The House of Representatives, on the 26th May, 1933, adjourned until a day and hour to be fixed by Mr. Speaker and notified by him to each honorable member. The House met pursuant to such notification.
Mr. Speaker (Hon. G.H. Mackay) took the chair at 3 p.m., and read prayers.
page 3194
BILLS RETURNEDFROM THE SENATE
The following bills were returned from the Senate without amendment or requests : -
Australian Antarctic Territory Acceptance Bill.
CannedFruits Export Control Bill 1933.
Supplementary Appropriation Bill 1931-32
Supplementary Appropriation (Works and Buildings) Bill 1931-32.
Australian Institute of Anatomy Agreement Bill 1933.
Commerce (Trade Descriptions) Bill 1933.
page 3194
ASSENT TO BILLS
Assent to the following bills reported : -
Royal Commissions Bill1933.
Petrol Commission Bill 1933.
Commonwealth Grants Commission Bill 1933.
Seat of Government (Administration) Bill 1933.
Commonwealth Inscribed Stock Bill 1933.
Financial Emergency Bill 1933.
Supply Bill (No. 1 ) 1933-34.
Australian Antarctic Territory Acceptance Bill 1933.
Canned Fruits Export Control Bill 1933.
Supplementary Appropriation Bill 1931-32.
Supplementary Appropriation (Works and Buildings) Bill 1931-32.
Australian Institute of Anatomy Agreement Bill 1933.
Commerce (Trade Descriptions) Bill 1933.
page 3195
CUSTOMS TARIFF 1933
Bill returned from the Senate with a message requesting amendments as set forth in the annexed schedule.
page 3195
EXCISE TARIFF 1933
Billreturned from the Senate with a message requesting amendments as set forth in the annexed schedule.
page 3195
MINISTERIAL CHANGE
Mr LYONS: Prime Minis ter and Treasurer · Wilmot · UAP
– I desire to inform the House that the honorable member for Corio, Mr. R. G. Casey, D.S.O., M.C., has been included in the Cabinet, and was, on the 25th September, 1933, appointed by His Excellency, the Governor-General to be a member of the Federal Executive Council. Mr. Casey will assist in the administration of the Treasury.
page 3195
LEAGUE OF STATIONS
Election of Australia as NonPermanent Member of Council.
Mr LATHAM: AttorneyGeneral · Kooyong · UAP
– by leave - Advice was received yesterday by the Commonwealth Government from the Minister Without Portfolio in London (Mr. Bruce) that Australia had’ been elected a non-permanent member of the Council of the League, of Nations. The Council of the League of Nations consists of five permanent members - Great Britain, France, Italy, Japan and Germany - and nine nonpermanent members. The non-permanent members are elected for periods of three years, but in such a manner that the term of three of them expires at each assembly. As the result of the recent election, the present non-permanent members are Argentine, Australia, China, Czechoslovakia, Denmark, Mexico, Panama, Poland and Spain. Canada, in 1927, was the first British self-governing dominion to be elected to the council, and, on the expiration of the triennial term in 1930, was succeeded by the Irish Free State. The Commonwealth Government has decided that the Minister “Without Portfolio or the High Commissioner in London will represent Australia at the meetings of the council, which take place from four to five times a year. It is considered that the representation of Australia on the council can be conveniently carried out from London, and that there is no necessity at present to incur the expense of establishing an office in Geneva.
page 3195
QUESTION
MR. BRUCE, M.P
Dr EARLE PAGE: COWPER, NEW SOUTH WALES
– I should like the Prime Minister to state whether, in view of the suggested transfer of Mr. Bruce from the position of Resident “Minister Without Portfolio and Acting High Commissioner in London, with full Cabinet responsibility, to the position of High Commissioner, an office that carries no Cabinet responsibility, he is satisfied that that lessening of the right honorable gentleman’s status will not interfere with the good work which he is accomplishing in Loudon?
Mr LYONS: UAP
– I am glad first of all to have this opportunity to extend on behalf of honorable members, I think, generally, congratulations to the right honorable member for Cowper (Dr. Earle Page) on his return to his place in this chamber. We are pleased indeed to welcome him back and to know that he is in good health and quite fit to attend to the important duties attaching to the position he occupies.
I am glad that he has expressed appreciation of the fine work that Mr. Bruce has been doing in London, and I give him and every other honorable member of this chamber the assurance that the altered position of Mr. Bruce in the future will not prevent him from continuing the good service that he has rendered to Australia in the past.
page 3195
QUESTION
DEVELOPMENT OF THE NORTHERN TERRITORY
Mr BLAKELEY: DARLING, NEW SOUTH WALES
– I ask the Prime Minister if it is a fact that a subcommittee of cabinet has been appointed for the purpose of negotiating with companies or persons with regard to a charter for the exploitation of the Northern Territory, and if so, will he make available to the House the names and addresses of such companies or persons, and state what stage the negotiations have reached with such companies or persons?
Mr LYONS: UAP
– A sub-committee of cabinet has been set up to deal with this question, and it is at present inquiring into the whole matter. When the inquiry has reached a point at which it is advisable that there should be a pronouncement as to the progress of negotiations, and the prospects of developing the Northern Territory, a full statement will be made to honorable members.
page 3196
QUESTION
COAL AND SHALE OIL
Mr JAMES: HUNTER, NEW SOUTH WALES
– Is the Prime Minister aware of the British Government’s proposals to guarantee a preference for .ten years of 4d. a gallon or for five years of 8d. a gallon on hydrocarbon oils manufactured from English coal and shale? If so, does the Government propose to encourage the Australian coal and shale industry by making a similar offer?
Mr LYONS: UAP
– It is not the practice of the Government to announce matters of policy in reply to questions, particularly those asked without notice.
page 3196
QUESTION
ARTIFICIAL LIMBS
Mr E J HARRISON: WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944
– I have been informed by several makers of artificial limbs that the Repatriation Department is entering into competition with private enterprise in regard to the manufacture of artificial limbs. Has the Minister any information that he can give to honorable members on this subject?
Mr MARR: Minister for Health · PARKES, NEW SOUTH WALES · UAP
– The policy ‘ of the Repatriation Commission is that the department does not compete with private enterprise in regard to the manufacture of artificial limbs for disabled persons, excepting of course those who are returned soldiers. That policy has been pursued throughout. However, representations have been made to me within the last week or ten days that the department in Sydney is competing to some extent with private enterprise. I am having full inquiries made into the matter and when they are completed T shall advise the honorable member and, if necessary, the House, of the result.
page 3196
QUESTION
INTERNATIONAL WHEAT CONFERENCE
Mr HILL: ECHUCA, VICTORIA
– Will the Prime Minister make a detailed statement to the House regarding the decisions of the International Wheat Conference recently held in London, and as to how far those decisions are binding on the wheatgrowers of the Commonwealth? What are the various wheat quotas allocated to the wheat exporting countries? Does the Government consider that in order to provide a workable scheme some form of “ market control “ is necessary ? As the harvest, in some early districts, will start within the next eight weeks, will the Government, in the event of Australia being a party to the International Wheat Agreement, take immediate steps to provide the machinery necessary for carrying out the scheme? Is the scheme calculated to raise the price levels of wheat in. the world’s markets, and if so, to what extent? In the event of no binding agreement being in existence, will the Government take steps immediately to ascertain, by means of a plebiscite, whether the wheat-growers of the Commonwealth are in favour of some form of market control similar to the war-time compulsory pool?
Mr LYONS: UAP
– A full statement regarding the wheat position will be made to the House at an early date.
page 3196
QUESTION
ELECTRIC LIGHT BULBS
Mr WATKINS: NEWCASTLE, NEW SOUTH WALES
– Some months ago the Minister for Trade and Customs promised a. deputation in Sydney that he would submit the question of the importation of cheap electric light bulbs to the Tariff Board. Has the Tariff Board considered the matter?
Mr WHITE: Minister for Trade and Customs · BALACLAVA, VICTORIA · UAP
– The matter has been referred to the Tariff Board, but the inquiry has not yet been held.
page 3196
QUESTION
PETROL ROYAL COMMISSION
Mr BEASLEY: WEST SYDNEY, NEW SOUTH WALES
– Will the AttorneyGeneral inform the House when the Petrol Royal Commission is likely to resume its sittings? Does the fact that nothing has been done for some months indicate that it is proposed not to press this matter any further?
Mr LATHAM: UAP
– At present a complete investigation is being made by the accountant member of the commission of the accounts of the oils companies. This is an inquiry of considerable magnitude, and’ is, perhaps, the most important task of the commission, but I can assure the honorable member that no time whatever will be lost in pursuing the further work of the commission.
page 3197
QUESTION
ACCOMMODATION AT BEAUCHAMP HOUSE
Mr MARTENS: HERBERT, QUEENSLAND
– In to-day’s Telegraph appears a statement to the effect that twelve girls at Beauchamp House have been compelled to make their rooms available to other persons. Is that a fact, aud if so, what is the purpose and reason of such an action?
Mr PERKINS: Minister for the Interior · EDEN-MONARO, NEW SOUTH WALES · UAP
– I do not know whether the statement is true or otherwise, but I shall make inquiries and let the honorable member know.
page 3197
QUESTION
CHIEF JUSTICE OF THE HIGH COURT
Mr WARD: EAST SYDNEY, NEW SOUTH WALES
– In view of the manner in which the position of Chief Justice of the High Court has been discussed, especially at recent United Australia party conferences, will the Prime Minister make a statement to the House to clarify the position, and also to end the speculation which is rife as to the intentions of the Attorney-General in the matter?
Mr LYONS: UAP
– So far as I know there has been no discussion of this subject at United Australia party conferences. The position of Chief Justice of the High Court of Australia is at present filled, and there is no justification for any discussion whatever on the subject.
page 3197
QUESTION
BROADCASTING OF BUDGET DIGEST
Mr BEASLEY:
– Is it a fact that the Prime Minister proposes to broadcast over national stations as well as B class stations an address relating to the budget? If so, will he arrange for the leaders of the respective parties in this House to exercise their right to reply over national broadcasting stations?
Mr LYONS: UAP
– It is a fact that I propose to-night to outline over the national broadcasting service the proposals contained in the budget, but there will be no party significance whatever in the statement. It will simply be a statement of the budget proposals without any comment, endorsement, or discussion. I think that the listeners - the people of Australia - as well as those who are present in this chamber this afternoon, are entitled to know to-night, the nature of what the Government proposes in its financial statement.
page 3197
QUESTION
BUTTER INDUSTRY
Mr BERNARD CORSER: WIDE BAY, QUEENSLAND
– Is the Minister for Commerce yet in a position to state the Government’s intentions with respect to stabilization of butter marketing by Commonwealth and State action?
Mr STEWART: Minister for Commerce · PARRAMATTA, NEW SOUTH WALES · UAP
– At the last conference of Commonwealth and State Ministers it was arranged that the Ministers of Agriculture of the various States should confer with the object of preparing a concrete scheme for submission by the States to the Commonwealth Government in connexion with the stabilization of butter marketing. I understand that there has been some consultation between representatives of some of the States, but up to the present the result of the consultation has not been intimated to the Commonwealth Government.
page 3197
QUESTION
QUESTIONS WITHOUT NOTICE
Mr LYONS: UAP
– As I am anxious to proceed with the delivery of the budget statement, I ask honorable members to give notice of any further questions which they may wish to ask or defer them until to-morrow.
Mr James:
– I rise to a point of order. 1 submit that the right honorable the Prime Minister has taken, undue advantage of his position-
Mr SPEAKER (Hon G H Mackay: LILLEY, QUEENSLAND
– Order !
Mr James:
– He has done so by asking us to defer any further questions we may wish to ask until to-morrow, although this House has been in recess for the last four months. On previous occasions similar requests have been acceded to.
Mr SPEAKER:
– The honorable member must confine his remarks to a point of order.
Mr James:
– When similar requests have been acceded to, we have found that the House has shortly afterwards gone into recess, and we have been deprived of the right of asking questions.
Mr SPEAKER:
– Order! The honorable member must respect the direction of the Chair. He has risen to a point of order, but the greater portion of his remarks up to the present does not refer to any standing order governing the procedure of the House. It is entirely within the province of a Minister to refrain from answering questions. The right honorable the Prime Minister having intimated that it is his desire that no further questions should be asked at this stage, I must, therefore, call on the next business.
page 3198
PAPERS
The following papers were presented : -
Commercial Relations - Copy of Exchange of Notes between the Government of the United Kingdom and the Government of the German Reich.
Commonwealth Bank Act - Balance-sheets of Commonwealth Bank and Commonwealth Savings Bank and Statement of the Liabilities and Assets of the Note Issue Department, at 30th June, 1933; together with Auditor-General’s Reports thereon.
Nauru -
Report to Council of the League of Nations on ‘ the Administration of Nauru during the year 1932.
Ordinances of 1933 -
No. 1 - Census.
No. 2 - Laws Repeal and Adopting.
No. 3 - Clearing of Lands.
New Guinea - Report to the Council of the League of Nations on the Administration of New Guinea from 1st July, 1931, to 30th June, 1933.
Papua - Annual Report for year 1931-32.
Trade and Commerce - Copies of Agreements between the Government of the United Kingdom and -
The Government of Denmark.
The Norwegian Government.
The Government of Sweden.
The Government of the Argentine Republic.
Air Force Act - Regulations amended - Statutory Rules 1933, Nos. 82, 89.
– I bring up the report of the Tariff Board on the subject of primage and exchange, and move -
That the paper be printed.
Mr BEASLEY: West Sydney
– No doubt it is necessary that the report mentioned in the motion of the Minister (Mr. White) should be presented to this House, but it seems strange to me that such a motion should be submitted at this stage, particularly in view of the fact that only a few moments ago the right honorable the Prime Minister (Mr. Lyons) asked honorable members to refrain from asking further questions, some of which may have a direct bearing on the subject of the report presented by the Minister for Customs. With due deference to your ruling, sir, that it is competent for Ministers to refuse to answer questions-
Mr SPEAKER:
– Order !
Mr BEASLEY:
– It is evidently the opinion of the Minister that this report should be printed. The subject dealt with in the report has been of interest to honorable members on both sides of the chamber for some time, and I submit that the Minister should give the House further information regarding it. We should be told immediately what the report contains. We should then be in a better position to discuss the budget proposals of the Government. I feel that sufficient courtesy has not been extended to honorable members generally and particularly to the members who sit with me in this corner of the chamber. Appeals are made from time to time to honorable members to assist the Government in different ways. Such an appeal has just been” made by the Prime Minister, but the honorable member for Hunter (Mr. James) has pointed out that in the past promises made by the Government in similar circumstances have not been fulfilled. I submit that the printing of this report could stand in abeyance until after the important measures which the Prime Minister proposes to introduce have been brought forward. In the circumstances, I shall oppose . the printing of the report in order to give the right cumstances I shall oppose the printing of the report in order to give the right honorable the Prime Minister the opportunity he wishes to proceed with the delivery of the budget speech. The questions which honorable members have been prevented from asking this afternoon are of great importance to their constituents. The information sought by honorable members could not have been obtained during the last four months.
Mr SPEAKER:
– Order ! The honorable member must connect his remarks with the motion before theChair.
Mr BEASLEY:
– It appears that it is the intention of the Government to prevent the discussion of other than its own particular business. It lays down the , procedure to be observed, yet, after the right honorable gentleman asked honorable members to refrain from asking further questions, the Minister for the Interior (Mr. Perkins) and the Minister for Trade and Customs (Mr. White) have taken up time by tabling reports. I wish to emphasize that the action of the Prime Minister has prevented honorable members from utilizing a privilege which should be available to them, particularly on the first sitting day, that of ventilating certain grievances and obtaining information desired by their constituents. In order to give the Prime Minister the opportunity he desires to introduce the budget, and to prevent any further delay, I propose to take advantage of the forms of the House at this stage by opposing the printing of the report.
Dr EARLE PAGE: Cowper
.- It is not my intention to delay the presentation of the budget speech for more than a minute. In view of the fact that it is now over a year since I asked that an inquiry should be conducted by the Tariff Board into the subject of primage and exchange, and of the fact that the contents of this report will have a material bearing on the budget, I ask the Minister for Trade and Customs (Mr. White) to say whether copies of this report will be made available immediately for the use of honorable members before the discussion of the budget takes place, and if it is the intention of the Government to implement the report at once?
Mr SCULLIN: Yarra
– I am sure that honorable members generally are anxious to bear the long-promised budget speech. I am concerned about the printing of this paper only in the way the right- honorable member for Cowper (Dr. Earle Page) is concerned about it. I hope . that it will be made available speedily, for it deals with a very important subject. The members of my party desire the report to be distributed as soon as possible.
Mr JAMES: Hunter
.- I rise simply to demonstrate that the Prime Minister (Mr. Lyons) will not gain any advantage by refusing to answer questions. The members of the party to which I belong realize that the printing of this paper will be a waste of time. If the report had been printed and circulated earlier there would have been no need forme to speak on this occasion.
Motion (by Mr. Lyons) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. G. H. Mackay.)
AYES: 51
NOES: 18
Majority . . . . 33
AYES
NOES
Question so resolved in the affirmative.
Original question put. The House divided. (Mr. Speaker - Hon. G. H. Mackay.)
AYES: 62
NOES: 6
Majority . . . . 56
AYES
NOES
Question so resolved in the affirmative.
page 3201
ESTIMATES 1933-34
Messages reported transmitting estimates of revenue and expenditure and estimates of expenditure for additions, new works, buildings, &c., for the year ending the 30th June, . 1934, and recommending appropriation accordingly.
Ordered to be printed, and referred to Committee of Supply.
page 3201
BUDGET 1933-34
In Committee of Supply:
Mr LYONS: Prime Minister and Treasurer · WILMOT, TASMANIA · ALP; UAP from 1931
– The past year has been one of the most interesting in the history of Australia, and, possibly, one of the most important in the history of the world. The minds of men - and particularly of men responsible for government - have been occupied with problems of the greatest complexity and difficulty. Economic and social maladjustments have been obvious, though the definition of their causes has given rise to endless dispute. Great experiments upon a national scale are being tried in Europe and in America, and no one can predict the results. The World Monetary and Economic Conference has almost entirely failed. We have witnessed the disappearance of hopes that some international agreement would provide an easy method of restoring prosperity. The Disarmament Conference has not yet achieved any results. Generally, the condition of the world is one of uncertainty, doubt and confusion.
The world depression affected Australia very early. The people of Australia were sufficiently wise and patriotic to make immediate sacrifices in the hope of securing some stability in a shifting world. This hope has largely been fulfilled, and the position of Australia, and of the Australian people as a whole, compares favorably with that of most’, if not all, of the countries of the world.
When the budget was introduced last year, the Government considered that there was every reason to adopt a policy of the greatest caution. Though the season appeared to be opening with good promise, it was too early to predict with any certainty the probable results. The advantage in sterling prices, gained as a result of the departure of -the United Kingdom from the gold standard, had been heavily offset, by a steady and continuous fall in gold prices. This latter movement- was continued well into the last financial year. The lowest monthly average prices of our chief exports in that year were as follow: -
Mr James:
– I rise to order. I wish to know why the right honorable the Prime Minister (Mr. Lyons) has supplied the Leader of the Opposition (Mr. Scullin) and the Leader of the Country party (Dr. Earle Page) with a copy of the budget speech, and has not extended a similar privilege to the leader of the party of which I am a member.
The CHAIRMAN (Mr Bell: DARWIN, TASMANIA
– There is no point of order.
Mr LYONS: UAP
– The table to which I was about to refer gives the average prices of our chief exports in Australian currency and sterling, and the equivalent in gold. I ask that this and any other tables which I do not give in detail be included in full in Hansard, my object being to save the time of honorable members.
Mr Beasley:
– I object to the inclusion in Hansard of any tables that are not read by the Prime Minister.
Mr LYONS:
– The honorable member having taken up that attitude, I shall read the whole of the figures, and he must accept the responsibility if honorable members are wearied by that procedure. This table of prices is as follows: -
The average of the gold prices of all export commodities reached in this year the lowest point touched since the depression set in in 1930.
Had we not experienced a bountiful season, the collapse in prices would have been felt far more severely than was, in fact, the case. The actual results of the year showed an increase in exports, including gold production, of £4,197,942 (sterling) over the previous year. This factor, together with returning confidence at home, which brought with it increased employment and better trade, led to a buoyancy of revenue which it was easy to hope for, but which there was no convincing reason to anticipate as a certainty.
The increased purchasing power of the people brought about an increase of imports during 1932-33 of £12,777,684 sterling, with the result that we were not able to add during the past year to our available balances of London funds. These increased imports were, however, accounted for mainly by increases in the importation of raw materials or aids to industry, the principal of which were as follow : -
The definite trend revealed by these statistics gives support to the view that Australian trade and industry, despite the fall in prices to which reference has been made, were slowly, but definitely, improving during the year.
There is scarcely need to remind honorable members that when this trend was revealed, I submitted proposals in November last for remissions of taxation involving a loss of revenue, on an annual basis, of £1,700,000. This was in accordance with the promise made in thebudget speech 1932-33 to reduce the taxation burdens upon the people as soon as practicable. At the time, it was intimated that these concessions could only be continued if, when the budget proposals of 1933-34 were being formulated,, existing circumstances made such a course possible. Happily, it can now be announced that legislation will be submitted shortly providing, among other things, for a continuance of the taxation remissions embodied in the Financial Belief Act of last December.
Review
Before dealing with the results of last year’s operations and the proposals contained in this year’s budget, it is desirable to place on record a number of . facts which not only are a cause for congratulation, but also form in themselves a justification of the policy for which this Government stands.
The CHAIRMAN:
– It has been the practice at all times, I believe, but certainly since I have been a member of Parliament, for the Treasurer to read the budget speech. The right honorable the Treasurer is in order.
Our National Credit
Mr LYONS: UAP
– When the budget speech was delivered last year, mention was made of the improvement, both at home and abroad, of our national credit, as revealed by the prices of our stocks. That improvement has continued in a marked way.
In London in July, 1932, our 5 per cent, stocks, due 1945-75, were regarded as the indicator stock in the market. The price of this stock at the time the budget was delivered was £101 3s. 9d. To-day the 5 per cent. 1945-75 stock, which stands at £10818s. 9d., has ceased to be the indicator stock, and has been replaced by the 4 per cent. 1955-70 loan, the price of which stands at £105 6s. 3d. These prices are all net.
It is significant of Australia’s improved standing that the latest advices from London show that Commonwealth 5 per cents, are quoted for the first time at a higher price than New Zealand 5 per cents., while our 4 per cents, are quoted higher than Canadian fours.
London Conversions
As is well known, the principal reason which led to the appointment of the Right Hon. S. M. Bruce as Resident Minister in London was the difficulty which confronted Australia with reference to her obligations maturing overseas, and especially the accumulation of loans with optional rights of repayment.
During the year, Mr. Bruce has been in constant communication with the Loan Council through the Commonwealth Treasury. The conversion terms that have been arranged from time to time have been fixed with the approval of the Loan Council.
Compulsory maturities falling due last year amounted to . . £21,981,000
In addition, we. had optional rights of redemption in respect of the following stocks bearing high interest rates: -
The following have been already dealt with - in the order shown: -
The total annual saving in interest and exchange effected by these conversions amounts to £1,600,000.
It was unfortunate that the first approach to the London market was for the redemption of a maturing New South Wales loan of £12,360,000. Nothing had tended' to destroy the market value of our stocks in London to a greater extent than the policy followed by a former government of New South Wales. Consequently, the negotiations leading to the conversion of this loan were particularly delicate and difficult.
Though the period of the new loan is short, it was thought that recourse to a short-dated loan was necessary in order to test out the market and pave the way for longer dated operations later on. This policy has subsequently been vindicated.
