14th Parliament · 1st Session
Mr. Speaker (Hon.G.J. Bell) took the chair at 9.30 a.m., and read prayers.
Motion (by Dr. Earle Page) agreed to -
That the House, at its rising, adjourn until Monday next at 11 a.m.
Assent to the following bills reported : -
Loan Appropriation (Unemployment Relief) Bill 1935.
Dried Fruits Export Control Bill 1935.
Canned Fruits Export Control Bill 1935.
Dried Fruits Bill 1935.
Invalid and Old-age Pensions Bill 1935.
Raw Cotton Bounty Bill 1935.
Customs Bill 1935.
-In view of the uncertainty surrounding the shipping position between Hobart and Sydney, will the Acting Prime Minister assure the House that the Zealamdia will be kept running between those ports, even if the payment of a subsidy is involved ?
– It is quite impossible for the Government to give an unconditional undertaking along the lines suggested by the honorable member, but it is prepared to consider reasonable conditions.
Mr.FISKEN.- Has the attention of the Acting Prime Minister been drawn to recent press reports which state that drought conditions in the United States of America are causing a shortage of meat to be experienced in that country, and that beef is bringing up to1s. 2d. per lb. in Australian currency. Will the right honorable gentleman have explored the possibilities of this outlet for Australian meat?
– I shall certainly do so.
– Will the Acting Prime Minister state whether the Government intends to take during this period of the session any action in regard to the wheat industry arising out of the report submitted by the royal commission on that industry?
– The action already taken by the Government is the result of findings of the royal commission. The first recommendation of that body was that the industry should be assisted by means of a home-consumption price, to be financed by a tax on flour. Such a tax has been imposed within the last fewmonths. In the matter of marketing, the co-operation of the States is needed. To deal with it, a special meeting of the Australian Agricultural Council has been called, and each State Government has been furnished with the report of the royal commission so that it may be fully armed with all available information.
– According to figures supplied by the Department of Trade and Customs, the value of the goods purchased by Italy and Germany from Australia during the last financial year was more than 26 times as great as the value of the goods purchased by the United States of America, while on the other hand Australia purchased from the United States of America motor vehicles of a value more than 30 times as great as the value of its purchases from Italy and Germany. Will the Minister for Trade and Customs state whether the Government intends, by tariff adjustment, to rectify this anomalous state of affairs, which is having disastrous effects on Australia’s basic industries?
– The Australian general tariff makes no discrimination between one foreign country and another. The rate of duty imposed on motor cars imported from the United States of America is identical with that imposed on similar imports from Germany and Italy. The Government, however, is desirous of increasing its trade with those countries that have trade balances favorable to Australia. While in Canberra yesterday, the German Consul-General called on me and asked whether the Government had any statement to make as to why Australia should not trade with Germany. I pointed out to him that the purchasing community in Australia is perfectly at liberty to buy goods from Germany provided that the stipulated rates of duty are paid. I assure the honorable member for Flinders that any approaches by the German Government with a view to having German goods marketed in Australia will be encouraged ; but as we have definite Ottawa margins giving a preference to Great Britain, and also a protective tariffto safeguard the welfare of our own manufacturers, it is only natural that the bulk of our trade should flow in those directions.
Leave for Ex-soldiers.
– Recently I asked the Acting Prime Minister whether the Government would grant toex-soldiers the same privileges with regard to leave in connexion with Anzac Day celebrations as are given to State public servants in New South Wales, and he promised that consideration would be given to the request. As Anzac Day is less than three weeks off, I should like to know whether any decision has been arrived at by the Government?
– The Government has considered the matter, and is making arrangements, wherever possible, for the granting of such facilities as are desired by ex-soldiers.
– On Wednesday last the honorable member for Hindmarsh asked me whether the Attorney-General had been able to take any effective action with the object of facilitating the hearing by the Arbitration Court of the case’ of the Adelaide Municipal Tramway Employees against the continued rationing of their employment. I have conferred with the Acting Attorney-General, who has been considering this matter in connexion with a request made to him by the Adelaide branch secretary of the Australian Tramway Employees Association.
It appears that recently an application was made in Court to His Honour Judge Beeby to allow evidence to be given in favour of the abolition of the rationing system in the Adelaide municipal tramways service. His Honour, however, pointed out that he was satisfied that the abolition would have involved the dismissal of 64 men. Having regard to the present state of the labour market, and this effect of the abolition of the system, His Honour was not prepared to abolish it, but considered that it should be continued a little longer.
As I have stated, the matter has been considered by the Acting AttorneyGeneral, who has advised the union that the conduct of judicial proceedings by Commonwealth courts is a matter which is necessarily protected from interference by any other authority, and that it would be quite improper for the AttorneyGeneral or any Commonwealth Minister to seek to interfere with, or to influence, the exercise by a judicial authority of any discretion vested in it by law.
The Government could not attempt to coerce a judge into hearing any evidence which he, in the exercise of his judicial powers, did not think it necessary or desirable to include, or thought it proper to exclude.
– Last evening’s press published reports headed “Meat Hopes wane at Conference”, “British Government stands firm”, “Argentine Meat Trade must be preserved “. Can the Acting Prime Minister say whether he has received from the Prime Minister a progress report of the negotiations that have taken place in connexion with this matter ?
– I believe that the newspaper reports are quite unfounded. No definite progress that can be reported has yet been made in the negotiations.
– Has the Minister for Commerce taken any steps in the direction of de-licensing exporters, or of refusing to grant export licences, to safeguard the good name of the Australian egg industry, which is being ruined by one or two unscrupulous exporters of eggs, principally in Victoria?
– The Department of Commerce has noticed that certain bad consignments of eggs were exported, and has gone to very great lengths to tighten up the inspection and the regulation of exports so as to prevent any recurrence of the trouble in the future.
– Is any subsidy or other payment being made by the Government to West Australian Airways Limited in connexion with its passenger service between Perth and Adelaide? If not, on what date did the subsidy cease, and what is the total amount paid to the company?
– The subsidy ceased some time ago. I cannot state the exact date offhand. The question of a new contract is now under consideration. If the honorable member desires further particulars and places a question on the notice-paper, I shall obtain the information for him.
– Would it be possible to reduce materially the duty on German wire-netting, without infringing the Ottawa agreement?
– The tariff schedule recently tabled in the House gave a clarification of a number of machinery items which were nominally subject to duty, but which are now shown as free under the tariff. That gives Germany opportunities to export machinery to Australia. Wire-netting is admitted free from Great Britain, and it is successfully being made, not only in the Eastern States, but also in Western Australia. As this article is free of duty, sales tax and primage, its successful manufacture here testifies to the efficiency of the Australian industry.
– The Minister has not answered my question.
– Not in the way the honorable member desired. He knows that the Government’s policy is that before any alteration of duty is made, the matter must be referred to the Tariff Board and that any reduction could be made only on the board’s recommendation.
– It is manifest that the Minister has misunderstood my inquiry. In reply to a former question, he cited the Ottawa agreement as a reason why certain trade negotiations could not be carried on with Germany. I simply asked him whether a substantial reduction of the duty on rabbit netting from Germany would in any way violate the Ottawa agreement?
– The answer is in the affirmative.
– How could a reduction of the duty on German wire-netting from £10 a -ton to a lower amount conflict with the terms of the Ottawa agreement, seeing that wirenetting is admitted free from Great Britain ?
– Because wire-netting is one of the items named in special schedules and arrangements in which the present margin has to be preserved. That margin stood when the agreement was signed.
– Can the Acting Prime Minister say what progress has been made by the Council for Scientific and Industrial Research in its inquiry into the possibility of marketing berry fruits throughout Australia?
– I understand that an investigation is being carried out. I shall ascertain how far the inquiries have gone, and inform the honorable member regarding them.
Pacific Island Services
– On Wednesday last, the honorable member for Parkes (Sir Charles Marr) asked me whether consideration would ibe given to the advisableness of applying the coasting trade provisions of the Navigation Act to the Territories of Papua, New Guinea and Norfolk Island. I have ascertained from the Minister in Charge of Territories (Senator Pearce), and now desire to inform the honorable memberthat the question of the exemption of the trade between Australia and the Territories of Papua and Norfolk Island and the Mandated Territory of New Guinea from the the coasting trade provisions of the Act was recently very carefully considered, but the Government was unable to see its way to alter the present position.
– Is the Minister for Trade and Customs able to state the number of men now employed in secondary industries in Australia as compared with last year?
– When the Tariff Validation Bill is being discussed I intend to give a complete analysis of the figures. They will show that in every State, factory employment has steadily increased. At the end of the financial year in 1931, the number of persons employed in Victoria was 338,843, and at the end of the financial year in 1934, it had risen to 405,009, showing a steady increase since the advent of the Lyons Administration.
– In view of the financial and legislative assistance that has been given to the primary producers, is the Government now in a position to turn its attention to the promise made by the Prime Minister (Mr. Lyons) in March, 1934, at Cessnock, that assistance would be given to the coal industry in the northern districts of New South Wales in the establishment of a plant for the extraction of oil from coal?
– The Government is giving all the attention it possibly can to the matter, and, as the the honorable member is aware, it is now the subject of investigation ‘by experts. I understand that Mr. Rogers, who is inquiring into it, is now in the United States of America, en route to England, to make a. final test.
– What is the intention of the Government regarding the future of the aeroplane carrier, Albatross, which has been out of commission for some time?Will it be maintained in reserve, as at the present time, or will steps be taken to get rid of it, so saving at least a small amount on the Navalestimates?
– At very short notice, perhaps a matter of days, the Albatross could be put into commission. It is still capable of rendering valuable service in the defence of this country, and the period for which it will be further utilized is merely a matter of expense.
– As I understand that the Government proposes to adopt the recommendation in the report of the Tariff Board, tabled yesterday, on the flax and linseed industry for the cessation of the payment of the bounty, I direct the attention of the Minister for Trade and Customs to the fact that in Victoria alone over 3,600 acres will be planted with flax in the coming season, 2,000 of which are in the Ballarat district. A scutching mill has been erected there during the last few weeks. In the circumstances, will the Minister request the Tariff Board to make another inquiry into the industry?
