13th Parliament · 1st Session
Mr. Speaker (Hon. G. H. Mackay) look the chair at 10.30 a.m., and read prayers.
– In view of the fact that the exemptions from primage duties announced on the 1st of September included chemicals to be used in the recovery of gold by flotation, cyaniding, and similar processes, will the Prime Minister consider the advisability of extending the exemption to the base metal industry, which is in a relatively worse condition than gold-mining?
– The list of exemptions is now complete, and there will be no time before the. introduction of the bill to consider the honorable member’s request. After the bill has been presented, however, the suggestion may be investigated.
-Iask the Prime Minister when the exemptions from sales tax will become operative, and whether the Government will have power to insist upon prices for exempt goods upon which the tax is now charged, being reduced accordingly, if the seller fails to do so voluntarily?
– That matter will be dealt with when the bill is introduced.
Motion (by Mr. Lyons) agreed to -
That the House atits rising adjourn until Wednesday next at 3p.m.
– Has the Assistant Minister for Trade and Customs yet considered the representations made to him by a deputation some weeks ago in regard to the Cockatoo Island Dockyard ? If so, is he in a position to inform the House what course of action is favoured by the Government?
– The matters brought to my notice by the deputation have been considered by the Cabinet and the departments concerned. The decisions have been communicated to honorable members interested, and I regret that, owing to the financial position, most of them are adverse. The Government has not yet decided the future of Cockatoo Island Dockyard, and is still considering whether it should be leased or amalgamated with Garden Island or dealt with otherwise. Circumstances beyond our control have caused delay in regard to one objective of the Government, but any representations which the honorable member for Martin may make to me will be brought to the notice of Cabinet.
– Can the Prime Minister have prepared for honorable members a list of the dates of maturity and rates of interest of Commonwealth and State loans overseas? In the budget papers, this information is so grouped that it is not easily dissected. I do not press for the return if its preparation will involve undue expense.
– I shall investigate the suggestion with a view to complying with the right honorable gentleman’s request.
Federal Capital Territory : Northern Territory
– I ask the Minister for the Interior whether education within the Federal Capital Territory is administered by the New South Wales Department of Education, or by a branch of the Department of the Interior?
– It is administered by the Department for the Interior, with the assistance of the Education Department of New SouthWales.
– How is education administered in the Northern Territory?
– By the Commonwealth, with the assistance of the South Australian Education Department.
– I ask the Prime Minister whether the Government intends to take any action upon the representations by Australian ship-owners and maritime organizations to protect them against the competition of the Matson line of steamers?
– This matter has received the consideration of Cabinet for some time, and was investigated by the Australian delegates to the Ottawa Conference. The Government is endeavouring to protect British and Australian shipping interests, but the honorable member will recognize that the problem is difficult. I am not able to make any public statoment at the present time.
– Members from the more distant States have to cool their heels in Canberra from Friday to Wednesday. This involves them in considerable expense. Some of us would like to return to our own States at the week-end, but can do so only by missing a sitting of the House. Will the Prime Minister consider the possibility of altering the days of sitting in order to meet the convenience of members?
– The Government is always anxious to study the convenience of members, particularly of those from the more distant States, but in the first few weeks of the session Ministers are busy with the preparation of legislation and the budget, and an increase in the number of sitting days would unduly trespass on their time.
– Two days have been wasted this week.
– I thought that honorablemembers attached some importance to private members day.
– It was mere windowdressing.
– As soon as the Government can conveniently do so, it will invite the House to meet on Tuesdays, in the hope that this will lead to an earlier termination of the session.
– Inview of the fact that Friday is usually, an unsatisfactory day, because many members desire to leave by the afternoon train, will the Government reconsider the proposal made some years ago that the House should meet on Mondays and adjourn on Thursday evening, thus enabling most honorable members to leave Canberra at the week-end?
– We shall endeavour to make such arrangements as will be convenient to the majority of honorable members. At the same time the administrative obligations of Ministers also must be considered. In connexion with any proposed alteration of the sitting days, the suggestion of the honorable member will receive attention.
– I understand that certain redundant telephone mechanics are being drafted into other positions in the Service. As these officers have received technical training, will the Postmaster-General instruct that, in making the transfers, efficiency rather than seniority shall be the governingconsideration ?
– Telephone business has slumped seriously during the last eighteen months, and much difficulty has been experienced in findingemployment for many of the mechanics, but rather than dispense with their services, the department is drafting them into other positions. As soon as telephone business revives, these men will be re-employed at the technical work for which they have been trained. I understand that, in connexion with appointments and promotions in the Service, both efficiency and seniority are given due weight. In deciding between two officers of equal efficiency, seniority would be taken into account.
– I ask the PostmasterGeneral whether it is a fact that for some months past the employees in the mailhandling branch at the General Post Office, Sydney, have been requesting that their work-rooms be inspected by an independent medical man during working hours, in order to decide whether the conditions are conducive to health, and that so far their request has not been acceded to?
– Although the department did not accede to the precise request of the Union, the principal medical officer appointed an independent doctor to accompany the medical officer who is always on duty at the General Post Office, on an inspection of the branch. As a result of their report, certain improvements have been made which will be conducive to the better health of the employees.
asked the AttorneyGeneral, upon notice-
– The answers to the honorable member’s questions are as follow : - 1and 2. The ratification of the convention was recommended by the Commissioner shortly afterhis return, but, on further consideration, it was found that in certain respects the convention dealt with matters which were beyond the legislative power of the Commonwealth and in other respects certain amending legislation would be necessary. A report from the present Commissioner of Patents, dated the 10th August, 1932, has been received by the Attorney-General, and the question as to whether the Commonwealth shall accede to the convention is now receiving consideration.
– The honorable member for Fremantle (Mr. Watson) has asked questions, upon notice, regarding the value of Australia’s production. The information is being obtained, and will be furnished as soon as possible.
asked the PostmasterGeneral, upon notice -
– The information is being obtained.
asked the Prime Minister, upon notice -
– The Public Service Board has been asked to prepare the information, and a reply will be made available at an early date.
Patients Eligiblefor Treatment
asked the Minister for Repatriation, upon notice -
What persons are eligible for admittance to the Randwick Military Hospital?
– The answers to the honorable member’s question are as follow : -
asked the Treasurer, upon notice -
Whether he is yet prepared to indicate to the House the result of his consideration of the request of the 31st August lastby the honorable member for Wimmera, that the Government’s reply to Sir Robert Gibson’s letter on the question of exchange should be made available to honorable members?
– The bank’s letter was considered in conjunction with the recommendations made by the committee of economists to the conference of Premiers in April last, and the policy of the Government in regard to the questions involved was declared in the statement made by me to that conference and published in the conference report. The attitude of the Government in this matter was also set out in the recent budget speech.
– Yesterday the honorable member for Fremantle (Mr. Watson) asked the following question, upon notice: -
What was the amount of interest paid by Australia to America during the last financial year in gold values, and what was the relative amount in Australian currency values?
The answer to the honorable member’s question is as follows : -
The gold value of the interest paid by all Australian governments in America during the financial year 1931-32 was £2.373,242. The cost in Australian currency of the payment of the above amount in America was £3,758,864.
The following papers were presented : -
Tariff Board - Report and Recommendation -Plain Clear Sheet Glass.
Ordered to be printed.
Returned Soldier Patients at Mental Hospital, Cullan Park, Sydney - Report on hospital conditions by the Repatriation Department.
Canned Fruits Export Control Act - Sixth Annual Report of the Canned Fruits Control Board, for year ended 30th June, 1932. together with a statement by the Minister regarding the operation of the Act.
Northern Territory Acceptance Act and Northern Territory (Administration) Act - Ordinance of 1932 - No. 17- Local Courts.
Motion (by Mr. Lyons) proposed -
That Notice of Motion No. 1 Government Business be postponed until after Order of the Day No. 1.
– I wish to know the reason for this alteration of the business on the noticepaper.
– The honorable member is easily offended.
– I am not prepared to sit quiet while the Prime Minister conducts the business of the House in any way that he may think fit without consulting the convenience of the House. When the Attorney-General (Mr. Latham) wason this side of the chamber he was very much alive in his refusal to allow what is now proposed to be done.
I am not quite so simple as he would like me to be. The least the Prime Minister should do is to give the House the reason for this proposal.
– The honorable member did not give the Prime Minister time to do so.
– The Prime Minister moved the motion and sat down without making any comment, and naturally the Speaker proposed it to the House. If other honorable members do not wish for information, that is their concern, but it is my intention to ask, while in this House, for any information to which I think I am entitled. Courtesy demanded that the Prime Minister should inform the House of the reasons for this alteration in procedure.
– I am sorry that the honorable member gets annoyed about such little things. I announced to the House last night that I expected to move the second reading of the Sales Tax Bill, and the Financial Emergency Bill, and that then the debate on the State Grants legislation would continue. The only alteration now proposed is the postponement of Notice of Motion No. 1 until we are ready to proceed with the Financial Emergency Bill.
– Could not the motion be moved now?
– I do not wish to move it until we are ready to proceed with the measure, which will be the case at a later stage to-day. The alteration of our programme isso unimportant that I did not consider that it required explanation. Had there been anything worth while to communicate, I should certainly have made an explanation to honorable members.
Question resolved in the affirmative.
Debate resumed from the 7th September(vide page 296), on motion by Mr. Lyons -
That the bill be now read a second time.
Upon which Mr. Beasley had moved by way of amendment -
That all the words after “That” be omitted with a view to insert in lieu thereof thu words “ tlie bill be withdrawn and redrafted to provide that financial assistance shall bc for the sole purpose of relief of unemployment.”
.- 1 think that there will be no serious opposition to the measures now before the House, which provide for the rendering of financial assistance to the three smaller States of the Commonwealth. The fact that three States have asked for financial assistance indicates clearly that economic conditions within the Commonwealth arc seriously out of balance, and if the honorable member for New England (Mr. Thompson), who said that he feared that the granting of assistance to the smaller States was becoming the settled policy of the Commonwealth, took the trouble to examine the genesis of these grants, he would find that it has become no more the settled policy of the Commonwealth than has the policy of protection. I suggest that while we have protection in order to promote the development of the secondary industries of Australia, we must have some arrangement for compensating those States which do not enjoy the fruits of the protective policy. These applicant States depend chiefly for their well-being, upon primary production, and the prices of primary products have declined much more than those of secondary products. That emphasizes the need for some compensating arrangement. For instance, in the last two or’ three years the value of wool has declined 41.9 per cent., wheat 38.5 per cent., and butter 26.9 per cent. From tlie non-rural index we find that secondary price levels have declined only 3.2 per cent. It stands to reason, therefore, that the States which manufacture secondary products have not, to the same extent, suffered from the shrinkage in price levels as have those States which are primary producing. The Year-Booh statistics show that in the year 1929-30, 85 per cent, of the total secondary producing units of this country lay within the borders of New South Wales, Victoria and Queensland, that 85 per cent, of the wages paid for that production were paid in those three States, and that 85 per cent, roughly of the total wealth contributed by secondary industries was con tributed in those three States. The population figures are on a similar basis. One must take notice of the fact that duo to the influence firstly of topography, and secondly of protection, we have a group of secondary production units in those three States which seems to be permanent, and that there is little hope in the future of anything like a similar development in secondary production taking place in the outlying States. Protection is tlie settled policy of Australia and one accepts that. No argument is necessary, however, to defend the smaller States against what amounts to an accusation that they come to the Commonwealth cap in hand asking for financial assistance from year to year. It is right to endeavour first of all to get to the root cause of this matter, otherwise no understanding is possible. Here we have one root cause. I do not say that the protectionist policy of Australia should be abolished, because that would be fatal. I cannot go half the distance that some honorable members go in regard to a downward revision of the tariff because I feel that that would be proceeding too far, and would tend to dry up the well-springs of employment. How to provide employment for our people is one of the fundamental problems facing us to-day. It is much better to be guided in our tariff policy by the considerations attaching to the subject of unemployment, than it is to go the whole hog, merely because the whole hog policy would suit the immediate needs of the man on the land. It would not suit his ultimate needs, because his home market’ is his best market, and a drastic breaking down of protection would disintegrate that market, and thereby, in the long run, make the man on the land worse off than he is to-day. We should go only a certain distance, aiming at the preservation of the balance between primary and secondary production, and at the same time, not unduly handicapping the primary producer, while, on the other hand, providing an expanding field of employment for the young people of Australia. The primary industries cannot offer a full field of’ employment. The statistics of the population engaged in primary production show a decline. Not only here, but all over the world the advancing technique in primary production is comparable with that in secondary production. It is a fact that in the world of farmers, the machine has displaced men. progressively; therefore, we have to encourage and develop the field of employment which the secondary industries offer, and at the same time, conserve to our farmers the markets which those who are engaged in secondary industries provide.
