting Treasurer asked for a slogan. I offer him one - "Don't be a bone; use your own, prevent further distress." {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- Would the honorable member lend his money at 3-J per cent ? {: .speaker-L1T} ##### Mr YATES: -- I do not want to lend money and I am prepared to forfeit the interest to-morrow on every Commonwealth bond I possess. When I first invested money in a war loan, I instructed that the interest should be paid back into the Treasury. But when I returned from the war, my political opponents, after sending me to gaol, circulated a canard regarding me. I then said, " You have put me out of work; pay me the same interest as the other chap receives." But my acceptance of interest on a war bond does not affect the principle that I am enunciating. If I were the biggest criminal unhung, that would not justify criminality on the part of another. The taxation now imposed upon the people would not have been necessary if the Commonwealth had been properly governed in its hey-day of wealth production. If the tremendous incubus of interest had not been loaded on the nation, and wealth were properly distributed, as it should be, and will be eventually, the present distress would not have arisen. Sooner or later the policy I am advocating will have to be adopted, and, in addition, this Parliament will have to pass a comprehensive national insurance act, so that, when people are old and worn, they will not be thrown on the industrial scrap-heap, but will continue to enjoy some of the wealth they produced when they were young and fitToday, 250,000 men in Australia are practically starving. And honorable members talk of repudiation! What of the repudiation of God's law - the right to live? What of the Christianity of honorable members opposite? "If any work not, neither shall he eat." But the Opposition will not give men a chance to work. When uext honorable members opposite enter God's edifice- {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- This is mere blasphemy. {: .speaker-L1T} ##### Mr YATES: -- Christian principles are the basis of civilization, and I believe in them. Let us have done with financial juggling and political philandering. When God's creatures ask for bread, do not give to them a stone. Question - That the words proposed to be. omitted (Dr. Earle Page's amendment) stand part of the question - put. The House divided. (Deputy Speaker - Mr. McGrath.) Ayes . . . . . . 27 AYES: 0 NOES: 18 Majority AYES NOES Question so resolved in the affirmative. Amendment negatived. Bill read a second time, and committed *pro forma.* {: .page-start } page 824 {:#debate-25} ### ADJOURNMENT Cost op Living : Appointment of {:#subdebate-25-0} #### Royal Commission {: #subdebate-25-0-s0 .speaker-KEV} ##### Mr FENTON:
Acting Prime Minister · Maribyrnong · ALP -- I move - That the House do now adjourn. I wish to announce that the Government has decided to introduce measures dealing with a gold bounty, and the construction of the Red Hill to Port Augusta railway. It has also decided to appoint **Mr. C** H. Wickens, Commonwealth Statistician and Actuary, a royal commission to inquire into and report upon the actual cost of living at the present time according to reasonable standards of comfort, including all matters comprised in the ordinary expenditure of a household consisting of a man, Lis wife, and three children under fourteen years of age. **Mr. Wickens** will have assistance, I hope, in the form of evidence and information from both employers and employees in industry. I think that honorable members will agree with the appointment of such a worthy and well-qualified public servant to undertake this inquiry. The Government has chosen a man who, it' is convinced, will discharge his duty faithfully and well. I feel that I am speaking for the public of this country when *1* say that **Mr. Wickens** is one of our most valued officers, and I much regret that an attack should have been made upon him this evening. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- Why does lie come into party politics? Why did the Government let him do it? {: .speaker-KEV} ##### Mr FENTON: -- I repudiate that statement. I presume that the honorable member is referring to a memorandum that waa prepared by **Mr. Wickens** at my request. After I had had a serious discussion with him, I asked him to prepare a memorandum on the lines of his suggestions. He did so, and, because certain criticisms were indulged in and certain extracts were made use of, I considered that I was in honour bound to make the full text of the memorandum available to the public. T repeat that, in appointing **Mr.** Wickens, we have chosen a man splendidly qualified to carry out the duties that will devolve upon him in connexion with this inquiry, and I do hope that we have heard the last of these unparliamentary attacks upon him. {: #subdebate-25-0-s1 .speaker-KZO} ##### Mr LATHAM:
Kooyong .- f shall not say anything about the qualifications or the personality of my friend, the Commonwealth Statistician. I wish, however, to say that his work is to collect statistics for the use of the public, including members of this Parliament, and it is highly important that he should be regarded as holding a judicial position, and as not being associated in any way with the current controversies of party politics. With reference to the appointment of the royal commission for the purpose of inquiring into the subject-matter mentioned by the Acting Prime Minister **(Mr. Fenton)** - a wage sufficient to maintain a man, his wife and three children according to a reasonable amount of comfort - I regret, indeed, that this Government is following the bad precedent set by the Hughes Government in 1920, when a royal commission was appointed, generally known as the Basic Wage Commission. In effect, it was appointed to report on the subject now referred to this new commission. Its report was made, and the workers of this country formed the belief that they would receive the wage recommended by the commission; but. it immediately became apparent that that wage could not be paid. Honorable members who have followed the course of political events in Australia recently will remember very well the outcry that was then raised because of the inability of the Government '.o provide the wage recommended by the commission. There are many in Australia who, not unreasonably, trace a great deal of the industrial discontent that has existed in Australia since 1920 to the fact that the standard of about £5 16s. fixed by the commission - it varied somewhat in the different States - was held out as the amount that should be paid as a basic wage. Not only was it quite impossible to pay it as a.- matter of finance, but further, the Commonwealth had no power to give any effect whatever to the recommendations of the royal commission in general industry. This Parliament is able to deal with the position in the Public Service but not outside, and the workers justly felt that they had been deceived. They will feel that again they are being deceived, because whatever recommendations the royal commission may bring in upon this subject, this Parliament has no power whatever to secure their adoption in whole or in part in general industry. I put it to the House that it is a cruel, a vicious thing, to institute an inquiry into a subject such as this, because its only effect will be to raise hopes that are doomed inevitably to disappointment. And why is it being done ? This action is being taken to delay still further, if possible, the Arbitration Court in dealing with the subject of the basic wage. And this is being done by a government which professes to have been returned to power to defend the system of arbitration ! Apparently, when it is thought that a decision may go against the political friends of the Government, the work of the court is to be stopped at all costs. Prom time to time this Government has adopted delaying devices. We have bad the unworthy spectacle of device and trick. time after time in recent weeks by this Government. {: .speaker-JPV} ##### Mr Blakeley: -- I rise to order. I object to the language that is being used by the Leader of the Opposition. The honorable member has stated that the action of the Government in appointing the royal commission is vicious. I object to that statement, and I ask for its withdrawal. {: .speaker-KZO} ##### Mr LATHAM: -- The honorable member is too late. {: .speaker-JPV} ##### Mr Blakeley: -- I am not. The Leader of the Opposition also said that the Government was resorting to trickery and delaying devices. I object to those terms. {: #subdebate-25-0-s2 .speaker-KRD} ##### Mr DEPUTY SPEAKER (Mr McGrath:
BALLAARAT, VICTORIA -- The words complained of having been objected to, I ask the Leader of the Opposition to withdraw them. {: .speaker-KZO} ##### Mr LATHAM: -- I do so, **Mr. Deputy Speaker.** It is indeed deplorable, after the experience which the Commonwealth Parliament had in 1920, and the following years, to find this Government resorting to a procedure that is unworthy of any self-respecting body of men, more particularly when, as I have said, this Ministry was returned, if you please, to support the principle of arbitration. Apparently Ministers and their supporters consider that arbitration should be one-way arbitration; that whenever there is a risk of decisions being given, against the interests of those with whom they are particularly allied, everything possible must be done to prevent such decisions from being made effective. 1 predict, without hesitation, that whatever may be the nature of the report of this commission, no action will be taken by the Government to give effect to it in general industry. The Ministry ha3 not the power to do so. Every member of the Ministry knows this, if he is worthy of his position in the Cabinet. But further, the decision of any royal commission cannot bind, or be made by this Parliament to bind, the Arbitration Court. It is the duty of that court, and of every other industrial tribunal, to. make its own inquiries and to use its own discretion in any matter that falls within its sphere of action. Accordingly, the inquiry to be conducted by the royal commission, the appointment of which has just been announced by the Acting Prime Minister, must necessarily be useless; but I am afraid that it will deceive a large number of workers. I predict that some day the Government will be very sorry indeed that it instituted such an inquiry. {: #subdebate-25-0-s3 .speaker-KYI} ##### Mr PROWSE:
Forrest -- I protest very strongly against the useless expenditure which will be involved by this royal commission. This afternoon I asked if the Government would appoint a royal commission to inquire into the condition of the wheat industry which is admittedly in a very serious position. Any recommendation made by such a royal commission could be adopted by this House, and, therefore, expenditure incurred by it would not be wasted. But the Government turned a deaf ear to mv request. This royal commission, it would seem, has been appointed in pursuance of a promise made by the Government to its supporters. I agree with the Leader of the Opposition **(Mr. Latham)** that any recommendations which it may make cannot affect, in any way, the conditions of the workers of this country. {: #subdebate-25-0-s4 .speaker-KZR} ##### Mr WHITE:
Balaclava .- I join with the Leader of the Opposition in protesting against this latest action of the Government. This morning, when the Acting Prime Minister **(Mr. Fenton)** announced the intention of the Government to appoint this royal commission, I asked him if he could indicate when we might expect to receive its report, and I was informed that it would be presented as soon as possible. There is not the slightest doubt that the Government's action is merely calculated obstruction to stop the economic adjustment which is going on in Australia. {: .speaker-JPV} ##### Mr Blakeley: -- I object to the words used by the honorable member for Balaclava. He has said that the Government's action is calculated obstruction to stop the economic adjustment. I ask for the withdrawal of those offensive words. {: #subdebate-25-0-s5 .speaker-10000} ##### Mr DEPUTY SPEAKER: -- I call upon the honorable member for Balaclava to withdraw the words objected to. {: .speaker-KZR} ##### Mr WHITE: -- I withdraw the words if you, **Mr. Deputy Speaker,** consider them objectionable. I personally do not. {: .speaker-10000} ##### Mr DEPUTY SPEAKER: -Order ! The honorable member must withdraw the words unreservedly. {: .speaker-KZR} ##### Mr WHITE: -- I do so, **Mr. Deputy Speaker.** While the Leader of the Opposition was speaking, the honorable member foi1 Bendigo **(Mr. Keane),** who, in another capacity, is chairman or president of the "Victorian branch of the Australian Labour party, in an interjection, stated that the appointment of this royal commission -was to check the court. {: .speaker-KE4} ##### Mr Keane: -- I said that the arbitration judges broke the law. {: .speaker-KZO} ##### Mr Latham: -- I direct your attention, **Mr. Deputy Speaker,** to the interjection made just now by the honorable member for Bendigo who said that our arbitration judges had broken, the law. {: .speaker-10000} ##### Mr DEPUTY SPEAKER: -I ask the honorable member for Bendigo to withdraw the statement complained of. {: .speaker-KE4} ##### Mr Keane: -- I withdraw it, **Mr. Deputy Speaker.** {: .speaker-KZR} ##### Mr WHITE: -- This Government pretends to be solicitous for the welfare of the workers and those who, at present, are unemployed; and yet its action in appointing a royal commission to inquire into the basic wage at such a time as this will only accentuate the position. The basic wage problem can be discussed from different angles. Experience over ti number of years has shown that the idea of paying to a man a wage sufficient to enable him to maintain himself, his wife and three children under the age of fourteen years, in. a certain standard of comfort, is economically wrong. J t applies to all men of 21 years and over. How many men at, the age of 21 years have a wife and three children? For many years industry has been taxed to pay for thousands of imaginary wives and children, and under this top-heavy system the country is now suffering. The Acting Prime Minister has attempted to camouflage the true position by saying that the inquiry is to be made by a reputable public servant. We all admire **Mr. Wickens** as a statistician, and are aware of his good repute; but the Government should not take this action at a time when the Arbitration Court is operating to bring about changes in the industrial sphere. Although I may not describe the Government's action as calculated obstruction of the court, the honorable member for Bendigo **(Mr. Keane)** has said that this commission will be a check upon it. Nobody denies that there must be a minimum wage; but the practice of basing it upon what a man and his family consume, instead of what, they produce, is fallacious. The royal commission is uncalled for, and will involve unnecessary expense. {: #subdebate-25-0-s6 .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP .- One of the greatest blunders ever perpetrated is the action of the Government in appointing a royal commission, on the basic wage. What has become of the Labour party's election promise to curtail government expenditure? Boards and commissions were declared by it to be an excrescence on the body politic,- and yet one of the first actions of this Government is to appoint a royal commission to deal with a matter already under the consideration of a properly constituted court. The Acting Prime Minister said that a basic wage would be determined for a man, his wife and three children. Is that wage to operate in the cities for the benefit only of those who are lucky enough to have a job at the present time, or will it apply to the people of Australia generally? Take the dairying, wool, wheat and mining industries, or any other rural industry one might mention. How can a basic wage be fixed in those industries for a man, his wife, and three children? It may be possible to do it in protected industries. The Minister is the apostle of high protection in this House, and came here with one idea. {: .speaker-KYV} ##### Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- He has had an honorable career in this Parliament. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- But his sole idea is that the higher the tariff wall the better for all concerned, and that if an industry cannot pay high wages, it is better for it to go out of existence. If a primary industry is not in a position to pay a basic wage, is it to be allowed to collapse because of an absurd and futile judgment once delivered by **Mr. Justice** Higgins, in which he laid down that principle. If the royal commission fixed an artificial wage and an industry could not pay it, what would happen? That industry would probably be destroyed. In view of the prevalence of unemployment, it is useless to talk about a basic wage and the standard of living, when we consider the plight of the men outback who are doing the pioneering work of this country, and also the men in the road camps. What, after all, is the standard of living of those who are out of employment? The fixing of an artificial standard will lead us nowhere. Let us face the fact that Australia can pay wages only out of what is produced in this country, and if the conditions under which men may be employed arc made too artificial and severe to enable an industry to observe them, that industry, willy nilly, will pass out of existence. If £1,000 is available for the payment of wages, it is better to employ 250 men at £4 a week than to give work to 200 men at £5 a week, leaving 50 men idle. The Labour party seems to imagine that wages can be paid out of thin air. There has never been so much unemployment in Australia as since the present Government came into power, and the blame for it lies chiefly at the door of this Government. The Ministry is holding a carrot in front of an ass in the hope that he will swallow it. Ministers are occupying the treasury bench under false pretences. They have no hope of carrying out the promises they made to the people. They declared that they were opposed to the appointment of boards and commissions; but they are now repudiating one of their promises. {: #subdebate-25-0-s7 .speaker-JPV} ##### Mr BLAKELEY:
Minister for Home Affairs · Darling .- The House has just listened to an extraordinary o.utburst - the second this evening - by honorable members opposite, who, in days gone by, chided honorable members who now sit on this side of the House on their demeanour and the manner in which they conducted themselves as members of Parliament. The exhibition of those honorable members was unworthy of themselves, and, most certainly, unworthy of this Parliament. Immediately a step is taken in the direction of ascertaining the truth relating to many important matters that have not been investigated for over ten years; immediately there is the slightest semblance of an exposure of the manipulation of capital, the watering of stock, the issuing of bonus shares, and all other matters that affect the determina tion of the basic wage in this country, we find the representatives of capital rising and using every expression they can call to mind in condemnation of the Government. {: .speaker-JOM} ##### Mr Beasley: -- They are afraid of the results. Mi-. R. Green. - We are not. {: .speaker-KRD} ##### Mr DEPUTY SPEAKER (Mr McGrath: -- Order! **Mr. B.** *Green continuing to interject,* {: .speaker-10000} ##### Mr DEPUTY SPEAKER: -Order! I have allowed the honorable member for Richmond **(Mr. R. Green)** a very fair amount of latitude, and I expect him to keep silence while other members are speaking. {: .speaker-JPV} ##### Mr BLAKELEY: -- Recently, the Commonwealth Arbitration Court commenced one of the most momentous investigations it has ever carried out, namely, an investigation of the basic wage of this country, in which are concerned between S00,000 and 900,000 men. Before the case started the declaration was made that wages were to be reduced over the whole industrial field by Ss. a week. In order that the court should have full and complete evidence upon which to base its findings, this Government offered the assistance of one of its officers. But what do we find? {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- It heard evidence from him. {: .speaker-JPV} ##### Mr BLAKELEY: -- We find that the Arbitration Court is not prepared to investigate various matters before it makes a declaration. {: .speaker-C7E} ##### Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920 -- On a point of order, I ask whether the Minister for Home Affairs is in order in attacking the Arbitration Court. {: .speaker-10000} ##### Mr DEPUTY SPEAKER: -- It did not appear to me that the Minister was making any attack on the Arbitration Court. {: .speaker-KZR} ##### Mr White: -- On a point of order, I draw attention to the fact that the Minister for Home Affairs said that the Arbitration Court is not prepared to take certain evidence. I contend that thereby he definitely impugned the court. {: .speaker-10000} ##### Mr DEPUTY SPEAKER: -- The point of view that I take is that the Minister was dealing with the functions of the Arbitration Court, and arguing that it, probably, had not the power to deal with all the matters in dispute. I, therefore, rule that he was quite in order, mid that he did not intend to cast any reflection on the court. {: .speaker-KZR} ##### Mr White: -- The court has full power 10 take evidence on any matter. {: .speaker-10000} ##### Mr DEPUTY SPEAKER: -- I ask the honorable member for Balaclava **(Mr. White)** to resume his seat. I have given my ruling, and there can be no debate upon it except on a motion that my ruling be disagreed with. {: .speaker-JPV} ##### Mr BLAKELEY: -- What I said was that the court had decided that it would not investigate the whole of the questions. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- It has the right to -:n.v whether it shall or shall not. {: .speaker-JPV} ##### Mr BLAKELEY: -- The court has definitely determined that it will deal with only two aspects of this very important matter - the national dividend and its allocation, and the capacity of Australia to pay. I have no desire to criticize tlie Arbitration Court of this country; but when the very existence of our workers is at stake, something more than an investigation under only two heads should take place. I cast no reflection upo^ t,ne court; tlie court itself said in 1929 that it had not the capacity to investigate all of these matters. The Government was instrumental in making available to the court the services of the Commonwealth Statistician, **Mr. Wickens.** It also suggested the various matters that should be investigated. {: .speaker-JWT} ##### Mr Francis: -- It had no right to do so. {: .speaker-JPV} ##### Mr BLAKELEY: -- The Government lias at least this power, that it can instruct its officers to go to the court and supply it with information under certain headings. {: .speaker-JWT} ##### Mr Francis: -- The Minister said that the Government had instructed the court. {: .speaker-JPV} ##### Mr BLAKELEY: -- I did not say any such thing; the honorable member is too <iuick at arriving at conclusions. When the Commonwealth Statistician arrived iit the court, he found that, while the act allowed lfim to investigate certain matters, lie did not possess the power to investigate others, and in his evidence he informed the court of that limitation of his powers. In order that he shall enjoy full and complete powers, the Commonwealth Government is appointing him n royal commissioner. riffM Among other things, **Mr. Wickens,** as :i royal commissioner, will investigate the amount of the national dividend of Australia for the vear ended the 30th June, 1930, and for each of the preceding two years. Although an investigation of that matter was made in 1910, the figures for that year are not applicable to the situalion in 1930. That applies in the case of every matter that the royal commissioner will investigate. Other subjects for investigation arc: The percentage of the national dividend of Australia which the basic wage worker has received in each of the States of Australia, taken separately, and in the Commonwealth taken as a whole, in each of the years ended the 30th June. 1908, to 1930 inclusive; the value added to the lands of each State of Australia by the provision of railway facilities; the amount of the present Australian railway capital represented by loan flotation charges and expenses, and the variation of interest in connexion with the loans that were floated from time to time; the average rate of interest payable on first and second mortgages on house property in each State for the last five years; and the ascertainment of clothing and manchester prices based on durability of articles. The next item will interest my honorable friends; probably it furnishes a reason for the display of so much heat by those who are representatives of the employer.* nf this country. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- On a point of order, I ask that that statement be withdrawn. I am not a representative of the employers of this country. I put it to you, **Mr. Deputy Speaker,** that the Minister has no right to charge honorable members on this side with being representatives of employers or of capital, as he has been doina; throughout his speech. {: .speaker-10000} ##### Mr DEPUTY SPEAKER: -- If the honorable member for Warringah **(Mr.** Parkhill) regards the statement as offensive, I ask the Minister to withdraw it. {: .speaker-JPV} ##### Mr BLAKELEY: -- I withdraw it. The paragraph in question is probably accountable for so much antagonism having been shown to an investigation ' that will be carried out in the full light of day. The commission will also obtain particulars concerning Australian companies in respect of - (1) capital invested, (2) profits made, (3) reserves accumulated, and (4) bonuses distributed. And then it will inquire into the inflation of capital of companies since 191S. Those are a few of the matters which the royal commissioner will investigate. Honorable members opposite and their colleagues were responsible for the appointment, in six and a ha'lf years', of 52 royal commissions and committees of investigation, at a cost of £600,000. This Government is availing itself of the services of the Commonwealth Statistician, so that there will not be any large fees paid, and