The terms on which the latest approach to the market has been made are an indication of the steady improvement of our position, and the growing confidence of the British investor in our capacity, and will, to meet our obligations as they arise. The conversion into a long-term loan of £20,951,000 of debt- an opera tion which would previously have been regarded, even in the days of our highest credit, as beyond our capacity - is both unanswerable evidence of restored confidence and a splendid tribute to **Mr. Bruce's** work in London. The yield to the investor on this loan is £3 17s.11d., which is the lowest for a long term issue in the current series of conversions. The nominal interest rate of the loan is *3¾* per cent. No long term Australian loan has been floated in London at so low a rate for over twenty years.
The Government desires to place on record its high appreciation of the manner in which **Mr. Bruce** has discharged the delicate and formidable task entrusted to him.
We still have some £34,500,000 of high interest bearing loans with optional conversion rights, and it is expected that these will be dealt with in the near future. The remaining unmatured debt in London due to the public is £338,000,000, carrying an average interest rate of 4.43 per cent. If the whole of this sum bore interest at 4 per cent, per annum, the amount of interest would be reduced by £1,450,000. "
The importance of maintaining our credit in London on a thoroughly sound basis is made clear by an examination of the loans that will mature during the next two years. Steps will have to be taken from time to time to arrange the necessary conversions.
For the information of honorable members, details of these loans are set out in convenient form -
At present the total annual contribution to the combined sinking funds of the Commonwealth and the States for redemption purposes in London, New York and Australia amounts to about £8,000,000. This amount is increasing yearly and will, in course of time, become an even more valuable aid toward meeting our obligations as they mature.
{:#subdebate-21-4}
#### The Internal Debt
Our internal position is also very heartening. The appreciation" of our stocks since the last budget was delivered shows a continued and solid improvement in their market standing. According to market prices, the average return to the investor, including redemption, over the whole of our 4 per cent, stocks in Australia, has decreased from £4 14s. per cent, on the 30th June, 1932, to £3 13s. 8d. per cent, to-day.
The improved outlook is also reflected in the increased amount which it has been possible to make available in the current financial year for the loan works pro grammes of the States, and, through them, for the provision of employment. Last financial year £14,041,000 was made available from all sources, while in 1933-34 the amount which it is proposed to spend is £20,600,000.
For some time it has been necessary to finance public works by means of treasury-bills. During last financial year, however, we were able again to raise loans for new cash on the open market. This, in itself, is significant evidence of the improved position of governmental finance. Since November last, loans for a gross amount of £16,462,000 have been floated in Australia. The first was a 3¾ per cent, loan, maturing in 1942, for £8,000,000, half of which was devoted to funding treasury-bills, and half to the loan works programmes of the States. This was the first occasion on which it was possible to approach the local market for a new money loan since the 16th June, 1930.
A second loan for £5,000,000 was placed on the market last May, the rate being again 3¾ per cent., with a currency of nine years. Not only was this loan over subscribed, but actually £8,462,000 was contributed within the record time of eight days. The loan was not underwritten, and the total cost of flotation was only 6s. 8d. per cent. This was in every respect a unique operation in Australian finance. Nothing could "have given a greater or more striking illustration of restored confidence.
{:#subdebate-21-5}
#### Interest Rates
The policy of the Government has been directed towards a steady reduction in interest rates in co-operation with, and with the active assistance of, the Commonwealth Bank.
The following table illustrates the manner in which interest rate3 have been falling: -
The lending rates of the private banks have also been on the downward grade. Action to reduce interest rates was taken some time ago, when the private banks announced a lending rate on overdraft for rural purposes of 5-J per cent.
Some banks have established 5£ per cent, as the lending rate on all secured advances for general purposes. Nevertheless, the Government considers that although the present average lending rates of the banks are the lowest that have ever obtained in Australia - or, at all events, for very many years - there is need for cheaper money still to stimulate industry and accelerate reemployment of the people. At a later stage, an indication will be given of the steps which the Government proposes to take to achieve this end, and which, it is confidently believed, will have the desired effect.
{:#subdebate-21-6}
#### Private Finance
In the sphere of private finance, there has been a very marked improvement.
Many of the stocks of leading financial, pastoral and manufacturing companies' have recovered much of the loss that followed the depression. Profits have appeared where, in the previous year, losses were recorded.
The shares of a representative list of ordinary industrial companies listed on the Melbourne Stock Exchange show an improvement in market .value of 29.6 per cent, in August, 1933, as compared with July, 1932. The profits of 80 representative companies have improved from £5,600,000 in the year 1931-1932 to £5,980,000 in 1932-1933.
Bank clearings in the six capital cities, excluding Treasury Bill transactions, increased to a weekly average of £30,043,000 in 1932-1933, as compared with £28,117,000 in 1931-1932.
{:#subdebate-21-7}
#### Rising Export Price Levels
Perhaps the most encouraging factor of all is the evidence of rising prices of our exportable commodities.
A list of the low prices to which these set out again in juxtaposition with the fell during the financial year just past prices ruling to-day : - has already been given. % These are now
Taking all our major exports into consideration, there has been a rise in prices in Australian currency of 40 per cent, in the six months from March to September of this year.
Though it is not suggested that this rise represents all that could be desired, particularly in regard to wheat and beef, the move in prices is, nevertheless, in the right direction.
While any over-optimistic estimate of the value of our exports during the coming year is to be deprecated, it is, however, almost certain that our London funds will be augmented during the present year. There is no reason to believe that this accretion of London funds will prove greater than our actual needs to finance the service of the overseas debt and the purchase of necessary imports. We still require a further rise in prices to build up in London such reserves as would enable us to meet a bad season with any degree of confidence.
The outstanding item in the list of rising export prices is undoubtedly wool. The wool industry has felt the full force of the depression, and it is very encouraging to note the recent marked improvement. It will take some time for the industry to recover from the effects of the depression. It has been impossible, during the period of abnormally low prices through which we have passed, for improvements to be maintained and other necessary work to be done. It is confidently anticipated, however, that if the present prices of wool are maintained, the wool industry directly and indirectly will absorb a good deal of additional labour, and thus contribute materially to the easing of the unemployment problem.
On the other side of the picture, an outstanding feature in the fall in prices of commodities in Australia is the reduction in the prices of petrol. In October of last year petrol was selling retail in Melbourne and Sydney at 2s. per gallon for first grade, and ls. lOd. per gallon for second grade. In other capital cities the prices were from Id. to 3d. per gallon higher. Petrol is now selling retail in five capital cities at ls. 5d. per gallon for first grade, and ls. 4d. for second' grade, and in Hobart the prices are Id. per gallon above these rates.
Honorable members are aware of the action that the Government took some months ago to appoint a royal commission to inquire into the .prices of petrol. The report of the commission is now awaited.
*Improvement in Post Office.*
The general improvement is also reflected in the development of telephone exchange services. During 1930-31, when, for the first time in the history of the Australian system, the cancellations were in excess of the new connexions, there was a net loss of 21,595 telephones. In the succeeding year, 1931-32, the net loss was 13,086 telephones, but last year, 1932-33, there was a fairly substantial net increase, the new connexions exceeding the cancellations by 3,058 telephones. The improvement is a definite indication of better trade conditions.
A further improvement in the rate of development is anticipated during 1933-34, and the necessary financial provision to meet likely demands has been made.
The restrictions formerly imposed on the extension of the hours of service at country telephone exchanges are being eased substantially, and, as a result, the period of service at over 200 exchanges is being extended almost immediately.
{:#subdebate-21-8}
#### Gold
Another, important factor in our internal economy has been the encouragement given to the gold-mining industry by the temporary abandonment of the gold standard by Britain, and by the rate of exchange at present existing between Australia and the United Kingdom. There is no doubt that the enhanced price of gold has given an enormous impetus to gold-mining. Production has increased during the year, from 668,197 fine ounces in 1931-32, to 766,209 fine ounces iu 1932-33/' It is estimated that this increase will be exceeded by 100,000 fine ounces in the current financial year, and that the production in Australian currency will amount to £7,000,000.
It is not possible to give accurate estimates of the extent to which gold-mining has been responsible for reducing unemployment, but it may confidently be asserted that the new hands directly and indirectly employed as a result of the revival of gold-mining number thousands. Many old mines, closed in the past because of mounting costs and low returns, are being re-equipped and are once more becoming productive.
One of the most notable steps' that have been taken is the formation of the Western Mining Corporation Limited, to conduct a comprehensive aerial survey of the gold-bearing areas of Western Australia. This organization is backed by very powerful financial groups, with the mo=l. up-to-date technical resources. If it is successful in its vast prospecting venture in finding new fields, it will be able to command adequate financial resources for their development. It is, of course, of paramount importance in this regard, that every effort should be made to keep costs as low as practicable. This is a fundamental condition, if large lowgrade ore bodies are to be worked to advantage.
{:#subdebate-21-9}
#### Monetary and Economic Conference
Attention should be directed to the important declaration of monetary policy subscribed to by the representatives of the United Kingdom, of the Dominions, and of India, at the conclusion of the World Economic and Monetary Conference in London, at which Australia was represented by the Eight Honorable S. M. Bruce. This declaration urged that, in future, there should be the closest possible consultation between the signatories in regard to the monetary developments of the Empire. All governments whose currencies have departed from their former gold parities seemed to be in agreement as to an ultimate return to gold, but at some new parities involving greater or less depreciation in relation to the old gold content of the coin, this to be determined in the light of the then existing circumstances. Honorable members need hardly be reminded that the recent departure of the United States of America from the gold standard, and the uncertain future of the dollar, have brought in their train new difficulties and complexities. It is clear that it will not suit Australia, as a debtor country, for sterling to be over-valued when the time comes to link up again with gold. Whatever the United Kingdom may decide to do in this respect, it is important that we should retain our own right to fix our monetary unit at; the point which is consistent with our own price level at the appropriate time. According to the course of world events, this may be late or early. Meanwhile, the Government, in the closest co-operation with the Resident Minister in London and the Commonwealth Bank, is being fully informed of current events and movements. No final action can be taken by the Government without the concurrence of Parliament. There is no reason to suppose that any decision will have to be made in the near future.
Though the World Monetary and Economic Conference proved to be almost entirely a failure, Australia has, as a result of **Mr. Bruce's** efforts, entered into two agreements, arising from the con- ference, in regard respectively to wheat and silver. Full statements will be made on these subjects at a later stage.
{:#subdebate-21-10}
#### Unemployment
Though muchremains to be done, and many of our people are still either unemployed, or only in partial employment, the financial year recently ended has revealed a steady and progressive diminution in the numbers of unemployed. The comparative figures for Australia, as published by the Commonwealth Statistician, were : -
The sustenance statistics furnished by the States from time to time are further evidence of the steady decline in unemployment figures throughout the Commonwealth.
Much has been done during the year by the various governments to alleviate the position of the unemployed. There are, however, definite limits to the capacity of government's to provide fulltime work." The great proportion of the people is normally employed by private enterprise, and it is to private enterprisethat we must look for the ultimate absorption of our people in useful work. In addition to an increased works policy, the Government will this year submit proposals which, by the removal of some of the burdens now carried by industry, should go a long way to revive industry and stimulate employment.
{:#subdebate-21-11}
#### State Governments
The State governments completed the year 1932-33 with a combined deficit of £8,600,000, as against a deficit of £18,400,000for the previous year. This year the estimated deficit is £8,500,000, subject to reduction by such savings as may be effected as a consequence of debt conversion overseas.
When it is borne in mind that the Commonwealth had a surplus for 1932-33 of £3,546,608, and that £7,769,002 was found by all the governments of Australia during the year for sinking fund purposes, it will be agreed that Australian finance, taken as a whole, is on a fairly satisfactory and sound basis. The amount estimated to be payable this year to the National Debt Sinking Fund for debt redemption is £8,038,000.
{:#subdebate-21-12}
#### States' Grants
The Commonwealth contributions to State revenues last financial year, excluding the contribution for relief of primary producers, amounted to £12,525,482; this year the estimated amount is £12,982,000, an increase of £456,518. When, as is frequently the case, comparisons are instituted between Federal and State taxation, it is material to remember that nearly £13,000,000 of Commonwealth revenue is spent by the States, and not by the Commonwealth.
In accordance with an undertaking given to the last conference of Commonwealth and State Ministers, provision is made in the budget for an increase of £300,000 in the grants to States as compared with last year. Details are -
As honorable members are aware, the Government has appointed a commission to inquire into the subject of Commonwealth financial assistance to the States. The commission is now engaged in its inquiry, and it is expected, that it will be in a position to report during the course of the year.
{:#subdebate-21-13}
#### Position Summarized
Although there are undoubtedly many difficulties confronting the nation, a comparison of the position as it existed when this Government came into office with the condition of' the country to-day - with credit restored, industry 'reviving, trade improving, export prices moving upwards, unemployment declining, and much sounder public and private finance - reveals ground both for satisfaction in what has been accomplished, and for confidence in what the future holds in store.
The Government believes that the time has arrived when, it should boldly and confidently set to work to relieve the people of some of the burdens which, though necessary and unavoidable at the time they were imposed, are now hindering the restoration of employment and hampering commerce and industry.
Let me remind you how heavy those burdens are. Although, when the first few months of the last financial year revealed an improving revenue position, steps were taken to reduce some of the more onerous forms of taxation to the extent of £2,100,000, the emergency taxation still in force is exceptionally heavy. This will be seen from the following statement, which shows the remaining annual burden of recent increases in taxation : -
It should be remembered that this emergency taxation was necessary notwithstanding the severe reductions that were made in expenditure.
{:#subdebate-21-14}
#### Financial Year 1932-33
At this stage it is desirable to set out briefly the results of last year's operations.
The following table gives the estimated, and the actual, revenue and expenditure for the year: -
On the revenue side there was a most encouraging increase, which was mainly derived from -
These figures were partly set off by decreases in land tax collections of £149,689, and in estate duties of £173,004.
When the previous budget was brought down, Australia had passed through a difficult year. The reduction in the purchasing power of the people was reflected in the fall of imports to a value of £45,000,000 sterling, while imports for the two previous year3, viz., 1929-30 and 1930-31, were £131,000,000 and £61,000,000 sterling respectively. The outlook for 1932-33 was uncertain, and the budget estimate was based on expectations of a slight improvement. The year, however, disclosed a very marked improvement in imports. These reached a value of £58,000,000, and were responsible for an increase in revenue, together with increased returns from excise, of more than £5,000,000.
On the expenditure side, the increase was mainly due to the supplementary provision of £2,250,000 for assistance to primary producers. This included £2,000,000 for relief to wheat-growers, "which, with the exception of a small amount for the Federal Capital Territory, was paid over to the .States for distribution to wheat-growers. There was also a further sum of £250,000 for fertilizer assistance to primary producers other than wheat-growers.
Other increases in expenditure included invalid and old-age pensions £271,000, Defence Department £110,000, miscellaneous expenditure £171,000. This last increase was due to unavoidable expenditure, including payments in connexion with the census, £43,000, payment of postponed contributions to the League of Nations, £30,000, and liquidation of overdrafts under the Shipping Act, £51,000. Federal aid roads also cost £122,000 more than the estimate, the expenditure being met by a special portion of the petrol tax, which is, in fact, set aside for payment to the States. This increase is, therefore, offset by a corresponding increase of customs revenue. On .the whole, the other items of expenditure conform fairly closely to the Estimates.
{:#subdebate-21-15}
#### The Current Year
We have now to turn to the prospects for the current financial year. As it was clear that it would not be necessary to impose any additional taxation, but that, on the contrary, it would be possible to make further reductions, it appeared to the Government wise to delay the introduction of the budget sufficiently long to obtain an indication of the season and the course of prices of our primary products. In that way, it was considered, we should be in a better position to judge the maximum extent to which we could safely retrace our steps by reducing taxation and removing other burdens which certain sections of the people had been asked to carry.
The last financial year closed, as has already been stated, with a favorable balance of £3,546,608. This result was achieved without the necessity to use any of the balance of the previous year's excess of receipts over expenditure of £1,314,091. Leaving out of consideration the accumulated deficit of '£17,216,340, to the reduction of which, in normal circumstances, any excess of receipts over expenditure should be devoted, there is an accumulated excess of receipts of £4,860,699. In the near future, as soon as circumstances permit, it will be necessary to take steps to deal with the accumulated deficit. In view, however, of the great need that exists to relieve industry of the taxation burden it is at present carrying, the Government does not consider that these excess receipts should be devoted to the reduction of the accumulated deficit, hut that, on the contrary, they should be carried forward into the next, two years and applied to relieve industry, to .assist in keeping down the cost of living, to reduce interest, and to alleviate, to some extent, the other burdens of the people.
{:#subdebate-21-16}
#### Budget Estimates for 1933-34
Based on present rates of taxation and expenditure (including some provision for increases in departmental expenditure this year, to which reference will be made later) and on the assumption that Australia will not be called upon to make any payment to the United Kingdom Government in respect of war debt, the estimated position for 1933-34 is as follows : -
In framing the budget estimates for this year, it is necessary to consider what is likely to be the position in the following financial year. The proposals for this year, which will be given in detail later, are based on the assumption that the revenue and expenditure for 1934-35 will be the same as the estimates for the present year. It is impossible to predict the revenue and expenditure of a future year with any great degree of certainty, but the Government believes that this, assumption is one which it is not unreasonable to make.
The Government is anxious that any remissions of taxation or increased expenditure that are provided for this year should not bring about a result which would make it imperative, in the year 1934-35, either to increase taxation again, or to reimpose the burdens embodied in the Financial Emergency legislation which the Government now proposes to lighten. It should be remembered that, whatever is done in the matter of reductions of taxation or increased expenditure, the actual loss to the budget this year, of which three months have expired, will be about three-fourths of the annual value of any concessions made. As I shall show later in detail, it is therefore, proposed : -
The actual liability on the budget of 1933-34 will be £6,652,000. The total amount of £9,148,000 will be the liability against the 1934-35 budget and the gross liability against the budgets of 1933-34 and 1934-35 will amount to £15,800,000.
These proposals will result in an estimated deficit of £1,17 6,000 for the present year. The full effect of the proposals will, however, not be reflected in the budget until next year, and, assuming that revenue and expenditure continue at the normal level, there will be an estimated deficit in 1934-35 of £3,672,000. The estimated deficits for 1933-34 and 1934-35 aggregate £4,848,000, and will absorb practically the whole of the excess receipts for the last two years, viz., £4,860,000.
It seems clear, therefore, that the proposals which are made in this budget represent the maximum concessions which can safely be made at the present time. If the results of the present financial year should be more favorable than the present estimate, the position can be reviewed when the budget of 1934-35 is under consideration.
{:#subdebate-21-17}
#### Remissions of Taxation
I have shown that remissions of taxation can be made. It only remains to determine what form these remissions shall take, and in what way the objectives the Government has in view can he achieved. These objectives are -
{: type="1" start="1"}
0. Stimulation of employment.
1. Lightening the burdens on industry by reduction of -
{: type="a" start="a"}
0. interest; and
1. costs of production.
2. Reduction of the *cost* of living.
The proposals divide themselves naturally into two main groups -
{: type="1" start="1"}
0. Direct taxation.
1. Indirect taxation.
The figures that I shall now give to honorable members show the annual loss of revenue, or increase in expenditure, as the case may be, which will result from the proposals made. It is necessary to appreciate the significance of these figures if a true picture of the position in the current year and the financial year 1934-35 is to be obtained.
{:#subdebate-21-18}
#### Direct Taxation
The Government proposes to make the following reductions of income and land taxes : -
The Government wishes to make it clear that one objective aimed at in the combined reductions in the company rate, the property super tax, and the land tax, is a reduction in interest rates charged to industry.
To some extent, the alteration of the law as it affects life companies is directed to the same objective, but, in the case of the weaker of these companies, the existing taxation is forcing them into an actuarially unsound position. An alteration of the law is therefore absolutely necessary. The Government expects that the stronger companies will gladly co-operate in the objective aimed at, and pass on to their debtors the relief they obtain. They will recognize, it is hoped, that the present is not a time to use this relief solely for the benefit of their policy-holders.
The Government confidently anticipates that its objective will be attained, and that speedy relief will be given throughout Australia to a large class of debtors, who owe money to insurance companies, banks, and other financial institutions.
In cases where reduction of taxation' cannot be passed on to debtors, the reductions will not only confer a direct benefit on the taxpayers themselves, but will also enable them to give more employment, and thus assist the community generally.
The reduced company rate should assist in the objective of providing employment. Although it gives no specific advantage to the large investor, who will still pay income tax upon the rate applicable to his individual income, it is a definite assistance to the small investor.
The proposed change in the income tax rate on personal exertion income removes the whole of the extra, taxation imposed in 1930 and 1931 on taxable incomes up to £500, but higher incomes will still hear a considerable part of the super-tax as then imposed.
This change will also have the effect of reducing the tax on certain of the lower incomes to a rate below that obtaining -before . the financial emergency legislation started to operate. In view of the general introduction of wages tax in most of the States I am sure this relief will be welcomed by this large class of taxpayer.
{:#subdebate-21-19}
#### Indirect Taxation
I now come to the proposals for the reduction of indirect taxation.
The Government proposes to make the following alterations : -
Exchange and the Tariff.
After the most careful review of the report of the Tariff Board on the incidence of primage and exchange on protective duties, which has been tabled* fo-day, the Government decided that the best course was to apply the report in so far as it affects protected goods entitled to admission under the British preferential tariff. The two principal countries supplying goods entitled to admission under this tariff that will be affected by the adoption of the Tariff Board's report are the United Kingdom and Canada. *New* Zealand, with which country exchange is at par, will not be affected. In the case of the two former countries, and especially the United Kingdom, the exchange relationship has for a considerable period remained fairly stable, and a satisfactory comparison of costs can, therefore, be established. The Government considers that, for the time being, at all events, it is the wisest course not to apply the recommendations of the report to foreign countries. It is proposed, however, to incorporate in the Customs Tariff Industries Preservation Act a provision that will enable the formula recommended by the Tariff Board to be applied, when and as required, to particular goods coming from countries whose currency is depreciated below our own in terms of gold.
*A* literal interpretation of the Tariff Board's recommendation with reference to duties on protected goods imported from countries with currencies depre-. ciated relative to Australian currency, would necessitate the application of the formula to all protected goods. Such action would, in many cases, be quite unnecessary. Moreover, it would have a needlessly provocative effect.
The implementing of the Tariff Board's report in the manner suggested is, the Government believes, the best way of dealing with an extraordinarily difficult subject. In so far as any endeavour has been made by other countries to deal with this most intricate problem, it has been done by raising tariffs to exclude goods from countries with depreciated exchanges. The Government is not prepared to adopt this course as a general principle. Owing to the fluctuations of foreign exchanges at the present time, the Government con- siders that it would be unwise to attempt an adjustment of duties, based on widely varying exchanges, on foreign goods subject to the protective tariff. In these cases, it is impracticable to establish a satisfactory comparison of costs.
If the reductions proposed are made in the British preferential duties, the competitive field will have been widened sufficiently for the present to ensure that Australian manufacturers will not be able to take - as I feel sure they do not desire to take - undue advantage of the extra protection afforded by the greater decline in Australian costs than is apparent, on a proper comparative basis, in the United Kingdom. There is a further advantage in the Government's proposal, in that it will leave a greater margin for the possible negotiation of separate trade treaties with foreign countries, and thus enable some advantage to be given to Australian exporters in return for reductions in duties on specified imports.
{:#subdebate-21-20}
#### Primage
The reductions of primage proposed are as follow: -
{: type="1" start="1"}
0. Reduction from 10 per cent to 5 per cent, on all protected goods entitled to admission under the British preferential tariff.
1. Reduction from 10 per cent, to 5 per cent, on certain selected raw materials of a class contained in goods covered by (1).
2. Abolition of the existing primage duty of 4 per cent, from all goods (except newsprint) entitled to admission under the British preferential tariff.
3. Reduction from 10 per cent, to 4 per cent, on certain raw materials and capital goods entitled to admission under the British preferential tariff.
4. Reduction from 10 per cent, to 4 per cent, on " printing papers, other than newsprint."
5. Abolition of the 10 per cent, primage duty on hessian.
6. Reduction from 10 per cent, to 4 per cent, on a small miscellaneous group.
Some further exemptions from primage are also being made. Newsprint is being excepted from these remissions in view of the abolition, some time ago, of the special impost of £1 per ton.