I regret that the honorable member for New England used the words “cadge” and “grab” in regard to the States of Tasmania, South Australia, and Western Australia. Those words, which may be in use in New South Wales, are not very well understood in the other States. It would have been much better had the honorable member said something about “ Hands Across the Sea,” because that would have been more friendly. At the same time, the “ hands across the sea “ are extended not’ so much by Tasmania to the States on the mainland as by the mainland States to Tasmania, because the balance of trade between the mainland and that State is invariably in favour of the mainland. Therefore, the words “Hands Across the Sea,” or as the honorable member for New England prefers “ cadge “ or “ grab “ seem to me to apply more to the mainland than to Tasmanian activities. The Prime Minister (Mr. Lyons) has indicated that the Government is seeking a formula upon which this question of State relief can be settled from time to time, but I think that it’ will be difficult to find such a formula. I have tried to arrive at a formula, but must confess that I have failed. We must ask ourselves these questions : Have these outlying States endeavoured to better their financial position and face up to the need for economy? Have they taxed their people adequately? So far as Tasmania is concerned, the answer is undoubtedly “ Yes.”
– And tho answer is “ Yes “ so far as South Australia is concerned.
-In the case of South Australia the answer is “ Yes, plus.” Have the States reduced their cost of public administration? Again the answer is “ Yes “ so far as Tasmania is concerned. I do not speak for the other States, because they are ably represented in this House. Has the Premiers plan been implemented by these States? The answer is “ Yes “ in the case of Tasmania. In trying to arrive at a formula, we must decide whether a State is worthy or unworthy, whether it has done its job. No matter what other economic changes occur, these criteria will remain constant. The honorable member for New England used two other words to which I object, not in anger, but in sorrow. He used the words “ indigent “ and, I think, “mendicant.”
– I used the word “ mendicant.”
– The honorable member for Balaclava should keep silent, because had it not been for the activity of two Tasmanians. Victoria would never have been established. Why those Tasmanians decided upon Melbourne” as i< place of settlement I cannot for the life of me understand.
As to the charge of indigence. I shall quote figures to show the position of Tasmanian trade. In the last ten years, there has been an increase in the number of cattle from 216,704 to 230,254. The number of sheep has increased from 1,550,000 to 2,120,000, and of pigs from 49,743 to 54,556. In 1921-22, the quantity of wool produced was 9,634,624 lb., and in 1930-31, 14,000,000 lb. In 1921-22, the quantity of butter produced was 5,270,243 lb., and in 1930-31, 9,S02,261. Size for size and fertility for fertility, that record will stand comparison with the record of any other State. Not one of those items of production has enjoyed any assistance from protection. Another commodity which interests the honorable member for New England, is tobacco. We have grown some very good tobacco in Tasmania, and realized a good price for it. When the acrimonious tobacco debate was proceeding in this House, the Tasmanian tobaccogrowers were the only ones in the whole of Australia, who did not complain. Their tobacco crop this year realized £8,000. Honorable members will realize that the smaller the turnover, the greater the cost per lb. In addition, Tasmanian tobacco-growers are at a disadvantage climatically compared with those in other portions of Australia. Tasmania has not been able to build up many big secondary industries, for the very substantial reason that the geographical position of the State is against it. That natural disadvantage :: increased by the unsatisfactory shipping services to Tasmania. That the people of the island State are good customers of the mainland, statistics for the year 129-30 prove. Tasmania’s exports to the other States in that year were valued at £6,600,000, whereas her imports from the mainland were valued at £S,000,000. Thus Tasmania’s adverse trade balance that year in the matter of interstate trade was £1,400,000. Tasmania, being an island, must necessarily depend upon water-borne transport in her trade with the other States. In this respect, Tasmania’s difficulties are greater than those of any other State - a fact which should be borne in mind in our consideration of applications by Tasmania for financial assistance. Not only is 75 per cent, of Tasmania’s trade water borne ; it is water borne by the ships of two companies which, in fact, are not competitors. The result is that the cost of placing Tasmanian goods in the markets of the mainland is greater than it would be were there active competition in the shipping trade. An extract from the report of the Tariff Board on galvanized iron bears out this contention of added costs -
It should be pointed out, however, that the list selling prices arc not the same at all Australian ports; at Fremantle and Hobart the price is 103. per ton higher than at other main ports; therefore, portion of the extra freight to these places is included in the price charged.
In the case of petrol, the position is much the same. The price of petrol in Hobart is, and will, no doubt, continue to be, 2d. a gallon more than in any other capital city in Australia. That is a severe handicap, which affects the people of Tasmania in their businesses as well as in their recreation. Again, some time ago, when freight rates on potatoes from the Western District of Vict’oria to Sydney were reduced by 4s. per ton, the reduction in respect of potatoes from the north-west coast of Tasmania was only ls. per ton, notwithstanding the shorter distance and the larger quantities sent from Tasmania. These illustrations show that ‘when an enterprise has a field to itself it is more inclined to consider it3 own interests than when it ha3 to meet competition.
The restrictive provisions of the Navigation Act seriously affect Hobart and the southern portion of Tasmania During three months of the year a more or less antiquated interstate steamer trades between - Sydney and Hobart. From about the 1st of April to the beginning of December there has been no direct passenger service between those two capitals, except for occasional visits of overseas steamers under permit. Recently vessels belonging to the Eastern and Australian line have visited Hobart at monthly intervals, and have brought 50 - or 60 persons to Tasmania each trip, and taken as many away. Notwithstanding that from about the 1st of January to the beginning of June, big overseas vessels aggregating 500,000 tons, and including mail steamers, visit Tasmania for the wool clip and apple crop, they are not permitted to carry a pound of freight or a single passenger to the mainland, and consequently people who desire to travel to and from Tasmania are stranded on the beach while these magnificent ships come and go without them. Obviously, the object is to force the trade, both in passengers and freight, through Launceston and the Bass Strait ferry, in the interests of the shipping companies. But what of the passengers who “wish to travel direct? Even in cases of sickness and grave emergency, persons wishing to travel directly from Hobart to Sydney have not been permitted 1o travel by these overseas vessels; but have been forced to take the longer and more expensive route overland via Launceston, and thence through Melbourne to Sydney. The cost of this journey is two to three times greater than that of the direct route.
Another matter which affects Tasmania is not so large as it is annoying. Tasmanian waters abound in fish, which the people on the mainland are always glad to obtain. When -the Sydney fish market permits Tasmanian fish to be sent, first, by rail from Hobart to Launceston, then by vessel to Melbourne, and later, by rail to Sydney, Tasmanian fishermen can dispose of their catch ; but when the Sydney market is so low as not to stand a freight of about £26 a ton, our fish has either to be dumped in the sea or not caught at all.
-is it possible for Tasmanian fishermen to market their fish profitably in Sydney against local competition ?
– Yes, provided the price is sufficient to cover freight. That is because of its superior quality. I can only say that it is ridiculous to expect Tasmanian fishermen to carry on under such conditions.
One of Tasmania’s main natural industries is the tourist trade. The island State has the scenery and the climate to attract tourists, as is evidenced by the frequent visits to Tasmania of members of this Parliament. The people of Tasmania wish that they would go there more frequently, and in greater numbers, for then they would have a greater appreciation of that State’s problems. Tasmaniahas many good roads, costly to make and expensive to maintain, of which full use is not made because the tourist trade has been strangled. Consequently, an investment of about £10,000,000 is deteriorating, more because of the weather than the wear of traffic. It is illogical for honorable members to object that Tasmania is always asking for assistance when they must know that the conditions imposed by federal laws are chiefly responsible for Tasmania’s condition. Tasmania asks only for a reasonable chance to do something for herself.
– Does the honorable member favour secession?
– No ; nor do I advocate making Tasmania a portion of Victoria. Some honorable members may think that Tasmanian representatives derive a great deal of pleasure from appealing to the Commonwealth for financial assistance. That is not so. Tasmania wants only fair treatment. The State will supply the enterprise if given an opportunity to do so without harassing restrictions.
– It would help Tasmania if the New South Wales lottery were discontinued.
– That would be a substantial help.
In moving his amendment, the honorable member for West Sydney (Mr. Beasley) indulged in a severe criticism of the Premier of South Australia. In that respect he was thoroughly in tune with the honorable member for Hindmarsh (Mr. Makin). That hedid not also castigate the Premier of Tasmania suggests that he had no complaint to make regarding the government of that State, probably because during recent months he has visited Tasmania and understands the position there. There is already on the statute-book legislation providing for a certain measure of relief to Tasmania in any case, so I presume the amendment does not apply to the grant to that State.
– Does the honorable member support the amendment in relation to South Australia?
– I do not understand the South Australian position as I understand that of Tasmania. Although small, Tasmania is big enough for me, and it is with the interests of that State that I am chiefly concerned. I urge that Tasmania be given a real chance, but in doing so, I do not advocate either secession or the abolition of the policy of protection.
– Do the people of Tasmania want to secede?
– They want freedom to trade with the rest of Australia; they want the restrictive provisions of the Navigation Act removed so that shiping may be free to cater for the Tasmanian trade. Honorable members representing States which benefit largely from the policy of protection should not coiffplain about the right thing being done for those other States which do not enjoy the same advantages.
– I shall confine my remarks almost entirely to the bill providing for assistance to Western Australia, because I understand the position of that State better than that of Tasmania and South Australia, although I know that those States also are faced with great difficulties. It is only fair to say that there exists in Western Australia a great deal of unrest and dissatisfaction with federation. Honorable members who think that the statements made in this House as to the position of Western. Australia are due to the idiosyncrasies of the representatives of that State should take the opportunity to visit Western Australia during the next recess, in which case they would learn for themselves how the people of Western Australia feel towards federation. The statements of Western Australian members in this Chamber only reflect the general opinion of the people whom they represent. In saying that, I do not necessarily associate myself with those who advocate secession, or think that because a policy of freetrade might suit Western Australia the fiscal policy of the country should be changed. I realize that, despite its importance, Western Australia is only a portion of the Commonwealth. The existing dissatisfaction has not always been present in Western Australia, for at one time in no State was there greater enthusiasm for federation.
– How would the people of Western Australia vote to-day?
– Many of those who in that State worked strenuously for federation had come from the eastern States, and settled in Western Australia in response to the call of gold in the early nineties. They came, for the most part, from Victoria and South Australia, and a number were from New South Wales. They were determined that when federation was consummated, Western Australia should join the union. While the older residents on the coast, largely because of their isolation from the rest of Australia, were opposed to federation, those on the gold-fields, at ‘ any rate, strongly favoured it. The first two referendum bills were defeated; but 40,000 persons residing on the gold-fields put their signatures to a petition in favour of an appeal to the people on the federation issue; it was signed by almost every adult from the Murchison to Esperance. That petition was presented to Queen Victoria.
There were repeated appeals to the Western Australian Parliament for a referendum to decide whether that State should enter the federation. A great movement sprang up on the gold-fields in favour of federation, and this finally caused Sir John Forrest, before submit ting the matter to the -people by referendum, to enfranchise the women of the State. The population in the coastal districts was comparatively conservative in those days, and this action was regarded as a very democratic one. It was desired that the women should help to defeat the aspirations of the people living on the gold-fields, where a comparatively small proportion of the inhabitants were women; but when the matter was submitted to the people of the whole State, a big majority voted for federation. The representatives in this Parliament, with one exception, are, so far as I am aware, not natives of Western Australia. It is well known that those who left the eastern States to reside in Western Australia generally became enthusiastic advocates of the claims of that State, particularly when families were born to them there.
As the honorable member for Swan (Mr. Gregory) has suggested, if a vote were taken now in Western Australia, the people would favour secession. What is the reason for this great change of front? In 1900, when federation was established, it was recognized throughout Australia that Western Australia laboured under numerous disabilities. It is entirely a primary-producing State, and the high tariffs, which benefited the eastern States, did not assist the western State, but were detrimental to it. In 1895, several factories were in operation in Western Australia, but they were swept out of existence by federation. I refer to tobacco, shirt, and boot manufactories. The tobacco manufacturing industry of Western Australia was displaced by the British-Australasian Tobacco Company, which supplied the State’s tobacco requirements from its factories in the eastern States. It has been said, although I do not know whether there is much truth in the statement, that when a certain jam factory was started in Western Australia, and began to preserve locallygrown fruit, dumping was resorted to by manufacturers of the eastern States, in order to put it out of business. It is true that, on occasions, jam made in the eastern States has been sold in Western Australia at a lower price than that charged in Melbourne. Of course, the struggling local factories had to go out of existence. -
In 1900, it was agreed that Western Australia should have a grant from the Commonwealth for a number of years, the amount to decrease at the rate of £10,000 per annum, and, in addition, that the State should be permitted to operate its own tariff laws for a limited number of years. When the honorable member for Swan submitted his proposal in that direction, I have no doubt that a number of honorable members thought that the adoption of the suggestion would destroy federation, since other States would probably ask for similar privileges. The representatives of Tasmania in this House have said that in no circumstances does that State require an alteration of the tariff system. The hope that the power to operate its own tariff for a few years would assist Western Australia to develop its industries was not realized, because of competition from the eastern States, and partly for another reason. Western Australia, Knowing its own requirements best, considers that it is necessary that the materials required for mining, farming and woolgrowing should be purchased in the cheapest possible markets, and, therefore, a large number of persons in the western States are regarded by residents in the eastern States as practically freetraders, although they would not object to a tariff that would assist them to establish infant industries, and would make it easier for them to obtain the materials required for industrial expansion.