– The flax industry has been assisted by the payment of a bounty, or the fixation of the price of flax, for the last twenty years, but with very poor results. Of the £100,000 made available for the assistance of the industry in 1930 only about £2,500 was claimed, so the Tariff Board inquired into the advisableness or otherwise of continuing the bounty and recommended adversely. I understand that the proprietors of the mill in Ballarat to which the honorable member has referred did not give evidence at the Tariff Board inquiry, although the proprietors of other mills did so. The hoard decided that, as the industry was uneconomic, the continuance of the assistance it was receiving was not justified. If the honorable member is able to submit additional evidence to me concerning the Ballarat mill I shall consider whether it is of sufficient importance to justify me asking the Tariff Board, not necessarily to make another full inquiry, but to consider the additional submissions.
– I ask the Minister for Health whether, as the Government has intimated that it intends to make a large contribution to the fund to .be established in the interests of the health of the mothers and infants of Australia, he will give consideration to the proposal I made to him a few days ago for the provision of an aerial ambulance to operate in the outback parts of New South Wales?
– The honorable gentleman put this question to me a few days ago, and I have been making inquiries into the subject. I have obtained from my department some information which will enable me to give him a full and considered reply on the next day of sitting.
– I have this morning received a letter from an ex-soldier who informed me that, although he had submitted an appeal to the War Pensions Entitlement Tribunal on the 4th December last, he had now been advised that his case cannot be heard before June of this year. Does not the Minister for Repatriation consider that six months is too long for a soldier to have to wait for a decision by this tribunal?
– The honorable gentleman is asking me, in effect, the cause of the delay in the hearing of this case, and I am sure that he will not expect me to give him an answer off-hand. I shall have inquiries made, but I assume that the cause of the delay is the number of appeals. I see no way of reducing the time necessary for each case to come before the tribunal other than to increase the number of tribunals - or to reduce the number of appeals.
– I direct the attention of the . Minister for Repatriation to the fact that I have this morning received a letter to the effect that the Farmers Assistance Board of South Australia has intimated to a returned soldier applicant that it is dissatisfied with his failure to disclose that he had been in receipt of a war pension of 24s. a week during the time he had been working under the Farmers Assistance Act. The letter of the board to the settler also stated -
I note that you desire assistance to purchase footwear and clothing to the value of £12, but in view of the pension referred to above, the board is not prepared to grant same.
It. will be necessary for you to provide all your requirements in this connexion from that source, also to meet any medical and hospital expenses that may be incurred during the year.
I ask the Minister whether, as the Commonwealth Government is now financially interested in the steps being taken by the State governments to afford relief to primary producers, he thinks it a fair thing that a war pension should be taken into account by a State instrumentality in the way I have indicated?
– I cannot answer the honorable member’s question offhand, but if he will give me the details of the case I shall have immediate inquiries made. I shall refer the letter to the Commissioner this morning with the object of furnishing the honorable member with a reply on Monday.
– I ask the Minister representing the Postmaster-General whether the Postal Department will reconsider the question of establishing a travelling post office on the north coast mail of New South Wales, with a view to affording the people concerned this necessary facility?
– Some time ago the department decided that all travelling post offices were to be abolished, but it was stated that facilities equal to those supplied by travelling post offices would be provided for people concerned. There is no intention at the moment to re-establish these post offices anywhere, but if the honorable member can show me that inconvenience is being caused to the people whom he has in mind, I shall take steps to see whether or not the complaints can be remedied.
– I ask the Minister for Commerce whether the proposals of the Government for assistance to the citrus fruits industry have yet reached a point at which he is able to give an assurance that legislation will be brought down to deal with the matter before the Easter recess, in order that people concerned may be able to make their plans accordingly for the handling of their export trade during this season?
– A conference of all sections of the citrus fruits industry will be held next Friday, at which it is hoped that definite proposals will be made to co-ordinate the operations of the industry. That will be too late, of course, for the matter to be dealt with before the parliamentary recess, but whatever is agreed upon can be carried into effect at a later date, and still be in time to assist the industry during this season. It is not of so much importance to the industry that the actual assistance should be rendered immediately, as that they should know what will subsequently be done.
The following papers were presented -
Public Service Act - Appointment of A. C. Fleetwood, Department of the Interior.
Dried Fruits Export Control Act - Regulations amended, &c. - Statutory Rules 1935, Nos. 29, 30.
Raw Cotton Bounty Act - Regulations amended - Statutory Rules 1935, No. 31.
In committee: Consideration resumed from the 4th April (vide page 794).
Clauses 1 to 5 agreed to.
– This scheme, which I have previously supported, is being put into operation by the Commonwealth with the co-operation of the States and proposals have already been submitted by the States for the approval of the Commonwealth. Schemes put into operation in the past by the States of Victoria, New South Wales and South Australia have proved successful. The AuditorGeneral of South Australia has reported that the legislation introduced into the parliament of that State to deal with this matter, some years ago, was sound. Introducing legislation in the parliament of New South “Wales on the 6th of February last to give effect to the legislation now before us, the Minister in charge of the bill said “I think it will be acknowledged by honorable members generally that, up to the present, the act is functioning successfully.” But up to the present, no legislation on this subject has been passed by the Queensland Parliament. When introduced and passed by the Queensland Parliament, it will have to comply with the conditions laid down in clause 7 of the bill. Can the Minister for Commerce (Dr. Earle Page) give me any information regarding any scheme proposed by the Queensland Government?
.- I should like an explanation as to the variation in the amount of money to be made available from the £12,000,000 for rural relief as a first grant to the various States. Western Australia and South Australia are each to receive a grant of £1,300,000; but for Queensland, the allocation is only £1,150,000, whereas the Minister for Agriculture in the Queensland Government, indicated that at preliminary conferences between the Commonwealth and the States it was tentatively agreed that the Queensland allocation should be higher. lt was also stated by the Minister for Agriculture that the Queensland statistician estimated that the grant should be £2,000,000. I am inclined to think that the Government is not unmindful of the fact that Queensland, essentially a primary-producing State, has many primary industries which are not established in other States. One would think, after listening to most honorable members on this subject, that the wheat-growers are the only people who matter or are the only primary producers who are experiencing difficulties.
The difficulties which beset the cattle industry and the tropical and subtropical industries of Queensland, such as the banana, pineapple, dairying, cotton, tobacco and sugar industries differ from those of the industries of other States. In view of what the Queensland Minister for Agriculture has said about the allocation proposed to be made for Queensland, I ask the Acting Prime Minister to explain this extraordinary difference between the grants made to the different States. It cannot be said that the allocations have been made on a population basis, because there are approximately 1,000,000 people in Queensland against 700,000 people in South Australia and 500,000 in Western Australia. I should like a full explanation of this variation of the allocation.
.– Has the Acting Prime Minister received any communication from Tasmania in connexion with this proposal? Has any objection been raised by that State in regard to it? Has not the Tasmanian Minister for Agriculture protested against the inequity of the grant to Tasmania in that it does not make any provision for relief of settlers under the closer settlement scheme controlled by the Agricultural Bank and of returned soldiers operating under the same bank? These settlers condemn the Commonwealth proposals on the ground that they do not go far enough. They merely touch upon the fringe of assistance to the majority of the farmers of Tasmania. Instead of providing £300,000 merely for debt adjustment, means should have been devised to improve methods of production. Under this bill no assistance will be given to returned soldiers operating under the Agricultural Bank in Tasmania, and many of them will be forced on the dole. In the past the nationalist governments have always been the champions of the cause of returned soldiers. But, obviously, this Government is only concerned in playing up to its supporters. If it were sincere it would have heeded the protest of the Tasmanian Minister for Agriculture and the Deputy Premier of that State. The constitutionality of this bill is questionable. It is doubtful whether we have the right to pay the debts of any one with taxpayers’ money. When does the Government intend to pay the debts of the unemployed or to render them assistance on lines similar to that rendered to farmers? I am not in favour of giving the farmers, for the benefit of American “go-getters” grant to pay off debts incurred through burning foreign petrol and buying machinery.
.- The honorable member for Denison (Mr. Mahoney) said that the Government was, in bringing forward this bill, playing up to its supporters, but I do not agree with that view. I regret that the debate was curtailed last night, because there are many points to be brought out in connexion with this important measure. It deals with the rehabilitation of a great section of the country’s industries, and that is a matter of interest and concern to every man, woman and child in the Commonwealth. In this bill, it would appear that we are merely touching the fringe of the matter. This measure provides for giving a certain amount of assistance to farmers who are in distress, but the big rehabilitation scheme has yet to be promulgated. There are, in Australia, 250,000 farmers, of which 70,000 are engaged in the growing of wheat, and their debts amount to £151,000,000. The debts of all those engaged in rural industry amount to possibly the appalling total of £500,000,000,so that the £12,000,000 which is being allocated in this measure is merely a drop in the ocean if we take into consideration that this amount is about equivalent of that which we have been voting as assistance to the wheatfarmers alone for some years past. But a little help is better than none, and we must remember that the Australian Agricultural Council is shortly to meet in the hope that it will be able to arrange a scheme for complete and permanent rehabilitation. However, I do not suppose that the decisions are going to be reached quickly no matter what considered schemes the States may have to put ‘before the Commonwealth.
The CHAIRMAN (Mr. Prowse).The honorable member must confine his remarks to the clause before the Chair.
– The important point we must remember is that £12,000,000, for the appropriation of which this clause provides, must be found by the people of Australia. Last night the honorable member for Fre- mantle (Mr. Curtin) made the important point that it would cost the country approximately £500,000 a year to provide this money. On the general question of rehabilitation there has been some hard thinking among those sections of the community, including the business men, manufacturers, importers, merchants, builders, and shareholders in industrial enterprises who are among those who will have to find the money which is to be distributed under this scheme.
Mr.Ward. - I rise to a point of order. Is the honorable member permitted to make general observations of this kind when discussing the clause now before the Chair?
– I have been listening attentively to the honorable member, and so far he is in order.