The combined effect of the proposed primage reductions, and of tariff adjustments on account of exchange on practically all of the protected goods admissible, under the British preferential tariff, will be to bring about a maximum reduction, of17½ per cent, at the present rate of exchange, comprising *12½* per cent, exchange adjustment, and 5 per cent, primage remission. The deduction of 12½ per cent, is based on a British preferential rate of 50 per cent, or higher, irrespective of whether the duties are ad valorem, specific, alternative or composite rates. This maximum reduction of 12½ per cent, is brought about by the dual nature of the Tariff Board's recommendation, which provides for a deduction of one-fourth of the duty or one-eighth of the value for duty, whichever is the lower. Where the rate is lower than 50 per cent, the deduction on account of exchange will be correspondingly lower, falling to2½ per cent, in the case of a British preferential duty of 10 per cent.
The Department of Trade and Customs and the Tariff Board are in agreement as to the list of goods to which this recommendation of the hoard is to be applied, and in due course the House will be asked to approve of this proposal of the Government. The proposal will be submitted in such a way that the House will know exactly what items are covered by the term "protected goods." Obviously, nothing is to be gained by needlessly surrendering revenue on nonprotected goods. Nevertheless, in relation to the raw material and capital goods of industry, primage is being removed, or reduced, as circumstances permit.
{:#subdebate-21-21}
#### Beer and Spirits
The duties on liquor have been greatly increased during recent years. The Government confidently expects the consuming public to receive a direct benefit from the reductions of taxation which are now proposed.
{:#subdebate-21-22}
#### Tea
It is proposed to remove the primage duty of 10 per cent, from tea, and also to reduce the customs tariff duty by1d. per lb. This involves an amount of £320,000. This remission the Government also expects to be passed on to the public.
{:#subdebate-21-23}
#### Fortifying Spirit for Wine
In order that the growers of grapes used in making fortifying spirit may bo paid a better price, and that the wine industry may be assisted generally, the Government proposes to reduce the excise on this form of spirit by 2s. 6d. per gallon, making the excise duty in future 6s. 6d. per gallon.
{:#subdebate-21-24}
#### Benzol
The reduction of revenue involved in the case of' benzol amounts to £15,000. The Government desires to give every possible encouragement to the manufacture of this spirit, since the plant not only is used to produce motor spirit from Australian materials, but also would be invaluable in time of war for providing an essential constituent of high explosives.
{:#subdebate-21-25}
#### Crude Rubber Duty
The Government is glad to be able to reduce this duty on a raw product used in manufacture from 4d. to 2d. per lb. In this case, again, the Government expects that real benefit will accrue to the users of the manufactured products. The Government's objective is, amongst other things, to cheapen the price of motor tyres.
{:#subdebate-21-26}
#### Sales Tax
I now come to the sales tax. In the first place, it is proposed to reduce the rate of sales tax by 1 per cent. This concession will be of great benefit to many classes of industry. It represents a reduction of taxation, and a benefit to the public as a . whole, of £1,350,000 per annum. The reduction will take effect on the date on which the amending legislation receives the Royal assent.
The temporary exemptions which were granted by the Financial Relief Act 1932 as from 11th November, 1932, and terminating on 30th September, 1933, will be incorporated in the schedules of continuing exemptions so that there will be no break in the continuity of the exemptions. The items to be dealt with in this manner are -
>
*Goods Imported or of Australian Production.*
>
>Books of a literary or educational nature, magazines, periodicals and printed music.
>
>Explosives for use in the mining industry.
>
>Jam, fruit pulp and canned or bottled fruits and vegetables.
>
>Pickles, sauces and vinegar.
>
>Poison carts.
>
>Certain parts of windmills and pumping equipment.
>
>
*Goods of Australian Production only.*
>
>Essences (being substantially juices of Australian fruits) from which non-alcoholic beverages are made.
>
>Fish of Australian origin, including oysters, crayfish, . prawns and crabs (whether cooked, canned or otherwise processed).
>
>Pastry, scones, buns, cakes and all similar products of bakers and pastrycooks.
>
>Treacle, molasses, golden syrup and other syrups produced by sugar refineries.
Further exemptions are now proposed in regard to many classes of goods. These exemptions will come into operation on the date of commencement of the amending legislation.
The list of the proposed additional exemptions which I shall shortly give is expressed in more or less general terms. Slight variations in the wording may be necessaryin order to express the proposals in the legal form necessary to give proper effect to the intention.
As regards the further exemption of aids to primary producing industries, it should he stated that these industries have already received extensive relief from sales tax through existing exemptions. The further exemptions now proposed represent other items which affect the production of fresh fruit and dried fruits, fishing, mining, dairying, horticultural and poultry-farming.
The total remissions proposed amountto £1,220,000, and the list is as follows : -
>
*Fruit-growing Industry (Exemptions to be Limited to Goods used in this Industry) -*
>
>Ethylene gas for colouring fruits and vegetables?.
>
>Fly traps and fly lure for fruit flies.
>
>Fruit wrapping paper.
>
>Grafting waxes.
>
>Refrigerating plant and equipment (and parts) forcool stores.
{:#subdebate-21-27}
#### Secateurs
*Dried FruitIndustry (Exemptions to be Limited to Goods used, in this Industry) -*
Carbonate of potash, caustic: soda, olive oil.
Dip tins, sweat boxes and drying trays.
{:#subdebate-21-28}
#### Engines
Hessian and sisalkraft.
{:#subdebate-21-29}
#### Fishing Industry -
Crayfish pots.
{:#subdebate-21-30}
#### Primary Production Generally -
Agricultural pipes and tiles for draining.
Haling presses.
Blade shears.
Bore drain delvers.
Cream cans, milk cans and dairy utensils other than buckets which are not seamless.
Fencing wire strainers and fencing tools.
Glass for horticultural purposes.
Machinery and plant for bulk handling of wheat.
Parts of such poultry farmers' equipment as is already exempt provided that the parts are of a kind not ordinarily used for any other purpose.
Rock salt and salt licks for live-stock.
Rugs for horses and cattle.
Sewing twine.
Sheep marking and branding oils. " Sheep jetting plant.
Trace chains, complete.
Water boring plant and equipment, including tools for use therewith.
{:#subdebate-21-31}
#### Mining -
Brattice cloth for use in the mining industry.
{:#subdebate-21-32}
#### Foodstuffs -
Cooked meats of Australian production sold in containers such as jars, tins, and the like, cooked meat or poultry of Australian production for sale over the counter to individual customers, and goods of Australian production being uncooked sausages that are for sale whole to individual consumers, sausage meat and mince meat, suet, dripping, lard and butchers' small goods.
Foods for infants and invalids and materials for preparation thereof, as prescribed.
Flour, self-raising.
Nuts the produce of Australia, roasted, broken or converted into meal or paste; peanut butter produced in Australia.
Prepared breakfast foods.
{:#subdebate-21-33}
#### Ice
Rice, barley, sago and tapioca.
{:#subdebate-21-34}
#### Medical, Surgical Goods, Ac. -
Drugs and medicines (including patent and proprietary medicines) which are used in the prevention, cure or treatment of sickness or disease in human beings and in the compounding or preparation of such drugs and medicines, but not including (except as may be otherwise provided in the act) preparations or drugs put up and sold for photographic purposes and preparations for the toilet (including soaps, toothpastes, cosmetics, pomades, perfumes and hair lotions), dyes, methylated spirit, napthaline, turpentine, olive oil, castor oil, linseed oil, carbonate and bicarbonate of soda, cream of tartar, caustic soda, sodium chloride, alum, borax, glycerine, petroleum jelly, lead salts, zinc salts, citric acid, chromic acid, formic acid, hydrochloric acid; hydrofluoric acid, nitric acid, pyrogallic acid, stearic acid, sulphuric acid and tartaric acid.
Rectified spirits for use in making medicines and essences.
Surgical, dental and veterinary materials, instruments and appliances' as prescribed. This will include, for example, artificial limbs, bandages, dressings, and absorbent cotton wool.
{:#subdebate-21-35}
#### Building Industry -
Cement, bricks, timber, roofing tiles and slates.
{:#subdebate-21-36}
#### Butter and Cheese Factories,&c. -
Machinery, plant and equipment for use in the manufacture of butter and cheese and materials and equipment for use in the dairying industry in the testing, pasteurization, and cooling of milk.
{:#subdebate-21-37}
#### Miscellaneous -
Axes and tomahawks and handles therefor.
{:#subdebate-21-38}
#### Coffins
Equipment and substances brought into use by life saving clubs and ambulances in connexion with the preservation of human life or the transport of persons for purposes of medical or surgical attention.
Equipment for use in churches and church services as prescribed, and articles as prescribed for use in religious devotion.
Fruit preserving jars and bottling outfits.
Goods for exhibition in a museum controlled by a committee or trustees appointed by a public authority.
Goods which have been used by a registered person as plant, machinery or equipment of his business and which are sold in the course of winding up the business or for transfer of the business to a new owner.
Saddlery and harness, collar check, kersey and saddle serge.
Scientific instruments and apparatus (including materials for use therewith), and examination papers for educational purposes in universities and schools.
Tool handles of wood.
Works of art produced in Australia and abroad by Australian artists.
It will be noticed that the principal exemptions may be divided broadly into -
{: type="1" start="1"}
0. Assistance to primary industry.
1. Relief from tax on medicines, surgical and dental appliances and dressings.
2. Relief on items of food.
3. Relief on building material.
In addition to the list of exemptions already set out, a regulation is being issued reducing the percentage of value on which tax is charged on tailor-made *goods* from 80 per *cent,* of the sale value to 662/3 per cent, of the sale value.
The total effect of the reduction in the rate of, and exemption from, sales tax is to reduce this taxation by £2,570,000 on an annual basis.
{:#subdebate-21-39}
#### Entertainments Tax
The Government proposes to evacuate the field of entertainments taxation altogether, and to leave this source of revenue entirely to the States. This will involve a loss of revenue of £140,000 a year. The Commonwealth will, if desired by the States concerned, continue to collect State entertainments tax where it is at present doing so.
{:#subdebate-21-40}
#### Total Taxation Relief
Including the relief now proposed, the taxation remissions by the present
Government since it assumed office are as follows : -
These figures are on an annual basis. The actual effect of the remissions of taxation proposed in the. budget of 1933-34 for the nine months is estimated to amount to £5,440,000.
{:#subdebate-21-41}
#### Revenue Summary
The total estimated revenue for the year, after allowing for the remissions of taxation to which I have referred, is £68,580,000. The details comprising this total are as follows: -
{:#subdebate-21-42}
#### Expenditure
Reference must now be made to expenditure. The estimated expenditure for the year 1933-34, before making provision, for the special increases of expenditure involved in the budget proposals, would have amounted to £68,544,000. This total represents a net increase of £828,000 over that of last year, deducting £2,250,000 provided in 1932-33 for the assistance of wheat-growers and other agriculturists. This increase I shall explain later.
It is proposed in addition to provide in the budget for special increases of expenditure, the annual cost of which will be £1,658,000. The charge on the budget this year as a result of these proposals will be £1,212,000.
I shall first deal with the latter proposals of the Government. I then propose to link up these with those increases of expenditure provided in the budget in what may be regarded as the norma] items of expenditure. This will reveal a proposed total increase of expenditure over the year 1932-33 (excluding the £2,250,000 relief granted to primary producers) of £2,040,000. Finally, I shall explain the principal increases in normal expenditure.
{:#subdebate-21-43}
#### Partial Restoration of Financial Emergency Reductions
It would be unjust, when removing some of the special burdens placed upon the taxpayer to meet the depression and secure budget equilibrium, to overlook those other- classes who contributed their quota to secure these ends. I refer particularly to the invalid and old-age pensioners, the war pensioners, the Public Service, and the superannuated employees of the Commonwealth.
The Government proposes, therefore, to restore in gome measure the reductions that have been made.
Old-age Pensions.
In the case of invalid and old-age "pensions, the Government proposes to increase the rate of all pensions below 17s. 6d. per week by 2s. 6d. per week provided that the maximum pension will not exceed 17s. 6d. per week. The payment to pensioners who are inmates of asylums and hospitals will be increased from 3s. 9d. to 5s. per week. As a result of these increases, the limit of pensioner's income plus pension will be raised from £71 10s. to £78 per annum, or from 27s. 6d. per week to 30s. per week, and the maximum payment to institutions for the maintenance of pensioner inmates will be increased from lis. 3d. to 12s. 6d. per week. The restoration of these payments is estimated to cost £635,000 per annum more than the present rate of expenditure.
In addition, it is proposed to amend the invalid and old-age pensions law so that, in future, should the cost of living increase, the pension will be raised automatically until it reaches a maximum of £1 per week. That is to say, it is proposed that the rate of all pensions shall be varied in accordance with changes in the cost of living, provided that the maximum pension shall not be greater than £1 per week, nor less than 17s. 6d. per week.
It is interesting to note that, based on the cost-of-living index for food and groceries, with which the pensioners are most concerned, 17s. 6d. will now purchase what would have cost 23s. 9d. in 1925, when the pension was raised from 17s. 6d. to £1. Expressed in another form, it now takes only 14s. 9d. to purchase what would have cost £1 in 1925, when the pension was increased to £1. With a pension of 17s. 6d. per week the pensioner is, therefore, relatively in a much better position now than he was in 1925.
The new basis proposed will operate by an. annual rise or fall df 6d. per week for each variation of 100 points in the index number for food and groceries, so that £1 per week will be paid when the index number again reaches 1,800, which was the level in 1925 when the pension was increased to £1, thus: -
The effect of the application of this scale will be that the rate of all pensions will be varied by 6d. per week for every increase or decrease of 100 points in the index number between the minimum and maximum proposed.
{:#subdebate-21-44}
#### War Pensions
When the original Financial Emergency Bill was under consideration, and a soldiers' committee was set up to advise the late Government as to what reductions in war pensions should be made to effect the saving desired, the recommendation of "that committee, which was acted upon by the then Government, limited the reductions entirely to certain dependants of deceased soldiers, and to dependants of ex-soldiers who were drawing pensions.
It has been found that these reductions have operated somewhat harshly in certain cases, particularly in the case of parents of deceased soldiers.
It is now proposed to restore the percentage reduction in these pensions in cases where the pensioner is found to he without adequate means of support. This means that pensions will be payable where the personal income is less than 30s. per week, or where the pensioner's property (other than a home) is of less value than £200.
It is also proposed that the reduction in the pensions of wives of incapacitated soldiers shall be 10 per cent, only, instead of the *22½* per cent, reduction now in force under the Financial Emergency Act. This will materially improve the conditions of the married soldier pensioners. No reduction under the Financial Emergency Act was made in the pensions of single men, nor in those of married soldiers so far as their own pensions were concerned.
The cost of these two concessions is estimated at £248,000.
{:#subdebate-21-45}
#### Public Service
The Government recognizes that the reductions of salary imposed by the Financial Emergency Act combined with the cost of living deductions, exceed, in their general extent, those made by the States as a whole.
Last year, in view of the financial conditions at the time, the Financial Emergency Act was amended in such a way as to provide that all those officers who had already suffered a reduction in excess of the cost of living deduction should be reduced a further £8 in salary. It is proposed to repeal this provision in the Financial Emergency Act.
In addition, it is proposed partially to restore the decrease in real wages - the reduction in excess of that due to the fall in the cost of living - by *2½* per cent., calculated on the salary standards from which the original deductions were made.
The annual sum involved in these restorations is estimated at £550,000. The proportionate benefit of these restorations will be felt principally in the lower paid ranks of the Service.
{:#subdebate-21-46}
#### Superannuation
It is also proposed to restore entirely the reduction made in the Commonwealth contribution to the Public Service Super annuation Fund. Owing to the fact that the Commonwealth superannuation scheme has not been many years in operation, the proportion of Commonwealth contribution in a large number of cases exceeds 90 per cent. In many instances, the effect was to reduce the superannuation payment below that of an old-age pension. There is, in regard to superannuation, a special relation that the Commonwealth has entered into with its servants which the Government feels should be restored to its full operation as soon as practicable. The same principle will -be applied in the case of superannuation payments to the judges, and also, by a reference to the committee provided for in the Financial Emergency Act, to the deferred pay of the Defence Forces which is provided in lieu of superannuation. The cost of these restorations will be £80,000 a year.
{:#subdebate-21-47}
#### Primary Producers
It will have been noted that many of the proposals which I have set out in my speech, notably those relating to remissions of Sales Tax and Primage, alterations of Tariff Duties, adjustments of the Tariff in relation to the existing circumstances of exchange, and reductions of Land Tax, are of especial concern to those engaged in primary production. Especially would I draw attention to the effects of our proposed reductions of taxation on the question of interest rates and I feel sure that primary producers and others in whose costs of production interest rates play a predominant part will especially welcome the proposals which have been announced. Practically every item used by primary producers has been exempted from Sales Tax and Primage Duty. In two special directions there are further items of expenditure in the Estimates this year which are new and which it is necessary to mention. These relate respectively to assistance to producers of fresh fruit for export and tobaccogrowing.
{:#subdebate-21-48}
#### Assistance to Producers of Fresh Fruit for Export
Provision was made during last financial year for assistance to citrus fruit-growers who had been deprived of their principal export market by the embargo placed by the New Zealand Government on importations of their fruit. Apple and pear growers have of late experienced the greatest difficulty in marketing their exportable surplus. The Government proposes to set aside £125,000 to aid these classes of fruit-growers who are engaged in exporting. The exact methodby which the assistance will be given has not yet been worked out, but the proposals of the Government will be submitted to Parliament in due course.
{:#subdebate-21-49}
#### Tobacco
The Government proposes also to set aside a sum of £20,000 for investigation and instruction purposes in regard to tobacco-growing. This should assist in putting this industry on a more satisfactory basis. The expenditure will be under the control of the Council for Scientific and Industrial Research, and the Government is satisfied that the money can be utilized without any conflict or overlapping with State activity and, indeed, in complete co-operation with the States. A conference of expert representatives of the Commonwealth and the States is being summoned for the purpose of preparing a detailed scheme.
{:#subdebate-21-50}
#### Summary of Expenditure
The total estimated expenditure for the year, after making provision for the budget proposals to which I have referred, is £69,756,490. Details of this total, together with a comparison with the actual expenditure for 1932-33, are as follow : -
The principal increases of expenditure which call for some explanation are defence and new works. The increase in payments to the States has already been explained.
{:#subdebate-21-51}
#### Defence
The Government recognizes that the provision made for defence has been inadequate for some years and that there is urgent need for certain extensions of our defence activities. A reference to the Estimates will show that increased provision is made for defence in four ways : -
While the Government deprecates the adoption of an alarmist attitude in regard to defence, it believes that ordinary prudence demands that we should take steps to fill up some of the obvious gaps in our defence system. If future circumstances indicate that still more vigorous measures should be taken, the Government will not hesitate to put before the House, proposals of a more comprehensive character. It must not be overlooked, however, that every increase in capital outlay on the defence services means an added annual charge. It is also necessary to be sure that what we build we can maintain, and that after building it will not be necessary to pull down again.
The total provision for new. works out of revenue this year is £ 1,624,880, as against an expenditure of £874,390 for last year; 'that is, a net increase of £750,490.
Theprincipal increases are -
Honorable members will be given full details of the proposals when the departmental estimates are before Parliament.
In addition to the increase in expendi ture from revenue for new works, it is proposed to expend £810,000 on works from loan fund. This amount was provided by the repayment to loan fund of the proceeds received last year from the sale of the Commonwealth Line of Steamers, including the insurance money in respect of one of the vessels which foundered. The Government considered that, in view of the special circumstances existing at the present time, it would be of advantage to allocate this money for expenditure on loan account instead of using it for amortization purposes. This it is proposed to do in the following way : -
There will also be an expenditure of £368,000 this year to complete commitments entered into by the Commonwealth under the Loan (Unemployment Relief "Works) Act 1932, making a total loan expenditure in 1933-34 of £1,178,000.
For loan works there will be a total provision this year of £1,178,000. In addition, the budget includes provision for the following increases of expenditure apart from the salary restorations: -
making a total of £2,523,000.
Most of this expenditure will provide additional work, and will, therefore, afford an appreciable contribution to the relief of unemployment. This aspect of the matter was kept in mind when the Government decided to allocate the proceeds of the sale of the ships in the manner indicated.
The Government wished to avoid placing any undue strain upon the local money market, and thus to leave the field as clear as possible for the States to carry out their loan programmes. It has to be remembered that any undue strain imposed on the local money market would immediately be reflected in increased interest rates for government securities. This, in turn, would be felt in private finance and would defeat the policy of lower interest rates. Again, the recovery of industry would be checked, and the re-employment of the workless prevented. Thus, excessive borrowing at the present time would accentuate, rather than ameliorate, the difficulties arising from unemployment.
To sum up the position as I have outlined it -
As these proposals will not operate retrospectively, the full annual rate will not be a charge on the budget for the current financial year. It is estimated that the effect on this year's budget will be as follows: -
The following is a summary of the estimated receipts and expenditure for 1933-34, showing the effect of these proposals : -
The deficit of £1,176,490 will be met out of the accumulated excess of receipts for the years 1931-32 and 1932-33, viz., £4,860,699, the balance of which, amounting to £3,684,209, will be required to finance the accounts of the following year.
I have refrained from dealing in any way with the activities of the various departments. Each Minister will give full details when the Estimates of the department in which he is concerned are under consideration.
Shipping Service Between Tasmania and the Mainland.
In regard to transport facilities between Tasmania and the mainland, arrangements were made to continue the fortnightly service between Sydney and Hobart during the winter months. That augmented service is at present running, and will continue until the summer service commences. The subsidy paid for this service is £6,000, part of which was paid from last year's appropriation.
In regard to the service between Melbourne and Tasmania, consideration is being given to a proposal made by the shipping companies to improve considerably the service between Melbourne and Launceston, Burnie and Devonport. The proposal covers the provision of a new steamer by the shipping companies to replace the older vessels now used on these services.
Pending completion of negotiations for the provision of this new steamer, an ' amount of £10,000 has been provided to enable an immediate improvement to be made in the service between Melbourne and the north-west coast' of Tasmania.
{:#subdebate-21-52}
#### Form of Public Accounts
In May, 1932, a Joint Parliamentary Select Committee on Public Accounts submitted a report containing a number of important recommendations for the alteration of existing practice in regard to the Estimates, budget papers, and public accounts generally. This report was received too late to enable the recommendations to be considered fully in connexion with the Estimates and budget' for 1932-33, but action has been taken to' give effect to the recommendations, wherever practicable, in the Estimates and budget papers for- this year.
Honorable members will notice on reference to the Estimates that the following important changes have been made: -
{: type="1" start="1"}
0. The more consistent and logical grouping of items.
1. The grouping of salaries and payments in the nature of salary.
2. The inclusion of salary details in a separate schedule at the end of the estimates of each department, thus making the main estimates of the departments more condensed while giving the same information.
3. The elimination of a large amount of unnecessary detail.
It is thought that these reforms, while not departing in any important particular from the. general principles followed in the past, will render the Estimates of more informative value.
{:#subdebate-21-53}
#### Legislation
Legislation to give effect to the reductions of taxation and the increases of expenditure, which I have indicated, will he brought down immediately, and will take effect as soon as passed try both Houses of Parliament.
{:#subdebate-21-54}
#### Conclusion
The narrative of the results of the year 1932-33, and the proposals for the current year which have been presented to the House this afternoon, provide, I think honorable members will agree, an encouraging picture. The improvement in our position has been very real and substantial. Both internally and externally our credit stands high, and this has been reflected in successful loan conversion operations overseas. Heavy taxation with its crippling effect's upon industry, its influence in maintaining high interest rates, and its bearing upon the problem of unemployment, is again being substantially decreased. Those concerned in primary and secondary industry can look forward to the coming, months confident in the knowledge that, in so far as taxation imposts have retarded development and lessened prosperity, the burden has been lightened. Further, it has been possible to make some restoration of the financial emergency reductions. These are things to gladden the heart of a nation. Adversity has chastened us all. We have realized that a nation, if it is to prosper, must rest upon sound economic foundations. To-day, the basis of our economic and financial structure is sound. On that foundation we must continue to build. We must strive to better the conditions of the people, confident in the knowledge that, pending the return of a full measure of prosperity with the revival of world trade, we, at any rate, have played our part.