prolonged sittings, or peregrinations around Australia. The investigation will be made at about one-twentieth of the cost of that of other royal commissions or committees of investigation appointed by the BrucePage Government. {: .speaker-JWT} ##### Mr Francis: -- How long will the inquiry take? {: .speaker-JPV} ##### Mr BLAKELEY: -- It is anticipated that the investigation of the whole of that very comprehensive reference will take about twelve months. The people of Australia will recognize, if honorable members opposite do not, that such an exhaustive inquiry cannot be completed in ten minutes. This is a commission to investigate various matters which have not been inquired into since the inauguration of federation. This Labour Government will, at least, pioneer a line of policy for the proper investigation of those factors upon which the wages of the worker depend. {: #subdebate-25-0-s8 .speaker-C7E} ##### Dr EARLE PAGE:
Cowper -- It is most remarkable that the Acting Prime Minister **(Mr. Fenton)** should bring down this very contentious matter for discussion at such a late hour, and that at twenty minutes before midnight the Minister for Home Affairs **(Mr. Blakeley)** should read to the House a long statement with regard to the terms of reference of this commission, probably one of the most important that has been appointed in the history of the Commonwealth. Why is it necessary to introduce the proposal in this shamefaced way, at an hour when half of the House has gone home? Why was the matter not introduced at a proper hour, and an opportu nity given for its discussion? It looks as if the Government is ashamed of this commission ; as though it is a red herring being drawn across the trail of unemployment; the problem that has dogged the Government ever since it came into power. The Minister for Home Affairs said that this matter affected some *800,000* workers in Australia. I contend that it affects 6,500,000 people, the whole of the inhabitants of this country. It may easily affect the questions of whether men are to be in or out of work; whether we shall be able to continue our industries or not; whether we shall be able to export both primary and secondary products; or whether our industries are to be absolutely strangled. I protest that this is not the manner in which to deal with the problem. When the honorable member for Fremantle **(Mr. Curtin)** sat on a royal commission some time ago he pointed out that the needs of a mail, his wife and three children, was not the essential factor to be investigated- when determining the basic wage, but that the family that really exists should be taken into consideration. Why did not the Minister appoint a commission to investigate this urgent matter on a real basis which the late **Mr. Justice** Higgins and **Mr. Justice** Powers asked for so frequently? We are merely to have a repetition of the investigation carried out under the direction of **Mr. Hughes** when he was Prime Minister. On that occasion the Arbitration Court protested that the report that was presented was quite valueless for its purpose of finding a sound basis for its decisions. This report will be equally as valueless in deciding the issue. I appeal to the Government to modify the terms of reference of the commission. If the matter is so important the commission should be given an opportunity to state upon what the basic wage should be based. The Minister declared that it will have an opportunity to examine all ' sorts of things, and he contended that honorable members on this side are afraid of what it will'-bring to light. If this commission is not a time-wasting device to prevent the Arbitration Court declaring a lower basic wage,1 or a red herring to divert attention from dealing with unem- ployrneut, let it get the results that the arbitration judges have asked for. I shall be glad to see it inquired into, not merely the items referred to by the honorable gentleman, but any of those points to which I have referred, which are more important than the bogys that are continually raised by honorable members opposite. For heaven's sake let us have an examination that will get us somewhere. The Government already has the sugar corn- I desire to dissociate myself from any personal attacks that have been made on the Commonwealth Statistician. I admire **Mr. Wickens** as one of the most able and sincere public servants that the Commonwealth has. I urge the Government to give him all the assistance that he asks for. We all know that he has been in indifferent health for the past eighteen months. If too big a task is imposed upon him he will not be available either to carry on the investigation of the royal commission or do the statistical work for which he is permanently engaged. This commission should deal with the facts. I urge the Government not to confine its investigation, to the needs of a man, his wife and three children, but to ascertain the actual requirements of an Australian worker and his family - the average of which is less than one child; also, to ascertain what should be the real basic wage for the rural workers of the Commonwealth. Question resolved in the affirmative. House adjourned at 11.59 p.m.

Cite as: Australia, House of Representatives, Debates, 27 November 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19301127_reps_12_127/>.