The suggestion that has been made by the honorable member for Swan is not entirely a Western Australian idea. In 1 925, a royal commission was appointed by the Western Australian Government to consider the disabilities of the State under federation. The commission consisted of Mr. W. G. Higgs, formerly a Treasurer of the Commonwealth; Mr. John Entwistle from South Australia, and Mr. Stephen Mills, who had had considerable tariff experience. Nov, one member of the commission was a Western Australian. The chairman and Mr. Entwistle expressed the following opinion -
That whatever benefit the Commonwealth protectionist policy may have conferred upon other States of the Commonwealth, it has not benefited the State of Western Australia; that it is impossible to give the primary producers of Western Australia relief by way of re duced customs duties without injuring the secondary industries of the Eastern States: and that the only effective means of removing the chief disability of the State is to restore to the State, for a period of years, the absolute control of its own customs and excise.
I have quoted one of the main recommendations of the commission. I frankly admit that the task of trying to induce the other States to agree to the proposal is a very difficult one; but the only alternative to its adoption will strengthen the movement for secession. I am not in a position to say whether the movement for secession has reached dangerous dimensions, but it has certainly become powerful, and it would be well to recognize its significance. Personally, I do not favour secession ; Western Australia should remain an integral part of the federation. It would be nothing short of a national calamity for a State comprising one-third of the area of Australia to secede from the Commonwealth.
– That is mere sentiment.
– Th ere is more in it than sentiment.I give the honorable member for Forrest credit for sincerity, but I claim that the disabilities of Western Australia could be overcome by other means than withdrawing from the federation. If honorable members from the other States could realize as fully as Western Australian members do the difficulties under which that State labours, a totally different attitude would be adopted by them to the suggestions vigorously advanced by the honorable member for Swan, and ably supported by the honorable member for Forrest. They would recognize that these honorable members are not playing up to their electorates, but are expressing the opinion of the people of Western Australia.
Recently, a commission was appointed by the Government of Western Australia to suggest means whereby the position of that State might be improved. It consisted of the Assistant Secretary to the. Treasury and officers who were well qualified to judge the position. The report which those gentlemen presented sets out the case much more fully than it was set out by the first royal commission that investigated the disabilities suffered by Western Australia under federation. I have perused the report carefully, and so far as I can see, although reference is made to the existence of’ the movement, no request is put forward for the secession of the State from federation. Tlie attention of the Government is directed, however, to the very difficult position iri which the State is placed.
– A money grant was asked for. Does the honorable member consider that that ‘would bring the State, back to prosperity?
– Just what would bring the State back to prosperity is a problem.. If this House accepted the proposal of the honorable member for Swan (Mr. Gregory), the people of Western Australia would be satisfied, and the movement towards secession would die a natural death. As I have already pointed out, the tariff is not a benefit, but rather a detriment to that State. But I do not expect the people of the eastern States .to accept any other fiscal policy. In 1925, the Federal Government appointed a committee to examine the effect of the tariff throughout Australia. It consisted of Professors Brigden, Copland and Giblin, Mr. E. C. Dyason, and the Commonwealth Statistician and Actuary, Mr. C. H. Wickens. That committee presented a report, in which it showed the cost imposed on the people of Australia as the result of the adoption of the policy of protection. I bring this forward for the purpose of demonstrating the unequal effect of protection in the different States. It benefits some States immensely, but is of no benefit to others. It adds to the disabilities of those that have only primary industries. The committee estimated that the added cost of Australian products due to the policy of protection was, in the year before the inquiry was held, £36,000,000, or approximately £6 per head of the population. It assumed that this cost was borne equally by all members of the community. It further reported having investigated the benefits derived by the different States. The per capita benefit disclosed by it was ns follows : -
The loss in the case of Western Australia amounts to £2 4s. per head of the population, equal to £1,030,000 per annum.
– There is a greater indirect loss.
– Doubtless the indirect loss is greater. Consequently, the people of that State cannot be expected to view the position gladly.
Not only did the report of the first royal commission recommend a special tariff for Western Australia, but Mr. Entwistle ..individually went much further, and said that he believed that the only way in which Western Australia could be helped was by secession. He reported as follows : -
In my opinion, Western Australia should never have entered the federation; but having done so, there is, I feel convinced, only one complete and satisfactory remedy for her present disabilities, viz., secession’. If that event occurred sill other recommendations in this report would become unnecessary. As, however, it cannot be taken for granted that secession will take place f have joined in recommendations having the object of relieving (at least to some extent) the present financing disabilities of the State of Western Australia.
It will thus be seen that even one whose bias might be expected to be in the direction of strongly opposing the idea of a distant State seceding, after an examination of the position actually suggests that as a means of obtaining justice.
I come now to the further disabilities under which Western Australia labours because of this continent’s ill-balanced population. That, I admit, is due largely to many natural difficulties. About 6,000,000 people are settled on the eastern seaboard and only about 450,000 on the western. The latter are attempting to develop at least one-third of the continent. That is an enormous task. For necessary services, the people of Western Australia have to pay a much higher rate than is paid in the eastern States. The railway service costs them £8.70 per head, while the average for the rest of Australia is only £1.68. The loss borne by the farmers on the haulage of superphosphates totals £133,000, the rate being 1.64 pence per ton per mile compared with id. in the eastern States. The use of superphosphates is essential in the west,. When the gold-fields declined, a large number of miners left their occupation and established themselves as farmers, at the request of a State Minister. They had practically no money, and undertook the farming of lands that cannot be considered as fertile as the agricultural lands of the eastern States. The only advantage they have is that the contiguity of the Indian Ocean ensures a more regular and copious rainfall. But, being almost essentially a primary producing State, “Western Australia has been much more severely hit than the eastern States by the fall in. world price levels; and it has been only partiallyassisted by the slight revival that has taken place in the gold-mining industry. Many of the farmers had been on the land for such a short period that they had not the means to withstand the fall that occurred in the prices of their products, and last year -a large number of them were compelled to leave their holdings, upon which they had expended all their energies in an endeavour to make a living. Any man who travels in the farming districts must be struck by the wretched plight of the primary producers.
– The taxation in Western Australia is not very severe.
– That has been answered, very effectively by Professor Brigden who, in a cass that he presented on behalf of Tasmania, set out the taxable capacity of the different States’ of the Commonwealth. The loan expenditure per -head of population in Western Australia amounts to £53 7s., as against £22 36s. 3d. in Victoria. My State has done its share towards balancing our trade overseas. Everybody must admit that it is imperative that Australia should strive to increase its exports. Our principal exports, of course, are primary products, manufactures amounting to only 5 per cent, of the total. In 1901 Western Australia had a production of only 774,000 bushels of wheat, or l/64th of the Commonwealth output, while in 1931 its production had increased to 53£ million bushels, one-fourth of our output! Its export, of wheat is immeasurably greater “tH’an that of any other State, per hoad of population, which benefits Australia and supports my contention that additional assistance should be given to our primary kil i tV *j producers.
In a statistical table the committee on disabilities that was appointed in 1925 points out that the finances of Western Australia have been much worse since federation than those of any other State, and the report indicates that that condition has not been brought about by lax administration or extravagant government expenditure, but. has resulted solely from the burden imposed upon the finances of my State by federation. Twelve years previous to federation the accumulated deficit of Western Australia was 19s. 2d. per head, which was lower than that of any other State with the exception of South Australia. After federation, Western Australia’s accumulated deficit was £20 13s. lid., as against £3 per head in Queensland, 2s. 2d. per head in Victoria, £11 5s. 4d. in South Australia, and £2 10s. 5d. in Tasmania.That strikingly illustrates the disadvantage of federation to my State. In regard to the number of secondary industry employees per 10,000 of the population, while all the other States, except Queensland, shows an increase, Western Australia shows a decrease between the years 1903 and 1929. The figures are-
These figures indicate that the enormous wealth produced by the secondary industries of Australia has benefited the east and burdened the west.
Western Australia’s adverse trade balance with the eastern States is tremendous. I admit that that is preferable to having a proportionally greater adverse trade balance with the United States of America, for it is supporting our own people and not outsiders. In 1928-29 Western Australia imported from the eastern States commodities valued at £9.767,000, its exports to those States being only £1,205,000. In the two following years the figures were -
I urge the Federal Government to appoint a commission, to sit in Western Australia, for the purpose of evolving a definite scheme to relieve that State of many of the disabilities from which it suffers under federation. I agree with the honorable member for Swan (Mr. Gregory) that, if it were practicable, and with the qualification mentioned by him, the problem could be solved by allowing Western Australia to credit its own tariff revenue for a number of years. It is essential that prompt assistance should be rendered to Western Australia. Otherwise the people of my State will be forced into secession, which I believe to be a policy of despair. I hope that the Government will instruct some of its Ministers to visit Western Australia and obtain first-hand knowledge of the conditions obtaining in that State.
– On a point of order. The honorable member for West Sydney (Mr. Beasley) has moved the following amendment to the motion for the second reading : - .
That all the words after “ That “ be omitted with a view to the insertion of the following words in place thereof: - “the ‘bill be withdrawn and redrafted to provide that financial assistance shall be for the sole purpose of relief of unemployment.”
Under Standing Order No. 160 -
On the order of the day being read for the second reading of a bill, the question shall be proposed “ That this bill be now read a second time.”
But under Standing Order No. 161 -
Amendments may lie moved to such question by leaving out “ now “ and adding “’ this day six months ‘, which, if carried, shall finally dispose of the bill ; or the previous question may be moved.
Standing Order No. 162 declares that–
No other amendment may bo moved to such question except in the form of a resolution strictly relevant to the bill.
These being the rules of procedure by which we are governed in the present circumstances, I submit that any amendment must plainly be relevant to the precise subject-matter dealt with in the ‘bill. The amendment of the honorable member for West Sydney, however, proposes, in effect, an alternative’ bill; he wishes to have this bill withdrawn and another introduced in its place to provide that the amount of money paid to the State of South Australia shall be used solely for the relief of unemployment. If the amendment is in order, it would be possible, upon the second reading of any bill involving the expenditure of money, to move for the application of the money in an altogether different way from that proposed. It would be possible - taking an illustration from the business on to-day’s notice paper, for an honorable menner who was interested in the order of the day, “ Tobacco - Tariff Board report - Motion for printing paper “, to move that instead of money being granted to South Australia in the way suggested, the amount granted should bc expended in fostering the growing of tobacco, or in providing means for curing tobacco. Or, taking the first notice of motion under the heading “ General Business “, that in the name of the honorable member for Melbourne (Dr. Maloney), it would be in order for an honorable member to move that instead of spending the grant in the way proposed, it’ should be spent on a bounty for the erection of buildings.
– If the honorable member’s contention is correct, such amendments would require a new order of leave.
– I suggest that this is the strict position, although, perhaps, not the practice. The honorable member for New England (Mr. Thompson) has a motion concerning the establishment of new States. I submit that if the amendment of the honorable member for West Sydney is in order, the honorable member for New England might seize th.e~ opportunity for applying his ideas on this subject by moving an amendment requiring the expenditure of the proposed grant on a referendum upon the matter he has at heart. I submit that it is not in order to propose an amendment to the motion for the second reading of the bill which, if carried, would require a measure containing quite different proposals to be introduced.
– The bill provides for the granting of a certain sum of money.
– That is so, and the questions arising upon that are: whether it is proper for the Commonwealth to grant any money at this time for anything; whether it is proper to grant money to a State; whether the State of South Australia would be a proper recipient of such, money; and so on. If we are to be at liberty to move on the motion for the second reading of a bill, an amendment involving the introduction of an alternative measure, a tremendous field of debate is opened up. This would be an interference with the proper progress of the business of the House, because the effect of permitting such a practice would be so far reaching that it would be difficult indeed to confine any discussion to the strict purpose of the bill. I submit, therefore, that, according to the Standing Orders, the amendment is out of order.
– In taking his point of order the Attorney-General has referred to Standing Orders 160, 161 and 162. Standing Order 160 sets out the method of moving the motion for the second reading of a bill. Standing Order 161 makes certain provision for the moving of amendments to the motion for ike second reading. For instance, it may be moved that certain words in the motion be left out or varied, and if such an amendment be agreed to, the bill is finally disposed of. But Standing Order 162 provides that certain other amendments may be moved to the motion provided that they are relevant to the bill. It is on the point of relevancy that the Attorney.eneral has based his objection. I submit that as during the course of the debate on this measure honorable members have been permitted to address themselves to various aspects of the subject, including unemployment, the Chair has already practically decided that unemployment is relevant. My speech, for instance, was not objected to as irrelevant. I cannot think that any honorable member is of the opinion that unemployment is irrelevant to a bill which proposes that a grant of a certain sum of money shall be made to South Australia in consequence of certain disabilities of that State. Surely by no stretch of - the imagination can it be held that unemployment is other than entirely relevant, not only to this measure, but to practically every other subject that, in our present circumstances, is submitted to honorable members for consideration. Unemployment is at the root of all our troubles. The honorable member for New England (Mr. Thompson) has indicated that he would like to discuss the subject of tobacco on the motion before the Chair.