– All classes are included in the casualties of the depression with the result that rents are gone, business is reduced, overdrafts are withdrawn or materially curtailed and company dividends are almost down to zero, or there are none at all in many instances. The income tax returns will show how such classes have failed in recent years. Inbusiness life in the city I have been amongst them all, and have had a close-up view of many trade tragedies. I know the fights they have been putting up. Large and small men are all in it. Great employers have been brought down by the crisis through which we havebeen passing, and, unfortunately, also they have brought down battalions of employees with them. The blow has been so severe that many executive men and others have taken the count, and they have exhausted their capital in their effort to live and provide for their families. Some of the men have come to me and asked me to help them to secure the dole. Thousands of others have cut their losses and started all over again. All over Australia they have started rehabilitation schemes of their own. The point is that they have not come to the Government for assistance, hut there is one form of assistance which they are hoping for, and which Parliament can give them - that is relief from the taxation load. They are entitled to every assistance - they are amongst the best of our nation-builders, and in the taxes they pay they help to finance our unemployment and rehabilitation schemes.
I support the clause because we are on the right lines in seeking to rehabilitate the farmers in order to encourage general rehabilitation. There can be no real rehabilitation unless ‘ all sections are included.
.- I desire to enter my protest against the inadequacy of the sum of £300,000 which is to be allocated to Tasmania. Discussion on this bill has hinged largely upon the wheat-growers, who are receiving £4,000,000 this year, apart from anything they may receive under this scheme. Tasmania is not a wheat-growing State, but it’ produces a great deal of fruit, and its fruit-growers have been hit harder hy the depression than have the primary producers in any other State. I suppose we shall have to support the clause, because we must take what is given to us. Last year, the wheat-growers received £3,000,000 of public money, this year they are receiving a direct grant of £4,000,000, and, judging by the debate on this bill, it would seem that the bulk of the £12,000,000 is going to them also. That, in my opinion, is unjust, because the fruit-growers are in a worse position than even the wheat-growers. A farmer with wheat-growing land need not sow wheat if he does not want to ; he can leave the land stand idle, or use it for some other purpose ; but the man with an apple orchard must incur the expense of pruning, spraying, cultivating, &c, whether he harvests the crop or not. Considera-tion should be given by the Government to those sections of the primary producers who have never yet received any assistance. Last year, it is true, a small sum was made available for the assistance of fruit-growers in necessitous circumstances, but the need for greater assistance still remains. At the present time, the potato-growers, the apple-growers and the small fruit-growers of Tasmania are worse off than they have ever been. Last year a thousand tons of raspberries were allowed to fall and rot because the growers were not able to harvest them. The growers asked for a government grant of £10,000, but even of this small amount they were given only half. There will be a market for all the primary produce that we can produce as soon as the depression lifts, and we have been frequently told that we have already turned the corner, and that prosperity is just ahead.
– I move -
That after sub-clause 2 the following subclause be inserted: - “(2a.) No grant shall be made under this act to a State unless or until there is in force in the State legislation constituting an authority empowered on application being made to it, and at its discretion, to take action having the effect of suspending, either wholly or in part, the rights of any secured or unsecured creditor of a farmer against that farmer.”.
Under this legislation certain moneys will be handed over to the States to be expended by them, but there is no guarantee that uniform methods will apply to its expenditure. Acceptance of the amendment would not affect the intention of the bill, other than to strengthen it, in that it would empower the State instrumentalities, which will have to implement this legislation, to suspend, either wholly or in part, the debts of the farmers, whether those debts be secured or unsecured. The amendment enlarges, rather than restricts, the scope of the bill. The debt burden of the rural producers is of such importance that the more power we give to the State instrumentalities to deal with it the better will be the chance of rehabilitation. I do not think that at this stage we can agree to writing down the debts. But we can empower the State instrumentalities to suspend them, either wholly or in part. The Royal Commission on the Wheat Industry dealt with this subject in paragraph 518 of its report in the following terms : -
The compulsory reduction of the debts forms the subject of proposal ( i ) of the list in paragraph 504 above. Such a reduction would be a quick and simple method of dealing with the position, but its repercussions on the general credit structure of the country would be considerable and in Individual cases much hardship might result from its general application.
I agree with that view. A suspension of the debt where the asset still remains an asset although portion of it is not bearing interest, will meet the position in a more equitable way. The debate has revealed that members are divided in their opinions regarding the future of many Australian primary industries ; but if we study their history over the last 40 or 50 years we shall see that there have been frequent fluctuations of the price* obtained for world commodities. I should bc loth to think that prices will remain indefinitely at their present low levels. Nevertheless, the climb out of the trough will be slow and arduous. Until we can see light ahead, we can assist by easing temporarily the burden on the primary producers. This subject also is dealt with by the Royal Commission on the Wheat Industry in paragraph 522 of its report -
The suspension of part of the secured and unsecured debt for a period of years forms the main part of proposal (ii) in paragraph 504. Its intention is to restrain those creditors -who might wish to enforce their legal claims to the full during the period in which the farmer is financially defenceless. It necessarily involves interference with the rights of creditors in the same way as these are being interfered with by the moratorium at the present time. To this extent suspension might be said to be unfair to the creditor side of the industry, but it must be remembered that it would safeguard for the time being whatever chance many of the creditors may have of obtaining any satisfaction in respect to the moneys they have loaned or the goode they have provided.
It would appear that the commission favoured the proposal to suspend debts rather than to write them down. It is not my view that there should be a common rule by which the debts of all primary producers throughout the Commonwealth would be suspended. I agree with the royal commission that individual cas.es should be treated on their merits. In both the wheat-growing and the woolgrowing industries it is not uncommon to find neighbours differently situated financially, although their holdings are practically the tune. The less fortunate position of the one compared with that of the other may not be due to any fault of his. The State instrumentalities have had many years of experience in dealing with individual cases, and I want to empower them to suspend either the whole or the part of a debt, whether it be a principal debt or one owing to a secured or an unsecured creditor. I trust that the committee will agree to the amendment.
– I move the following amendment of the amendment -
That all the words after the words “to it” be omitted with a view to insert in lieu thereof the following words “ to take action having the effect of writing down, either wholly or in part, the liabilities of the farmer to any secured or unseured creditor, on a pro rata basis “.
My amendment carries the proposal of the honorable member for Gwydir (Mr. Abbott) to a further stage. If I understand his proposal aright, its underlying purpose is to prevent foreclosures. His amendment is directed towards the suspension of debts with a view to avoiding the removal of farmers from their holdings. The honorable member is not prepared to go to the extent of authorizing the States to write down the debts. In the view of the members of this party, that leaves the matter practically the same as it was, so far as the final adjustment between debtor and creditor is concerned. It may be true that his action will delay the process, and that during the delay circumstances will possibly arise to place the debtor in a more favorable position in regard to his commitments to his creditors. It may also be argued that the honorable member proposes that the States shall not be permitted to take action at what might be considered the most unfortunate period of the farmer’s career. We, on the other hand, hold the view that the position of most of these farmers has reached such a stage that it is physically impossible for them to carry on, whether the action proposed by the honorable member is taken or not. We are buttressed in that opinion by the general conditions surrounding the primary industries to-day, particularly with regard to the export trade. It cannot be denied that the possibility of expansion pf export of any of our primary products is very remote. It looks as if those engaged in primary industries will be confined to limited spheres of production, but no doubt within a few weeks we shall have more definite information from London on that subject. The action of the Government in other directions is having a serious effect upon our secondary industries, which means that the expansion of the home market is also becoming an equally remote possibility. It is evident that the influence of foreign interests in regard to trade treaties and agreements is very powerful. We can see that from what is being done with regard to our foreign trade both with Great Britain and with other countries. In spite of the attempts of the Government to balance one set of interests against the other, and its professions of anxiety for adequate tariff protection of Australian industries we are forced to the definite conclusion that for some time to come there is no possibility of the expansion of either foreign or home markets for our primary products. The time has therefore arrived to tackle this problem in a more definite and concrete manner. In all these matters the psychological aspect has to be considered. If a farmer finds himself facing a hopeless future, he has no encouragement to fight for better circumstances. He falls into a condition of hopelessness, seeing no daylight in front of him, and facing what appear to him to be impossibilities.. He has a cloud of debt hanging over his head, and, in the circumstances, cannot be expected to enter into his daily occupations with any spirit of enthusiasm. There seems to be general agreement in this chamber that the debts will have t’> bc written down, but there is an evident reluctance to face the problem. I cannot understand the reason for hesitation. If it is inevitable, why prolong the agony which must be caused to those who arn affected? In these days of difficulty, the more definite and candid we are in regard to measures which we know must in the end be adopted, the sooner the remedy will be applied, and the better and kinder it is for all sections. This constant postponing of the inevitable also has a bad effect all round. It creates a feeling of depression, and dampens the spirits of the people, until they take little or no interest in the affairs upon which their livelihood ordinarily depends. Sufficient evidence has been forthcoming during the last four years to convince all competent observers that the writing down process is now not only desirable, but absolutely imperative. It is proposed in the bill, according to the evidence we have regarding the intentions of the States, that the writing down process shall apply only to certain unsecured creditors. It will not, therefore, be on the principle that all who are involved will be called upon to share alike. The proposal is that the unsecured creditor shall be called into a meeting and the circumstances of the debtor explained to him. He is then to be given gently to understand that if be is not prepared to reduce his claim by a certain percentage, the prospect of his securing anything at all will become very remote. Therefore, by a process of coercion he is to be forced to reduce his claim in the hope of getting something. If the unsecured creditor is to be treated in that way our argument is that the secured creditor should be treated similarly, and that all the farmers’ debts should be treated on a pro rata basis. If the storekeeper’s claim is to be reduced by 50 per cent, the money lender’s claim should be treated in a similar way. If the local doctor’s claim is to reduced by 10 per cent, a similar reduction should apply to all other claims. We propose a method by which this may be brought about on a basis of justice and equity to all concerned. This Parliament has no right to legislate in such a way as to give privileges to any particular section of financial interests. The moral obligation attached to a debt is just the same whether it is secured or unsecured. If by the process of coercion which I have described a certain set of circumstances can be forced upon the unsecured creditor, the same treatment can be applied by the various States, by means of definite action, to all the parties involved. Judging by the debate, most honorable members seem to feel that this * position is inevitable. If it is, why delay? How much longer is the process to drag on? In the working out of the details, the question of interest must be included, because after all, interest is a debt, and also a continuously growing one. It should not he regarded as of any more importance than a debt to the local storekeeper or any other unsecured creditor. We believe that the application of this principle must be general. If it is to be just and equitable, no other course is open. Whilst it may be argued that the province of the Commonwealth in these matters is restricted, because the States have been called upon to administer ‘the measure, the fact remains that the people to whom the assistance is to be given are taxpayers of the Commonwealth as well as of the States. They are the same people in every sense of the word and carry the same responsibilities of citizenship. If this Parliament believes that they should be helped, then, particularly in this case, when the money is being raised by the Commonwealth and handed over to the States free of interest, it is within the province of this Parliament to lay down definite principles for the strict guidance of the State legislatures in framing and administering their laws. The interest on the loan in the first instance will have to be met by the people of the whole Commonwealth, so that they are vitally concerned as a Commonwealth in the way the money is applied. Interest payments will have to be met, not only by direct taxation, but also by various forms of indirect taxation and in such a way that practically every person will in some form or another subscribe towards the interest on the loan to be raised to render the assistance provided for in this bill. Workers on the basic wage whose incomes have been reduced will contribute, and even those who can barely obtain all the necessaries of life will, by indirect means, have to contribute their share. Thai being so, we contend that no particular privileged class should benefit by the action which the Government proposes to take under this legislation, particularly in view of what we know is happening in New South Wales under the farmers’ relief legislation of that State. If this measure is passed in its present form special concessions will be given to the mortgagee class to the detriment of the farmers, storekeepers and the general public. Practically every one will be called upon to contribute directly or indirectly in order to meet the interest payments of the amount raised and the entire benefit will go to the money-lenders. For those reasons I have moved the further amendment now before the committee. The amendment of the honorable member for Gwydir (Mr. Abbott) deals with certain phases of the subject. He is trying to ensure that farmers shall remain in occupation of their properties a little longer, and that the pressure of the mortgagee will be temporarily eased. The adoption of the honorable member’s amendment would provide them with a little more breathing space, but would not, in fact, relieve them from the responsibilities and difficulties now confronting them.