Finally, let me say that the Government regards this year's budget as a reward which the Australian people have earned by the sacrifices they have made, and the self-discipline they have imposed, to meet the circumstances of the depression. Its proposals constitute a milestone on our road to recovery. They bring the prospect of increased employment. Hard times are not yet past,but what I have said shows that there are already definite signs of improvement. This restoration budget will, I believe, carry to the people of the Commonwealth a message of hope, and of faith in Australia.
I move -
>That the first item in the Estimates, under Division 1 - The- Senate - namely, " Salaries and Allowances, £6,840," be agreed to.
Progress reported.
{: .page-start }
page 3223
{:#debate-22}
### PAPER.
The following paper was presented : -
>The Budget 1933-34 - Papers presented by the Right Honorable J. A. Lyons, P.C., M.P., for the information of honorable members on the occasion of the Budget of 1933-34.
Ordered to be printed.
{: .page-start }
page 3223
{:#debate-23}
### TARIFF PROPOSALS (1933)
{:#subdebate-23-0}
#### Customs Tariff Amendment (No. 3) : Customs Tariff (Exchange Adjustment) : Customs Tariff (Industries Preservation) : Special Customs Duty Amendment (No. 6) : Primage Duty (No. 3) : Excise Tariff Amendment (No. 5)
*InCommittee of Ways and Means:*
{: #subdebate-23-0-s0 .speaker-KZR}
##### Mr WHITE: Minister for Trade and Customs · Balaclava · UAP
.- I move -
{: type="1" start="1"}
0. That the Schedule to the Customs Tariff proposals introduced into the House of Representatives on the thirteenth day of October, One thousand nine hundred and thirty-two, as amended in the House of Representatives subsequent to that date, bo further amended as hereunder set out, and that, on and after the fifth day of October, One thousand nine hundred and thirty-three, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Customs be collected in pursuance of the said Customs Tariff proposals as so amended in the House of Representatives and by this Resolution.
That, excepting by mutual agreement or until after six months' notice has1 been given to the Government of the . Dominion of Now Zealand, nothing in. this Resolution shall affect any goods the produce or manufacture of the Dominion of New Zealand entering the Commonwealthof Australia from the Dominion of New Zealand.
CustomersTariff (Exchange Ad justment ) .
{: type="1" start="2"}
0. That, on and after the fifth day of October, One thousand nine hundred and thirty-three, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Customs on goods to which protective duties apply and which are admissible under the British Preferential Tariff and which are entered for home consumption on or after the fifth day of October, One thousand nine hundred and thirty -three, be varied in accordance with the following provisions : -
1. Whenever at the date of exportation of any such goods Australian currency is depreciated to the extent of not less than 162/3 per centum in relation to the currency of the British country from which those goods are imported, a deduction from the amount of duty payable on those goods in accordance with any law of the Commonwealth for the time being in force imposing Duties of Customs (other than primage duty) or in accordance with Customs Tariff proposals shall be made of -
{: type="a" start="a"}
0. one-fourth of that amount of duty ; or
1. 12½ per centum of the value for duty, whichever is the less ; and
2. Whenever at the date of exportation of any such goods Australian currency is depreciated to the extent of not less than111/9per centum and less than 162/3 per centum in relation to the currency of the British country from which those goods are imported, a deduction from the amount of 'duty payable on those goods in accordance with any law of the Commonwealth for the time being in force imposing Duties of Customs (other than primage duty) or in accordance with Customs Tariff proposals shall be made of -
{: type="a" start="a"}
0. one-eighth of that amount of duty ; or
1. 6¼ per centum of the value for duty, whichever is the less.
For the purposes of this Resolution " goods to which protective duties apply " shall bo deemed to be the goods specified in the Schedule to this Resolution or covered by the Customs Tariff Items so specified.
For the purposes of this Resolution -the telegraphic transfer (buying) rate shall be applied in determining the extent of depreciation of Australian currency and where doubt exists as to the telegraphic transfer (buying) rate, the rate shall be such rate as is declared by the Commonwealth Bank of Australia.
That in this Resolution " Customs Tariff proposals" shall mean Customs Tariff proposals (not being proposals relating to special duty or primage duty) introduced into the House of Representatives on or after the thirteenth day of October, One thousand nine hundred and thirty-two, and shall include any amendment of such proposals.
{:#subdebate-23-1}
#### Customs Tariff ( Industries Preservation )
{: type="1" start="3"}
0. That, in lieu of the Duties of Customs which may be levied in pursuance of section eight of the *Customs Tariff (Industries Preservation) Act* 1921-1922 there be collected Duties of Customs in accordance with the following provisions : -
1. If the Minister is satisfied, after inquiry and report by the Tariff Board, that the exchange value of the currency of the country of origin of any goods has depreciated in relation to Australian currency, and that by reason of such depreciation goods have been or are being sold to an importer in Australia at prices which will be detrimental to an Australian industry, the Minister may publish a. notice in theGazette specifying the country as to the exchange value of the currency of which he is so satisfied, and the goods originated in that country to which in his opinion the provisions of this Resolution should apply.
2. Upon the publication of the notice, there shall be charged, collected and paid to the use of the King, for the purpose of the Commonwealth, on all goods specified in the notice and produced or manufactured in the country specified therein, a special duty ascertained as follows : -
{: type="a" start="a"}
0. From the nominal par value in sterling of a unit' of the currency of the country of origin of the goods there shall be deducted the value in Australian currency of the same unit at date of exportation of the goods.
1. The amount ascertained under the last preceding paragraph shall be divided by the value in Australian currency of a unit of the currency of the country of origin of the goods at the date of exportation of the goods.
2. The figure ascertained under the last preceding paragraph shall be multiplied by the value for duty of the goods assessed in accordance with the *Customs Act* 1901-1930.
Special Customs Duty Amendment (No. 6).
{: type="1" start="4"}
0. That, on and after the fifth day of October, One thousand nine hundred and thirty-three, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, the Schedule to the Customs Tariff (Special Duty) Proposals introduced into the House of Representatives on the eighth day of March, One thousand nine hundred and thirty-three, be amended by omitting the following : -
Primage Duty (No. 3).
{: type="1" start="5"}
0. That in addition to the duties collected in accordance with -
{: type="a" start="a"}
0. any law of the Commonwealth for the time being in force imposing Duties of Customs ; or
1. Customs Tariff proposals ; there be imposed on and after the fifth day of October, One thousand nine hundred and thirty-three, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, ad valorem Duties of Customs (in this Resolution referred to as primage duty) at the rates hereunder set out on the undermentioned goods which are entered for home consumption on and after the said fifth day of October, One thousand nine hundred and thirty-three, except such goods as are hereunder specified as being exempt from primage duty -
{: type="1" start="1"}
0. . Goods exempt from primage duty - .
Goods covered by Items 51 (a), 100, 129 (a), 157, 158, 160 (a), 162, 163, 164, 165, 166, 167, 171, 285 (c), 320 (c) (2) (6), 334 (c) (2), 338 (c), 339, 368, 370, 371, 371a, 372, 373, 394 (a), 400, 401, 409, 410 (b) (1), 410 (c), 417 (b), 423, 424 (e) and 427 (a) ;
Agricultural and horticultural seeds not covered by any Item ;
Agricultural horticultural and viticultural spraying and dusting materials and preparations to be used in the checking of plant and seed insect pests and of plant and seed diseases ; Annatto cheese cloth and rennet to be used in the cheese industry ;
Bags sacks packs and bales for bran, chaff, potatoes, onions, ore, coal, corn, flour, sugar and wool ;
Blue prints ;
Books and periodicals imported by or for : - «
Any public library including the Mitchell Library of New South Wales,
The National Library, Federal Capital Territory,
The libraries of the Universities of Sydney, Melbourne, Adelaide, Queensland, Western Australia and Tasmania,
State Parliamentary Libraries ;
Bullion and specie ;
Calico for use in the manufacture of bags of a size capable of holding at least forty-five pounds of flour ;
Caustic soda and caustic potash for fellmongering purposes :
Chemicals to be used in the recovery of metals by the flotation cyaniding and similar processes ;
Cream separators and parts thereof :
Dips washes and drenches for live stock and materials for use in the manufacture of such dips washes and drenches ;
Fauna for Zoological Gardens at Sydney, Melbourne, Brisbane, Adelaide, Perth and Hobart ;
Fishing nets and netting for fishing and twine for the manufacture or repair of such nets or netting ;
Garden and field spraying machines and spray pumps ;
Hay presses ;
Historical records, in print picture or manuscript, imported by or for public libraries, including the Mitchell Library of New South Wales ;
Literature published by or issued under the authority of the League of Nations ;
Machinery and parts thereof for use in the mining industry ;
Manures and fertilizers ;
Materials for use in the manufacture of agricultural horticultural and viticultural spraying preparations ;
Materials for use in the manufacture of comsacks floursacks and other sacks ;
Milking machines and parts thereof ;
Minerrs'hatsandcaps ;
Outside packages and outer coverings, including the sole containing package, containing solely goods exempt from primage duty ;
Postage stamps ;
Potato raisers diggers sorters and planters ;
Rabbit poisons ;
Rabbit and dingo traps ;
Radium ;
Rape seed for posture purposes:
Rook phosphate ;
The Schedule - *continued.*
Rock salt ;
Sheep shearing machines and parts thereof ;
Soda ash covered by Item 278 (a) (2) (a) ;
Stockinette for use in the manufacture of meat wraps ;
Straw stackers ;
Stud stock, viz. : - horses, cattle, donkeys, sheep, pigs and poultry ;
Sub-surface packers for agricultural purposes ;
Sulphur ;
Tractors and parts thereof ;
Vessels exceeding 500 tons gross register ;
Water bore casings ;
Water pipes to bo used in the agricultural, dairying, grazing and mining industries ;
Wire, iron and steel, of gauges (Imperial Standard Wire Gauge) Nos. 8 to 14 both inclusive ;
Wool presses ;
Works of art for national art galleries ;
The following goods when admissible under the British Preferential Tariff : -
Goods covered by Items 174, 170 (b) (1) to (5) inclusive, 219 (c), 278 (a) (2) *(b),* 404, 404a and 415a ;
Fuel oil and coal consumed in Australian waters ;
Goods, not otherwise exempt from primage duty, for public hospitals ; and
Any other goods which are from time to time exempted from primage duty by Proclamation made by the Governor-General acting with the advice of the Federal Executive Council and published in the Gazette ;
{: type="1" start="2"}
0. Goods subject to primage duty at the rate of 4 per centum ad valorem : -
Goods covered by Items 55, 108 (a), 334 (c), 335, 344 and 419 (c) ;
Fibres for use in the manufacture of binder twine ;
Outside packages and outer coverings, including the sole containing package, containing any goods subject to primage duty at the rate of four per centum ad valorem but not containing any goods subject to primage duty at the rate of five per centum or ten per centum ad valorem ;
Power kerosene ;
The following goods when admissible under the British Preferential Tariff which are not exempt from primage duty : -
Goods covered by Items 136 (f) (2) (first occurring), 358 (a) and 358 (b) ;
Covered cable and wire covered by Item 181 (a) (1) ;
Gelignite ; blasting and dynamite gelatine ;
Knitting machines and parts thereof ;
The following goods when not admissible under the British Preferential Tariff which are not exempt from primage duty : -
Goods covered by Items 174, 179' (b) (1) to (5) inclusive, 219 (c), 404, 404a and 415a ;
Fuel oil and coal consumed in Australian waters ;
Goods for public hospitals ; and
Any other goods which are from time to time, by Proclamation made by the Governor-General acting with the advice of the Federal Executive Council and published in the *Gazette,* added to the list of goods upon which primage duty at the rate of four per centum is imposed ;
{: type="1" start="3"}
0. Goods subject to primage duty at the rate of five per centum ad valorem : -
Goods covered by Items 106 (c), 147, 224, 231 (a) (2), 281 (l) (1), 392 (a) (1), 392 (a) (2), 392 (a) (3), 392 (G) and 435, which are not subject to primage duty at the rate of four per centum ad valorem or exempt from primage duty ;
Iron and steel boiler tubes ;
Jute fibre ;
The following goods when admissible under the British Preferential Tariff which ore not subject to primage duty at the rate of four per centum ad valorem or exempt from primage duty : -
Any other goods which are from time to time, by Proclamation made by the Governor-General acting with the advice of the Federal Executive Council and published in the *Gazette,* added to the list of goods upon which primage duty at the rate of five per centum is imposed ; and
{: type="1" start="4"}
0. Goods subject to primage duty at the rate of ten per centum ad valorem -
All goods whatsoever, which are not, in pursuance of the foregoing provisions of this Resolution -
{: type="i" start="i"}
0. exempt from primage duty ;
1. subject to primage duty at the rate of four per centum ad valorem ; or
2. subject to primage duty at the rate of five per centum ad valorem.
For the purposes of determining the rate of duty applicable under this Resolution to any goods to which Items 168 (b) (1), 179 (b) (6), 179 (e), 332 (d) or 376 (e) apply, the goods shall be deemed to be covered by the Item which determines, for the purposes of the Customs Tariff Proposals, the rate of duty on those goods.
That where by this Resolution or any Proclamation issued thereunder any goods are exempt from primage duty or are subject to primage duty at the rate of four per centum or five per centum ad valorem, on the condition that those goods will be used for a purpose specified in relation thereto in the Resolution or Proclamation, as the case may be, the Comptroller-General of Customs may require security that those goods will be used for the purpose so specified.'
That in this Resolution the word " Item . " or " Items " shall mean Tariff Item or Tariff Items as set out in the Customs Tariff proposals.
That in this Resolution " Customs Tariff proposals " shall mean Customs Tariff proposals introduced into the House of Representatives on or after the thirteenth day of October, One thousand nine hundred and thirty-two, and shall include any amendment of such proposals.
{:#subdebate-23-2}
#### Excise Tariff Amendment (No. 5)
{: type="1" start="6"}
0. That the Schedule to the Excise Tariff 1921-1928, as proposed to be amended by Excise Tariff
Proposals introduced into the House of Representatives on or after the twenty-fifth day of February, One thousand nine hundred and thirty-two, and as proposed to be amended by any other proposal made in the House of Representatives subsequent to that date, be further amended as hereunder set out, and that on and after the fifth day of October, One thousand nine hundred and thirty-three, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Excise be collected in pursuance of the Excise Tariff as proposed to bo amended by any such Excise Tariff proposal and other proposal and by this Resolution.
{:#subdebate-23-3}
#### Customs and Excise
As indicated in the budget speech, the proposal is to make certain reductions under revenue items in the tariff, a summary of which has been circulated for the information of honorable members. It has been maintained in many quarters that the rates of duty imposed on beer and spirits have for some time exceeded the p6int of ^maximum revenue returns. As the reason for the existence of these duties is to raise the maximum possible revenue, the Government has decided to test whether the lower rates will mean increased returns. The Treasurer has made an allowance for an estimated loss to revenue; but this may or may not occur.
The partial remission of duty on raw rubber is somewhat overdue. This tax enters. into the cost of production, and unduly increases costs, particularly the cost of motor tyres. The present duty is 4d. per lb., which approximates 125 per cent, to 150 per cent, ad valorem. The Government trusts that the lower costs will be passed on to the public, and that motorists in particular will derive the benefit through reduced tyre prices.
The remission of duty, of Id. per lb. on tea will involve an amount of £185,000. As tea will also be exempted from the 10 per cent, primage tax, the total remission of taxation on this item will amount to £320,000 per annum.
In the matter of excise, the reduction of 2s. 6d. per gallon on spirit used for fortifying wine may ease somewhat the very difficult situation which has existed in the wine industry for many years. In order more fully to appreciate the difficulties confronting the industry, which is the third largest industry in South Australia, I paid a visit to South Australia during the recess for the purpose of obtaining first-hand information concerning the industry. The reduction of duty on the fortifying spirit, which involves the remission of £91,000 per annum, will not be a panacea for all the ills besetting that important industry; but it will not be an insubstantial contribution towards the return to more equable conditions. The Government looks to the wine-makers to pass the benefit of the reduction on to the grape-growers by paying such prices for grapes as will provide a reasonable remuneration to the large number of grape-growers dependent upon the wine trade. Many other questions concerning the wine industry are at present under investigation and consideration, and I hope to complete a comprehensive plan to deal with all existing difficulties. Whether this can be done without the full cooperation of the State Governments, I cannot yet say, but every endeavour will be made to assist the large number of grapegrowers who are experiencing difficult times.
The only other reduction relates to the 4d. per gallon reduction on benzol, which is a coal tar distillate. The Government feels that it should encourage the production of this commodity in the Commonwealth, especially when we possess such rich coal deposits, and have many unemployed miners.
The total value of the trade to be affected by the reductions of the revenue duties under the customs tariff, as represented by the import figures for 1931-32, is £1,845,000, of which British countries accounted for £1,013,000 of the total, the volume of the affected trade with individual countries, British and foreign, based again on the 1931-32 figures, being -
{:#subdebate-23-4}
#### Customs Tariff (Special- Duties)
A further resolution which I have moved exempts from the operation of the existing 50 per cent, special duty the following goods : - Perfumery n.e.i. and toilet -preparations; and cameras and magic or optical lanterns.
This is in keeping with the Govern- ' merit's policy of removing this duty at the earliest possible date. The special duty will now apply to only six lines.
{:#subdebate-23-5}
#### Primage
Recommendation V. of the Tariff Board's report on primage and exchange deals with primage duty. In its report the board recommends the removal of primage duty from the protective items in the tariff schedule as soon as the Government considers that revenue considerations will permit. The board also points out that when primage is removed from any protected goods it should simultaneously be removed from raw materials entering into the manufacture of such goods in Australia.
Under Article 14 of the United Kingdom and Australia Trade Agreement, the Commonwealth Government undertook, insofar as goods the produce or manufacture of the United Kingdom are concerned, to reduce or remove primage duty as soon as the finances of the Commonwealth would allow. This is an obligation to be honored at the earliest opportunity. The four important aspects which the Government had to consider before making "a decision on primage remissions were -
{: type="a" start="a"}
0. what proportion of primage the Treasury could afford to forego, having regard to remissions being made in other directions;
1. the protective incidence of primage ;
2. the necessity on making remissions for holding a fair balance between protected goods on the one hand, raw materials and capital goods essential to the production of protected goods on the other;
3. the Government's obligations under Article 14 of the United Kingdom and Australia Trade Agreement in respect to primage on British goods; and
4. relief from primage in special cases.
It will be found that within the limits set by prudent finance, the Government has made decisions which hold the balance equally between these requirements: With regard to the amount of primage which the treasury could remit, it was finally decided that the maximum could not possibly exceed £585,000. This amount represents 12½ per cent, of the total amount of £4,660,000 collected in primage for the financial year 1932-33. Primage has become an exceedingly important revenue item, and the question of its total abolition is quite outside the realms of immediate possibility. I think that it is patent to all honorable members that the primage duty, although intended as a revenue duty, is protective in its incidence so far a® concerns goods to which protective duties apply. The final decision of the Government was that the primage duty on goods covered by protective items should be reduced from a rate of 10 per cent, to a rate of 5 per cent, in respect of goods admissible undert the British preferential tariff. The duty which will be remitted as a result of this decision amounts to £185,000. The number of tariff items under which this reduction of 5 per cent, in primage will operate is 819.
The remission of duty on raw materials and capital goods has been brought about by the following measures : -
{: type="1" start="1"}
0. Remissions of 10 per cent, primage in certain cases.
1. Remission of certain 4 per cent. lines.
2. Reduction from a rate of 10 per cent, to a rate of 4 per cent, in a number of instances.
3. Reduction from a rate of 10 per cent, to a rate of 5 per cent, in other cases.
The total remissions on, these selected raw materials and capital goods will approximate £240,000.
Other remissions comprise -
The total of these other remissions under this group is £160,000. A statement has been printed for the information of honorable members which shows in complete detail the changes effected under such heading.
It will be noticed that there is no specific mention of any item, except hessian, in which the primary producer is directly interested, because practically every item in which the primary producer is directly interested, either in the way of implements or aids to production, was exempted from primage duty by the present Government shortly after election to office. An analysis of the duty remissions under the raw materials list will indicate that there are a number of articles in which rural interests have quite an important indirect interest, such as tinned sheet, and cables for electric light undertakings.
A new and important feature introduced by the present primage resolution is its preferential provisions. The resolution provides that certain goods of United Kingdom origin, or imported from other British countries entitled to the benefits of the British preferential tariff, are to be exempt from primage or dutiable at lower primage rates, whilst the -existing rates on similar foreign goods are retained. The most important group so affected is that covering protective items in the tariff, on which a preferential primage of 5 per cent, will operate. Goods covered by such items when admissible under the British preferential tariff will pay 5 per cent, primage, while similar goods not admissible under the British preferential tariff will pay 10 per cent. This preferential treatment on protective goods will apply to 819 tariff items. This is an exceedingly important contribution towards inter-empire trade, and will widen the present beneficial margins operating in favour of British trade. The value of tho import trade under protective items from the United Kingdom is worth approximately £4,380,000; but owing to the fact that a substantial proportion of this trade already enjoyed primage exemptions or was admitted at concessional rates, the net value of the trade, from a primage point of view, which is preferentially affected by the present resolution can be valued at £3,600,000. The 5 per cent, preferential remission under this group is, therefore, worth £180,000 to British trade.
The next important group from the viewpoint of United Kingdom trade is that providing for the remission of all primage on goods entered under the British preferential tariff under the important by-law items in the tariff covering machines, machine tools and machinery, tools of trade, minor articles for use in the development of an Australian industry, or of the natural resources of Australia. At present, these goods are subject to primage at the rate of 4 per cent., but under the resolution which I have just introduced they will be exempt from primage if eligible for entry under the British preferential tariff. All goods admitted under these items are of a class not manufactured in Australia: indeed, they form quite an important part of the capital goods and raw materials required by Australian industry. All other goods, with the exception of newsprint, admissible under the British preferential tariff on which primage at the rate of 4 per cent, is at present payable are also being exempted. The value of the United Kingdom import trade so benefited by the remission of this 4 per cent, primage impost is £2,000,000, and the revenue remission is £80,000.
Apart from these two important groups, a preference of 6 per cent, is being accorded on au additional range of raw materials and capital goods. This preferential rate of 6 per cent, operates as a result of the reduction from 10 per cent, to 4 per cent, when such goods are admissible under the British preferential tariff. These goods comprise hoop iron, aeroplanes and parts thereof, including engines, certain explosives for the mining industry, cable and knitting machines. The' value of the United Kingdom trade is £370,000, and the remission in primage is worth £22,000.
The total value of United Kingdom trade, on which a preferential margin is being accorded under the primage resolution, is £5,970,000, and the amount being remitted as a result of the grant of these preferential margins is £282,000.
For full details of the classes of goods on which preferential margins are being accorded, I refer honorable members to group Nos. 2, 4, 6 and 8 in the printed memorandum, which shows the details of the changes made.
I have had an analysis made of the trade in the goods affected by these primage amendments according to sources of supply, and it i3 interesting to note which countries supplying such goods will benefit from the reductions. The trade of the United Kingdom will benefit more than that of any other country. United Kingdom trade to the value of £8,000,000 will be subject to tax remissions amounting to £387,000, representing 66.1 per cent, of the total remissions. Next to the
United Kingdom the countries to derive the greatest advantages from the remissions are Ceylon and India. On our trade with Ceylon, valued at £503,000, the remissions will total £50,000. On our Indian trade, valued at £270,000, -the remissions will amount to £27,000, while our imports from other British countries amounting to £115,000 will enjoy remissions involving £5,500. Foreign trade to the value of £1,530,000 is also affected by remissions amounting to £115,500 or 19.8 per cent, of the total amount remitted. The total British and foreign trade affected is £10,418,000, and the total amount to be remitted is £585,000.