– No; I wanted to discuss the subject of New States.
– I do not know that such a discussion could be regarded as relevant, because our Constitution provides that the affairs of this country shall be governed in a certain way. In any case the subject of new States is in no sense analogous to that of unemployment. I submit, however, that having allowed a discussion on the subject of unemployment in the debate on this bill, the Chair has already determined that that subject is relevant. The object of this bill is to make a grant to South Australia in consequence of certain disabilities under which that State is labouring. Unemployment is undoubtedly one of those disabilities, and honorable members would therefore be in order, I contend, in directing that any money voted to that State shall be spent specifically for the relief of unemployment. The reasoning of the AttorneyGeneral is, in my opinion, faulty. If the money proposed to be granted to South Australia were devoted to the relief of unemployment, one of the main disabilities of the States would be relieved. The point of order, therefore, should not be sustained.
– The Attorney-General (Mr. Latham) gave me notice of his intention to raise this point of order on the amendment of the honorable member for “West Sydney (Mr. Beasley). The original question before the Chair was “ That the bill be now read a second time,” and upon that question the honorable member for West Sydney has moved by way of amendment “That all the words after ‘That’ be omitted with a view to the insertion of the following words in place thereof: - the bill be withdrawn and redrafted to provide that financial assistance shall be for the sole purpose of relief of unemployment’.” I do not think that the amendment is inconsistent with section 56 of the Constitution. Therefore, the only point to be considered is whether it is relevant to the bill, as is required by
Standing Order 162. In this connexion, I remind honorable members of the terms of the Governor-General’s message on which the measure is founded. This appeared in Votes and Proceedings for Thursday, the 1st September, and reads as follows: -
Message No. 27. - In accordance withthe requirements of section 50 of the Constitution of the Commonwealth of Australia, the (GovernorGeneral recommends to the House of Representatives that an appropriation of revenue be made for the purpose of a bill for an act to grant and apply out of the Consolidated Revenue Fund a sum for the purpose of financial assistance to the State of South Australia.
I rule that the amendment does not seek to increase the appropriation proposed for the financial assistance of South Australia. The money proposed to be granted can be spent by that State for the purpose of relieving unemployment, or for any other purpose considered to be necessary. There are many precedents in the practice of this House which support the validity of the amendment. I have available references to numerous cases in which similar amendments have been moved to motions for the second reading of bills, among them being one moved by the Attorney-General himself, to the Wheat Advances Bill, on the 16th December, 1930. The nearest caseof a like character to that under consideration occurred in the session of 1923-24 during the debate on the motion for the second reading of the Defence Equipment Bill. In that instance, the amendment sought to limit any expenditure under the bill to Australia, although no area was defined in the measure. The amendment of the honorable member for West Sydney merely seeks to limit to a definite purpose the proposed financial assistance which the bill provides for general purposes, and is, therefore, quite in order.
Debate (on motion by Mr. Stacey) adjourned.
Motion (by Mr. Lyons) proposed -
That the resumption of the debate be made an order of the day for a later hour this day.
Mr. Speaker having put the question and declared it carried,
– I rise to a point of order. At least two honorable members in this corner called for a division on the pro posed adjournment of the debate. We want this matter decided in the interests of the unemployed. We do not think it would be fair to adjourn the debate at this stage.
– I listened carefully when I put the question, and I heard Only the honorable member for Hunter’s voice raised against the proposed adjournment of the debate.
– I called “ No.”
– The honorable member for Dalley (Mr. Rosevear) also called with me.
– As there seems to have been a misunderstanding, I shall put the question again.
Question put. The House divided. (Mr. Speaker - Hon. G. H. Mackay.)
Majority . . . . 39
Question so resolved in the affirmative.
(Nos. 1 to 9).
Bills brought up by Mr. Lyons, and read a first time.
– I move -
That the hills be now read a second time.
The sales tax has now been in operation for a little over two years. It is a matter for regret that, in view of the present state of the finances, it is impossible to hold out any hope of the discontinuance, in the immediate future, of this somewhat unpopular form of taxation. The Government, however, feels that a certain measure of relief should be given at this juncture, particularly for the benefit of primary producers. A good deal of criticism has been levelled against the general form and incidence of the sales tax, and various suggestions have been made with a view to its simplification or replacement by some other form of taxation, such as that mentioned quite recently by the honorable member for Balaclava (Mr. White). I do not propose at this juncture to enter upon a general discussion upon the merits of the present form of taxation or of a turnover tax. The Government is at present unable to make such a complete change as has been suggested; but it is our desire to give relief in certain directions.
From the 1st August, 1930, to the 30th June, 1932, a total revenue of nearly £12,000,000 has been collected from this source, at a cost of approximately £125,000, or a little over 1 per cent., which compares fairly favorably with the cost of collecting other forms of taxation.
Certain competitive anomalies and technical and other defects were inevitable, and the more important of those that have come under notice have been made the subject of amendments contained in these bills. I, therefore, propose to give honorable members an indication of the effect of the proposed amendments, which can, if necessary, be explained more fully in committee. The object of these bills may broadly be stated as follows: -
The sales tax exemptions proposed in the budget speech constitute a fairly comprehensivespecification of aids to primary production, and, as stated in that speech, are intended to operate, along with certain remissions in other directions, as a contribution towards the reduction of the high costs which press upon the export industries. The bills contain provisions for the operation of these exemptions on and from the 2nd September, 1932.
The exemptions granted, in addition to those announced in the budget speech, are as follows: -
Wagons, drays and spring drays for use in farming or pastoral pursuits.
Engines for use in farming or pastoral pursuits.
Fruit grading, sorting and cleansing machines.
Wheat grading and pickling machines. Stump extractors and lifting jacks for use in farming or pastoral pursuits.
Scoops for use in farming or pastoral pursuits.
Preparations for use in the prevention, cure or eradication of diseases or pests in poultry, birds or live-stock.
Poultry farmers’ equipment, viz., incubators, brooders, trap nests, feeders, hoppers, fountains and waterers.
Wire netting, barbed wire and wire of gauges 8 to 14; manufactured field wire fencing and gates; wire fencing droppers and fencing droppers and posts made of iron or steel, ordinarily used in farming or pastoral pursuits.
Water pipes (galvanized) not exceeding 3 inches in diameter, and galvanized pipe fittings; windmills and towers, pumps, pump jacks, power pumping heads, pump valves, tanks and troughing for use in farming, pastoral or mining activities.
Dips and washes for cattle or sheep.
Agricultural, horticultural and viticultural spraying and dusting materials and preparations to be used in the checking of noxious weeds, plant and seed insect pests and plant and seed diseases.
These exemptions will also operate on and from the 2nd September, 1932. The last four of the additional exemptions both qualify and extend the exemptions announced in the budget speech, and should be read in substitution for the exemptions so announced.
It has also been decided, with the object of aiding primary producers -
The other exemptions and abatements provided for in the bills are the following : -
This will remove difficulties which have arisen in the application of the exemption of pastry and be in line with the general principle of exempting common or basic foodstuffs.
This exemption is considered desirable in view of the existing exemption of newspapers.
These were intended to be exempted, together with foreign films, by last year’s amending acts; but, through an oversight, the exemption was limited, in effect, to non-British films.
Although unable, in view of the sacrifice of income involved, to accede to the representations for the exemption of all imported books and journals, the Government has agreed to exempt importations of the publications described, in view of their noncommercial character.
It was intended by last year’s amending acts to exempt re-imported goods admitted free of customs duty under tariff item 401, but, by an oversight, goods covered by paragraph b of that item were not included in the exemption. - Clause 4 h. Bill No. 5.
This exemption, which involves very little loss of revenue, and which has already been granted in respect of customs and primage duties, is the outcome of representations made on behalf of Canadian railway authorities.
By this provision, drawback of sales tax paid On the importation of any goods will be allowed wherever drawback of customs duty on those goods is allowed. This will provide a much needed relief from tax in. the class of case in which sales tax is paid on the importation of any goods which the importer is obliged to export, because he finds them defective or unsuitable.
Australian primary products are exempt from sales tax, but only in their natural state, that is, before any process or treatment takes place which alters their form, nature or condition.
A large section of those engaged in the fishing industry has been deprived of the benefit of the general exemption of primary products, because it is frequently impossible to market fish in a wholesome condition without submitting them to some process such as boiling, smoking or drying. This unexpected hardship will be removed by these bills.
The proposed amendments, which have as their object the removal of defects and anomalies and the clarification of the law, may be briefly stated and explained as follows: -
In consequence of a decision of the High Court, some doubt exists as to whether a person who imports or purchases fabricated parts and combines them into a distinct commercial article can be treated as a manufacturer.
It is essential that the law should be clarified for the purpose of ensuring that the tax should fall, as intended, on the sale value of the completed article, and that the person who both fabricates and combines the parts of any commercial article should not be at a disadvantage in competition with persons who produce a similar article by a combination of purchased or imported parts. -Clause 2 a, BillNo. 1.
The department has experienced many difficulties in determining what sales may be classified as wholesale sales. No guidance has been available by way of decisions of the court on this point, but it is necessary to protect the revenue by expressing in the law certain principles to be followed in this connexion. - Clause 2 b, Bill No. 1.
There are many classes of manufacturers who dispose of the whole or the greater part of their products in the course of contracts for work and labour, for example, contracts for the installation of lifts by a lift manufacturer.In such cases, the goods manufactured escape tax because they are not sold. It is proposed to remove this anomaly by providing that goods disposed of in such circumstances shall be deemed to have been sold - Clause 2 d, Bill No. 1.
Where a trustee or receiver assumes control of the business of a manufacturer or wholesale merchant, and proceeds to wind up that business, it is not possible, under the existing law, to require him to be registered. The consequence is that goods which have been obtained free of tax by the wholesaler or manufacturer whose business is being wound up entirely escape tax. It is necessary to remedy this anomaly. - Clause 2 c, Bill No. 1.
The practice of the department is not to assent to such deeds, but to submit a proof of debt for the tax due. The necessity for the amendment arises from implications, arising from a recent judicial decision, that proof of debt in such cases is tantamount to assent to the deed of arrangement. - Clause 3b, Bill No. 1.
Under the existing law the burden is placed on the department of establishing a wholesale or market value of goods in such cases. Almost insuperable difficulties have arisen in administration of the law in this connexion.
To remove these difficulties it has been decided to prescribe for all such cases that the sale value of the goods shall be the price for which the manufacture concerned could have purchased those goods from other manufacturers. This will also remove the undesirable implication, in the present form of the law, that the tax applies only to goods of a class which the taxpayer manufactures for sale. - Clause 4, Bill No. 1.
A provision to make fully effective the exemption from sales tax of goods sold to, or imported by, Commonwealth and State Governments, departments and authorities in certain circumstances -
Sales to, and importations by, government departments are, in certain prescribed circumstances, exempt from tax. Where, however, tax has been paid on any goods before they are sold to a government department, the exemption is nullified because the vendor must recoup himself for the sales tax previously paid in respect of the goods. The typical case is that of the retailer who obtains government contracts, and whose goods have all borne tax at the time of their purchase by him. The effect of the amendment will be to enable a refund to be made to the retailer of the tax passed on to him where he can show that he has sold the goods to the government department at a tax-exclusive price. - Clause 6, Bill No. 1, and corresponding clauses in other bills.
A provision for the imposition of a penalty by way of additional tax in certain cases in which misleading returns are furnished -
A penalty cannot at present be imposed on taxpayers who include taxable sales under non-taxable heads, because it cannot be said that they have omitted any taxable trans actions from their returns. Such omissions, however, can only be discovered by an audit of a taxpayer’s accounts, and are, therefore, just as prejudicial to the revenue as the complete omission of taxable sales from the returns. - Clause 7, Bill No. 1.
The inclusion of machinery in the relevant acts to impose the same liability for tax upon persons who have failed to comply with their obligations to become registered as that which is imposed on registered persons. - Clause 2, Bill No. 2, and corresponding clauses in other bills.
A provision to extend the benefit of certain rebates granted last year to certain classes of wholesale merchants to trustees and beneficiaries upon whom the estates of such merchants devolve by will, statute or operation of law -
This provision is necessary to effectuate the full intention of last year’s amendment of the law in this connexion. - Clause 3, Bill No. 2, and corresponding clauses in other bills.
A provision for the purpose of imposing tax on goods which a registered person imports tax-free by quotation of certificate, and which are subsequently applied by that person to his own use -
This provision will remedy an oversight in the original Sales Tax Regulations by placing on the same basis all importers who apply goods imported by them to their own use. - Clause 3, Bill No. 6.