– The honorable member’s time has expired.
– I support the amendment moved by the honorable member for Gwydir (Mr. Abbott). There must be power to deal with secured as well as unsecured debts, and the States should have this authority. I direct the attention of the committee to the fact that after this measure is enacted, a very large loan will have to be raised on the open market, and we should be very careful in adopting any amendment which might have a detrimental effect upon the raising of such a loan. I should like to go much further in the direction proposed, but many difficulties are in the way. Some of the statements made last night, and particularly those of the honorable member for Fremantle (Mr. Curtin) and the honorable member for Martin (Mr. McCall) may affect the successful raising of the necessary money. The speech of the honorable member for Fremantle in regard to the future was almost one of despair. Honorable members should not lose sight of the fact that we cannot possibly hope to hold this country indefinitely unless the population is increased considerably. That cannot be done by developing secondary industries in capital cities, in four of which practically one half of the population of the Commonwealth reside. I read quite recently that General Smuts said that sleeping Asia is waking from one end to the other, and that at present two-thirds of the human race are on the move. As remarkable developments are taking place in the eastern countries, our main objective should be to develop and populate our empty spaces. To do this we must reduce production costs and fmd overseas markets for our products. In Western Australia, we are trying to fulfil the objective of nationhood, by developing the undoubted resources of that huge territory. Like the honorable member for Fremantle and the honorable member for Martin, I know that grave mistakes have been made, particularly in the expenditure of moneys by governmental authorities. In nearly every instance we find that the estimated cost of public works has been exceeded, and that the objective in view when the money was raised has seldom been achieved. In Western Australia, large territories of magnificent country were to be developed
On an extensive scale, but, unfortunately, many persons totally unfitted for rural work were placed on the land, with the result that large sums were wasted. But the same thing has happened in Victoria and elsewhere. The pronounced drop in export values and the unnecessarily high cost of everything required by the farmer to develop his property have been the principal factors in connexion with rural stagnation. Mr. Wood, an accountant at Perth, stated recently that the cost of developing 1,000 acres in 1913, was £2,600, and that in 1930 the cost had increased to £4,400.
-I assume that the honorable member proposes to connect his remarks with the clause or the amendment.
– The honorable member for Martin (Mr. McCall) apparently overlooks the disgraceful expenditure of £26,000,000 byNew South Wales in constructing an underground railway and a harbour bridge in Sydney. There are numerous other instances in which public money has been wasted by the Commonwealth and by the States, and our national debt thus increased. Therefore, if the arguments which have been advanced are taken at their face value, many people “will doubt whether any good can result from this measure. For instance, if I had no first-hand knowledge of Australia, but had money to spare to put into a loan to be devoted to this purpose, I would, after listening to the honorable member for Martin (Mr. McCall), immediately button up my pocket if I thought even one-third of his criticism was justified.
– What happened to the £7,102,000 spent in settling 1,700 dairy farmers in Western Australia?
– I admit a great mistake was made in Western Australia, but similar criticism may be applied to soldier settlements in Victoria and New South Wales. These schemes resulted in tremendous losses, due to many causes, the principal being, perhaps, that the land was purchased at inflated values. However, similar failures were experienced by all the States just after the war.
– Does not the honorable member think it right that those losses should be borne in mind?
– But the situation should not be exaggerated. The honorable member sought to make us believe that any further money expended in a proposal of this nature would be sheer waste.
– No, that was not my argument.
– Well, then, I can only conclude that there was no sense in any remark made by the honorable member. The failure in Western Australia was certainly a serious one and had it not been for the big rise in the price of gold the State would to-day be practically bankrupt. Huge sums are being spent in gold-mining and that industry is keeping Western Australia fairly prosperous. However, practically every country in the world depends for its prosperity mainly upon its farming, and the failure of agriculture in Australia would result in the collapse of the nation. At the Rome Agricultural Conference, it was pointed out that nearly every country in the world considered that the prosperity of its farmers was essential to its national wellbeing. The same conclusion has been arrived at by the Royal Commission on the Wheat Industry. This commission held that the collapse of the prices of any single commodity had not had so serious effects as had been the case in the collapse of wheat prices. Two reasons for the tragic plight in which the wheat-farmer of Western Australia finds himself to-day are, first, the serious collapse of prices and, secondly, the enormous cost the Western Australian wheat-farmer has had to pay for all his requirements. It has been estimated that in 1931-32 the farmers of Western Australia were paying annually from £8,000,000 to £10,000,000 more for their requirements than they would have had to pay had they been able to buy on a free market. The effect of this upon the producer was that, instead of being able to meet the position when prices fell, he found that any reserves he might have had had been exhausted, owing to the high cost of his requirements. Such are the circumstances which have made it necessary for the Commonwealth Government to bring in a measure of this kind but I wish to emphasize that to enable the farmer to carry on we must also have a compulsory pool or provision for a home consumption price. With a high tariff policy this is surely a measure of justice to the farmer. I regret that I did not have an opportunity to speak on the second reading of the bill last night. I had prepared a lot of information with which I hoped to give an effective answer to the statements made by the honorable member for Martin. However, the honorable member has now admitted that his remarks contained no sense whatever.
– I support the amendment moved by the honorable member for West Sydney (Mr. Beasley) on the amendment moved by the honorable member for Gwydir (Mr. Abbott). Eventually, something on the lines proposed by the honorable member for West Sydney will have to be done in Australia before the primary producer can he placed on his feet. We have loaned a considerable sum of money to the farming industry. The amount provided in clause 6 of this bill deals only with one class - the creditor class farmer. There is nothing revolutionary in the proposal of the honorable member for West Sydney. Similar proposals have been made by governments elsewhere. Debts owing to the mortgagees have been written down in Brazil in the coffee industry when it is in no worse a plight than that of our own primary industries. Even in New Zealand a government, which is not a Labour government, recently introduced a Rural Finance Adjustment Bill to achieve a similar object. That measure sought to encourage the settlement, by voluntary arrangement, of debts as between the farmer mortgagor and his creditors, and the procedure to be adopted seeks to have such matters adjusted between the farmer mortgagors and their creditors whether the latter be secured or unsecured. Irrespective of the fate of that measure, it was the original intention of the Government of New Zealand to cover secured as well as unsecured creditors. If the farmer loses his equity in his property the unsecured creditor is placed on a very unfair basis indeed compared with the secured creditor. Even the law in New South Wales dealing with adjustments of this kind does not deal as effectively as it might with the position; . it leaves the secured creditor alone. Let us take the case of a wheat farmer who, say, has owed a debt to a bank for fourteen years. I claim that in making payments over that period the farmer has paid in interest alone the equal of the total amount loaned to him. It may be said that if a mortgagee in the future were asked to loan money on land the fact that his equity had been written down would make him very diffident indeed about supplying a fresh loan. But already there has been a general writing down of creditors in Australia, and we should be lacking in courage if we do not go further and follow the course adopted in such countries as New Zealand, Brazil, Canada and others in dealing with this situation: It is all very well for honorable members from city constituencies to complain about the large amount of money which has been granted to primary industries. I remind those honorable gentlemen that they would not be in the city at all but for the primary industries. I am mentioning Western Australia’s outlook in this matter, but it is only because I happen to be familiar with the real conditions in that State, as other honorable members are intimately acquainted with the conditions in their respective States. In Western Australia up to £20,000,000 has been spent from State revenue in farming districts to supply those districts with railways and water supplies. Yet out of 12,000 farmers settled, 2,000 have, in recent years, abandoned their holdings.
– The honorable member for Swan (Mr. Gregory) ought to be told that.
– -The arguments used by the honorable member for Swan were absolutely sound, and I endorse every one of them. The point is, that if the farmers are forced off the land the £20,000,000 worth of railways and water supplies will be valueless so far as the metropolis is concerned. Upon what does the city of Perth depend? It is dependent upon the timber industry to a slight extent, upon farming almost entirely, and upon the mining industry, which has been largely responsible for the solvency of the State and, fortunately, has experienced a much-needed revival.
– They are all primary industries.