The figures which I have quoted show clearly and unmistakably that the Commonwealth Government's undertaking given to the United Kingdom Delegation at Ottawa that it would reduce or remove primage as soon as the Commonwealth finances would permit, is being implemented. The percentage of the remissions attributable to United Kingdom goods is 66 per cent., other British countries 14 per cent., whilst that of foreign countries is 20 per cent.
{:#subdebate-23-6}
#### Exchange
During the parliamentary recess there has been much uninformed criticism of the exchange position, and the Government has been accused, among other things, of suppressing the Tariff Board's report on exchange, because, it was alleged, the result had proved embarrassing to the Government. The terms of reference to the Tariff Board should have indicated to these critics the extraordinary difficulties of the subject: the intricate nature of the problems to be elucidated; the economic survey which had to be undertaken by the Government in order to ascertain, as far as it is possible to do so, the effects of the Tariff Board's recommendations on the protection accorded to Australian industry, on Commonwealth finances, on Empire and foreign trade, on international relationships; and, finally, the ultimate or long distance economic result of the recommendations.
Unfortunately, the Tariff Board's report was presented at a time when certain Ministers were exceptionally busy. Loan Council meetings and Premiers Conferences, together with the lengthy tariff debate, prevented these Ministers from giving early attention to the many sided problems connected with the report.
Another factor which tended towards delay was the necessity for customs and treasury officials to assess the effects of the Tariff Board's recommendations on revenue. Before this task could proceed it was also necessary for the Customs Department and the Tariff Board to come to agreement on what are to be regarded as protective items. This work had to be carried out by the officers of the Customs Department at a time when they were occupied with the work connected with the tariff debate in Parliament. Naturally these very necessary preliminaries took some time. I mention them to indicate how unjustified was the criticism levelled against the Government.
Honorable members now have the board's report, which they will have an opportunity to study before the debate is resumed. But it is necessary that I summarize the case from the report, so that the Government's action may be appreciated.
On the 14th December, 1932, the Tariff Board was formally directed to inquire into and report upon the protective effect of primage and exchange. The reference was comprehensive in its scope, and placed before the board the question whether it was possible to evolve a practical method of adjusting protective duties to compensate for the effects of exchange and primage. The board was specifically directed to have regard to the following six major considerations: - First, the necessity for maintaining protection to Australian industries - both primary and secondary; secondly, the maintenance of the tariff preference margins which the Commonwealth was bound by agreement to accord to the United Kingdom and Canada; thirdly, the internal effects of exchange and primage, and its effect on the cost of imported raw materials; fourthly, the advantages or disadvantages likely to result to primary or secondary industries if some deduction were made from protective duties to offset the protective incidence of. the adverse exchange ; fifthly, the effect of adverse exchange on government finance in relation to overseas interest payments ; and, sixthly, the desirability of evolving a method which would be readily understood by importers, easy of practical application, and free from administrative difficulties.
The reference also required that, if as a result of its inquiries, the board was led to the opinion that compensating adjustments in duties were practicable, it was to report further as to -
{: type="1" start="1"}
0. The amount of variation to be made on account of exchange and on account of primage.
1. "Whether the variations should be applied to specific duties and composite duties as well as ad valorem duties.
2. Whether such variation should be assessed on a sterling or a gold basis.
3. The net effects of the variations on the duties on goods imported from countries with currencies having a higher exchange value than Australian currency, and also from countries with currencies having a lower exchange value.
4. Whether there was need for special provision to meet the progressive adjustments of Australian costs to exchange.
The principal witnesses appearing before the board were representatives of chambers of manuf actures and commerce, employers and trading associations, and the representatives of certain tariff revision and reform bodies. The Australian Association of British Manufacturers stated a case for British manufacturers. Professor Giblin, Professor of Economics at the University of Melbourne, also tendered evidence and dealt with the economics of the subject.
The board in its report draws attention to the fact that the adverse exchange between Australia and Great Britain increases the price, not only of finished goods, but also of materials imported for further processing in Australia. It also increases the price of materials of Australian origin which are readily exportable and have their value determined on oversea or world's market.
Most goods manufactured in Australia include a proportion of imported or exportable material. The protective effect of a duty is not increased by the full amount of exchange payable, but by a proportion dependent upon the relation between the value of the exchange-affected materials and the whole. Actually, the effective protection due to the adverse exchange on sterling recedes from the maximum of 25 per cent, as the proportion of exchange-affected material used in the Australian product increases.
The effect of exchange in increasing protection has been recognized ever since the initial depreciation of Australian currency. There was, however, an almost universal belief that the high rate of exchange was only transient. Consequently, it was deemed desirable to maintain protective duties at a level which would reasonably protect manufacturers under normal exchange conditions.
The consensus of informed! opinion now inclines to the view that there will not be a rapid improvement in exchange. In fact, it is expected that exchange on sterling will continue at approximately the present level for an indefinite period. The board, therefore, considers that its recommendations in regard to protective duties would be based on false premises if it continued to ignore the depreciation in Australian currency.
Other factors affecting prices are inextricably associated with questions of exchange, and it is impossible in practice to isolate those effects, which are due directly and entirely' to depreciation in exchange. Since the depreciation of Australian currency, wages and other running costs, measured in terms of the Australian pound have fallen in Australia at least as much as in the United Kingdom.
Exchange adds materially to the cost of landing imported goods, and thereby increases the protection afforded Australian industries well above the rates considered reasonable when they were adopted by Parliament.
In many industries where local competition is keen, the risk of unreasonable prices due to over-protection is slight, but in others there is a tendency for Australian prices to creep towards the cost of imported goods.
Such increase may arise from a number of causes such as -
{: type="1" start="1"}
0. Undue profit taking.
1. Tendency to lag in efficient production.
2. Unwise attempts to produce goodswhich can only be manufactured locally at excessive cost.
3. The extension of the range of goods to lines which it is not economic to manufacture.
4. An unnecessary expenditure upon plant, leading to over-capitalization of the industry.
The successive increase in many duties in recent years, the adverse exchange, the addition to primage duty coupled with reductions of wages, rent and interest charges, have resulted in many industries being over-protected. The board considers that, in the best interests of the Commonwealth, such over-protection should be rectified insofar as practicability permits. The protective effect of exchange has made a number of industries temporarily independent of duties.
The low prices ruling in our export industries make the need for the removal of excessive protection the more urgent. Under duplicated protection, industries will be encouraged to start or expand on an unsound basis.
The difficulties to be overcome are formidable, but unless some action in the direction of an exchange adjustment to duties is taken, other revision of the tariff may be rendered nugatory. It is not practicable to determine what reduction is necessary to offset exactly the added protection arising from the adverse exchange; but it is possible, by the adoption of a simple formula, to reduce duties by amounts that will certainly not render Australian manufacturers more vulnerable to competition under existing exchange conditions than when sheltered by duties imposed by Parliament under normal exchange conditions.
The board examined a number of proposals submitted during the public inquiry, and others made before and since the inquiry, and i3 satisfied, after critical investigation, that some fixed and constant proportion of any ad valorem duty may be allowed as remission without fear of increasing the vulnerability of local manufacturers to overseas competition.
A review was made of a large number of items embodying duties at- the British preferential tariff rates up to 50 per cent, ad valorem, and the board satisfied itself that a reduction of one-fourth of the duty was reasonable, and would not in any instance do more than allow for the net effect of exchange.
The tariff schedule contains a number of specific and other high rates, many of which have been fixed to cover ranges of quality or to provide adequate protection against low-grade or end-of-season goods. A reduction of one-fourth of the duty in such cases might result in giving- the importer a rebate in excess of the amount due to adverse exchange, and thereby reduce the net protection of the Australian manufacturer. To obviate this undesirable result, the board recommends that in cases where goods are subject to protective duties in excess of 50 per cent, ad valorem or its equivalent, a flat rate deduction of 12£ per cent, of the value for duty should apply, instead of the reduction of one-fourth of the duty.
The adjustments proposed by the board reasonably meet conditions due to the exchange between Australia and the United Kingdom. Exchange is responsible for still higher Australian costs in the case of materials imported from countries which are on a gold basis, but the board does not attempt to propound any scheme of adjustment which would reduce the margin of additional protection compared with the sterling exchange on goods imported *from* such countries. Its first recommendation is limited to goods from countries on British sterling, countries appreciated relative to sterling, and countries nominally on a sterling basis, and is calculated to meet conditions while the rate of exchange is stabilized at 25 per cent. Proposals are included to meet unexpected improvement in the exchange position.
A reduction of the duties under both the British preferential tariff and the general tariff by tho same percentage would reduce the higher general tariff by a greater absolute amount than it would reduce the British preferential tariff on the same goods, and such a narrowing of existing preference margins would, iu certain instances, contravene the provisions of the trade agreement with the United Kingdom. The board avoids this complication by recommending that the reduction of duty on goods subject to general tariff rates, or any preferential rate higher than British preference, shall be determined by using the rates under the British preferential tariff as the basis for calculating the deduction. No adjustment of duties is considered necessary in the case of goods from countries whose currencies are depreciated on sterling to a lesser extent than is the Australian currency.
The board points out that the existing rates of duty on goods from the country with exchange depreciated relative to Australia have a much lower protective incidence than they had when such duties were imposed, to which condition two factors contribute. The invoice value of the goods in terms of Australian currency is lower on account of the depreciation of the currency of the exporting country, and it is also lower owing to the fact that ad valorem duties are calculated on the basis of values in sterling, which results in the amount of duty being less than would be the case if such invoice1 value were converted into Australian currency. The board considers that there is need for providing additional protection against importations from countries with currencies having a lower exchange value than Australian currency, and recommends the adoption of a formula providing for an addition to the duty to compensate for the lost protection.
The board states that the variations recommended are intended to apply to the protective as distinct from the revenue items in the tariff. The simultaneous application of the adjustments on all protective items is considered to be more equitable than gradual adjustments on individual items would be. By being applied generally they will have a prompt and useful effect in their tendency to reduce costs by lowering prices for necessary imported goods and, in some cases, forcing down prices for Australian products. Any reduction in costs which is thus achieved will help protected industries as well as the struggling export industries, and will at least partially offset the reduction of duties upon individual lines. Finally, the hoard concluded that from the purely protective aspect it is practicable to evolve a method of varying duties, which will be equitable to protected Austraiian industries and that such a course is expedient in the national interest.
The board is of the opinion that reduction in the protective duties is not calculated to affect the balance of payments position adversely sp long as protective duties are not reduced below the level required to maintain local production in those lines where protection is justified.
Consequently, it does not contemplate that the adoption of its recommendation will necessitate an increase in the rate of exchange. In the opinion of the board, the revised duties will actually afford a degree of protection which will be equal at least to that which was contemplated when the old duties were imposed. The revised duties will force the lowering of prices where they are being held at unjustifiable levels. In some cases where Australian producers have ventured into the manufacture of lines which can bo produced only at excessive cost, there is likely to be a loss of competitive" ability. Its net effect on the balance of payments is difficult to measure, but it will not be great, particularly after the initial increase in the first few months has exhausted itself.
The board states that it is not perturbed by suggestions that the adoption of its recommendation will result in the creation of a vicious circle of lowered duties, increased imports, an increased exchange rate, and the need for lowering duties again. In its opinion, it is essential to separate the problem of the amount of protection required for the establishment of industry from questions connected with the balance of payments. The external solvency of Australia is intimately associated with the maintenance and extension of its export industries. If excessive protection raised the general level of prices, exports would bo checked. In determining the measure of protection required by individual industries, the board has in the past recommended rates which, in its opinion, are in the best interests of -the community, and particularly on total employment. It will not increase employment, nor assist the balance of trade to allow other conditions, such as primage and exchange, materially to increase the protective level. In regard to the maintenance of preference margins, the board is convinced that it. is not possible to propound a practicable scheme which will maintain, under different exchange conditions, the absolute preference intended to apply at nominal par rates of exchange. It considers that its proposals will go as far as is reasonable towards that desideratum without unduly penalizing trade, and aid considerably in . implementing the Ottawa agreement by reducing the duties which *are* at present payable on United Kingdom goods, without diminishing the protection below what is considered to be a reasonable level. Those proposals will not, in any case, reduce the preferential ad valorem differences provided under the Ottawa agreement.
The result of the Tariff Board's consideration of this difficult and highly controversial subject, of which 1 have quoted a summary, was the submission of recommendations in the following terms : -
{: type="1" start="1"}
0. A deduction shall be made from the duty payable of one or other of the amounts calculatedas hereunder set out, whichever is the smaller, viz.: -
{: type="a" start="a"}
0. One-fourth of the duty that would be payable at the rates listed under the British preferential tariff; or
1. Twelve and a half per cent, of the value for duty.
This recommendation shall apply to goods from any country the currency of which on the date of shipment of the goods is -
{: type="a" start="a"}
0. British sterling;
1. Appreciated relative to sterling;
2. Nominally on a sterling basis.
{: type="1" start="2"}
0. In the event of the rate of exchange Australia-United Kingdom receding to a figure below 20 per cent., but not lower than 12½ per cent, in place of the existing rate of 25 per cent., the adjustment of duties on account of exchange should be one-eighth of the duty payable or6¼ per cent, of the value for duty, whichever is the lesser amount. In the event of the rate of exchange receding below 12½ per cent., the adjustment provided for in the board's report, or the alternative lower adjustment, whichever is at the time operating, should cease to be applied.
In the event of the exchange rate improving temporarily, and later moving again in an adverse direction, the adjustment should be based on the conditions existing at the date of export of the goods and at rates in accordance with whichever of the three conditions set out above is applicable.
It might here be mentioned with regard to these recommendations, that the board expressed the opinion that if the exchange persists at its present level for a period of two years, world costs and prices may have altered to such an extent that a reconsideration of the subject would be warranted. The third recommendation reads -
{: type="1" start="3"}
0. Consideration has beengiven to the effect of exchange in increasing the landed cost of goods from countries whose currencies are depreciated relative to sterling, but less than Australian. The board considers that no ad- - justment of duties is necessary in reward to importations from such countries.
The board, in its report, then proceeds to refer to imports from countries whose currencies are depreciated relative to Australian currency, and makes the following observations : -
>It has already been shown that the existing rate of duty applied to imports from countries with whom the Australian exchange is adverse has the effect of increasing the protection; conversely the application of the existing rates of duty to goods from a country with a depreciated exchange relative to Australia has a much lower protective incidence than was intended when the duties were fixed. This arises from the following circumstances: -
>
>The invoice value of the goods in terms of Australian currency is lower; and
>
>On account of the departmental practice of collecting ad valorem duty on the basis of sterling, the duty on goods so rated is even lower than it would be on the basis of Australian currency.
>
>The board is not overlooking the fact that the Industries Preservation Act could be invoked in the case of importations from a country with a depreciated currency, but it considers that it is only just and logical that a general corrective should he applied to goods from countries with currencies depreciated relative to Australian currency.
>
>In considering what would constitute an equitable adjustment, the board has recognized that the depreciation of the currency of a country exporting goods to Australia would to, some extent, affect the cost of imported and exportable raw materials in terms of the currency of the country much in the same manner as obtains in Australia.
*Sitting suspended from 6.15 to 8 p.m.*
{: #subdebate-23-6-s0 .speaker-KZR}
##### Mr WHITE: UAP
-- Recommendation IV. of the Tariff Board is in the following terms : -
>The board considers that a reasonable addition to the duty would be a fraction of the value for duty, the fraction to be determined by the following formula, viz. : -
par value in sterling of a unit of the currency of the country of origin of the goods, and "b" represents the value in Australian currency of the same unit at date of shipment of the goods, and recommends accordingly.
With regard to Recommendations I. and II., which provide for a deduction from protective duties on account of exchange, the board suggests that -
>The degree of adjustment recommended by the board has been calculated to meet existing conditions, the position at the moment being that the rate of exchange is stabilized at 25 per cent. The board considers that in the event of exchange moving not more than 5 per cent, in either direction, the absence of immediate adjustment would have no serious effects, i.e., a further depreciation of the Australian currency to the extent named would not seriously affect the protective incidence of the tariff schedule, and on the other hand an improvement in the rate of exchange not exceeding 5 per cent, would not uncover Australian manufacturers to any dangerous degree, one factor in this instance being that the margin allowed by the board in fixing the adjustment recommended would partially meet the changed position, and the effect of the remainder would bc immaterial.
The finding of the board is not intended to convey the belief that should the Australian exchange further depreciate there should necessarily be a further adjustment of duties. In this connexion the board considers that no decision should be arrived at until occasion called for it, when action would be determined upon after proper inquiry-
In another place it has been suggested that in two years, under almost any circumstances, another inquiry would be essential-
>An important point for consideration is that any unexpected recovery of the Australian position in regard to exchange might render the Australian manufacturers vulnerable unless a provision be- made to meet such circumstance. The board, therefore, feels that it is incumbent on it to make some provision against a possible unexpected improvement in the exchange position to an extent exceeding 5 per cent. Such improvement in the exchange position might happen, for example, when Parliament was not in session, and when immediate action by legislation would be impossible.
These are the Tariff Board's recommendations, and its comments thereon. The Government, after an exhaustive review and consideration of all the factors, has made the following decisions : -
{: type="1" start="1"}
0. It accepts Recommendations I. and II., insofar as they affect protected goods admissible under the British preferential tariff.
1. It accepts Recommendation III., insofar as it does not conflict with the application of Recommendation II. to protected goods entitled to admission under the British preferential tariff imported from British countries with currencies compared with which the Australian currency is depreciated to such an extent as would justify the deduction from duties as provided for in Recommendation II.
Recommendations Nos. I. and II. are the principal recommendations with which the committee should concern itself. A further decision of the Government is -
{: type="1" start="3"}
0. It accepts the formula embodied in Recommendation IV., but prefers to apply it in approved cases instead of over the whole protective range of the tariff. The Government thinks that it is undesirable to apply the formula in. the manner suggested by the Tariff Board, as in many cases such action would be unnecessary for the protection of local industry, and moreover would be needlessly provocative. In effect, its application will be specific and not general.
The Government's proposal is that the formula should be applied in substitution for the existing exchange dumping duty under section 8 of the Customs Tariff Industries Preservation Act. It will, however, be an improvement on that act, which was designed to meet the currency inflation associated with the immediate post-war period, principally the deprecia-tion of the German mark. As has been the case hitherto, the manner of applying the formula will be by Tariff Board inquiry, recommendation to the Minister, and gazettal. The fact that the Tariff Board has already recommended the application of this formula should tend towards the simplification of the procedure of applying these duties when their aid is invoked. It is hoped that an inquiry into currency depreciation will be quicker than would the ordinary inquiry under the Industries Preservation Act. This reform is needed, and the view that I take is that, provided the Tariff Board is satisfied that detriment to Australian industry will occur, and that the other circumstances surrounding the case warrant action being taken, the board should be in a position to make an early report on matters referred to it under this section of the Industries Preservation Act.
I pass now to the effects of the Government's decisions. These will bring about the following amendments to customs duties: -
On goods to which protective duties apply, when imported from British countries which are entitled to entry of protected goods under the British preferential tariff -
{: type="a" start="a"}
0. when Australian currency is depreciated to the extent of not less than 162/3 per cent, in relation to the currency of the British country exporting the goods to Australia, the deduction from existing protective duties shall he one-quarter of the amount of duty or one-eighth of the value for duty, whichever is the less.
1. when Australian currency is depreciated to the extent of not less than 11-1/9 per cent., and less than 162/3 per cent, in relation to the currency of the British country exporting the goods to Australia, the deduction from existing protective duties shall be one-eighth of the amount of duty or 6¼ per cent, of the value for duty, whichever is the less.
These deductions will be made from duties under protective items, irrespective of whether such duties are ad valorem, specific, alternative, or composite.
I should explain that a depreciation of 162/3 per cent, in our currency expresses an adverse exchange rate of 20 per cent., while a depreciation of 11-1/9 per cent, expresses an adverse exchange rate of 12½ per cent. Under the tariff resolution, which I have just introduced, it has been found necessary to express the differences between currency values in terms of depreciation of Australian currency, in contradistinction to the method employed by the Tariff Board of using an adverse exchange rate.
No deduction on account , of exchange will be made from duties on goods not entitled to admission under the British preferential tariff. The deductions proposed to be made will, naturally, benefit United Kingdom trade more than that of any other country. The benefit will be great indeed. The import trade from the United Kingdom under protected items is £4,380,000, out of a total import trade from that country of £24,000.000, and the amount of the deductions from duty which will be made on account of the exchange adjustments proposed will be approximately £300,000. The adjustments will also benefit Canada and cer tain non-self-governing colonies which are entitled to British preference on goods entered under a very limited number of protected items.
Mr.Forde. - How will they affect Australian secondary industries?
{: .speaker-KZR}
##### Mr WHITE:
-- They will not affect them. It will be seen in the summary that I have given, that in many instances those industries are enjoying double protection, and that they are not vulnerable under any deduction that may be made under this exchange formula.
As New Zealand currency is on a par with our own, no deduction will be made in the case of protected goods imported from that country.
The number of tariff items affected by the adjustments is 839. A dissection shows that 98 items will be reduced 5 per cent, or less; 215 by more than 5 per cent., and not more than 10 per cent.; 84 by more than 10 per cent., but not more than 12½ per cent; and 442 items, under which specific rates operate, will be reduced by varying amounts. In the case of these 442 items the deduction will be principally at the rate of 12½ per cent., as specific rates usually provide forrelatively high duties, and where British preferential duties exceed 50 per cent, the 12½ per cent, deduction applies.
The adjustments to duty on account of exchange, involving as they do reductions under the British preferential tariff on protected goods, will, as is the usual practice with customs duties, operate from 9 a.m. to-morrow morning. But where, as a result of these adjustments to duties on account of exchange, a duty lower than that payable under the 1921-1930 customs tariff would result, then the rates under the 1921-1930 customs tariff will apply. In order, however, that the reductions on account of exchange will have general application, and a clean schedule with no such anomalies operating, may be the law, it is hoped that the tariff debate will be expedited.
Recommendation IV. of the Tariff Board, dealing with the importation of goods from countries with currencies more greatly depreciated than Australian currencies, will be applied to specific goods after inquiry and report by the Tariff
Board. In other words, the recommendation of the Tariff Board is being embodied in the Industries Preservation Act, and instead of applying generally, will apply specifically. The special duties applicable under the proposal will, it is considered, be more effective than the duties now leviable under the schedules to section 8 of the Industries Preservation Act. I think honorable members will admit that the Industries Preservation Act has not been effective, and that it is rather slow in its operation. This will be an improvement ; it will embody in the act itself the formula recommended by the Tariff Board.
{: .speaker-KHO}
##### Mr Holman:
-- Will that make it necessary to go to the board?
{: .speaker-KZR}
##### Mr WHITE:
-- It will be necessary to go to the Tariff Board; but as the reference will be merely on the matter of currency depreciation, that body should be able to make a quick review, and to furnish a report expeditiously.
{: .speaker-KHO}
##### Mr Holman:
-- There will be no necessity to wait for the High Court?
{: .speaker-KZR}
##### Mr WHITE:
-- It is a matter with which the High Court will have no concern.
I do not propose to deal now with further technicalities of the subject; I shall leave those until the matter is being considered by the committee. My immediate purpose is to explain matters in broad principle, and to allow honorable members to obtain a true perspective of the changes. The changes that I have indicated represent the Government's decision on a most complicated and difficult subject. It does not give effect to the Tariff Board's recommendations in their entirety, inasmuch as the resolution does not provide for deductions to be made in respect of protected goods imported from foreign countries with currencies related to gold or depreciated to an extent not greater than sterling.