A provision to cause sales tax to be paid on the same basis in all cases in which registered persons purchase goods and apply them to their own use -
At present, a registered person who refrains, as required by law, from quoting his certificate when purchasing goods to be applied to his own use, has to bear tax on the purchase price of those goods. On the other hand, a registered person who, whether erroneously or otherwise, obtains goods tax-free by quotation of his certificate, and subsequently applies them to his own use, is taxable on what would be the fair market value of those goods if sold by him in the ordinary course of trade.
The ascertainment of the fair market value in the latter case gives rise to considerable difficulty, and constitutes, moreover, a differentiation which has no justification in principle. - Clause 2, Bills No. 4 and No. 8.
The Government, when preparing these amendments, was animated by a desire to give relief wherever possible, and to impose no additional burden on any taxpayer, unless by way of removing some anomaly or injustice to other taxpayers.
– Is mining not a primary industry?
– It is, and that industry has been touched upon in the amending bills.
– No provision has been made to exempt explosives from taxation.
– Very careful consideration was given to that matter, but administrative difficulties were found to be insuperable.
– Why not exempt all classes of explosives, large quantities of which are used in clearing land?
– Every honorable member, I am sure, could suggest one or more additional exemptions to be added to the Hat. If our finances could stand it, we should not hesitate to include all the articles honorable members have suggested.
Debate (on motion by Mr. Scullin) adjourned.
Sitting suspended from12.45 to 2.52 p.m.
Debate resumed from page 583.
.- I listened with interest to the remarks of the honorable member for Hindmarsh (Mr. Makin), who drew a gloomy picture of the condition of South Australia, and I have to confess that I was not certain whether he was coming or going. The honorable member devoted his attention chiefly to the Premier of South Australia, whom he criticized most severely and unfairly. All honorable members must acknowledge that Mr. Hill has been doing his utmost to comply with the conditions of the Premiers plan, and to steer the political barque, of which he has command, through the troubled waters of depression to a safe harbour. All sections of the community in South Australia, and indeed, in the other States also, have good reason to be proud of Mr. Hill, but I regret to say that the real opposition in the State Parliament now comes from his former Labour colleagues, who deserted him when the testing time came. I was particularly disappointed in the honorable member for Hindmarsh. Every one knows that South Australiahas suffered great disabilities under federation. It is a primary producing State, approximately 98½ per cent. of its revenue coming from primary products. Prior to federation, we were able to manufacture secondary products on a small scale, but when the manufacturers in the eastern States had ready access to our market, the manufacturing industries in South Australia found it difficult to carry on, the chief obstacle being the lack of cheap fuel. It is gratifying to know that the official Opposition in the South Australian Parliament has loyally cooperated with the Premier in his endeavours to rescue the State from its financial and economic difficulties. Practically the only obstacles to success have been those erected by that section which now supports the honorable member for Hindmarsh and those who are allied with him. The honorable member for Swan (Mr. Gregory), and the honorable member for Forrest (Mr. Prowse), made out a strong case for financial assistance being given to South Australia. Indeed, it would not be wide of the truth to say that they gave, perhaps, a little more attention to the position of South Australia than to the troubles with which their own State is faced. No one will deny that the three less populous States of South Australia, Western Australia, and Tasmania have suffered, and are suffering, great disabilities from federation, and this being so, I am confident that the bill will be passed by a large majority.
– A grant will not keep South Australian factories going.
– Unfortunately, we lack coal deposits, and for this reason, it is almost impossible for industrial enterprises to be carried on successfully in competition with the manufacturing concerns in the eastern States. Also, we lack natural forests. We have one of the finest deposits of iron ore in the world, but cannot work it satisfactorily owing to the lack of coal. Consequently, ore from Iron Knob has to be exported to New South Wales and other parts of the world. Another disability, and one so serious as to b6 a national calamity, is due directly to the action of that section of the community which supports the honorable member for Hindmarsh. I refer to the closing down some time ago of the Wallaroo and Moonta mines which, over a long period, gave remunerative employment to about 6,000 men. Many years ago, I worked in those mines, and therefore I speak from first-hand knowledge of the position. At that time, they were not under trade union control. On two days of each week, the price of copper was posted at the offices of the mines, ana the minors’ wages were regulated by tho market price. This proved a very satisfactory arrangement, not only to the company, but also to the employees. When the war broke out the market for copper was, for a time, restricted. Accordingly, the men were asked to accept a reduction of 10 per cent, in their wages. They readily agreed to the proposal, and work proceeded smoothly for about two months. As the market situation did not improve they were again approached and asked to accept a further reduction of 5 per cent., making the total reduction 15 per cent. Again they accepted the changed conditions and continued at work. Shortly afterwards the British Government made a contract to take all the copper that could be produced by the Wallaroo and Moonta mines for a period of five years, or the duration of the war, at £109 per ton. Following the arrangement which had always been in force of regulating wages by the price of copper, the miners’ wages rose substantially. I happened to be in the pay office of Wallaroo mine one day about three months after the contract had been made with the British Government, and noticed that, as the men entered one door they received their pay envelopes, and as they left the office by the other were handed a second envelope containing the arrears of pay representing the 15 per cent, reduction to which they had agreed some months earlier. I mention this to show that, in all its relations with its employees, the Wallaroo and Moonta Mining Company had been most scrupulously fair. When the contract ceased, trouble arose in the mines, largely owing to the interference of trade union officials. These men told the miners that they were amongst the highest-paid miners in the world, and that, although the price of copper had fallen, they should sec that their wages did not fall also. I am, as I have said, speaking from first-hand knowledge because I was interested in the company at the time, and was supplying the mines with all the underground timber required. Although the price of copper fell steadily from £109 to as low as £75 per ton, the men, being influenced by trade union officials from Adelaide, declined to accept any reduction in wages. As all negotiations proved abortive, the mines finally were closed down, and, as they are what are described as “ wet “ mines, requiring powerful pumping machinery to keep down the water, it is improbable that they will ever be re-opened.. Eventually, the company was compelled to go into liquidation, and machinery worth anything up to £1,000,000 has been sold piecemeal. As the direct result of interference by trade union officials from Adelaide, the copper-mining industry in the Wallaroo and Moonta districts has been extinguished, shareholders interests have been sacrificed and approximately 6,000 mcn have been forced into idleness. If the Premier of South Australia had not courageously adhered to the Premiers plan - had he continued in the leadership of the section which is now opposed to him in State politics - South Australia would have been in a much more desperate plight to-day than she is. We should have required, not £2,000,000, which was asked of the Commonwealth, and which should have been granted, but a very much larger sum. Because of the heroic measures adopted by the Premier of South Australia, the people of that State are taxed up to the hilt, but they are- bearing the burden manfully, secure in the belief that the legislation passed, and the steps taken by the State Government, will eventually bring South Australia through her difficulties. Some opponents of the measure, notably those representing New South “Wales, have asked why the smaller States should look to the Commonwealth for financial assistance. I remind them that New SouthWales, some little time ago, helped herself to much more than is now asked on behalf of the smaller States. As for the amendment moved by the honorable member for West Sydney (Mr. Beasley), that the grant should be allocated for the relief of unemployment in Australia, I merely wish to say that we are going to get the amount provided in the bill, and we know how to spend it.
.- One has no alternative but to support the bill, because the current financial year is now fairly well advanced, and it is absolutely necessary that the States concerned should be in a position to carry on their activities. But I hope that, before the next budget is brought down, proposals to grant assistance to the smaller and primary-producing States of the Commonwealth will be put on a proper basis. I disapprove of the principle of year to year payments. If there are to be money payments by the Commonwealth to the necessitous States, a definite term of years should be provided. .During the regime of the” Bruce-Page Government the arrangement with South Australia was for three years, and with Tasmania and Western Australia it was on a five years’ basis, so that the State Treasurers were able to lay down a continuous policy. I have always felt that the policy of paying money to the States in this way is faulty, and one that should not be continued. It would be far better if we could find some means whereby the States could “be assisted, either through an alteration of the national policy in several respects, notably in connexion with the tariff, by special assistance to agricultural industries, or by allotting definite fields of taxation to the States.
– What about the Navigation Act?
– For many years past we have consistently advocated the repeal of the Navigation Act in order to assist the far distant States. I think the time has arrived when a new line of demarcation should be drawn which will ensure that the States will be able to carry out their functions, especially their developmental activities, without any fear for the future. At present, it is impossible for them to do so and it is our responsibility to see that the position is altered.
The budget papers presented by the right honorable the Prime Minister show how necessary this is and how impossible it is for things to continue as they are for very much longer. During the last four years, the accumulated deficit steadily rose until it was over £17,000,000. Grants to various States were, during that period, paid, so to speak, out of that accumulated deficit. Although the Commonwealth Government is budgeting this year for a deficit of £1,300,000, it will be offset by the surplus from the operations of last year, but if it is necessary to pay £4,100,000 owing to Great Britain for interest, the deficit for the current financial year will be_ over £5,000,000. The position in Australia today is that the States receiving grants from the Commonwealth will still have deficits in their accounts and the three States not receiving grants in the Commonwealth will also have deficits at the end of the current financial year. These particular payments to the States seem to be payments out of nothing or out of something which is less than nothing. That is a condition of affairs which surely must lead to a demand for the reorganization of our governmental system in order to give the States and the Commonwealth some definite financial future in which such a situation is not likely to arise again.
The reductions in the cost, of administration, both Commonwealth and State, are in no way comparable with the reduction in the national income. In 1928-29 the governmental expenditure of Australia was approximately 26 per cent, of the total national income; to-day, despite the reductions brought about as the result of the Premiers plan, those costs absorb 43 per cent, of the total national income, involving the imposition of additional taxation, whether indirect in the form of customs duties or sales tax, or direct in the form of income taxation and increased railway freights and fares.
– Is the percentage greater than it was prior to the adoption of the Premiers plan?
– Yes, because there has been a steady fall in the national income. We must try to find some real line of demarcation or make some re-arrangement of Federal and State activities which will ensure to the States that they will have ample financial resources at their disposal to carry on their legitimate functions. The present condition of affairs, with half the States of the federation receiving grants from the federation, cannot indefinitely continue.
During the last three years, despite the cessation of external borrowing, there has been an increase of the unfunded debt of the Commonwealth to an amount approximating £80,000,000. That method of financing has proceeded at the same rate at which the borrowing went on previously. It is a state of affairs which must not be allowed to continue. When one realizes the extra taxation imposed by the Commonwealth during the last three years, one readily sees that the field of taxation available to the States is being steadily diminished. Increased income taxation, exceedingly high so far as property is concerned, sales tax, bringing in a revenue of £8,000,000, and primage duty necessarily leave less in the pockets of the people for the payment of the taxes which the States are empowered to impose and which are necessary to enable them to carry on. What we need is a comprehensive survey of the whole field of taxation, so as to effect a real economy that will result, not merely in a transfer of expenditure from one spot to another, but in an actual reduction of the total amount of governmental expenditure of Australia.
Turning to the great public activities, one sees immediately typical instances in which real and permanent savings can be made. It is remarkable that the grants provided for in these bills practically coincide with the railway deficits in the various States concerned. For instance, in South Australia, the railway deficit is £1,090,000, the grant provided for in this bill is £1,000,000. In Tasmania, the railway deficit is £300,000 ; in Western Australia it is £290,000. If the railway deficits could be lifted off the backs of the States, we should be doing something which would make it less necessary for the States to approach the Commonwealth for help to carry on their activities. The need for a single form of control of the Australian railways has been set out first by the Commonwealth Commissioner of Railways, secondly by a conference of railway commissioners, Commonwealth and State, and finally by Mr. Heath, the chairman of a committee which has recently made an investigation of the whole subject.
– The capital burden cannot be shifted off the States.
– I am not dealing with the capital burden for the moment. I am dealing with the point as to whethersome material alteration in the control of the railways cannot be brought about. Mr. Heath in his report said definitely that the standardization of equipment would bring about substantial economies amounting to hundreds of thousands of pounds a year. He pointed out that the fact that fourteen different shops were building locomotives did not tend to efficiency or economy, which he said could be secured by a reduction in the number of these establishments, and led to an unnecessary increase of capital cost.
The form of control I suggest is not Commonwealth control. I suggest that it should be on the lines of the Loan Council. A body should be set up consisting of representatives of the various States and the Commonwealth. With single control I think that in time surprising economies could be made by standardizing. For instance, we have in Australia 3,900 locomotives of 162 different types. 7,700 passenger vehicles of 584 different types, and 87.900 other vehicles of 412 different types. Surely there is no need for such a huge number of types of rolling-stock. The benefit of standardization in railways has been proved in America and Great Britain. In 1882, before standardization, American railways had 82 different types of axles, now they have only five. They had 26 types of couplers, where to-day there is only one in use. Mr. Heath pointed out that in Australia there is a tremendous waste in the designing and testing of various machines because of the absence of any definite standard for the whole of Australia. I am satisfied from the figures before me that if we dealt with our railways in the way I have suggested, we could save from £1,000.000 to £2,000,000 a year by co-ordination. It seems to me that this year the Commonwealth will be the only Australian Government to balance its budget, and then only because ii has command of practically the whole field of taxation, and because its commitments, although great, are not increasing.