– That is so. _ Almost one half of the product of the industry that we are now discussing has been hypothecated for the payment of last year’s interest. I am not finding fault with banking institutions and other investors in these industries and saying that they should be actuated by philanthropic motives. The point that I make is that the man who went into the wilderness to open up virgin country has devoted the whole of his capital, time, and labour for years to an attempt to stabilize the industry and it is unjust and inequitable that he alone should bear the reduction of the equity in the wheat industry. Those who live in the cities are primarily dependent upon these farmers, whom the existing conditions are likely to force off the land. One can recognize a farmer immediately one sees him in the streets of the city. He gets very little of the good things of life. It is ali very well for those who carry the fashion of Bond-street to express opinions concerning the primary producers. Let them visualize what it is to li ve under similar conditions, eat similar food, endure the laborious toil, moil and sweat that the farmer has to meet, and then, at the end of a lifetime, bc faced with bankruptcy.
– I take it that the honorable member proposes to connect his remarks with the clause.
– I am proposing to do so. If the Government has made one mistake during this period of the session, it is in connexion with the lack of opportunity that has been given to members to discuss this important measure. Some honorable members who remained in the chamber until an early hour this morning were deprived of the opportunity to speak upon it. I am in favour of the amendment that has been moved, and of a later one that has been foreshadowed. If the experience of the last few years is to continue, I am afraid that the proposed scheme will not have the effect of keeping the farmers on the land.
– The Acting Prime Minister (Dr. Earle Page) stated in his second-‘ reading speech that each State would have to prepare its own scheme, and that the Commonwealth would approve of any scheme that conformed with the fundamental principles of the bill. I understand that while the Governments of Queensland and several other States have not submitted definite schemes, they have indicated to the Commonwealth the desire that this grant should be made available for more than merely debt adjustment. I believe that the Government of Queensland desires that a portion of it shall be allocated to the compounding of debts. The manager of the Agricultural Bank in that State has said that such a proposal does not involve a very big outlay. It is also considered that advances should b« made to farmers to enable them to pur chase stock and improve their properties and that local associations or district councils should be assisted to make improvements for the benefit of the community, such as water supply schemes, road making, and the like. The point on which I desire to be quite clear is, whether the State of Queensland, or any other State which has not submitted a definite scheme, cannot participate in the proposed distribution unless or until a scheme which conforms to the fundamental principles of the bill has been submitted to and been approved of by the Commonwealth.
.- I support the amendment moved by the honorable member for West Sydney (Mr. Beasley). The debt structure of the farmers is a matter which this country must meet right now. The Commonwealth is merely proposing a palliative, and is accepting no responsibility, because it realizes that the scheme will be a failure. When that eventuates it will say “We provided the money, but the States did the work, consequently the responsibility is .theirs, not ours.” The scheme put forward by the StevensBruxner Government in New South Wales safeguards the mortgage companies and the banks, but in no way assists the farmers. It is a quasi bankruptcy act which that Government has passed. As the honorable member for East Sydney (Mr. Ward) said last night, the contention of the Commonwealth and of the Wheat Commission is that those whose operations are uneconomic should be put off the land, and only those should be assisted who have a possibility of carrying on successfully. In New South Wales the conditions are different as it is only the uneconomic cases with which the Government of that State is dealing. The farmer who has the alternative of coming under this scheme or of becoming bankrupt will say, “I shall go to the quasi bankruptcy court first, and see what I can get there.” It is the man who is down and out who should be assisted, yet the Acting Prime Minister (Dr. Earle Page) says that the bill is not designed to assist him. To use a vulgar expression, the Commonwealth is “ passing the buck “, and the farmers will ultimately be penalized.
In regard to the compulsory writing down of debts, I listened attentively to those who took part in the debate yesterday. I am sure that the honorable member for Flinders (Mr. Fairbairn) spoke differently from the way in which he would have spoken in 1931-32, when the greatest man in this country advocated the writing down of interest, and went oven further and said that there must be a writing down of indebtedness. That proposal was then described as repudiation. The honorable member for Flinders now says that pressure should be applied to the secured creditors to compel them by writing down some of their debts to corns to the aid of the farmers. The honorable member for Echuca (Mr. McEwen) has said that some form of compulsion must be adopted to induce mortgagees to write down their indebtedness. In 1931-32 the Honorable 1. T. Lang was regarded as a repudiationist because he appealed to the people of this country and overseas to deal with the problem by the writing down of interest and indebtedness. Dr. G. L. Wood, of the Melbourne University, recently stated the case for a compulsory writing down of indebtedness in the following terms : -
Everywhere we see obsolete equipment crying out for retirement. Everywhere, too, we see the absurdity of trying to embalm the dead and protect them with gigantic pyramids of debt represented by the book value of dead assets. The investor cannot take continuously from an established industry profits which are then invested in new industries, and expect both old and new capital to go on reproducing indefinitely. Sooner or later he has to admit the loss of earning power of old capital, and to accept a composition or .conversion which registers the diminished earning power of Slink capital.
The present scheme will not assist one iota towards the solution of the problem. The indebtedness of the farmers will still exist, and requests will be made for further assistance in succeeding years. The honorable member for Gwydir (Mr. Abbott) stated, in the bulletin published by the United Country party in 1931-32, that no responsible government and no decent person in the community would stand for the writing down of interest, yet he now complains that he himself has been charged exorbitant interest by a financial institution, and that the question of interest must be seriously tackled. This is a remarkable change of front. Further progress along these lines will have to he made until eventually honorable members opposite see fit to adopt the policy enunciated by our leader during the last election campaign. There must be a compulsory writing down of the indebtedness of the farmers and of other businesses in this country.
– We shall shortly see what the people of New South Wales think of that.
– Every section of the community in that State is being bribed in view of the impending election.
Let me deal with the case of the unsecured creditors. Everyone knows that country storekeepers stand behind the farmers throughout the year. The storekeepers will probably get about 2s. in the fi out of any composition of debts consequent upon the passage of thiB bill, whereas the secured creditors will get a full 20s. in the £1. Every one at all acquainted with the real facts of the case knows that the storekeepers have carried the farmers for the last year or two; yet honorable members of this committee who are aware of this fact apparently intend to pay no regard whatever to the welfare of these individuals, but to take every care that the banks and financial institutions are fully protected. We contend that this money should be disbursed on a pro rata basis and that the banks and mortgage companies should come in on the same footing as other creditors, making a similar sacrifice in every respect. Unless the interests of the country storekeepers are protected serious reactions will fall upon the farmers, for next time farmers whose debts are compounded go to the storekeepers for credit it will be refused. The storekeepers will say that, having in the past trusted the farmers without making full inquiries into their financial position, and having lost heavily in doing so, they do not propose to take a similar risk. Another serious reaction of the failure of this committee to protect the interests of the storekeepers in country towns will undoubtedly be that the cost of living in such localities will increase, for the storekeepers, having lost heavily in respect of the indebtedness of farmers, will be obliged to increase the price of their commodities to other people in their locality in order to recover their losses. The effect of this, in turn, will be that local townspeople will divert their trade to city firms, chain stores will be established, and the lot of the country storekeepers will become very hard. All this could be avoided if honorable members would provide in this measure that unsecured and secured creditors, that is, generally speaking, the country storekeepers, on the one hand, and the banking and financial institutions, on the other, shall participate in the disbursement of this money on a pro rata basis. We all know very well that the big monied interests of this country will not lend £1 to customers on mortgage unless it is covered by assets to the extent of £3 or £4. Like the honorable member for Swan (Mr. Gregory), I should have been glad of the opportunity to follow the honorable member for Martin (Mr. McCall) in the second-reading debate, for that honorable gentleman spoke quite truly when he said that there had been a considerable writing down of assets in connexion with our secondary industries. I should probably have not reached the same conclusions as the honorable member, but on the whole, his statement of the position of our secondary industries was logical. Both our primary and our secondary industries must be developed on harmonious lines. They must be encouraged together. Dr. Mannix spoke wisely at Lismore last week when he told the farmers that unless they were willing to encourage the development of the home market their position in respect of the overseas market would become worse instead of better. He also said that they should not run away with the idea that secondary industries were not necessary in Australia. Unless secondary industries are developed there will be a very poor local market for our butter, sugar and other primary products. The home market for wheat should also be stabilized. If that were done, we could then throw upon the markets of the world our surplus wheat and accept any price offered for it.
– Does the honorable member think that it would be fair to dump our surplus products on the world’s markets ?
– If we were living in a pure and undefiled world, such as both the honorable member and I hope to see some day, it would be wrong to do as I suggest; but when the doors of almost every country are being closed against our products we are entitled to put our own house in order, provide for our own needs, and then throw our surplus products on the overseas markets and accept any price offered for them.
– The honorable member’s time has expired.
– We have under notice at the moment three proposals for the allocation of this money among the States: First, that provided for in the clause as it appears in the bill; secondly, that indicated in the amendment of the honorable member for Gwydir (Mr. Abbott) ; and, thirdly, that advanced by the Lang Labour party. I am not in complete agreement with the allocation proposed in the bill. I direct the attention of honorable members to the following figures indicating the percentage production of various products of South Australia in relation to the Commonwealth, in the years since the depression commenced: -
In spite of those figures it is proposed that South Australia shall receive only 13 per cent, of the total amount to be disbursed. It appears to me that the statistical authorities who advised the Government in connexion with this matter were influenced by some considerations that should not have affected the matter, or else by factors unknown to us. I am fairly well acquainted with the position of agriculture throughout the Commonwealth generally. [Quorum formed.’] I do not think that we can, by any stretch of the imagination, consider that the proposal now under notice is the final step that we shall have to take in the process of agricultural debt adjustment during the next year or two. Our difficulties, at the moment, are increased by reason of the conflicting interests that must be reconciled. Although I represent a farming community, I must say that I am not at all sure that the proposed method of distribution, as between secured and unsecured creditors, is equitable. I take the view that some unsecured creditors, especially since the beginning of the depression, have done as much as, .and in some instances, a great deal more than, some secured creditors to keep farmers on the land by providing them with the sinews of production. But, unfortunately, the complexities of the situation, and the variety of circumstances to be faced, make it extremely difficult for this Parliament to lay down any hard and fast rules in regard to debt adjustment. I have had some experience of debt adjustment processes. The first debt adjustment measure placed on the statute-book of any State, was that introduced by the Butler Government in the South Australian Parliament, and passed in 1929. At that time South Australia was suffering from the third successive year of intensified drought conditions. This was before the prices of primary produce crashed so disastrously. In view of my experience, I have no hesitation in saying that the proposal of the Lang Labour party would be quite inequitable. I do not consider that the honorable gentlemen who comprise that party are competent to deal with a matter of this kind. The proposal they have put forward is, in effect, that one ‘body of money lenders in this country should subscribe money to a government loan to be used to extinguish the debt of another body of creditors. No sane company of people could possibly agree to such a proposal.