Many factors influenced the Government in deciding not to apply the Tariff Board's recommendation No. 1 to goods imported from foreign countries. I do not at this stage propose to state all the Government's objections, but it expects thereby to be able to arrange specific trade treaties with nations which have already indicated their willingness to enter into them. Tariff preference from such sources should open a wider market for Australian exports and develop a greater volume of reciprocal trade.
{: .speaker-F4U}
##### Mr Forde:
-- What recommendations of the Tariff Board are being disregarded ?
{: .speaker-KZR}
##### Mr WHITE:
-- We have adopted recommendations Nos. 1 and 2, which will not apply to foreign duties.
{: .speaker-F4U}
##### Mr Forde:
-- What about recommendations Nos. 3, 4 and 5 ?
{: .speaker-KZR}
##### Mr WHITE:
-- Recommendation No. 3 has been adopted in such a manner as not to conflict with recommendations Nos. 1 and 2. A further reason which actuated the Government was the development on a large seals of national currency depreciation in certain foreign countries. This has been aptly termed " the war of the exchanges ". An endeavour was made at the World Economic Conference to check this development, but without success. With the uncertainty surrounding this important phase of exchange control, together with the possibility of a manipulated exchange, not truly expressing the comparative costs between any two countries, the Government considered it would be unwise to adjust duties on protected goods imported from foreign countries on account of exchange differences. The position with regard to British countries is entirely different. Australian currency is definitely anchored to sterling and most of the other British countries doing a large export trade with the Mother Country are similarly situated. Comparative costs between Australia and the United Kingdom are stabilized and well expressed in the exchange rate on London. Moreover, the rate appears to be a natura] one. In reviewing the whole of the circumstances surrounding exchange and the solutions which arc being applied, honorable members will appreciate the very real problems which face the Tariff Board in endeavouring to recommend reasonable protection. In the first place the cost of landing imported goods in Australia is increased by the extent of the exchange. Secondly, costs of manufacture in Australia are also increased by the effect of exchange upon raw materials and capital goods, such as machinery. It would, therefore, be extremely difficult for the Tariff Board to ignore the effects of exchange. If it were required to do that it would have to isolate and deduct from Australian manufacturers' cost3 of production all increases due to exchange. That, of course, would be an impossible task. The board's report deals exhaustively with these difficulties and it is essential that honorable members should not overlook the real problems which face the board and the Government in their -'tariff-making. The adjustments proposed "«to be made on account of exchange will not expose Australian manufacturers to undue competition by reason of the fact that the proposed maximum deduction from duties is only half the adverse exchange rate. This difference represents a very wide margin in order to cover increased manufacturing costs iu Australia due to exchange. The Tariff Board, as it points out in its report on this subject, recommends duties that in actual practice include an additional protective or safety margin which, if included in the calculations of protection, will show local manufacturers to be in a much safer position than might otherwise be assumed.
With regard 'to the effects on preferential trade and particularly trade from the United Kingdom, it can be truly said that the changes effected by these primage and exchange tariff resolutions constitute the greatest single contribution directed towards the encouragement of British trade made by any Australian Government since 1907. The margins of preference in favour of United Kingdom will be widened still further and the benefits arising from the extension of these margins will prove exceedingly valuable. Honorable members will appreciate the value of these extended margins from the following figures, which show the combined effect on preferential margins of the exchange adjustments and preferential primage. These preferential margins are additional to existing margins. Out of a total number of 839 tariff items affected, 101 items will carry an increased preference of from 5 per cent, to 10 per cent.; 213 will carry increased preference of over 10 per cent, and up to 15 per cent. ; 83 will carry increased preference of over 15 per cent, and up to 17$ per cent. ; one will carry a margin of 20 per cent., while on 441 items under which specific rates operate, increased preferences mainly at 17$ per cent, will operate. These are striking figures, which show clearly how genuine is the disposition of this Government to honour in every detail, and to implement to the full, its obligations under the Ottawa agreement. I would point out that, notwithstanding the considerable amount of unmerited criticism which has been directed against the Ottawa agreement by diverse commercial interests and political parties, there can be no question that it has been instrumental in promoting and increasing inter-empire trade. By so doing the agreement is making a material and real . contribution towards the economic development of the constituent parts of the Empire. The Commonwealth has been a noticeable contributor to the improved trade. In the first six months of 1933 imports of Commonwealth products into the United Kingdom increased from 7.40 per cent, to 8.09 per cent, of Britain's total imports, while the exports of the British merchandise to Australia increased from 4.70 per cent, to 5.68 per cent, of the total. These are definite and concrete results which are all the more important because they have been obtained during a period when international trade had reached conditions bordering on chaotic, and when British trade during the same period had diminished.
Those figures arc an effective reply to those who, through little vision, prophesied failure for the Ottawa agreement. The Government's constant objective is tariff revision which aims at the maintenance of a fair balance between the primary and the secondary industries, which are related and complementary, at the same time putting the interests of the Commonwealth before those of any section of the community. Reduced unemployment, increased export and import trade, and a balanced budget, show that this policy is succeeding.
Progress reported.
{: .page-start }
page 3246
{:#debate-24}
### SUPPLY BILL (No. 2) 1933-34
*In Committee of Supply:*
{: #debate-24-s0 .speaker-F4O}
##### Mr LYONS: Prime Minister and Treasurer · Wilmot · UAP
-- I move -
>That there be granted to His Majesty for or towards defraying the services of the year 1033-34 a sum not exceeding £2.799,620.
As the available appropriation under Supply Act No. 1 of 1933-34 is almost exhausted, it is necessary to make a further appropriation of revenue to carry on the services of the Commonwealth, pending the passing of the Estimates. The committee is now asked to appropriate £2,799,620 to meet requirements for the period of six weeks from 1st October, 1933. This amount includes the " following sums for ordinary services : -
The amounts which are included in this bill are for essential services and, together with the amounts appropriated by the last Supply Bill, involve a rate of expenditure which is not greater than that provided in the previous year's appropriation or the current year's Estimates. In accordance with the usual practice, provision has been made for " Refunds of Revenue " and " Advance to the Treasurer ". The amount set down for "Refunds of Revenue" is £100,000, and for " Advance to the Treasurer ", £750,000. As honorable members are aware, the advance to the Treasurer is to meet miscellaneous and unforeseen requirements and also to enable uncompleted works in progress on 30th June, 1933, to be continued. No provision is made in this Supply for any new expenditure or for any departure from existing policy. As the Estimates for the current' year have now been tabled, honorable members will, in due course, have full opportunity to consider all items in detail.
{: #debate-24-s1 .speaker-F4Q}
##### Mr SCULLIN: Yarra
-- Before the House adjourned some four months ago, I think, towards the end of last May, the Parliament granted Supply for three months. At that time every honorable member was under the impression that that Supply ' was granted to enable the Government to carry on until the budget and the Estimates were passed by the Parliament, thus enabling the Government to carry on until the end of the financial year. There would have been no need for this bill had the House been called together within a reasonable time, but the lengthy adjournment beyond the time contemplated has rendered this measure necessary. The bill provides really for an extension by six weeks of the three months' Supply granted by this Parliament before the last adjournment. I mention that to show that we are drifting along in a slipshod way at a time of national crisis. This Parliament should have been summoned earlier to enable it to pass the budget and the Estimates in time to avoid the introduction of this additional Supply Bill. Under cover of Supply bills we may discuss many things of policy which the Government has done or left undone in between sessions, but as we now have the budget before us, and as the Estimates will follow .afterwards, we shall have ample opportunity to discuss the Government's policy, its action and its inaction in certain directions. Like many other honorable members, I am anxious to come to grips with the Government's policy as declared in the budget speech. The sooner we discuss and deal with the bills that will arise out of the Government's policy - and I hope that there will be no restriction of debate on them - the better it will be for this country. I therefore do not propose to take up any further time in discussing this Supply bill which is after all a stop-gap to enable the Government to carry _ on the ordinary services of the Commonwealth during the next six weeks.
{: #debate-24-s2 .speaker-KWC}
##### Mr THORBY: Calare
.- The introduction of this Supply Bill for the purpose of providing means to enable the essential services and administration of the Commonwealth to be carried on for the next six weeks provides me with my first opportunity . to direct the attention of the Government to quite a number of serious matters. I regret that I shall have only a very few minutes at my disposal on- this occasion, but in that time I shall deal with the administration of a number of the departments concerned in this bill.
I wish to deal specifically, in the first place, with the administration of the Sales Tax Act, and I shall refer to a number of serious anomalies which, apparently, are to be allowed to continue. I shall also refer to tlie unnecessary harshness of those administering this department. This is not only causing a tremendous amount of ill feeling, hut is also bringing a number of business firms to the verge of bankruptcy, in consequence not merely of what appears in the act but of the -manner in which the measure is being administered.
Some glaring instances have been brought under my notice during the last few months of failure on the part of the administration to grant, exemption from sales taxation in cases iu which this Parliament has declared that exemptions should he granted. Provision was made in the act for certain exemptions from sales tax and similar provision was made in respect of primage duties; but under tlie regulations that have been passed and the methods that have been adopted in administering both the sales tax and primage legislation it is almost impossible for the interests concerned to obtain the advantage of these exemptions. I am able to give specific instances of every class of case to which I shall refer, but I need not go any further at present than citing the experience of a. firm which imports tractors. Hilder certain circumstances tractors and spare parts for such tractors are exempt from primage and sales tax, but the actual practice of the administration in cases of applications for such exemptions justifies me in saying that apparently the Ministers responsible for the administration of this legislation have lost control of these departments. It appears that the administration is being carried on by officialdom under a system which can justifiably be described as tyrannous. If .the Government and the responsible Ministers desire illustrations in support of my statements, I shall furnish them without any hesitation, not only now in the time at my disposal, hut later when the budget is under discussion. I wish to make it clear that my remarks are intended as constructive criticism. I shall hold nothing back from the Government in my efforts to prove the disabilities to which business *is* being subjected under the present administrative methods, apparently unknown to the members of the Government. I know most of the members of this Government personally and T should find it difficult to believe that they would be parties to a continuance of the methods which are at present in vogue.
I shall now deal specifically with the procedure that i3 adopted in respect to the importation of caterpillar tractors. Such tractors are subject, under certain conditions, to primage duty, and also to sales tax. But I ask whether Ministers are aware of the degree of dissection of accounts which is necessary to determine the amount of taxation payable? In respect to the admission of three cases of tractor parts into this country, five sheets of closely typed items were required to give the description of the various parts. Mention had to be made of every individual item in the packages and some of the items listed were valued at only one half-penny. In addition, the weight of the parts had to be given though in some cases it was a matter of ounces. This exhaustive dissection is necessary, we are told, to ascertain which method of taxation will return the larger amount to the Customs Department. When the Customs Department has finished its investigation the Sales Tax Department comes on the scene and exactly the same process is necessary. I hold in my hand the sheaf of papers which were actually completed in respect of the importation of the three cases of tractor parts to which I have referred. We find references in these papers to such minor items as set screws which, in some cases, weigh only two ounces, and are valued, in American currency at 15 cents. Reference is also made to springs which weigh one ounce. The list specifies hundreds of different tractor parts, though in some cases only one or two of such parts are imported. At the end of the list reference is made to the advertising material imported with the tractors which, in this case, weighed 2 lb. Even the instruction sheets, which weighed 1 lb., are specified. The duty on this advertising matter is ls. 6d. per lb. The advertising matter was valued at 3s. and the duty on it was 3s. Even the oiling charts are listed. It appears to me to he ridiculous that such an exhaustive dissection should be necessary in order to assess the amount of customs duty and sales tax payable on the importations.
Another anomaly relates to the guarantee which the importer is expected to give in order to obtain the advantage of exemption from sales tax and primage. In respect of both the tractor itself and the parts, a firm is required to give a definite guarantee, under bond, that both the tractor and the parts will be sold only to a person following agricultural pursuits, otherwise he cannot obtain the advantage of the exemption which is supposed to be available. It is, of course, impossible to give such a guarantee. No firm can say to whom these machines and parts will ultimately be sold. Yet the taxing authorities have gone so far as to demand from every firm carrying on this class of business a guarantee of the kind I have mentioned. Such firms have also been required to furnish a monthly return of the stocks held of these tractors and parts. This means an expensive monthly stocktaking. It is no small task to list every spare part of this description. After the business houses concerned protested bitterly against this procedure and brought a lot of pressure to bear on the Government, instructions were issued to the Customs Department to ease the position and not demand compliance with impossible conditions. I shall not need to go further on this point than to quote the following opinion expressed by. one prominent business house engaged in this class of business: -
>Our principals have been experimenting *tor* many years on a diesel tractor, and have now perfected a machine which is already on this market. When we recently imported a 50- horse-power diesel " Caterpillar " tractor we ordered a quantity of essential spare parts to come forward with the tractor. Now it is impossible for us when importing a tractor to know whether we will ultimately sell this tractor for agricultural purposes, or for use as a tractor by a shire council or government department. If, on making our customs declaration, we state it is imported for agricultural purposes, we pay no primage at time of importation, but if we subsequently sell to a shire council who is building roads in an agricultural district, we are forced to pay the primage at time of sale.
On the other hand, if the firms pay primage and sale3 tax on their importations of this description, and the machinery is afterwards sold for agricultural purposes, there is no provision for a refund of such taxation. As a matter of fact, both the Customs Depart ment and the departments administering the primage and sales tax legislation have refused refunds in such circumstances although this Parliament has declared that such taxation shall not be collectible on tractors or spare parts sold for agricultural purposes.
Even though I have so few minutes at my disposal to discuss this subject, I repeat that I have directed attention to these facts not because I love criticizing a public department or a government, but because I desire to see the anomalies to which I have referred removed. It is deplorable that business people are forced, week after week and month after month, to submit to such conditions as I have mentioned. It is regrettable that, because an honorable member directs attention to these things, he should be accused of extreme hostility to the Government, and of discussing matters which are of po value to the country. This, however, will not hinder me from criticising departments which, I say deliberately, are crucifying the business interests of this country. The kind of thing to which I have referred is going on in every State of the Commonwealth. I assure the Government that I have documentary evidence to support every word that I am saying. The Sales Tax Department has undoubtedly laid itself out to place impossible conditions upon certain business interests in Australia.
I shall now refer to the experiences of a business operating in George-street, Sydney. I can give the Minister the name of the firm concerned, and also all details of the transaction, but I do not propose to use the name publicly in this debate. This particular business house is registered under the Sales Tax Act, and has done its best to comply with the requirements of the department ever since the inception of this legislation. For quite a long time it was paying £16 16s. a year *to* a qualified accountant to prepare the returns required by the department. But on the 12th April last, the Sales Tax Commissioner required the firm to submit a detailed statement of the whole of its business transactions since the inception of the act. In order to try to comply with this demand, the firm appointed a qualified accountant. I have personally investigated this case, and I know the facts are as I give them. The accountant employed on this work had to make a careful dissection of the business of this firm, and in dealing with its operations for last June, eighteen dissection sheets of sixteen columns each were required. The man was working on the job for four weeks, and had the assistance of a typist. The preparation of the returns for that one month involved the firm in an expenditure of £25 for additional clerical services. The net result of the whole investigation was that an amount of 16s. 4d. of additional sales tax was found to be payable. In spite of this result the Sales Tax Commissioner is persisting in his demand that a similar analysis of the firm's business shall be conducted for the whole period during which sales tax has been payable. Apparently the firm is to be required to spend £25 for every 12s. or 14s. of extra taxation which may be payable.
{: .speaker-KNP}
##### Mr Maxwell:
-- Did the honorable member bring these facts under the notice of the Minister?
{: .speaker-KWC}
##### Mr THORBY:
-- Yes ; I have received replies from the Minister on a number of such cases. I shall deal with individual Ministers and individual cases to a greater extent on another occasion. I have only fifteen minutes available for this purpose to-night, though I could spend fifteen hours on it and justify the expenditure of so much time.
I shall now further illustrate the iniquitous practices of the department by referring to the sale of a business. I can give a specific instance of the kind to which I shall refer. We shall take the case of a business sold for, say, £2,000 as a going concern. On such a transaction sales taxation is not payable. If a business is sold for a lump sum as a going concern, with no specified amount mentioned for machinery and furnishings, sales tax is not payable. If specific mention is made of furniture and machinery, tax is payable, according to the decision in the Searl case. In order to show what the business interests are facing in this regard, I cite the ease of a business sold on a very small deposit of £50. I am able to swear that the agreement for that sale was for the payment of a lump sum, and that no specific items were mentioned. The contract of sale was in the hand writing of the vendor and the buyer who signed it. The contract was subsequently submitted to a legal firm in order that the legal requirements might be complied with. The solicitor, in due course, advised that, to comply with the State Stamp Duty Act, it would be necessary to put a book value on the furniture and machinery. This was done, and the amount so specified was afterwards embodied in the contract of sale. The result was that the Sales Tax Commissioner demanded the payment of 6 per cent, sales tax on the transaction, because, in order to comply with a State law, a book value has been placed upon certain assets sold as a going concern. That sort of treatment from the department will not win the goodwill of the business interests of this country. On every sale of a similar nature, the department demands 6 per cent, sales tax, which in this case absorbed practically the whole of the deposit, and which in other cases would absorb a large proportion of it, although the principal sum would not be collected for, perhaps, five or six years. The method adopted in the collection of this tax is wrong.
I also cite the case of a business man living in a constituency adjoining my own. In this instance, after a hard fight, I was successful in obtaining some redress. This man has a variety of interests in his manufacturing and sawmilling business, and he is subject to the payment of sales tax on every transaction, because he is registered under the act.
{: #debate-24-s3 .speaker-JOS}
##### The CHAIRMAN (Mr Bell:
-- The honorable member has exhausted his time.
{: #debate-24-s4 .speaker-KWC}
##### Mr THORBY: Calare
.- I thank honorable members for giving me the opportunity to continue my remarks. This man has occupied important public posts, and is of 30 or 40 years business standing. He is not a rogue. The honorable member for Gwydir **(Mr. Abbott)** will support mc in that statement. He has held the most responsible positions that his town could offer him. Because other men, who were carrying out blacksmithing operations, were exempt from sales tax in certain respects, he understood that his operations of a similar nature would also be exempt. W*hen an inspector went through his books it was found that this man had not included certain activities associated with his business, with the result that under the process adopted., by the Taxation Department of doubling all amounts once they find a shortage, he was handed a bill for £200 sales tax. He said that he could not pay that amount immediately, but he added, " If I owe the money, I will pay it." He produced his books, but the Deputy Commissioner insisted on the payment of the money, although the man proved conclusively that he was not in a position to pay it. He said that the best he could do was to pay the current sales tax each month, and £3 monthly off the additional amount for which he had been assessed. The Deputy Commissioner absolutely refused to accept this offer, and, I understand that this action was approved by the central authority. The department went to the extreme of putting a bailiff in to sell the man's furniture.
{: .speaker-JLJ}
##### Mr Abbott:
-- A shocking thing; but it is quite true.
{: .speaker-KWC}
##### Mr THORBY:
-- If the Minister were prepared to criticize me publicly for taking exception to action of that kind, I should say that he was no longer fit to occupy his position, and any government that stood for such treatment of business men should not be permitted to continue in office. I have merely given one illustration of the treatment received from the department. I have not gone about looking for examples of anomalies; I have received them without asking for them. - 1 could quote case after case for the next twelve or fifteen hours, but the time now available to me is limited to a few minutes. No government is justified in putting a bailiff into a man's house under such circumstances, yet in this case a bailiff was put in until I was instrumental in having him bundled out. The bailiff was about to sell less than £100 worth of furniture because the department wished to collect sales tax amounting to £200 to much of which, I contend, it was not entitled, rather than allow the man to continue his business. The department knew that he was employing four or five men, and that he had other commitments he was unable to meet. I made inquiries into this matter, and the opinion I formed was supported by a local accountant. Even then the department only reluctantly altered its course of action. This man is carrying £2,000 of outstanding debts on his hooks, and .is practically faced with bankruptcy. The case affords another striking illustration of the anomalies occurring under the act. Yet the Government demands 6 per cent, on debts that business people cannot collect, and which may, ultimately, prove to be bad debts. The man to whom I have referred had provided the wages and material necessary for the carrying on of his business, and when he asked for time in which to pay his tax a bailiff was promptly dumped into his house. That is in accord with what has happened in other instances.
I shall now deal with a case of another type, in which a most honorable business man who had furnished a sales tax return for every month as regularly as clock work ever since the act has been in operation, but through an oversight, which he readily admitted - and I shall prove that the Taxation Department itself is not free from mistakes - had omitted to send in a return for one month. The department discovered this " criminal " act, and the man was called upon to pay 8s. 9d. sales tax for that month. He was fined 10 per cent., which amounted to 10d., plus a penalty of £1 for having failed to furnish the return within the prescribed time. Should not discretion be used by the department, when business men are doing their utmost to comply with the laws of the country? Are the people not entitled to a common-sense system of administration?
Consider the position of the small butchers who were forced to come under the act because they sold a few paltry pounds of sausages or sausage meat ! The taxation authorities, in their wisdom, first declared that sausage meat was taxable because it was a manufactured article, processed by a machine. Later they ruled that, on pure meat chopped up in a machine, it was not necessary to pay sales tax, but if the butcher put a sprinkling of seasoning into the meat it became a manufactured article, and was taxable. We have the ridiculous position throughout the Commonwealth that small butchers who sold a few paltry pounds of sausages and dripping were forced to register under the act and pay an iniquitous tax, which no government can justify.
I have repeatedly appealed to the Prime Minister and his colleagues, both in this House and throughout the department, to abolish the sales tax bond. It is unreasonable, and is not demanded in other directions except in the isolated case of a travelling variety show. '
{: .speaker-F4O}
##### Mr Lyons:
-- In every sales tax act throughout the world the bond is required.
{: .speaker-KWC}
##### Mr THORBY:
-- I am not concerned with the taxation imposed in other parts of the world ; ' but nobody can justify making a present of nearly £500,000 in premiums to the insurance companies of this country, because the business interests of Australia are required to give a bond that they will pay their sales tax. Seeing that the tax is collected monthly, what greater risk is there of a business man leaving the country than any other taxpayer? In connexion with no other form of taxation in Australia are the people required to enter into a fidelity bond that they will pay a tax when it is due. The Taxation Commissioner is given more power in thi3 regard than is exercised by the judge of a court, and more power, in a sense, than is enjoyed by even the Government itself, in investigating and following up a case even after the taxpayer has died, or after he has become bankrupt. Neither death nor bankruptcy is a bar to the inquisitorial powers of the Commissioner. Business men through Australia are forced to furnish sales tax bonds which are iniquitous, unnecessary, and hampering, and could be abolished without the Government sacrificing a single penny.
There are cases of other kinds to which I shall briefly refer in the few minutes at my disposal. The taxation authorities, in their wisdom, have declared that sales tax shall be paid on certain articles which Parliament has decided to exempt from this tax. An irrigationist purchased a piece of belting, but, because it could be used for some other purpose than for transmitting the power of his engine to his pump, he was compelled to pay sales tax on the belting. The department flatly refused to recognize the belting as part of the machinery,' and said that it was merely the transmission equipment. In -another case, an irrigationist purchased a certain number of curved plates, together with a quantity of fire clay and asbestos lagging, for the repair of his engine. If these articles are not to be regarded as engine parts, I do not know what to call them. I contend that they are parts of the engine that is supposed to be exempt from sales tax. The Taxation Department, with the wisdom of Solomon, has ruled that, a3 the plates cannot be used for any other purpose, they are exempt, but as the lagging and the fire clay could be used for other purposes, sales tax must be paid on them. Does that decision display common sense? I could furnish many other illustrations of similar anomalies which are seriously harassing business men.