– The Commonwealth b«s the advantage of the Hoover moratorium.
Dr-. EARLE PAGE. - If that advan tage becomes permanent through the cancellation of war debts, the Commonwealth will save between £4,000,000 and £5,000,000 a year. Permanent relief could be given to all the States if the Commonwealth were to bear for the time being the losses in connexion with their railways. This would enable the States which are at present being assisted to estimate their financial position for some time ahead, and the other States to concentrate on their internal problems. In other ways, substantial savings could be made. In the country one may see telegraph lines leaving the road and following a cleared track over wooded h i Ils, and a few miles away other telegraph lines carried alongside the cleared railway track. This is evidence of unnecessary duplication. There should be 9,me co-ordination of the railway and telegraph services, especially in country towns where telephone communication is not possible between 9. p.m. and 9 a.m., or between 1 p.m. on Saturday and 9 a.m. on Monday. The railway stations in small towns could bc also the post and telegraph offices, and, where trains are few, the one staff could do all the work. This would enable a considerable extension of facilities to the public while at the same time effecting a substantial wiving. In many towns a telegram cannot be despatched after 6 p.m., but the Canadian-Pacific Railway will accept a telegram at any time, in a barber’s shop or elsewhere, because it utilizes its railway telegraphic system:
– Is not the right honorable member advocating unification?
– No ; I am advocating greater co-ordination between government and government and also between the departments of one government. I have no doubt that one could discover in the Commonwealth departments many instances of lack of coordination. In connexion with navigation, Federal and State activities are duplicated. The Government of New South Wales is expending £30,000 annually in Sydney that could be saved if the control of navigation were concentrated in one authority. The Royal Commission on the Constitution, which strongly supported the federal system of government, advocated that certain spheres of activity should be handed over to the Commonwealth. In order to cut down the cost of government and enable taxation to be reduced, we should examine the possibilities in this direction. Such a reform is long overdue, and I suggest that at the next Premiers “Conference the Commonwealth representatives should ask the various State Governments to call together committees representative of the local governing associations, to discuss means of abolishing duplication, and so reducing expenditure. Much avoidable cost is incurred through laws and regulations requiring the filling in of forms and returns, many of which are unnecessary, but have become part of the accepted routine. During the next four or five years we shall have to explore every avenue to discover where economy consistent with efficiency can be effected. We shi’.ll find it imperative to do what was done in the ‘nineties, when, because of the continual drop in the national income, the cost of government in Victoria was reduced from approximately £9 10s. a head, to £5 14s. The State could not afford to pay more, and economies were necessitated in ways that otherwise would not have been adopted. Mr. Menzies, the Attorney-General in Victoria, and Mr. R. W. D. Mackay in Sydney, have been studying Commonwealth and State legislation with a view to discovering a more satisfactory distribution of legislation and administration. They have found that Victoria has 200 principal acts. These statutes they have classified into thirteen different categories. At least 100 of these acts could be Commonwealth law, and such uniformity throughout Australia would lead to economy in administration and in business costs. Legal procedure would be simplified. In connexion with the transfer of land, for instance, why need we have a different set of laws in each State when all the States are inhabited by people of the same race and national allegiance?
– The right honorable member would deprive the lawyers of a job.
– Yes, and to that extent would reduce the cost of many transactions. These gentlemen have urged, and I endorse the suggestion, that we should endeavour to fix a definite line of demarcation between matters which can be most appropriately dealt with by the national Parliament, and those matters of essentially local development and control which could be best handled by the States.
I further urge the Government’ to extend, as far as possible, the system I initiated in 1923 when I brought about the amalgamation of the Federal and State taxing authorities. By that step the cost of administering the Treasury was reduced from approximately £1,000,000, when I assumed office, to £650,000 when I left office, a definite saving of £350,000 with increased convenience to the taxpaying public. The essence of the arrangement was that although the Federal Parliament imposed its own taxation, the State should collect it for us. The result was that the Commonwealth saved upwards of £300,000 annually, and I understand that the economies in the States amounted to another £100,000. I believe that this effort at uniformity and the removal of duplication could be extended considerably, simplifying government, reducing costs, increasing efficiency, and leaving more people available for productive work. If we can carry out, as well, the subdivision of New South Wales into new States, as is now proposed, a definite restraint will be placed upon both State taxation and borrowing. That would bring us within reasonable distance of making both ends meet, which, under present conditions, is impossible of achievement. I hope that before this grant comes up for revision next year, some definite period will be stipulated, or some permanent provision made for assisting the smaller States, which, I think, are entitled to the consideration that they are asking for to-day. I agree with the honorable member for Denison (Mr.Hutchin) that the smaller States who have to approach this Government for assistance, are undoubtedly penalized under the tariff policy of the Commonwealth, and are, therefore, entitled to some consideration; but they should not have to depend upon a chance vote in this chamber for the assistance that they need. They should know exactly where they stand, no matter what the political -complexion of the National Parliament may be.
.- It is gratifying to hear the right honorable member for Cowper (Dr. Earle Page) turning his thoughts towards economy, but I have recollections of the action of Common wealth Governments for many years before the slump came, in building up the Public Service, and generally leading the public in a campaign of extravagance. I do not place much hope in the idea of turning over the affairs of the States to the Commonwealth. Our railway systems have been specifically mentioned, but I am inclined to think that if they were placed under Commonwealth control we should be changing from seven extravagant systems to one even more extravagant system. The right honorable member for Cowper referred to what he called co-ordination, but the only co-ordination that the Commonwealth Government seems to understand is a system under which the State Governments will” hand over control to the Commonwealth.
– That is not suggested.
– No ; but it has been the experience of the past. The Commonwealth Government has for years been encroaching on the domain of the States.I need refer only to the Electoral Department, the Health Department, and the Taxation Department. It is obvious that there is duplication of expenditure
Provision for giving compensation to States was made in the Federal Constitution, and it is because of the existence of that provision that these proposals have been brought forward. The honorable member for West Sydney (Mr. Beasley) has moved an amendment which is designed to change these grants to the States into a special grant for unemployment, but to confuse issues leads only to confusion of ideas. The honorable member for New England (Mr. Thompson) was prepared to support this legislation provided that he could obtain from the Government some promise in connexion with the establishment of new States. I have no doubt this chamber, we shall never come to any logical conclusion. The claims of the States should be dealt with on their merits. Several independent investigations have been made into the position of the smaller States, and those who have made the inquiries have all been unanimous that the States which at the beginning of federation were in the best position have, since federation, been relegated to an inferior position. Their population has not increased, and their industries have to a large extent languished. It is, therefore, fair to conclude that the outer States are suffering disabilities as a result of their association with the Commonwealth. Take the position of Western Australia. An expert has recently calculated the amount of revenue which that State has lost by reason of the abolition of border duties. Taking the year 19.28, if border duties had been levied to the extent that Commonwealth duties were levied on the quantity of goods imported into that State, i’t would have collected £2,300,000 in. customs revenue. That sum very nearly coincides with the estimate of £2,400,000 which was made by Mr. Mills, a member of the Tariff Royal Commission in respect of the year 1924. That amount of revenue has been lost to Western Australia, and the loss is directly reflected in the state of the finances of the country. Since federation the surpluses that Australia once enjoyed have changed to deficits. That has been generally the experience of the three States that are now asking for assistance. The trouble has arisen chiefly because of the operation of the Australian policy of high protection. That policy raised the cost of production throughout this country. It rendered gold-mining unprofitable, and the people of Western Australia turned to agriculture. As that State is a country of wide spaces, railways and other public works had to be constructed, and grants had to be made to farmers. As a result, large sums of money had to be borrowed mainly for the purpose of establishing public utilities, the like of which had already been established under cheaper conditions in the older States.
While agricultural products were realizing high prices, the outer States were able to carry on ; but now that the price of wool and wheat has fallen 50 per cent., they are forced to seek assistance from the Commonwealth. Objection has been raised by the Minister for the Interior (Mr. Parkhill), with some appearance of good reason, that Western Australia has not been prepared to tax its people sufficiently. It is true that the income tax levies in Western Australia are the lowest in the Commonwealth, but in considering this matter, we must haveregard to indirect as well as direct taxation. Customs duties are a form of indirect taxation which affects the people just as severely as does direct taxation. The Tariff Commission found in 1925 that protection was costing the people of Western Australia £2 4s. per head above the average for the whole of Australia. In addition, there is a further impost of £1 per head to provide the sugar bounty for Queensland. All these things reduce the ability of the people of Western Australia to pay taxes. In 1930, Professor Giblin made a. calculation of the taxable capacity of the people of the different States of Australia. Taking the Australian average as 100, he showed that the taxable capacity of the people of Western Australia was 71. Savings bank deposits in Western Australia average £52 per head of the population, as against the Australian average of £100; while the value of private estates, on the basis of the sworn valuation in the several probate offices, was £1,714 in Western Australia, compared with £2,920, the average for the Commonwealth. Western Australia is a State of poor, but honest, people.
– What is the taxable capacity of the people of the other States ?
– I have given the average for the Commonwealth which should be sufficient for the purposes of comparison.
I am not here to advocate that these grants should be made in order to give a setback to the movement towards secession. I am not a secessionist, although I recognize that the movement in Western Australia in favour of secession is growing because the people there sincerely believe that that State has been unfairly dealt with by the Commonwealth.
Although I cannot see any possibility of secession ever being achieved in a constitutional way, since the other States would not give the vote necessary to release Western Australia, I do believe that if an overwhelming proportion of the people of any State are really sincere in their desire for secession, they can accomplish that end without difficulty. If, for instance, the great bulk of the people of Western Australia were to record a vote in favour of secession, they could accomplish their purpose merely by ceasing to pay Commonwealth duties.
– They could be prosecuted under the Crimes Act, and deported.
– Even if proceedings were instituted against the State Government the Commonwealth Government might not obtain from it any more than it did from Mr. Lang’s government. Even in the circumstances which 1 I have suggested, the people of Western Australia would still be prepared to pay the portion of past liabilities for which they are responsible under the Constitution. I cannot imagine their fellow citizens of Australia taking active steps to enforce a union on an unwilling people. I am not suggesting anything in the nature of a threat in order to obtain for Western Australia the assistance proposed in this bill. I submit that the outer States suffer disabilities under federation, and that they are entitled to some compensation. The amounts provided in this bill, and the related measures, will not adequately recompense the States concerned for the loss of industries and other losses under federation, but having regard to the state of the country’s finances, I accept them as a fair contribution for the Commonwealth to make. I therefore hope that the bills will be passed in their present form.
– Although my examination of the problems of the States which seek assistance from the Commonwealth leads me to agree with the logic of the mover of the amendment, I shall vote for this measure in its original form. It is the duty of the Commonwealth to assist necessitous States, but I agree with the right honorable member for Cowper (Dr. Earle Page) that this system of paying a dole to them must end. I rise to refer to the problem of unemployment. I do not use the term as a catchword; I regard unemployment as a serious problem which must be faced. Indeed, scientists in every country agree that it lies at the root of the present depression. All the statistics gathered by international conferences at Geneva and elsewhere; all the inquiries by the Taylor Society Group of America - a group recognized as containing the world’s outstanding experts in the examination of economic problems - lead to the conelusion that the fundamental cause of the world’s troubles to-day is that the army of unemployed has grown so large that it is now the cause of the continuance of the depression rather than its effect. They argue - logically I think - that the world has been robbed of such a large demand for goods and services by the unemployment of so many of its people, that it cannot carry on its business activities in anything like a normal way. Australia has still 30 per cent, of its people unemployed. Surely the facts made public by the Commonwealth Statistician ought to lead us to examine what we did last year, and the year before, with a view to seeing whether the results of our efforts have been successful or otherwise. If we conclude that they have not been successful, notwithstanding that they might have done some good, the only logical thing for us to do is to have the courage to try something else. Figures recently published in Geneva, show that 25,000,000 persons are totally unemployed in America, Australia, and European countries. The figures do not include Asiatic countries. On a conservative basis, that means that between 60,000,000 and 70,000,000 people are deprived of their purchasing power. The consequent falling off in the demand for goods and services has brought about the present depression. All the methods adopted under the Premiers plan have failed, and must continue to fail, to solve this problem. Although a grant of £1,000,000 to South Australia will not, and cannot, put that State on its feet, I shall vote to grant that amount to South Australia because there is nothing else offering. Logical though the amendment may be, I feel that! effect could not be given to it. Even if it were carried,. it would temporarily add to the army of unemployed’ in that State rather than lessen their number, and for that reason I cannot vote for it. I agree with the honorable member for West Sydney (Mr. Beasley) that if the people of South Australia, and indeed, of the Commonwealth as a whole, were to attack the problem of unemployment at its foundation they could not do better than spend every penny of the £.1,000,000 in setting the unemployed to work. In Australia we still have 30 per cent, of our population unemployed, and the basic wage is lower now than it has been for many years. The costs of production in every direction are lower than ever. The factors which most; honorable members claim should put industry upon a normal footing are operating, yet the position grows worse instead of better. Because of that, I take a different view from that of a large number of other honorable members of this House. It has been said repeatedly that with lower costs of production, and reduced overhead expenses generally, Australia would be better able to compete with other countries in which a lower standard of living is enjoyed by the masses of the people. In that connexion, I propose to quote an extract from the last copy to hand of the journal issued by the International Labor Office at Geneva. The paragraph refers to Japan, and I am always interested iD the experience of other countries. I selected this quotation, because we regard the cost of production in Japan, China and India as being lower than that in Czechoslovakia, Italy, and some other countries. The statement should make even the honorable member for Swan (Mr. Gregory) again consider whether our remedy lies in lower costs, because the argument of the school of thought to which he belongs is that if we could cut down costs to a basis which would give us fair competition with countries that produce at lower costs than ourselves, all would be well. The publication referred to states -
Wages in Arrears.