– The honorable member apparently believes that the storekeepers should make all the sacrifice.
– I know too much about the storekeepers to accept, as gospel, all that has been said about the country storekeepers by some honorable members. The country storekeepers have not carried the farmers during the last five years, for they have been carried as the result of various government schemes for granting them relief. The storekeepers’ commitments in respect of farmers have, in many cases, been met in cash fairly regularly each quarter by the Crown authority set up in particular States for that purpose, either out of money made available through government loans or out of the proceeds from the sale of the preceding crop. I know that a considerable amount of money is owing to some country storekeepers in respect of transactions of several years ago in some districts; but I also know that in some country districts in South Australia the number of farmers who owe money to country storekeepers could be counted on the fingers of one’s hand. Unfortunately, however, this is not the case in the wheat-producing areas. A good deal of twaddle has been talked about what the country storekeepers are doing for the farmers at present. The fact is that quite a number of private mortgagees have done a great deal to help the farmers in the way of debt adjustment without any kind of compulsion on the part of governments. These individuals have faced the circumstances that have arisen and, of their own free will, without any coercion whatsoever have written down, not only debts due to accrued interest, but also the amount of the principal of secured debts as well. This has been done in a fairly general way and not only in isolated cases. Members of the Lang party talk about what the Government is doing to secure the rights of the banks and big financial institutions, but I can assure honorable members that the Banks have also had to take their share of the losses incurred by the agricultural and pastoral industries. After the war, every one looked at things through rose-coloured spectacles, and the banks lent money on securities which appeared good at the time, but when the crash came those investments turned our very badly.
If the people represented by the honorable member for Martin (Mr. McCall) do not want this measure, it does not matter twopence to the farmers. All we are providing for here is that certain unsecured creditors are to be paid something out of loan moneys raised by the Commonwealth Government in respect of debts which, in the ordinary course of events, they would never be able to collect at all. If the farmers who owe these debts were forced into the insolvency courts, the creditors for whom the honorable member pleaded would not get a farthing. The Commonwealth Government, by an act of grace, recognizing that it owes a moral obligation to these people, proposes that they shall be paid 5s. in the £1. “When I say that the Government recognizes that it owes the farmers and their creditors a moral obligation, I refer to the joint appeal circulated by the Commonwealth and State governments to the farmers to grow more wheat so as to provide in London, by the sale of this wheat, credits out of which our interest commitments might be met. The farmers responded to the appeal, and many of them became insolvent as a result.
– Whose fault was it that they went insolvent? The Scullin Government provided a guarantee of 4s. a bushel for all wheat grown, but the Country party in the Senate defeated the measure, and the honorable member knows it.
– The Scullin Government had not the power to give a guarantee of 4s. a bushel for wheat, and it lacked the courage to enforce its own legislation in this respect. The Scullin Government either deceived itself, or deliberately deceived the farmers. It was as the result of a joint appeal by the Commonwealth and State governments that the farmers were urged, not only to grow more wheat that year, but also to fallow more land and clear more scrub. It was pointed out that after a drought good crops generally resulted, and the farmers were told that they would obtain an ample return from their outlay. I am not blaming the then Prime. Minister (Mr. Scullin) for what happened. He did the best he could according to the light available to him at the time, and the fact that the market went against the primary producers was not foreseen by him any more than it was foreseen by the trading and financial interests. If the banks and financial institutions could have foreseen the drop of prices they would have called in their advances to the farmers long before, and would have refused to advance further sums on rural security. It is not right to saddle any particular party with the responsibility of what happened, and I do not attempt to do so. The appeal to grow more wheat was made on behalf of all parties, and the measure we are now considering is an act of restitution to those persons other than farmers for the efforts they made to keep the farmers solvent.
I regret that the honorable member foi Martin should have made an attack in this House on the rural industries. It will do no good. We should try to bring about a reconciliation of city and country interests rather than set the one against the other. I recognize the rights of certain creditors, just as I recognize the rights of certain farmers. Some farmers are in such a position that they cannot be saved. They were greedy during the good times that they bought up their neighbours’ land at ridiculous prices; now they cannot meet their obligations, and they must take their gruel.
– The honorable member’s time has expired.
.- There seems to be a fairly unanimous opinion among honorable members who have spoken to this measure that there should be some form of debt adjustment. We have before us now three propositions : First, there is the bill itself ; then there is the amendment of the honorable member for Gwydir (Mr. Abbott) who wishes to prevent foreclosures; and then there is the amendment of the honorable member for West Sydney (Mr. Beasley), the effect of which is that all creditors, secured and unsecured, shall make equal sacrifices. The chief difficulty which I foresee under the Government’s proposal is that, although £12,000,000 of Commonwealth money is to be handed over to the States for the relief of rural indebtedness, the States themselves lack a common policy. The Acting Prime Minister (Dr. Earle Page), when introducing the bill, said that some farmers were in a position to look after themselves, but that there were others on marginal lands and dry areas whose position was se desperate and whose outlook was so hopeless, that it would be useless to attempt to help them. Nevertheless, under the Farmers Relief Act of New South Wales it is this very class that is being catered for, and it is their debts that Commonwealth money will be used to pay. The farmer in New South Wales who comes under the Farmers Relief Act must forfeit all control over his property, and must sign himself outside the provisions of the moratorium act. He practically puts himself in the hands of a receiver, and carries on as a labourer on his own farm. No farmer who is in a position to help himself would agree to go under that act. An effort should be made to secure some agreement between the policies of the various States in regard to debt adjustment.
The Acting Prime Minister quoted various examples of how the debt relief scheme is operating in New South Wales. No doubt they were hand-picked examples, but even from them it is evident that the mortgagees, who are probably banks or big financial institutions, have made no sacrifices at all. All the sacrifices have been made by unsecured creditors, yet the honorable member for Barker (Mr. Archie Cameron) tried to show his superior knowledge of happenings in country districts by saying that the storekeepers were now doing nothing to help the farmers. The Acting Prime Minister, in reply to an interjection, admitted that most of the unsecured debts were due to storekeepers. As a matter of fact, there is not much danger at the present time that the farmer who is in financial difficulties will be immediately dispossessed. If the banks and financial institutions embarked on a general policy of dispossessing farmers because they could not meet their commitments there would be such a flood of properties on the market that no price would be offered for them at all. The interests of the mortgagees are best secured by keeping the farmers on their properties as caretakers. The position of the unsecured creditors, however, is entirely different. The storekeepers have stood by the farmers in the hope that they would be able, at some time or other, to meet their commitments to them; the farmer’s word was his bond, yet they are the only creditors who are asked to make any sacrifice.
– They took the risk.
– iSo did the man who lent money on mortgage.
– Had it not been for those who lent money on mortgage most of the farmers would never have been on their farms at all.
– And if the storekeepers had not given credit the farmers would have been forced off their holdings whether the banks dispossessed them or not. After all, the farmer does not produce all the food or clothing he needs, or his other necessities, during the period while he is waiting for his crop. Those are supplied to him at that critical time by the storekeeper. In the proposed compositions the man to whom the farmer owes the major portion of his debt makes no sacrifice, but the person to whom he must in future look for credit accommodation between crops, is offered - in some cases only 2s. 6d. in the fi. The Leader of the Opposition (Mr. Scullin) pointed out that in South Australia if the application of a farmer who seeks to come under this scheme of debt adjustment is rejected because of his hopeless position, the fact is advertised in the Government Gazette. Not only does he fail to get assistance from the Government, but the fact that he is unable to meet his commitments is also advertised. What hope has he in the future of securing that credit which is indispensable to him to provide for the food he does not produce and the clothing that he needs? He i3 advertised far and wide as a defaulter.
– He is nothing of the kind.
– If the honorable member for Barker (Mr. Archie Cameron) were a storekeeper and became the victim of one of these compositions, having, as an unsecured creditor, to accept 2s. Gd. in the f from the farmer, what would he do if the farmer immediately afterwards asked him for an advance of foodstuffs or clothing? Of course he would refuse it. The farmer is secured on his farm because it does not pay the banks to drive him off. They have either to put a caretaker in possession and pay him, or flood the market with farm lands.
– They cannot get rid of the farms that are back on their hands to-day.
– In these compositions, where the great bulk of the sacrifice is made by the unsecured creditor in the shape of the storekeeper, the future credit of the farmer with the storekeeper is ruined, and it must be remembered that the storekeeper is indispensable in many ways to the farmer. The honorable member for Barker, in criticizing the amendment of the honorable member for West Sydney (Mr. Beasley) asked “ How can you go to the money lender and ask him for money for the new loan if you call on him to make a sacrifice when the debt adjustment is taking place?”
That apparently is the only reason why the honorable member for Barker is not in favour of the major creditors, in the shape of the banks, making a contribution.
– The honorable member has that entirely wrong.
– The honorable member for Barker made his attitude clear in denouncing the amendment of the honorable member for West Sydney. He definitely asked how we could force the financial institutions to make sacrifices in these debt compositions on the one hand, and then go to them for money to make the debt adjustments.
– That is not what I said.
– I heard what the honorable member said. His attitude is typical of the Government he supports, and it is a striking indication of the necessity for nationalized banking. The whole community is too much in the hands of private financial enterprises. This Parliament has to cringe and crawl and pass legislation which is not equitable - legislation which, in this instance, forces a sacrifice on the unsecured creditor and not on the secured creditor. Because the secured creditor happens to be a banking institution, we are afraid to ask it to make a sacrifice. We have to go to it afterwards to beg it to advance the money necessary to make the proposed adjustment from which it, itself, will be the principal beneficiary.
– On a point of order, I submit that the honorable member is speaking to clause 7, and not to clause 6.
– I ask the honorable member to confine his remarks to clause 6.