Inspectors have been sent to the premises of country storekeepers and other retail traders to discover whether they have sold a few bags of cement, a few plumbing fittings, or a few tins of paint to sub-contractors. These retailers are being forced to submit detailed reports. In one case at Grenfell, after investigating a firm's books, the inspectors found that for each month the average increased amount of tax payable was less than 5s. lt cost that firm the services of one of its staff for at least a mouth to check over the items and pick out a few bags of cement, because the sales tax authorities said that when a plumber, builder or sub-contractor carried out a small contract, 6 per cent. sale3 tax must be paid on the increased value of the articles used, because their value should have been assessed at a higher rate as part of the contract. This harassing treatment is costing commercial houses, particularly in country districts, large sums, and causing complete dislocation of their business, because the department is determined to scrape up a few paltry pence in additional taxation. In some cases it does not amount to shillings, and the necessary investigation costs the men concerned considerably more than the amount of extra tax that is collected. I trust that the Government will realize that this must not continue, or imagine for one moment that the commercial interests will continue to submit to it.
I could quote similar cases from Victoria, Queensland, and oilier parts of the Commonwealth and give details of the con-, di tions which apply in the tailoring, ironmongery, saddlery, leather and flourmilling industries, and in fact, in almost every branch of commerce in Australia. I have the fullest particulars, all of which will stand the closest investigation, which show how these people have been persecuted, how their business transactions have been hampered, and how they have been put to unnecessary expense simply because of the -system of administration now in operation has been allowed to continue. I am criticizing the administration of this department merely with the idea of having these anomalies removed so that business will be encouraged rather than discouraged. Consider the position of a large country storekeeper conducting a tailoring business in conjunction with his other business activities. A tailor conducting a small .tailoring business is exempt from sales taxation, but the person who conducts a general business, including tailoring, or a large tailoring business, is subject to the tax.
{: #debate-24-s5 .speaker-10000}
##### The CHAIRMAN:
-- The honorable member has exhausted his time.
**Mr. THOMPSON** (New England)
{: type="1" start="1"}
0. 9. 2]. - As it may be some time before honorable members will have an opportunity to deal at length with the general financial policy of the Government, I consider this a suitable occasion, particularly for the representatives of country constituencies, to bring their grievances under the notice of the Government. My object in speaking at this juncture is to assist the Postmaster-General **(Mr. Archdale Parkhill)** in the more efficient administration of the important department which he controls. I come in closer contact with the work of the Postal Department than with that of any other Commonwealth department, and am, therefore, in a position to bring under the notice of the Postmaster-General the views of country people on his administration. It is to be regretted that the present Minister, who we know is a very capable man politically, does not visit country districts more than he docs. If he were to follow the example of some of his predecessors and occasionally meet the country people- and hear their grievances, he would learn a lot that would assist him in the efficient administration of his department, and thereby be able to render greater satisfaction to residents in country districts. I propose to bring various matters under his notice, not with the idea of embarrassing him, but to enable him to make a suitable reply either during this debate or when the estimates of his department are under consideration. Owing to the limited time at my disposal, I cannot give details of the complaints I have received, but I shall mention briefly' some of the grievances of country residents. During the eleven years in which I have been a member of the Federal Parliament, I have never known country people to be so intensely dissatisfied with the Postal Department as they are to-day after making full allowance for the severity of the financial depression which the country has experienced during the past four years. Fully 90 per cent, of the residents in country districts do not consider that they are getting a fair deal from the Postal Department. They believe that all the benefits are being given to those residing in the metropolitan areas, and that the thin end of the stick is, as usual, being handed to country people. Their particular grievance at present is the tightness of the department in the matter of telephone extensions and postal facilities generally. During the regime of the Bruce-Page Government, a progressive policy was embarked upon under which country people were provided with improved telephonic and mail facilities. This was possible largely as the result of an extensive, but sound borrowing policy, which enabled the leeway in telephonic and mail services in country districts to be made up. The country people were comparatively well satisfied with the treatment that they were then receiving, but during the last four years extensions have practically ceased. District postal inspectors, divisional engineers and other officers, whose task it is to move about the territory under their control and to personally investigate grievances, have been prevented by head-quarters, largely on the score of expense, from coming in contact with the people. In these circumstances, we can easily imagine what has happened. The men competent to investigate complaints and report to headquarters have been sitting in their offices in the country. I have repeatedly interviewed the postal officers in my electorate, who have told me that it is useless to worry them because money has not been made available to enable them to carry out inspections as formerly. They have said they can do their work only by correspondence. It may surprise the committee to know that in one instance I drove a postal inspector 50 miles in my own car to meet a deputation of persons who wanted an urgent matter adjusted. The offer they made was accepted by the postal official within an hour. It is not the responsibility of honorable members to drive postal officials around the country in this way. These inspectors, having been compelled to remain in their offices, their efficiency has been reduced by at least 50 per cent. Recently the Postmaster-General visited Adelaide, where he announced that the department under his control is in such a nourishing financial position that it will show a surplus of at least £1,000,000. That money has gone into Consolidated Revenue, and while that practice is observed the Minister will be unable to give residents in country districts the benefits to which they are entitled. Prosperity has returned to the- Postal Department, as was stated by the right honorable the Prime Minister **(Mr. Lyons)** in his budget speech to-day, but additional telephonic facilities are being granted only to residents in the metropolitan areas. The niggardly policy pursued by the department for the last four years is still being followed in country districts. In reply to a request from a school teacher living in an outlying district, **Mr. J.** W. Kitto, the Deputy Director of Postal Services in New South "Wales, said on the 29th September of this year that -
>Formerly tlie department extended very liberal treatment to applicants for telephone services in country districts, but owing to tho serious state of the national finances, it was found necessary in 1930 to drastically curtail expenditure, consequently a limited amount only may be incurred in providing individual subscribers' services.
>
>That statement appears in a letter written subsequent to the date on which the Postmaster-General spoke in Adelaide of the flourishing financial position of his department. Residents in country dis- cricts have the utmost difficulty in getting the department to take any interest in their applications for telephonic services. I have spent months and have written dozens of letters to get the department up to the point at which its representatives will investigate a claim. There is great dissatisfaction regarding party telephone lines, which are very popular in country districts. For instance, fully 90 per cent, of those using party lines are dissatisfied with the scale of charges, which are unnecessarily heavy. They are also intensely ' dissatisfied with the whole of the conditions governing party lines. One subscriber to a party line is made responsible for the collection of the amounts due by all the other subscribers. That is most unfair, and is the cause of a lot of irritation and dissatisfaction as well as friction between neighbours. Why should one subscriber be made a scapegoat for all the others? That is a grievance which could be remedied by the department if it desired. Moreover, a number of party lines are allowed to get into a state of disrepair. During the last four years, practically no money has been spent on country telephone services, and I have seen miles of party telephone lines in which the posts are leaning over at ah angle of 45 degrees. The people concerned are held responsible by the department, but in most cases they are not in a position to incur the expense involved in putting the telephone lines in a proper state of repair.
>
>Another grievance of country settlers concerns the shortage of mail service facilities. Pour years ago country mail services were cut down wholesale. Places which previously had three mails a week were provided with only two mails a week, others were reduced from two to one mail a week. In most cases the only reason advanced in favour of the reduction was that the country's financial position rendered reduced services necessary. I shall mention one case of many which have come under my notice. It concerns a soldier settlement 2D miles from the nearest town, and comprising 50 returned soldiers and their families, a population of over 200 persons. For four years those settlers have sought a restoration of three mail services a week.
{: .speaker-10000}
##### The CHAIRMAN:
-- The honorable member has exhausted his time.
{: #debate-24-s6 .speaker-JVR}
##### Mr NAIRN: Perth
-- I am glad that the honorable member for Calare **(Mr. Thorby)** has drawn attention to some of the difficulties to which business people are subjected by those who administer the Sales Tax Acts. I shall cite the case of -a firm which was engaged in the manufacture of furniture. This firm was registered as a manufacturer, but owing to its business falling off, it engaged in the second-hand furniture trade. In the course of time that side of its business became more important than the manufacture of furniture. After about two years in the second-hand furniture trade, the firm received an account for some hundreds of pounds said to be due as sales tax. The Sales Tax Acts require that manufacturers shall register and that all goods sold by them shall be subject to the sales tax. That is all right so long as the goods sold are manufactured goods. In passing that legislation Parliament had in mind the business of manufacturing and the sale of manufactured goods. Second-hand goods are not liable to sales tax. A reasonable interpretation of that act would be that sales tax should be paid by manufacturers only on such manufactured goods as are sold. Yet the Commissioner of Taxation has interpreted the act in the narrowest way. He holds that because a manufacturer is registered all the -goods that he sells are subject to the payment of sales tax, notwithstanding that those goods may otherwise be free from that imposition. The manufacturer whose case I have mentioned is in competition with other secondhand furniture dealers who, because they are not registered as manufacturers, are not called upon to pay sales tax. The administration of the Sales Tax Acts has been left almost entirely to the Commissioner of Taxation. The experience of most, honorable members is that, when they bring taxation matters forward, they are invariably referred to the Commissioner of Taxation.
{: .speaker-KRD}
##### Mr McGrath:
-- Their representations are generally ignored.
Mr.NAIRN. - The Commissioner for Taxation has sole control of the department, probably because it is convenient for Ministers to hand unpleasant matters over in that way. The Minister should be interested in matters of principle.
When the Commissioner of Taxation finds flaws in the legislation which adversely affect the department, he is quick to ask Parliament to pass remedial legislation. And frequently that legislation applies retrospectively. Surely the same obligation rests on him to correct other flaws in the legislation which he discovers. It is anomalous that one section of traders should be free from this tax while other sections in competition with them have to pay it. There may be grounds for differences of opinion regarding the correctness or otherwise of the Commissioner's interpretation of the legislation which he administers, but there can be no difference of opinion regarding the necessity for remedying anomalies. I hope that the Minister administering the Sales Tax Acts will take notice of these complaints, and see that anomalies which press hardly on business people, and cause irritation and loss, are removed.
{: #debate-24-s7 .speaker-K4X}
##### Mr NOCK: Riverina
.- I desire to give one . instance to supplement the' case put forward by the honorable member forCalare **(Mr. Thorby).** My complaint is not against the Government, but against the administration of the act by the departmental authorities. Last year the Government announced a. number of exemptions from sales tax, its object being to reduce the cost of production of our export commodities. My complaint concerns articles bought by primary producers through a co-operative butter factory. If the articles in question had been bought by the farmers individually, they would not have been subject to sales tax; but because the farmers joined in a co-operative enterprise, and erected and equipped a butter factory to treat their product, the articles used are subject to sales tax. The administration has not carried out the intention of Parliament. Another anomaly occurs in connexion with the engine. I was advised that it would be exempt from sales tax, but that the boiler which would provide the steam for the engine - and without which the engine would have been useless - would not be so exempt. I submit that these cases should be dealt with by the department in a common-sense manner. I cannot imagine that the expenses of railage and cartage on the machinery and plant to the country town in which it was to be erected should be treated as a commodity sold to the people concerned, and, consequently, liable to sales tax. It is evident that there are a good many avenues for inquiry by the Government with a view to ensuring that the intention of Parliament is given effect by the department.
{: #debate-24-s8 .speaker-KRD}
##### Mr MCGRATH: Ballarat
.- The thanks of the House are due to the honorable member for Calare **(Mr. Thorby)** for having called attention to the administration of the Sales Tax Act. There are many aspects of the sales tax with which I should like to deal, but to-night I shall refer to one aspect only - its effect on the master tailors. I wrote two letters to the Prime Minister **(Mr. Lyons)** in relation to the effect of this legislation on the tailoring trade, but they were ignored. My representations were treated with contempt'. I received a reply in each case stating that the question of the sales tax payable by master tailors would be dealt with in the budget, hut the particular matters to which I drew attention have not yet been replied to. A number of tailors in Ballarat had paid the sales tax every month, when, suddenly, an official from the department visited their establishment and inspected their books. He found that they had sent out invoices for £8 Ss. for suits costing £8, the additional 8s. representing the sales tax on the £8. They have now been required to pa.y sales tax on the *£88s.,* which is equivalent to imposing sales tax on sales tax. Probably no section of the community has been affected more by the sales tax than that comprising the master tailors. There is scarcely a tailoring firm in Australia which is not living on its capital. 'From one firm, of tailors the department demanded £.150, because it had been paying sales tax only on the cost of the article, and not on the cost of the article plus the sales tax. That firm cannot pay the amount demanded of it. I appeal to the Prime Minister to give consideration to the case of the master tailors, many of whom are on the verge of bankruptcy.
In my dealings with the department, I have been unable to obtain any satisfaction whatever. My representations have been treated with contempt. I have been fortunate to get any reply at all to my communications. When my constituents complain to me about the sales tax, I promise to attend to their complaints, and I invariably advise them not to pay the tax until they hear further from me. In some cases, they have waited six months for a reply from the department. In other cases no reply at all has been received. I hope that the result of this discussion to-night will be a strict investigation into the working of the department. I hope that Ministers will do their duty in administering the law. I agree with the honorable member for Calare that there is a tendency for Ministers to become somewhat lax - even haphazard - in their administration. The Government has done well to propose a reduction of the sales tax by 1 per cent., and to increase the number of exemptions. I wish, that we could do without legislation of this character; but if we cannot do that, let us at least see that it is administered fairly.
{: .speaker-KFE}
##### Mr Gregory:
-- A tax on turn-over would be preferable.
{: .speaker-KRD}
##### Mr McGRATH:
-- Whatever the defects of the sales tax, a tax on turnover would be worse. It is appalling that cases such as those mentioned by the honorable member for Calare could occur in this country. It is not right that a bailiff should be put into the home of a mau who is struggling to make' a living for himself and his family merely becausebe has not paid certain taxes.
{: .speaker-JLJ}
##### Mr Abbott:
-- And a reputable citizen at that.
{: .speaker-KRD}
##### Mr McGRATH:
-- I hope that the Minister will institute an inquiry intothe conduct of the officer responsible for placing a bailiff in the home of a reputable citizen. Such a person should not be allowed to occupy any responsibleposition whatever in the department. The Minister should take action to have the interpretation of the commissioner revised. Years have elapsed since the tax was instituted and thesepeople have believed that they have paid the full tax to which the Government was legally entitled. If this intrepretationof the act by the Commissioner is upheld it will place a particularly heavy burden upon them.
I am sorry that I have not sufficient time at my disposal to criticize theGovernment for- its administration of the-
Invalid and Old-Age Pensions Act, which, in particular, is an everlasting disgrace to the Assistant Treasurer **(Senator Massy-Greene)** who has recently announced his intention to withdraw from the Ministry. The promise that was made by the Attorney-General **(Mr. Latham)** that the act would be sympathetically administered has not been honoured; I am unable to find one instance where the administration has been sympathetic. Departmental officials have claimed that children of old-age pensioners have not been able to produce receipts for rates or other payments made in connexion with a home. Of course they could not. They have simply paid the money in the name of their parents and have not bothered about details. I can quote 500 cases in my constituency in which pensions were reduced to los. a week, contrary to the wording and spirit of the act. I know that that is so because, through my representations, those pensions have been restored to 17s. 6d. a week. The Deputy-Commissioner of Pensions in Victoria refused to see me on the subject and, for a considerable time, would not answer my letters. After a good deal of trouble I have secured a few replies, but dozens are still outstanding. The pensions of 41 inmates of Nazareth House, Ballarat, were reduced to 14s. a week. I had intended to bring the matter up when Parliament was last in session, but I was confident that the Government would recognize the unfairness of the action that had been taken by pension officials and rectify the anomaly. I wrote repea'tedly and ineffectually to the Victorian Deputy-Commissioner of Pensions and, finally, turned to the Commissioner, **Mr. Heathershaw,** asking him to be kind enough to refer me to the section of the act under which the reductions bad been made, and pointing out that, in my .opinion, the action taken by the department was illegal. I received a letter from **Mr. Heathershaw** acknowledging that my contention was correct, and so the 41 persons are to have a restoration of the reductions that were made. In not 1 per cent, of the pensions that are being granted is the rate of 17s. 6d. being paid. I have in mind the case of two women, neighbours of mine, who are penniless, dependent on their relatives for their keep. I filled in claims for them and they were granted pensions - at the rate of los. per week.
{: .speaker-L08}
##### Mr Rosevear:
-- The honorable member voted for a reduction of pensions.
{: .speaker-KRD}
##### Mr McGRATH:
-- I did not imagine that I was dealing with such a callous crowd, and never for a moment did I think it possible that the act could be interpreted as it has been. I am confident that when the merits of the cases are recognized the Government will see that these two women are paid pensions of 1.7s. 6d. a week. I am not now speaking for electors in the Ballarat constituency. I know that their interests are safeguarded, for I do not allow anything unfair to pass without protest. I am pleading for the thousands of unfortunate persons who have no contact with a member of Parliament, and would do anything rather than write a letter of protest to their representatives. They suffer in silence, believing that Parliament intended that their pensions should be reduced to 15s. per week. I want to know why the Deputy Commissioner for Pensions for Victoria is so persistent in his efforts to reduce payments by 2s. 6d. or 5s. a week. I also urge the new Assistant Treasurer (Mr; Casey) not to follow the example of his predecessor in office and countenance wholesale and indiscriminate reductions of pensions. I lodge my protest on behalf of the many unfortunate persons who are suffering as a result of this legislation. I know dozens of cases in which families own homes to the value of about £200, to which they have so strong a sentimental attachment that they prefer to relinquish their pensions rather than sign over their interest to the Government. Those homes have been acquired as the result of thriftiness and their owners are good citizens who merit greater consideration than do those who have squandered their earnings. I appeal to the Government to repeal that section of the Invalid and Old-Age Pensions Act which has brought about unfair reductions.
{: .speaker-L08}
##### Mr Rosevear:
-- Why does not the honorable member speak to the Pensions Association ?
{: .speaker-KRD}
##### Mr McGRATH:
-- That organization is being run by a few persons who are trying to get a few shillings out of the old-age pensioners.
The **CHAIRMAN (Mr. Bell).Order!** The honorable member has exhausted his time.
{: #debate-24-s9 .speaker-JOM}
##### Mr BEASLEY: West Sydney
-- As the budget debate will take up a good deal of our time, I have a few matters about which I. should like the Government to take prompt action. A notice has been posted at the Garden Island Dockyard which reads as follows : -
H.M.A. Naval Establishment, Sydney, 20th September, 1933.
{: .page-start }
page 3258
{:#debate-25}
### NOTICE
{:#subdebate-25-0}
#### Commonwealth Employees Compensation Act No. 24/1930
Medical Expenses of Employees Injured on Duty.
{: type="1" start="1"}
0. The Commissioner for Compensation under the Commonwealth Employees Compensation Act, No. 24 of 1930, has advised that where an employee injured on duty is a member of a lodge and is entitled to free medical attention the Commonwealth is not liable for charges which may be made by the medical practitioner.
1. In future an injured employee who claims compensation under the Commonwealth Employees Compensation Act will be required to state whether he is or is not a member of a benefit society, his contributions to which entitle him to medical and/or hospital benefits. (Sgd.) C. j. Pope,
{:#subdebate-25-1}
#### Captain Superintendent
The employees at the dockyard consider that circumstances might arise necessitating the attention of a medical specialist whose charges would he beyond the scope of any allowance paid by a benefit society to which they belonged, and the Commonwealth would not hold itself liable for such charges. I was under the impression that the Commonwealth Employees Compensation Act covered any medical attention that might he necessary to a workman while on duty, and I should like the Government to make a pronouncement on the subject so that these and other employees may know exactly where they stand in the matter.
It would appear that certain amendments are to be made to the financial emergency legislation, and I direct attention to an anomaly in the Invalid and Old-Age Pensions Act. That legislation provides that where a pensioner owns a home which he is not occupying, its value shall be set off against the pension which he receives. In certain circumstances that might be sound practice, but I know of cases in which it involves hardship. I have in mind particularly a husband and wife who are pensioners and own a property which is situated some distance from the city. Because of the state of the wife's health, the couple have to live in the city itself, in order that she may receive special medical treatment and attention. The husband has to attend hospital as an out-patient, and is unable to leave his wife alone in her own home because of the condition of . her health. The circumstances have forced the couple to come to the city and reside with a daughter, so that the daughter may look after the mother. I admit that the Deputy Commissioner has been sympathetic, and has been good enough to extend the period during which the pension is payable oven though, according to a strict interpretation of the law, he is not entitled to do so. It is unfair, however, to place him in that position, and the Minister should give consideration to cases of this kind when the pensions law is under review. Where it can he established to the satisfaction of the Deputy Commissioner that the health of the pensioners requires them to change their residence so as to be closer to a hospital, no deduction should be made in respect of the property they leave, provided such property is not producing revenue. Two years ago the Leader of the Country Party **(Dr. Earle Page)** brought under the notice of the Minister cases similar to this, and he, as a doctor, can appreciate the position of those who have to change their place of residence in order to receive medical attention.
Serious differences of opinion sometimes develop between private medical practitioners and other medical men commissioned iby the pensions department regarding the total and permanent incapacity of applicants for invalid pensions. Where such differences occur there should be some provision for an appeal from the Government medical officer. I have on previous occasions strongly criticized the action of doctors appointed by the Government in turning down applicants for pensions after more than one independent practitioner of high reputation had certified them to he totally and permanently incapacitated. In some instances, the Government medical officers have been forced to reverse their original decisions, but there should be" provision for appeal in all disputed cases, and I ask the Government to amend the act to provide for this.
{: #subdebate-25-1-s0 .speaker-KZF}
##### Mr LANE: Barton
.- I desire to bring under the notice of the Government correspondence which has passed between me and the Deputy Commissioner of Pensions in New South Wales regarding certain phases of the administration of the Pensions Act. I understand that there are now four persons to whom appeals in such cases may be made. First, there is the Deputy Commissioner, then the Assistant Commissioner, then the Acting Commissioner, and, finally, the Commissioner himself. I suggest to the Minister, who is now talcing charge, that at least two of these officials might be eliminated so that the applicant may have quicker access to the Commissioner. On the 16th August, I wrote the following letter to **Mr. H.** Theggie, Deputy Commissioner of Pensions : -
>I desire to present to you the ease of- , who is indebted to the New South Wales Savings Bank, Homes Department. The equity is £130 upon a £500 property. Also the case of- , whose equity in a property, apparently, is £270 upon a £550 property.
>
>These two old gentlemen have recently lost their wives, who were pensioners, and have, as a result, been reduced in their pensions through having to leave their homes and live with their children.
>
>The banks, as mortgagees, have exercised all the rights of mortgagees in taking over the properties, utilizing the rentals for liquidating whatever charges they have against the homes. Owing to a clause in the Bank Act, the Homes Department cannot take possession of these properties. They are forced to put them upon the market for sale, which would, probably, cost £8 to put them up for public auction, and the possibility is that there would be no bid.
>
>I submit to you that as the mortgagees have exercised all the rights they can, but are limited by an act of Parliament to own these properties as a bank, can only own the buildings in which it transacts its business, that under these conditions the amount of pension due to these pensioners, who are entirely dependent on the pension, and have no income whatever, be restored to the full rate.
>
>I would be pleased if you would obtain a ruling from the Chief Commissioner as already you have given your decision against the granting of a higher rate.
In the course of a telephone conversation **Mr. Theggie** informed me that he disagreed with my conclusions, and asked me to state a case for submission to the Commissioner. I did so, and later received the following letter from **Mr. Theggie:-**
>With reference to your further representations in these cases, I have to say that the matter' has been referred to the Assistant Commissioner, whose decision is that the equity in the properties must be maintained in computing the rate of pension.
>
>In **Mr.- 's** case, the property is valued at £500, and in **Mr.- 's** case £550. Possibly, those figures are higher than the present market values. I shall be glad, therefore, if they can furnish me with a valuation from a competent valuer, and I will then be in a position to re-assess the pensions, and possibly increase thom.
In this ease the mortgagee, the Savings Bank of New South Wales, cannot take actual possession. Besides pensioners, there are hundreds of people handing their homes back, and it is stipulated in the act that those homes must be put up for auction. To do this costs the banks £8 for each home, and sometimes not even one bid is obtained. I believe that much of the difficulty which has arisen in regard to the administration of the act is duc to the Commissioners assuming the responsibility of making interpretations, rather than refer matters to the Minister. I know of another case in which a man was receiving a dole of 5s. 9d. a week. Immediately after his dole was increased to 9s. 3d. a week the Deputy Commissioner took it upon himself to reduce the pension of the man's wife to 2s. 6d.