An inquiry conducted by the Japanese Government on 1st April, 1932, disclosed the facthat owing to the economic depression 83? factories and mines had failed to. pay their workers’ wages and savings entrusted to them. The total sum of money in arrears amounted to 2,095,723 yen, affecting99,293 persons. The majority of the defaulting establishments were silk filatures, as shown in the table below.
I have drawn attention to that statement to show that there are other factors to consider besides the reduction of production costs.
– How does the honorable member account for Canada’s big export trade, although it pays higher wages than are received in Australia ?
– Wages in Canada have always been higher than in Australia. There must be another explanation of Canada’s prosperity. My contention is that we must pass this legislation ; but the arguments used by the honorable member for West Sydney (Mr. Beasley) that unemployment is the key to the whole of our troubles is sound. Our only hope lies in getting everybody back to work. A restoration of the purchasing powers of the masses is required, so that they can buy the goods and services which many people are ready to provide.
Debate (on motion by Mr. McBride) adjourned.
Motion (by Mr. Lyons) agreed to -
That he have leave to bring in a bill for an act to amend the Financial Emergency Acts 1931, and for other purposes.
Bill brought up, and read a first time.
– by leave - I move -
That the bill be now read a second time.
This measure makes provision for the necessary legislation to give effect to the proposed reduction of expenditure announced in the budget speech. I am moving the second reading of the bill this afternoon in order that honorable members may have an opportunity over the week-end to make themselves acquainted with its various provisions and be in a position to discuss it as soon as the House meets next week. It is regretted that the reductions are necessary; but the changed condition of Australia, with its heavily diminished income, and the cessation of the flow of overseas loan moneys, together with the increased value of the monetary unit, render these changes inevitable. The proposals cover a wide field of legislation, and they are all included in this bill, which amends the Financial Emergency Act passed last year. The bill deals with ministerial and parliamentary allowances; Public Service salaries and wages ; maternity allowances ; invalid and old-age pensions ; wine export bounty, and gold bounty.
Last year, the aggregate salaries of Ministers were reduced from £15,300 to £11,857 10s., the reduction being 22½ per cent. It is now proposed that the reduction shall be increased to 30 per cent. The annual amount payable will therefore be £10,710, and the total reduction will be £4,590. Last year, parliamentary salaries and allowances were reduced on a sliding scale as follows: - £1,000 and under, 20 per cent ; over £1,000 and up to £2,000, 22½ per cent. ; over £2,000, 25 per cent. For the purpose of arriving at the precise rate of reduction, all salaries and allowances, including ministerial salaries, were aggregated.
The bill provides for the following reductions: - President of the Senate and Speaker of the House of Representatives, 30 per cent. ; Chairman of Committees in either House, 27½ per cent. ; senators and members, 25 per cent. ; Leader of the Opposition in either House, 25 per cent. The additional annual savings in respect of ministerial and parliamentary allowances represent in the aggregate about £6,533, which is approximately a further 5 per cent.
Under the Financial Emergency Act last year, the salaries and wages of the Public Service, according to the standards operating at the 1st July, 1930, were reduced, firstly, by a flat rate corresponding to the fall in the cost of living, and, secondly, by a further reduction on a sliding scale up to 24 per cent. on the remaining salary. This further reduction applies only to salaries above the basic wage. In the case of an adult male, the cost of living reduction was £34, inclusive of a reduction which had been effected in April, 1931. Since that adjustment was made there has been an additional fall in the cost of living, which warrants a further reduction at the rate of £8 per annum. As the principle of salary and wage adjustments in accordance with the rise or fall in the cost of living is a feature of industrial awards, the Government sees no reason why the same principle should not be applied to the present salaries of the Public Service. The bill, therefore, provides for the following general reductions: - Adult male officer, £S per annum; adult female, £5 per annum ; minors, £4 per annum. The proportionate reductions for adult females and minors are in keeping with the Public Service practice. Further provision is made so that salaries and wages will rise or fall on the 1st July each year in accordance with the usual formula relating to cost of living index numbers Shortly stated, the position of salaries is this: If there had been no Financial Emergency Act, salaries would have been automatically reduced by £18 last year, and a further £24 this year, on account of the fall in the cost of living. The effect of the Financial Emergency Act, and of this bill, will be to bring into full operation this cost of living reduction of £42, plus the further percentage reductions up to 24 per cent., which were, made last year, and to provide for automatic adjustments in future, varying with the rise or fall in the cost of living.
The field of salary and wage payments of the Commonwealth is so extensive and complex owing to the various awards and conditions, that it is not practicable to apply this scheme of reduction to every employee, and, at the same time, secure equitable results. Special provisions were included in the act last year to meet these conditions, and special provisions are included also in this bill.
– What are those special provisions ?
– They “relate to the appointment of a- committee to which special cases are referred for report and recommendation, and to certain discretionary powers that are to be left in the hands of the Minister.
– Power to take away from public servants their arbitration privileges.
– The honorable member knows that similar provision was made kist year.
As officers of the Commonwealth stationed outside of Australia may not have benefited by a reduction in the cost of living, it is provided that the reduction of £8 shall not be applied to these offciers unless the Minister so directs.
In the Naval, Military and Air Forces, power is given to the Minister to make an appropriate reduction in the same way as was done last year.
With regard to employees of the Commonwealth who work under federal court awards which provide for cost of living reductions and the further ten per cent, reduction, the Government can see no reason why the reductions fixed by the court for application to outside employees should not also be applied to Commonwealth employees; and provision is being made accordingly.
There are certain employees under other awards, including State awards, industrial tribunals, &c. In these cases the Government proposes to apply the principle which was adopted under the Financial Emergency Act last year. They will be considered by the committee that was constituted under Section 13 of the act. Any variations of salary or wages will be determined by the Minister following upon the receipt of the committee’s recommendations.
An amendment is also embodied in the bill to enable the Minister to exercise his powers from time to time to meet the cases to which I have just referred and other cases, to deal with which power was given in the act last year.
The provisions relating to salaries and wages are contained in Clauses 6 to 10 of the bill and further explanation of them will be given when the bill reaches the committee stage.
It is estimated that the total savings on the budget this year will be about £220,000.
The Maternity Allowance Act as originally passed by Parliament provided for the payment of a maternity allowance of £5 to every mother, irrespective of her financial position. Following upon the adoption of the Premiers plan in 1931, the act was amended to provide that the amount of each allowance should be reduced to £4 and that no payment should be made in any case in which the income of the claimant and her husband for the twelve months preceding the birth of the child in respect of which the maternity allowance was claimed exceeded £260. As a result of . this legislation, a saving of approximately £260,000 per annum was effected in maternity allowance expenditure.
The experience of the department is, that the amendment of the law has operated equitably, and it is believed that a further economy can be effected without involving any hardship in deserving cases. It is proposed, therefore, to amend the law further to provide that an allowance shall not be paid in any case in which the total income of the claimant and her husband exceeds £208 per annum.
I come now to a matter of much greater importance. The Government has been closely considering the most suitable means of securing reduction in the heavy expenditure oil invalid and old-age pensions. In the budget speech I announced that the maximum pension payment would be reduced from 17s. 6d. to 15s. per week, that a system of inspection would be adopted with’ a view to limiting pension payments to those for whom they are really intended, that future pension payments would be a charge against the pensioner’s estate at death, and that should the pensioner become possessed of property cancelling the right to receive a pension, the pension would be a charge against such property.
In considering the amendments necessary to give effect to the budget proposals, the- Government has come to the conclusion that the necessary savings in the pension bill can be secured without reducing the pensions of those who are entirely dependent for their maintenance on their pension. It therefore proposes to maintain at 17s. 6d. the pensions of those who come within that category. At the same time, however, the Government proposes that, where the children of pensioners are in a position to eontribute towards the cost of the pension, they may be required to do so.
Before explaining fully the proposals of the Government, I think it desirable to make quite clear the extraordinary growth of pensions, particularly within recent years. The estimated expenditure on old-age and invalid pensions for the present year is £10,500,000. Had the pension remained at 17s. 6d. the expenditure would have been £11,812,000. Had it remained at £1, the expenditure would have been £13,125,000. Last year the actual expenditure was £11,126,000.
In the first ten years of the operation of the Pensions Act, the annual rate of increase in the number of pensions paid was 5,428. In the next ten years the average annual increase was 11,149. In the last three years the increases have been- 1929-30, 13,950; 1930-31, 22,020, 1931-32, 15,089. Last year the position was - v
The cost of these pensions was £11,126,000, representing 34s. Id. per head of population. The increase in the cost of pensions per head of the population serves to demonstrate, perhaps mors than anything else, the impossibility of continuing this benefit on the existing scale of expenditure. The increase in the per capita cost from 8s. 4d. in 1910-11, to £1 14s. Id. in 1931-32 is little short of astounding. The per capita cost of course varies with the rate of pension, but the increase in the number of pensioners is a more important factor in this direction. During the last six years the average annual increase in the number of pensioners was 13,000. That, this average was exceeded last financial year, during which more than 15,000 pensioners were added to the roll, demonstrates that, omitting the abnormal figures for 1930-31, the annual increase in the number of pensioners is still growing.
It was in those circumstances that the Government was reluctantly compelled to seek a reduction in the rate of pension. It was in quite different circumstances that the rate of pension was fixed at 15s. per week in 1920. The Government at that time was favoured with buoyant revenues and the financial year preceding that in which the rate of pension was increased produced a surplus of £2,200,000, whilst the year in which the increase was made closed with a surplus of £893,000. The position facing the present Government is entirely different. Whereas in 1920-21 there were 140,396 pensioners, the number to be provided for at the beginning of this year was 255,609. We were faced with a prospective deficit of £2,781,000, and after allowing for the surplus brought forward from last financial year there still remained a deficit of £1,467,000, which compelled a reduction in the expenditure to bridge the gap.
Even after reducing the rate of pension the scale of payment in the Commonwealth compares more than favorably with those of Great Britain, and the other components of the Empire.
– We heard that last year. The right honorable member is merely repeating what was said by the exTreasurer.
– The honorable member will hear it again. If the Treasurer in the Scullin Government made a similar statement, it merely indicates that we are both right.
– At one time the honorable gentleman used to be proud that pensions cost so much.
– I should be very proud to-day if Australia could afford it, but it is foolish being proud of expenditure which is beyond the purse of the nation.
The comparisons are as follow: -
The conditions governing pensions in Great Britain also apply to noncontributory schemes in the IrishFree State and Northern Ireland. I would particularly draw attention to the case of pensions in Canada, where the benefits in some respects appear to be more liberal than those provided by the Commonwealth, but it must be remembered that, in Canada, no pension is paid to a person under 70 years of age. If that were the qualifying age in Australia our treatment of pensioners might be even more liberal.
– An age qualification of 70 will be the next step.
– The steps that are being taken now will safeguard the pension so that indigent citizens of the future will receive it. All persons in Canada whose age and qualification entitle them to a pension do not necessarily receive one. From the latest information available just one-half of the provinces and territories has undertaken, in conjunction with the federal authorites, to pay pensions, and those provinces which have not entered into such an arrangement include Quebec, with a population of 2,734,600. Moreover, it must be remembered that Australia is the only country in the Empire which provides a noncontributory system of invalid pensions.
– That is not true.
– Order! The honorable member for East Sydney must be aware that his remark is unparliamentary and I ask him to withdraw it.
– I withdraw.
– It was originally intended to reduce the maximum rate of pension from 17s. 6d. per week to 15s. in all cases. It has been decided, however
– By the rank and file of the party.