– The condition which the honorable member for Gwydir (Mr. Abbott) seeks to bring about, I think, already exists. There is in the various States moratorium legislation which prevents the eviction of the farmer. After all, all that the honorable member seeks in his amendment is security of tenure for the farmer, and not relief from debt. All honorable members say they believe in debt adjustment; the only question to be decided is whether the adjustment shall be equitable, whether the secured and unsecured creditors shall make pro rata sacrifices. If honorable members agree to that, if they believe that the banker as well as the storekeeper should make a contribution to the solution of the difficulties of the primary producer, they must vote for the amendment of the honorable member for West Sydney. All that his amendment postulates is that, if there is to be a debt adjustment - and we all agree that there should be - then the sacrifice involved in it should be borne equally by all creditors, whether secured or unsecured.
– I should not have spoken but for the remarks of the honorable member for Swan (Mr. Gregory) about filling up the empty spaces. Last week I endeavoured to criticize the honorable member severely for the manner in which he treated the sugar question, which he evidently did not understand ; but, on this occasion, I agree with him in many of his conclusions, although not in all. In discussing the amendment of the honorable member for Gwydir (Mr. Abbott), I wish to refer particularly to the authority to be set up. None of the speeches to which I have listened has been comprehensive enough, although that of the honorable member for Flinders (Mr. Fairbairn), and that of the Leader of the Opposition (Mr. Scullin), seemed to get closest to that ideal. The whole of Australia now needs overhauling by an economic survey, based on soil and climate, which will eventually lead to regional development, getting back as near as possible to where we should be in primary and secondary production. This means maximum activity at the source of primary production. That is the only way to get out of the slough of despond which has been portrayed by honorable members on all sides during the last few days. How then, is that to be done? A .great deal depends on the authority which is set up under this legislation. The Leader of the Opposition endeavoured to solve the problem yesterday. He said that the farmer had equal rights with everybody else; that we should admit that he had those rights, and then set about the business of effecting an improvement. Let us see how this is to be done. He spoke of living areas, and was corrected by the honorable, member for Flinders. The honorable member for Flinders, in that regard, was quite in error and the Leader of the Opposition was to a great extent correct, but both were wrong in certain fundamental respects. According to the Leader of the Opposition many people are in bad circumstances because they own too much land, but many more ‘are suffering because they have too little. Much of my time has been occupied, not in putting people on the land, but in advising them when they go on it. In fact much trouble has been brought about by “ putting “ people on the land instead of allowing them to “go” on it - and assisting them afterwards - which is a vastly different thing.
The big subject which will come under the purview of the amendment of the honorable member for Gwydir is that of living areas. What is the authority which is to be set up? It is in the choosing of that authority that the House is going to make or break the good work that it is endeavouring to do in the expenditure of this money. It is the expert’s job to decide what a living area is. Uneconomical holdings have been the great bugbear of Australian life. Some are too small and some are too large. The living area decides everything. In the land of distant horizons from which I come, we have found that the living area can be fixed by expert knowledge and economic survey. In that way it becomes of real use to Australia. Unless this problem is gone into and studied closely, the holdings may become not an asset, but a drug on the market. I draw an analogy between a hospital and the allocation of land. A hospital is never really satisfactory in Australia if it has more than from 250 to 300 beds. It is unweildy. So, if you add to your land more than the area that you can work, it gradually becomes not an asset, but a drag on you and a drug on the market, because the relative as well as the actual costs ‘are increased unduly. You are made poor by having too much land. It is essential that the authority to be set up shall consist of trained men who can make a real economic survey of the whole of Australia, with the idea of using only those areas which are ripest for settlement, instead of allowing people to sprawl all over Australia, going out and wasting their energy in futile efforts and returning with saddened hearts. After deciding on the areas which are ripest for settlement, we must endeavour to keep our activities as near to the sources of primary production as possible.When that authority is being appointed to carry out this work, the true spirit of federation should be kept in view, helping the smaller andless fertile areas and putting the burden on those which have been richly endowed by nature at the start. In that way we shall have a glorious opportunity to be truly federal in our activities, instead of perpetrating what appears to he now merely a glorious farce of the first magnitude.
.The amendment before the committee deals with a fundamental aspect of the measure, namely, the distribution of the money. However, the question arises as to whether, even under the amendment, all the people who might desire to participate in the benefits of this legislation will be permitted to do so. The Government proposes to provide an amount of £12,000,000, but it makes no provision in this measure to ensure that every debtor who is eligible shall be free to participate in this grant; that is to depend ultimately on the goodwill of creditors. Any fair-minded honorable member will agree that it is quite wrong to leave the matter stand there. The amendment moved by the honorable member for Gwydir (Mr. Abbott) seeks to make the method of distribution more equitable. He proposes that provision shall be made for suspension of part of the liabilities, but the amendment proposed by the honorable member for West Sydney (Mr. Beasley) goes further in suggesting the establishment of an authority clothed with power to write off debts that would be recoverable in the event of immediate liquidation. I hope that that suggestion will not be favoured by the committee. On the other hand, the amendment proposed by the honorable member for Gwydir does not go far enough. I hold that the authority he proposes to establish as a condition precedent to the distribution of this money, should be clothed with power equivalent to that given to the Board of Review in Canada and, to a degree, to a similar authority in New Zealand. In other words this authority should be clothed with power to review the debt position of the farmer and to order a writing off of that portion of the debt which it considers would he irrecoverable in the event of liquidation.
– That follows the lines very closely of the amendment moved by the honorable member for West Sydney.
– No ; the honorable member for West Sydney proposes that this authority should he clothed with power to write off debts that would be recoverable.
– That is not so.
– The honorable member does not understand the amendment moved by the Leader of his party. The Minister who introduced the legislation into the Parliament of New South Wales which is to implement this bill, has said that if the debtor farmer makes application under the debt adjustment scheme it will be necessary for him to come under Part I of the New South Wales act. This part provides exactly what the honorable member for Gwydir suggests. However, those are conditions which we should not be content to see applied to our rural debtors. Under that legislation before a man can participate in this grant he must forfeit the whole of his right to handle his own affairs; he must, for instance, immediately come under the supervision of certain officials who, by the way, will draw as remuneration 3 per cent. of the gross proceeds from all sales on the farmer’s behalf, have authority to receive all money from the sals of produce, and also to make disbursements in the payments of accounts of the debtor and, in addition, will actually have authority to sell some of the assets of the farmer. The applicant may be kept subject to these conditions for a period of six years. That is what will happen under this measure in New South Wales if the amendment moved by the honorable member for Gwydir (Mr. Abbott) is carried. I do not think this is fair, and I regret that I have not had an opportunity to support some more equitable provision which would strike a happy medium between the amendment moved by the honorable member for Gwydir and that movedby the honorable member for West Sydney (Mr. Beasley). I repeat the suggestion I made during the second-reading debate that there should be established in all States, as a condition of their participation in this grant, some authority clothed with power to investigate the position of rural debtors, and, if necessary and desirable, order tie writing off of that portion of debts which, in theevent of the Government refraining from granting this assistance or in the event of immediate liquidation of the farmer’s affairs, would be irrecoverable.
.- I support the measure, although I am not entirely satisfied with the allocations. I do not suggest that the States could give a hard and fast estimate of the allocations they would require in order to put this rehabilitation scheme successfully into effect. But in limiting the loan money it has made available, the Government is acting wisely, inasmuch as if unlimited cash were made available it would be much more difficult for the States to make such compositions of debts as might be found necessary. The Government is also justified in making only tentative allocations with the idea of reviewing the position later and then making such allocations as experience may show to be necessary. To arrive at some intelligent basis on which to determine the allocations between the States, we have, first of all, to decide who are the people it is expressly desired to help under this measure. During the second-reading debate, we heard a good deal of criticism of the actions of various governments in the past with regard to land settlement. In this respect, Australian governments are faced with a problem peculiar to this country. We are, as it were, pioneering the development of a certain class of country in regard to which we have no experience to guide us. If it is any consolation, we have the knowledge that all countries in the world have made mistakes in connexion with rural industries. This fact is evident from the condition of primary producers in other countries. However, that does not help usin our own difficulty. We should examine this position in the light of our own experience, however limited that may be. This bill is designed to make money available with the object of enabling efficient farmers to work their farms economically. It has been suggested that past governments would have shown greater wisdom had they obtained technical advice to guide them. Whatever advice they might have obtained, recommendations would necessarily have been based on some standard of price values. At no time in the past could experts have anticipated the huge and continual fall in the price levels of our primary products which has been experienced in recent years. Consequently, even if the Government had had the best advice available in the past it could not have undertaken a developmental scheme that would have successfully anticipated the difficulties which, to-day, confront, not only Australia, but other countries also. In view of this fact, it would be very difficult to allocate the blame for any omissions in governmental policy in the past.
It is going to be extremely difficult to determine just which farmers should be assisted under this bill in order that they might be enabled to continue in production. I am not one of those who holds that present price levels will continue; consequently, I believe we have to try to assess the prospects. I am not as pessimistic as the honorable member for West Sydney, whose amendment is based entirely on the view that present values will obtain for a long time. The factor which influenced him in that respect was that at the present time we are experiencing difficulty in retaining the markets for our primary produce. Up to the present, however, we have not accumulated any surplus of primary products in this country. So far we have been able to dispose of all our products, though sometimes at very low prices. Furthermore, there is every possibility of our developing new markets. I am not suggesting that we can retain our old markets in Europe or increase our market in Great Britain. This possibility depends entirely upon the internal policies of the countries with which we deal. But there are avenues which have already been opened and which are capable of being increasingly exploited. For instance, during the depression we largely increased our production of wool ; if we had been pessimistic, as some honorable members are, we would have hesitated to expand that industry. “We have been able to sell our wool; Japan has come into the market and has taken this commodity in increasing quantities, and I believe will continue to do so.
– And Germany to-day is taking less.
– The increased sales to Japan have compensated us for that loss of German trade. This year we have a huge wool clip, and I do not think any honorable member will suggest that we shall be unable to dispose of it. In recent years we have also been able to open up new markets in the East for our wheat. We have sold considerable quantities there; this year we sold more wheat in the East than last year. Therefore I will not admit that we have exhausted the possibilities of developing markets, and thus I am not as pessimistic as the honorable member for West Sydney. It is for this reason that I oppose the amendment moved by the honorable gentleman.