{: .speaker-KJQ}
##### Mr James:
-- The honorable member for Barton voted for the bill which made such things possible.
{: .speaker-KZF}
##### Mr LANE:
-- I have never been so cowardly as to tell pensioners that they cannot hope for any relief by applying to their own parliamentary representatives, nor have I been mean enough to go into another man's electorate in an endeavour to persuade pensioners that the Lang planners are the only people who can get them an increase in their pensions. Much of the difficulty encountered by pensioners has been due to the action of certain members of this Parliament who have deliberately misled pensioners into believing that they have no hope of getting any increase in pensions under the present Administration. The- honorable member for West Sydney **(Mr. Beasley),** the honorable member for Hunter **(Mr. James),** and the honorable member for East Sydney **(Mr. Ward),** hoping to catch a few votes in the Barton electorate, visited the old-age pensioners and tried to bluff them into believing that the Lang party alone would be able to secure any pension, benefits for them.
{: #subdebate-25-1-s1 .speaker-KYI}
##### Mr PROWSE: Forrest
.- The Postal Department should not be a taxing machine. Its function is to render service and promote development and I understood that the BrucePage Government declared itself in favour of that policy. When there is a surplus of postal revenue, that surplus should be put back into the service to secure greater efficiency. In the United States of America, the post office has never been regarded as an instrument for obtaining revenue, but rather as a means of rendering service to the community. Those honorable members who have asked for improved postal facilities or for telephone extensions must be familiar with the department's reply that the financial position did not justify the expenditure which would be involved. The Postmaster-General **(Mr. Parkhill)** knows that in recent years the incomes of many people have been so reduced that they have been unable to keep up their payments for telephone services, but it is in the interests of the community that those services should be maintained. More generous treatment should he extended to such people, even if it involved some reduction of the profits of the department. I am quite satisfied that, if the postal service were privately conducted, greater consideration would be given to these matters, and the liability of the people would be extended over a period of depression; instead of which they have been ruthlessly deprived of their facilities because they have not had the wherewithal to pay for them. Instead of £1,000,000 being withdrawn from this service and placed in the Consolidated Revenue account, those who have contributed this money should be given the benefit of an improved service. It should be the policy of the Government not to impoverish the Postal Department, and thereby augment the general revenue account, but to extend the facilities given by the department. Serious complaint is made concerning the inadequate remuneration of those who are in charge of unofficial post offices throughout the country, compared with that of the permanent Public Service. Before large sums are disbursed among . other sections of the community, this particular branch of the Postal Department's activities should be made more efficient, and of greater benefit to the community.
Doubtless other honorable members have received communications similar to those that have been sent to me, in connexion with educational correspondence to outback communities. Some of the big-souled teachers who are conducting this educational correspondence desire to include in it a personal letter that will cheer up the recipient; but if one word of such a nature is written the full letter rate must be paid. As it is a case of brightening the lives and advancing the education of those who live in the backblocks, the extra postage, which means a great deal to this class of teacher, ought to be waived.
I congratulate the honorable member for Calare **(Mr. Thorby)** upon the information that he has given to the committee. The question of proper administration is a most important one in the government of any country. We have possibly . some of the finest public servants to be found in the world. I should like all public servants to feel that they are servants of the community. Unfortunately, however, some of them are more concerned with the preparation of petitions to federal members to have their former salaries restored to them.
{: .speaker-K0A}
##### Mr Gabb:
-- That is only natural.
{: .speaker-KYI}
##### Mr PROWSE:
-- I agree that it is natural; and perhaps some of them deserve that for which they ask. There are, however, examples of thoughtlessness, which I thank God are not general. I have in mind a country post office which is 4 miles distant from the place in which a certain family resides. There is no mail service to their district, and if they asked for one to be provided they would be told that their request could not be entertained on the ground of financial stringency. Consequently, they have a private letter box, and it is the practice for any servant or member of the family who happens to be in town to collect the mail; but, should the key of the box be inadvertently left behind, the official in charge of the office declines to deliver the mail, although to my knowledge he is only 10 feet away from that private letter box. He would compel a man, who works ten to twelve hours a day milking cows, to return home for the key. The Government would not decline on the ground of insecurity to place the mail in a rotten box by the wayside. Is it not safer to hand it to a servant of the house or to a member of the family? I know that on two occasions this official has refused to hand over mail to a servant of some standing or a member of the family. Yet a petition has been framed, asking for the restoration of that man's emergency cut. I should like the positions to be reversed, so that the public servant, would be obliged to rise at 6 o'clock in the morning, milk cows in mud and slush, and work 10 or 12 hours a day. The public servants of this country could materially assist the members of the general public. In our railway systems, there are some men who perforin excellent service on behalf of the community, while there are others who have a different conception of their duty. I hope that Government employees will recognize that they are the servants and not the bosses of the community. When regulations are issued by any department,, common sense should be displayed in interpreting them.
{: #subdebate-25-1-s2 .speaker-KJQ}
##### Mr JAMES: Hunter
.- I am astonished that provision has not been made, either in tho budget or in the Supply Bill, for the extraction of oil from coal or shale. I have raised this question on several occasions, and have also, during the recess, made repeated representations to the government, at the instigation of many local governing authorities and organizations in my electorate, regarding the making available of a sum of money for this purpose. It has been proved in other countries that oil can be extracted from coal at a cost of 7d. a gallon. Our bill for oil and petrol imported from overseas amounts annually to approximately £18,000,000. If we were to adopt the policy that I advocate, the cost of maintaining the unemployed would be considerably reduced by a depletion of their numbers. **Senator McLachlan** has stated that the extraction of oil from coal is not yet an economic proposition, and that we should await the result of experiments in other countries. Yet we find that other countries have already adopted the hydrogenation process. A large plant was installed at Indiana in the United States of America. Other plants have been installed in Japan, Hungary, Germany, and also England, whose example the Prime Minister during his recent tour through the Commonwealth exhorted the people to follow. Wu have now an excellent opportunity to follow the example of the Mother Country. This afternoon I asked in this House whether the Prime Minister was aware that the British Government was making available a grant of 4d. per gallon in respect of light hydrocarbon oils manufactured in Great Britain from indigenous coal, shale or peat, and whether the Commonwealth Government would follow that example. The Prime Minister said that it was not customary to announce government policy in reply to questions without notice. That was a wrong attitude for him to adopt, particularly in view of the isolation of this country. If war took place in the Pacific, the whole of our motor transport services would be held up because of our dependance upon oversea supplies of petrol and oil. The right honorable member for North Sydney **(Mr. Hughes)** and other sabre-rattling individuals, have been trying to stampede the people of this country into the belief that we are likely to be faced with war in the near future. At all events they are doing their best to manufacture a war. If war took place our best defence would be a properly organized transport service propelled with locally manufactured fuel, such as that produced by the hydrogenation of coal. I have previously been an advocate of low temperature carbonization, but the experts are now of the opinion that the new system of hydrogenation is more economic and efficient. The following is an extract from a mining journal issued by the Queensland Government : -
{: .page-start }
page 3261
{:#debate-26}
### OIL FROM COAL
English papers deal with the announcement of the Prime Minister **(Mr. Ramsay**
MacDonald) that the British Government proposed to give a guaranteed preference at the rate o! 4d. a gallon in respect to light hydrocarbon oils manufactured in Great Britain from indigenous coal, shale, or peat. The guarantee would be for ten years from 1st April, 1934. If the preference remained at its present level, the Prime Minister said of 8d. a gallon, the period of guarantee would he four and a half years from 1st April, 1935. If it was reduced to 4d. a gallon the period would be nine years from the same date. Legislation would give effect to the guarantee. **Mr. Ramsay** MacDonald said that according to figures supplied to him, about 7,000 men would be directly employed, and a slightly less number indirectly. The particular plant which the Government had in mind, would, when completed, be capable of producing about 100,000 tons of petrol, roughly 30,000,000 gallons, a year, and consume 350,000 tons of coal in a year, giving employment to 1,000 miners. The cost of plant and general equipment of the industry was given at about £3,000.000.
That is a direct contradiction of the statement of **Senator** McLachlan to the effect that the plant would cost £12,000.000. The cost of the plant matters little, because it is full time that we set our own house in order by making adequate provision for the manufacture of a product that would be urgently required in the event of war, and help in a large measure to rehabilitate the coal industry. I do not think that this country is likely to be called upon to defend its shores, but we must he prepared for any eventuality. A war in the Pacific might cut off our supplies of oil from overseas. The Government should give a substantial bounty to companies which are prepared to extract oil from coal and shale. I understand that certain people are ready to engage in this industry if given sufficient encouragement by way of a bounty or tariff protection. The honorable member for Corio **(Mr. Casey)** who has now attained Cabinet rank, has given considerable thought and study to this subject, and I hope that he will do Iris utmost to persuade his colleagues to give every encouragement to this industry.
I assure the honorable member for Barton **(Mr. Lane)** that I did not tell pensioners in his electorate that they would receive no redress if they appealed to him or any other Government supporter. What I have said, and I still say, is that I do not know how any supporter of the Government who voted for a reduction of pensions can shed crocodile tears because of the hardships inflicted upon pensioners by reason of the action of this Government. I can quite understand that some ministerialists are much concerned about the formation of strong organizations of pensioners in their electorates. There is no doubt that the pensions department has been harsh in itsadministration of the act. I have a letter from one of my constituents, in which he says that as a new claimant for a pension he was required to sign a typewritten statement to the effect that he would probably secure employment and earn at least 5s. a. week, and that as a result of that anticipated earning, his pension was fixed at only 15s. a week. Many pensioners in my electorate have died since the operation of- the financial emergency legislation. In one case certain persons on the dole were forced to refund an amount of £17 which had been paid by the department to their mother while she was alive. In another case the property of the deceased pensioner was valued at £54 5s. 8d. As the act provides an exemption of only £50, the department compelled the beneficiary under the will of the pensioner, to refund £4 5s. 8d. In that case the beneficiary was on the dole. Surely that cannot he said to be sympathetic administration on the part of the pensions department. Another woman who has written to me has been asked to refund an amount of money paid as pension to her deceased mother and finds it impossible to do so. The department, in a letter to her, has stated, it seems by way of threat, that -
>If there is no money in the estate with which this charge may be satisfied at present such charge will be deferred until the property is sold.
Is it the intention of the department to sell this property? In almost every letter of this kind that the department sends out there is a footnote calling attention to the provision in the act that the Government may order the beneficiaries of an estate or the executors of a will to dispose of estates under certain conditions. As the Government proposes to afford some little relief to pensioners when the budget proposals are implemented, I think it should also give some consideration to the property aspect of the subject. This legislation, in its present form, is actually a tax upon the thrifty.
{: #debate-26-s0 .speaker-JOS}
##### The CHAIRMAN (Mr Bell:
-- The honorable member's time has expired.
Progress reported.
{: .page-start }
page 3263
{:#debate-27}
### PRINCIPAL PARLIAMENTARY REPORTER,
{:#subdebate-27-0}
#### Retirement of Mr. C. H. P. Robinson
{: #subdebate-27-0-s0 .speaker-KIT}
##### Mr SPEAKER (Hon G H Mackay:
-- I desire to inform honorable members that since the House last met, **Mr. C.** H. P. Robinson, Principal Parliamentary Reporter, has commenced long service leave prior to his retirement in March next. **Mr. Robinson** joined the *Hansard* staff of the Parliament of New South "Wales in 1S8S. He participated in the reporting of the Federal Conventions, and on the formation of the *Hansard* staff of this Parliament in 1901, transferred to the Federal Service. In 1923, he succeeded the late **Mr. B.** H. Friend as Principal Parliamentary Reporter.
By the retirement of **Mr. Robinson,** the Parliament loses a capable and highly esteemed official. Representing the third generation of parliamentary recorders in his own family, he brought to bear on his work an inherited capacity, which was reinforced by a wide general knowledge and sound literary judgment. His long service had intimately acquainted him with Australian political history during tho last half century. He possessed a keen sense of the obligation of himself and his staff to the Parliament, and maintained the records of debates at a high level of accuracy and literary expression. To all parties and all members he was uniformly obliging and helpful. His service will be remembered as that of an able official and a courteous gentleman. His personal charm and efficiency have merited the sincere regard of all members of the Parliament. The affection and good wishes of a host of friends will accompany him in his retirement. I am sure that I express the sentiments of all honorable members when I wish **Mr. Robinson** many years of good health and happy leisure. .
**Mr. J.** S. Weatherston has been pro; mo ted to the position of Principal Parliamentary Reporter and he will be succeeded as second reporter by **Mr. G.** H. Romans. Each of. these gentlemen has served the Parliament faithfully over a period of 20 years.
{: .page-start }
page 3263
{:#debate-28}
### ADJOURNMENT
Retirement of the Principal Parliamentary Reporter, **Mr. C.** H. P. Robinson.
{: #debate-28-s0 .speaker-F4O}
##### Mr LYONS: Prime Minister and Treasurer · Wilmot · UAP
-- I move -
>That the House do now adjourn.
I desire to support you, **Mr. Speaker,** in paying a well-deserved tribute to the work of **Mr. Robinson** during a period of service dating back to the opening of the First Parliament of the Commonwealth. **Mr. Robinson** was held in the highest esteem by honorable members, and I regret that he will no longer be associated with us in this chamber. His unfailing courtesy and genial manner made him a very likeable personality. Possessing a keen intellect and an extensive knowledge of public affairs, he discharged his duties with marked efficiency, his ability and thoroughness being reflected in the high standard of the work performed by the reporting staff. I trust that **Mr. Robinson** will, long be spared to enjoy good health, and that he will be able to take the fullest advantage of his respite from the work which he carried out so faithfully and well.
{: #debate-28-s1 .speaker-F4Q}
##### Mr SCULLIN: Yarra
.- I endorse every word that you, **Mr. Speaker,** and the Prime Minister have uttered in tribute to the ability and personal charm of **Mr. Robinson.** There is among honorable members of the Opposition a unanimous feeling of regret that **Mr. Robinson** has terminated his work in this Parliament and gone into retirement. We trust that he will enjoy health and happiness for many years. One quality that has been very noticeable in our parliamentary reporters generally, their chiefs particularly, and **Mr. Robinson** not least of all, has been their conscientious discharge of their duty. The knowledge that they would receive from the *Hansard* staff strictly impartial treatment as well as efficient service has given to honorable members a keen sense of security. Impartiality and accuracy are, of course, very essential in recording parliamentary debates. Although we have capable men to take the places that become vacant from time to time, we shall miss **Mr. Robinson.** He possessed a genial personality, and a most kindly disposition, and he was, moreover, a very efficient and capable servant of the Crown. Possessing a scholarly mind, he brought to bear upon his work as the chief reporter of the Parliament a fine intelligence and' sound judgment.
{: #debate-28-s2 .speaker-C7E}
##### Dr EARLE PAGE: Cowper
-- I associate the members of the Country party with the tributes that have been paid to **Mr. Robinson** and the expressions of regret that he will no longer be with us. We remember gratefully the unfailing courtesy that he displayed on all occasions. He appeared so energetic and young that we find it difficult to realize that he had arrived at the age of retirement. I was surprised when I returned to Canberra to hear that he had reached the age of 64 years and was terminating his official career. The fact that he has been able to retain his energy and enthusiasm gives us reason to hope that he will have a long period of retirement. The Country party expresses its appreciation of the work he has done in this Parliament and wishes him a very happy old age.
{: #debate-28-s3 .speaker-K0A}
##### Mr GABB: Angas
.- As an unattached member, I endorse what has been said regarding **Mr. Robinson.** I sum up my knowledge of him by saying that t have found him to be a "white man " indeed.
{: #debate-28-s4 .speaker-KJQ}
##### Mr JAMES: Hunter
.- The group with which I am associated desires to recognize the -great ability displayed by **Mr. Robinson** as Principal Parliamentary Reporter. He always extended to my party the utmost courtesy, and we regret, that the Parliament has lost the services of such a capable officer. Like the right honorable member for Cowper **(Dr. Earle Page)** I could hardly realize that **Mr. Robinson** had reached the retiring age. All members of the House must recognize the ability which **Mr. Robinson** and his staff have displayed in raising the literary standard of the records of debates in this Parliament, and I and my colleagues acknowledge our indebtedness for this service.
{: #debate-28-s5 .speaker-KHO}
##### Mr HOLMAN: Martin
.- As a private member I am glad to associate myself with the remarks of the Prime Minister regarding **Mr. Robinson.** and I think I may claim a personal interest in the gentleman whose merits are now being so justly recognized. For many years I was a member of the New South Wales Parliament when the chief of the *Hansard* staff was **Mr. Charles** Robinson, under whom, his son, **Mr. Herbert** Robinson, was trained as a parliamentary reporter. Of the undoubted ability of the latter I, like every other new member, have been a gratified and interested witness for the last eighteen months. On that point I need not dilate, but having known since I first entered the Parliament of New South Wales 30 years ago, the second generation of a family attached to parliamentary work, I can answer for the excellence of the school in which the Principal Reporter of this Parliament was reared and trained. I can only add that **Mr. Herbert** Robinson inherited all the merits, and, I presume, most of the virtues, of his greatly esteemed father.
Question resolved in the affirmative.
House adjourned at 10.34 p.m.
{: .page-start }
page 3264
{:#debate-29}
### ANSWERS TO QUESTIONS
*Tlie following answers to questions were circulated : -*
Surat Coinage.
{: #debate-29-s0 .speaker-F4O}
##### Mr Lyons: UAP
-- The answers to the honorable member's questions are as follow : -
{: type="1" start="1"}
0. Yes. 2 and 3. A reduction of the silver content of the coinage would not increase the circulation which is the only method by- which large profits could be obtained. The present issue is sufficient for the currency needs of the Commonwealth, and to increase the circulation beyond requirements is impracticable.
Trade-MarkFees.
{: #debate-29-s1 .speaker-KZO}
##### Mr Latham: UAP
-- The answers to the honorable member's questions are as follow: - 1, 3 and 4. Representations have been made to the Government by the Adelaide Chamber of Commerce and other bodies that trade-mark fees be decreased, and those representations are receiving careful consideration.
{: type="1" start="2"}
0. Owing to trade depression, applications for trade-marksnaturally declined during the years 1930 and1931. The figures for1932, however, show an increase over those for the previous year.
Primage and Exchange: Report of tariffboard.
{: #debate-29-s2 .speaker-KZR}
##### Mr White: UAP
-- The answers to the honorable member's questions are as follow : -
{: type="1" start="1"}
0. The report is dated the 13th April, 1933, and was received shortly afterwards.
1. No.
2. Yes.
Duty oniron and Steel Plates.
{: #debate-29-s3 .speaker-KZR}
##### Mr White: UAP
-- The answers to the honorable member's questions are as follow : -
{: type="1" start="1"}
0. All iron and steel plates aredutiable undertariff item 136(d), but sizes which are not being manufactured in Australia arc admitted under item 404.
1. Sizes which are not being manufactured in Australia are admitted free of customs duty when the produce or manufacture of the United Kingdom.
2. Prior to the amendment of section 15 of the Tariff Board Act in 1929, all questions relating to variations of by-laws were submitted by the Minister to the Tariff Board. Since that date, and until recently, variations of the by-laws were dealt with by the Minister upon reports furnished by the department. The former method has recently been reverted to.
3. See answer to 3.
4. The by-law has been varied from time to time since 1922 both upon reports from the Tariff Board and the department. The last amendment being made on 23rdJanuary, 1933.
5. 14th January. 1933.
6. The Tariff Board recently held a comprehensive inquiry into the duties on iron and steel plate, and when the reports have been received by the. Government and dealt with they will be laid upon the table of the House.
7. The letter and spirit of Ottawa is being observedby the Government in all tariff matters.
{:#subdebate-29-0}
#### Dairying Industry
{: #subdebate-29-0-s0 .speaker-KFA}
##### Mr R GREEN: RICHMOND, NEW SOUTH WALES · CP
n asked the Minister for Commerce, *upon notice -*
{: type="1" start="1"}
0. . Have representations been received asking that legislation similar to the Dried Fruits Act 1928 be introducedto cover the dairying industry ?
1. If so, what reply was made to the request?
2. Will the Minister make a full statement on the matter, particularly as regards any action that maybe necessary by the States either before or after the introduction of such Commonwealth legislation?
{: #subdebate-29-0-s1 .speaker-KV7}
##### Mr Stewart: UAP
-- Following upon a discussion at a conference of State Ministers of Agriculture held in Sydney in May, 1933, this subject was discussed at, the Premiers Conference held in Melbourne on the 8th to 14th June, 1933. At the Premiers Conference it was resolved that the States should consider and submit to the Commonwealth proposals for a marketing scheme for butter. The Commonwealth Government representatives undertook that careful consideration would be given to any scheme suggested by the States. It is understood that pursuant to this decision the States hare been in consultation, but up to the present the result of such consultation has not been intimated to the Commonwealth Government.
{:#subdebate-29-1}
#### Shipping Restrictions
{: #subdebate-29-1-s0 .speaker-KFA}
##### Mr R GREEN: RICHMOND, NEW SOUTH WALES · CP
en asked the Prime Minis ter, *upon notice -*
{: type="1" start="1"}
0. Was the question of restricting foreignowned steamship lines in the carriage of intraEmpire products, orengaging in intra-Empire trade, discussed at the Imperial Economic Conference at Ottawa?
1. If so, was any decision arrived at, and what is the nature of such decision ? 3.If finality was not readied, what negotiations, ifany, are now in progress?
2. Have the Governments of Australia, New Zealand, and Fiji, considered restricting in any way the trading of foreign-owned vessels between these three countries?
3. If so, what decision has been reached?
{: #subdebate-29-1-s1 .speaker-F4O}
##### Mr Lyons: UAP
-- The answers to the honorable member's questions are as follow : - 1 and 2.I have on several occasions, in reply to questions in this House, stated that this question wasdiscussed at Ottawa by the representatives of Australia, New Zealand and Great Britain, and it was agreed that the matter should be further examined in London by representatives of the three Governments?
{: type="1" start="3"}
0. The matter is receiving the very close attention of the Government in consultation with the Governments of the United Kingdom and New Zealand. No decision has yet been reached, but I hope to be in a position, at an early date, to make a definite announcement on the subject. . 4 and 5. See reply to No. 3.
{: #subdebate-29-1-s2 .speaker-KFA}
##### Mr R GREEN: RICHMOND, NEW SOUTH WALES · CP
en asked the Prime Minister, *upon notice -* 1.Is the Government represented on the Australian Overseas Transport Association?
{: type="1" start="2"}
0. Has the Government power to say whether any additional shipping lines should be added to the number of those catering for the carriage of Australian produce overseas?
1. If not, what is the position?
2. Has the Blue Star Line requested *to* be allowed to enter the Australian trade on the same terms as other lines?
3. Was the request granted, if not, why not?
{: #subdebate-29-1-s3 .speaker-F4O}
##### Mr Lyons: UAP
-- The answers to the honorable member's questions are as follow : -
{: type="1" start="1"}
0. No.
1. No.
2. Under Part II. of the Australian Industries Preservation Act any person who, in relation to trade and commerce with other countries or among the States, offers any concession to any other person upon the condition that that other person will deal exclusively with him in relation to any particular goods or services or generally is guilty of an 'offence. By an amendment of the act in 1930, it was provided that certain agreements in relation to the carriage of goods to other countries made and entered into between shippers and ship-owners and approved by the Australian Overseas Transport Association shall not be deemed to be made in contravention of that part. 4 and 5. It is understood that the Blue Star Line applied to the Australian Overseas Transport Association to be allowed to enter the Australian trade, but that they subsequently advised the association that they could not provide a service at present, and the negotiations were thereupon discontinued.
Cite as:Australia, House of Representatives, Debates, 4 October 1933, viewed 22 October 2017, <http://historichansard.net/hofreps/1933/19331004_reps_13_141/>.