– No, by the Government. The honorable member’s party is all rank and no file. It has been decided that where a pensioner has no income other than his pension, on which he is entirely dependent, he shall still receive a pension of 17s. 6d. per week, and where the income of a pensioner is less than 2s. 6d per week, the amount of pension plus income shall not exceed 17s. 6d. per week. Pensions to inmates of benevolent asylums and institutions will be reduced from 5s. per week to 3s. 9d. per week. The practice of dividing the maximum pension between the pensioner inmate and the institution itself will still be continued. The reduction in the pension of 2s. 6d. per week will be borne equally by the pensioner and the institution, the latter, in the future, receiving l1s. 3d. instead of 12s. 6d. per week, as at present.
– Is not the division fixed by the State Government?
– No, by the Commonwealth Government.
Under the existing law, if a pensioner directly or indirectly deprives himself of property or income in order to qualify for or obtain a pension, he is ineligible to receive a pension. In order to tighten up this provision it is now proposed to disqualify an applicant for a pension if, within a period of five years preceding his claim, he has transferred otherwise than bona fide for value, property exceeding in the aggregate the sum of £100. At the same time a discretion is left to the commissioner that, if he is satisfied that any such transfer of property, though not made for value, was a reasonable gift, the claimant shallnot by reason of that transfer be ineligible for a pension.
Upon the death of a pensioner the amount of pension paid to him after the commencement of the act shall be a debt due to the Commonwealth, and is charged upon his estate in priority to all other debts of the pensioner except encumbrances existing prior to such commencement upon real property of the pensioner.
To give effect to this provision it is necessary to take power to control the sale and transfer of real property by the pensioner. To this end no pensionwill be granted to any person, nor will the payment of pension be continued to existing pensioners unless the claimant or pensioner furnishes to the Commissioner full particulars of real property owned by him or in which he has any interest. Every pensioner and every claimant will be required to sign an undertaking not to transfer or mortgage any real property except with the prior consent in writing of the Commissioner, and any person who accepts a mortgage or transfer of real property from a pensioner without such consent will be guilty of an offence.
– How will the authorities have knowledge of these matters?
– In dealing with aged persons they will surely be entitled to inquire. A transfer or mortgage effected in contravention of this provision will be void, and of no effect.
There are precedents for this provision. Under the Victorian Old-age Pensions Act, which was passed in 1901, the claimant was required to sign a deed poll under which he undertook on demand to transfer all his real property to the State, and the State was authorized to sell such property, and to deduct from the proceeds the amount of pension paid.
– There were bad precedents in that act.
Mr.Beasley. - We are going back !
– No; we are adopting different, methods. The Canadian pensions law provides that a pensioner who possesses property, being a home in which he resides, may transfer the property to the pensions authority, in which’ event the property will not be maintained for the purpose of calculating the pension. On the death of the pensioner, or upon his ceasing to use such property as a home, the authority may sell the property and, after deducting the amount of pension paid by reason of the home not being maintained as property, together with compound interest at the rate of 5 per cent. per annum, is required to pay the balance to the person entitled thereto. The pension authority is also entitled to recover out of the estate of a deceased pensioner the total amount of pension paid together with compound interest at the rate of 5 per cent. per annum.
The bill further provides that where a pensioner becomes the owner of property, not including the home in which he resides, of such value that he becomesdisentitled to receive a pension, it is provided that the total amount of pension paid after the commencement of the act shall forthwith be recoverable from the pensioner, but so that the total amount of the property is not reduced below £400 or, in the case of a married pensioner, £800. Any balance of the pension paid remaining after the application of this provision shall be a charge upon the estate of the person on death.
The remaining provisions in the bill relating to the charges on the estate of a pensioner are -
If any property being the home or household effects of a pensioner passes upon his death to another person being the widow, widower, father, or mother, or a child, sister, or brother, of the pensioner, and who was permanently residing with the pensioner at the date of his death, and -
In other words, in the case of certain persons who are not yet entitled to the oldage pension, but who are within five years of becoming entitled to it, and who in the opinion of the Commissioner are in indigent circumstances, no charge shall be executed by the Commonwealth until the death of the transferee.
Other provisions of the bill are -
I may add that while we feel entirely justified in imposing these conditions, we are also providing safeguards that will prevent any real injustice being done to individual pensioners.
– What does the Prime Minister estimate will be the effect of these variations?
– It is not possible at present to give a reliable estimate. All that I can say is that it is felt that the increased expenditure due to allowing the pension to remain at 17s. 6d. per week for those entirely dependent upon it, will be made up by the operation of these additional provisions, and that the budget will be balanced in the way indicated.
– Then the Government expects to save the £1,100,000 ?
– In one way or another.
The bill provides that where any person has the control or disposal of any money or other property of a pensioner, the person may be required by the Com missioner to apply the money or property in satisfaction of any charge or liability under the act. He is made personally liable for the satisfaction of such charges, and is indemnified for all payments which he makes to the Commissioner.
It is common knowledge that there are many cases where relatives of a pensioner who have a moral obligation at least to contribute towards the maintenance of the pensioner, and who are in a position to do so, are content to allow the maintenance of the pensioner to fall on the State. In order to correct this position, the bill provides a process by which the relatives of a pensioner being a husband, wife, father, mother, or children over 21 years of age, and who are not voluntarily contributing adequately to the maintenance of thepensioner, may be compelled to do so.
– Married or single?
– Yes. I may mention that a similar provision is contained in the South African old-age pension law.
The moneys recovered from the relatives of a pensioner, it is provided, shall be paid into the Consolidated Revenue Fund as a contribution towards the cost of the pension, so that the pensioner receives his pension intact, but does not receive, in addition, the compulsory contributions from his relatives. He may, however, receive voluntary contributions from his relatives which, with other income, may amount to not more than £32 10s. per annum.
– What will be the process of recovery?
– Full provision for recovery is made in the bill. The measure further provides that no pension will be granted to any claimant in cases where his relatives severally or collectively adequately maintain him.
In the administration of the law as it at present stands an annual review is made of every pension, and, if the review discloses that the pensioner has acquired property or income since the date of the last review or the date of the granting of the pension, the rate ofpension is adjusted accordingly. The amending bill places upon the pensioner a statutory obligation to advise the Commissioner of Pensions of the acquisition of property or the receipt of income which affects the rate of pension he is receiving. By this means the pension will be more quickly adjusted to the altered circumstances of the pensioner. The Government is determined that, so far as it is humanly possible, invalid and old-age pensions shall be drawn only by those persons who are legally entitled to them. Such action is necessary in the interests, not only of the taxpayer, but also in the interests of the deserving pensioners themselves.
– What is the estimated number to be removed from the list?
– Until investigations are made, it is impossible to form an estimate. .
Under the Wine Export Bounty Act 1928 a bounty of ls. per gallon was payable on fortified wine exported. The Wine Export Bounty Act 1930 increased the rate of bounty to ls. 9d. per gallon in respect of fortified wine exported on or after the 13th March, 1930. At the same time the rate of excise duty on spirits used in the manufacture of fortified wine was increased by 5s. per gallon. Provision was made in the act for the amount of revenue derived from the special excise duty of 5s. per gallon to be paid into a trust account, from which the wine export bounty would be payable. It was anticipated that the revenue so derived would be sufficient to meet all payments of wine export bounty under the act. Provision was made, however, that any amount by which the special excise duty fell short of the amount required for the payment of the bounty would be paid out of the Consolidated Revenue Fund. Mainly owing to the falling off in the local consumption of Australian wines by reason of the financial depression, the revenue derived from the special excise duty has proved insufficient to meet payment of the bounty, and the Consolidated Revenue Fund was required to meet bounty payments to the extent of £96,000 in 1930-31, and £131,000 in 1931-32. The Government feels that a limit should be placed on tlie liability for payment of the bounty, and provision is, therefore, made in the bill that the amount to be financed by the Consolidated Revenue Fund towards payment of the bounty, namely, the amount of the bounty in excess of the revenue derived from the special excise duty of 5s. per gallon, shall not exceed £96,000, that amount being the deficiency charged to the Consolidated Revenue Fund during 1930-31.
The bill further provides, in effect, that where payment of the bounty at the rate of ls. 9d. per gallon would involve a charge on the Consolidated Revenue Fund in excess of £96,000, the rate of bounty shall be reduced proportionately. The method of giving effect to this reduction will be prescribed in regulations, but before promulgating these regulations the Minister will confer with representatives of the industry with a view to arriving at a basis of adjustment that will be acceptable to all concerned.
– So that it may be done “ under the lap “.
– No. The limit to the amount to be paid is provided for in the bill, but the method by which it will be applied will be decided by the Minister after consultation with those interested.
– It will not be determined by Parliament.
– It will be made known to honorable) members in due course. Nothing will be hidden.
– But we cannot interfere with a regulation.
– If honorable members think that the method adopted is wrong, consideration will be given to their representations as well as to those of persons engaged in the industry. I can assure the honorable member for Angas (Mr. Gabb) that no information will be withheld from him in this regard.
– I do not want the winemakers to dictate to the Government in this matter; representations of the grapegrowers should receive consideration.
– Clause 20 of the bill provides for the suspension, from the 30th September, of payment of the bounty on gold produced in Australia. The payment of this bounty was originally provided for under the Gold Bounty Act of 1930. The bounty was to be a payment in each year, for ten years, of £1 for each ounce of gold produced in excess of the average annual production during the three years 1928, 1929, and 1930. When the act was passed in 1930, the rate of exchange, Australia on London, was £9 per cent. and British sterling was on a gold basis. The gold produced in Australia was then, and still is, sold at world prices through the Australian mints. As a result, the producer receives a price in Australian pounds which includes allowance for the depreciation of the Australian pound as compared with sterling and allowance for the depreciation of sterling as compared with gold. The Australian pound in relation to gold has depreciated so much since 1930 that, without any allowance for bounty, the producer now receives far more in Australian pounds than was contemplated when the bounty was first provided for. The par price ofgold per fine ounce is £4 4s.11d. When the bounty was first agreed to, the Mint price of gold in Australian pounds was £4 l1s. 6d. per fine ounce, or 6s. 7d. above par. When the bounty was reduced in July last, the price was £5 9s.1d. or 17s. 7d. above the price when the bounty was first agreed to. At present, the Mint price per fine ounce is £7 6s. in Australian pounds, or £2 14s. 6d. above the price when the Gold Bounty Act was passed. In these circumstances, the payment of a bounty from Commonwealth revenue cannot be justified.
– The Government is trying to catch them on both the London and Australian price.
– No. The question of whether the bounty should vary with the variations in the rate of exchange was considered when the original bounty was introduced. The then Minister for Trade and Customs (Mr.Forde), in introducing the bill, said that the Government reserved the right to reconsider the question of reducing the bounty in the event of an abnormal rise in the exchange rate. The rate of exchange rose to £130 10s. in January, 1931, but no change was then made in the gold bounty.
In July, 1931, the gold bounty was dealt with in the legislation arising out of the Premiers plan. While other bounties were then reduced by 20 per cent., the gold bounty was reduced from £1 per fine ounce on the excess production to 10s. per fine ounce. The greater reduction then made in the gold bounty was considered to be fully justified by the rise of the exchange on London from £109 to £130 10s.
The Financial Emergency Act of 1931 also made provision for the rate of bounty being increased by1s. for each fall of 3 per cent. in the rate of exchange between Australia and London. The result was that, when the rate of exchange fell to £125 10s. in December, 1931, the bounty became l1s. per ounce, instead of 10s.
– And even that has been taken away.
– Those engaged in other industries would be glad to get back to the same condition of prosperity as they enjoyed at the time the honorable member was a Minister. It is important to remember that, when the Financial Emergency Act of 1931 was passed, Great Britain was on the gold standard. When Britain departed from the gold standard in September, 1931, and sterling depreciated in relation to gold, the mint price of gold in Australia immediately increased. This increase was more than sufficient to offset the reduction made in the bounty under the Financial Emergency Act of 1931. The gold producer is thus now receiving not only more than was contemplated in 1930, when the bounty was introduced, but also more than was contemplated in 1931 when the bounty was reduced. The amount actually payable in bounty for the year 1931 was £88,740. If the bounty were paid on the total excess production of 1932, it is estimated that the cost to the Commonwealth would be £130,000. If the bounty is suspended as from the 30th September, it is estimated that the bounty payable for this year will be £100,000, and a saving of approximately £30,000 will be effected during the present financial year.
The point at which payment of the bounty should be renewed is a matter of importance. The Government first took the view that payment should not be renewed until the price of fine gold at the Melbourne mint fell to £5 per ounce. Representations have been made by the principal mining interests that the London price for gold should be taken into consideration in determining when the bounty shall be renewed. These representations have been carefully considered by the Government, and it has now been decided to provide for the restoration of the bounty when the London mint price does not exceed £5 per ounce, and the Melbourne mint price does not exceed £5 10s. per ounce. This new basis for the restoration of the bounty will, it is believed, be acceptable to the gold-mining industry, as well as providing some relief to the taxpayers.
Debate (on motion by Mr. Scullin) adjourned.
House adjournedat 4.10 p.m.
Cite as: Australia, House of Representatives, Debates, 16 September 1932, viewed 22 October 2017, <http://historichansard.net/hofreps/1932/19320916_reps_13_135/>.