During the debate last night one honorable member put forward the plea that this money should be utilized for composing debts, using a goods standard of money; he showed that values which at one period were low were doubled subsequently. We have to find some basis on which we can allocate this .money fairly throughout the rural industries. The suggestion of a goods standard as a basis for doing this will no doubt meet with the general approval of debtors at the present time, but I ask the honorable member- who propounded this idea whether he thinks debtors, when prices rise, will make good to their creditors any loss which the latter may have suffered through writing down when values were low. I suggest that they will not. Therefore, holding ‘the view that prices definitely will rise, I favour the temporary suspension of indebtedness to enable prospects to be realized.
It was stated last night that certain uneconomic areas had been opened up and developed. It is very difficult to determine which areas are economic and which uneconomic. If we examine the position in practically any area we shall find that some of the farmers have done exceedingly well, and have no financial embarrassment, showing clearly that success or failure is largely dependent upon the human element even in areas that are regarded as unsuitable for wheat-growing. Consequently, it will be extraordinarily difficult for the constituted authority to decide what areas are definitely uneconomic, which should be diverted to other production, and which should revert to their natural state. Probably many mistakes will be made and a great deal of injustice will be caused. I admit that it will be futile in many cases for the States to attempt to bring about rehabilitation. The matter is complicated by the fact that distress is not confined to marginal areas, but exists in some of the best agricultural districts in Australia. This consideration leads to the assumption that it is not the quality of the land, but some other factor which is responsible for the present position. Therefore, the human element will be of vital importance in the application of the scheme.
Strong exception has been taken by honorable members opposite to the means that are to be adopted to induce creditors to assist in the attainment of the desired object. One honorable member has objected to the practice of governments of writing-off a large amount of their indebtedness. Action in this regard should be dictated largely by the circumstances surrounding the incurring of the indebtedness. Prom time to time governments have charged inordinately high prices for land upon which they have effected settlement. The area that I represent has been developed within the last 20 or 30 years. At the inception of its development the Government allotted the land at prices ranging from 4s. to 10s. an acre. Naturally, the better portions were first developed. As time went on and development was extended, higher prices were asked for inferior land. Subsequently the injustice of the prices charged was recognized, and drastic reductions have voluntarily been made. I have in mind an area round Buckleboo which is definitely marginal in character, for which prices as high as 35s. an acre unimproved were charged by the Government. Unfortunately, when land was thrown open for application, whether it was of good or inferior quality, there were always persons who were prepared to try to make a living on it. In the period of high prices it was possible for some of these settlers to make a living, but under the reduced scale of prices it is absolutely impossible.
The CHAIRMAN (Mr. Prowse).The honorable member’s time has expired.
– Honorable members who vote for the application of the gag on the motion for the second reading of a bill should refrain from making second-reading speeches in committee.
This clause provides for the expenditure of approximately £12,000,000. It represents what is termed an instalment of the Commonwealth’s scheme for the rehabilitation of rural industry, which is to be spread over a period of three years. The scheme might better be described as one for the rehabilitation of banking and financial institutions. The rural industries affected will be just as well off when the money is made available, as they were previously.
The honorable member for Echuca (Mr. McEwen) has attempted to mislead the committee as to the effect of the amendment of the honorable member for West Sydney (Mr. Beasley). That amendment simply makes provision for an equitable basis of adjustment among secured and unsecured creditors.
– It provides for a pro rata basis.
– Being pro rata, it must be equitable as between creditors. If one man is owed £1,000 and another £100, the first will be given a pro rata adjustment of his £1,000, and the second a pro rata adjustment of his £100. The bill, on the other hand, sets out that the man who is down and out shall not he rehabilitated. There are three classes of farmers - the top, the middle, and the bottom. This scheme is confined to what may be termed the middle farmer, the man who has some equity in his property and has a chance of recovery. It does not propose to wipe out debts that are irrecoverable; they are already wiped out. The amendment of the honorable member for West Sydney seeks to have a pro rata adjustment made between secured and unsecured creditors when the compositions take place. The question is often asked - Who is the best citizen, the man who invests in production, or the man who parasitically draws interest without rendering a useful service to the community? Obviously, the manufacturer who establishes in country towns depots at which the farmers may obtain their requirements cheaply and conveniently renders a necessary service. Apparently, such persons are to be left out of consideration, while the pure parasite is to be safeguarded. The latter lends neither money nor credit. Having the right to operate as a banker, he merely liquefies a portion of the farmer’s own credit, and charges him interest upon it. A banker can never lend money, because he does not have it to lend.
– What he lends buys something.
– -That is one of the inane interjections which the honorable gentleman is in the habit of making. The Acting Prime Minister (Dr. Earle Page) has said that the debts of the farmers aTe mostly overdrafts. How does an overdraft operate? The Government has simply brought down, in a cowardly fashion, a measure to camouflage the scientific reduction and curtailment of production. It has not the courage to do the thing openly.
Let us analyse the position of the farmer. Take the case of a man whose equity in a property is £5,000. He wishes to raise an overdraft of £2,000 on it. Persons lake the honorable member for Barton (Mr. Lane) would say that the banker lends him credit. The farmer gives the banker deeds valued at £5,000, and the banker allows the farmer an overdraft of £2,000, using the credit established by the assets of the farmer. If the Government really wished to rehabilitate the rural industries, it could do so without providing £12,000,000, as is now contemplated, and without encouraging the financial thieves, rogues, and vagabonds - to use the phraseology employed by the honorable member for Northern Territory (Mr. Blain) a week or two ago, when dealing with the operations of certain mining companies in that portion of the Commonwealth. The banks have never been in a position to lend real money. The associated banks have on deposit approximately £300,000,000; but, if their depositors demanded payment, the banks would not be able to find more than £15,000,000, so the only conclusion we can come to is that, in the course of their business, they have appropriated, for their own purposes, the assets of the people, and charge them interest on credit supplied.
The amendment moved by the honorable member for “West Sydney (Mr. Beasley) provides the basis for a satisfactory adjustment of the debt problem. Under the Government’s proposal, there will be an expenditure of £12,000,000, or possibly more, and in a few years there will be further appeals to this Parliament. The fact is that the existing social system is bankrupt. In attempting to rehabilitate our rural industries, the Acting Prime Minister (Dr. Earle Page), who is, I suppose, responsible for the proposal now under consideration, is applying to the economic system one of the principles employed in his profession. He seeks to administer a stimulant., in the form of financial aid, in order that our primary industries may carry on a little longer. In other words, he is doing what he can to prolong an effete and rotten economic system that is in its death throes. The only practical method for the rehabilitation of rural industries is to treat them as other industries in this country are treated, namely, by ensuring to those engaged in them a satisfactory home consumption price for their products.
– In examining proposals to assist distressed farmers throughout the Commonwealth, the Government had to consider how it could do the most good with the money available, and what methods should be adopted to secure the greatest benefit to those most directly concerned. The scheme now before the committee represents one of the most progressive steps that has been taken in any country.
I listened carefully to the debate yesterday and this morning, and noted the suggestions made by a number of honorable members. Many of the proposals made contained a certain degree of merit, but all implied the expenditure of very much more money than is contemplated under the Government’3 scheme, or else they foreshadowed a revolutionary method of attack upon this grave problem. It is clear that, if Ave have to wait until some one evolves a perfect system, insuring uniformity of action in all the States, we shall have to wait a very long time. Accordingly, the Government brought down its proposals. The sum to be set aside, £12,000,000, is the amount that was mentioned in my policy speech during the last election, and is, I believe, sufficient for the purpose. The Government considers that the best method is to take advantage of the existing machinery in the various States in order to establish direct contact with the farmers who are in need of this’ assistance. If this Parliament sought to impose on the different States conditions of procedure with individual farmers which they were unwilling or unable to carry out, the inevitable result would bc that the money for this purpose would not be used and the whole scheme would break down. For this reason, the Government is unable to accept those proposals which cut across the policy in minor respects of some of the States. It is important that the scheme should become operative at the earliest possible moment. Delay will be fraught with the gravest consequence to our primary producers. The conditions under which the money shall be used by the States are set out in clause 7, and the amounts to be granted are specified in the preceding clause.
The Government is willing to accept the amendment of the honorable member for Gwydir (Mr. Abbott), which provides for the suspension of part of the liabilities of an applicant. Some such method is inevitable in dealing with thi? problem. In three of the States, Western Australia, South Australia and New South Wales, there is already provision for the suspension of secured and unsecured debts under stay order. The amendment on the amendment, moved by the honorable member for “West Sydney (Mr. Beasley), really involves a compulsory writing down of the farmers’ debts. The Government is unable to accept it,because it would lead this Parliament into an uncharted sea, which no government of any country has been able to navigate. Governments in many countries have considered similar proposals to that submitted by the honorable member, but in every case have rejected them. Nearly every country which has dealt with this matter has provided that, in cases where provision has been made for the writing down of debts, a period of five years or more shall elapse before the actual writing down takes place debts in the meantime being suspended. In the United States of America, debts have been suspended for five years. In New Zealand, a proposal for a compulsory writing down by 20 per cent. of the farmers’ equity in real estate was rejected in the House of Representatives. No country has done what the honorable member for West Sydney has suggested.
It is imperative that we should make this scheme operative as quickly as possible, and that it should be along proved lines. There is already in the States the necessary machinery to give effect to the Government’s proposal.
I come now to the question of allocation. In my second-reading speech, I dealt fully with this matter, pointing out that the scheme outlined was the result of a conference of Commonwealth and State statisticians. I repeat that the allocation of the first £1,500,000 was on a tentative basis, to enable the States to get to work at once. On the temporary basis, it is true, it was at first suggested that Queensland would have an allocation of £2,000,000, but a closer examination of the position in that State showed that the farmers there generally were better off than in other States. Consequently, under this proposal the allocation for Queensland is less than that for South Australia or Western Australia. Honorable members have, no doubt, read the report of the Statistician dealing with this matter. I am certain that there need be no apprehension of hardships or anomalies in connexion with it. The Government has reserved £2,000,000 of the £12,000,000 to be made available, so that in a year’s time, when we should be in a better position to obtain accurate data with regard to the whole of the debts, we can make any necessary adjustments. As it is desired that this bill should go to the Senate this afternoon, in order that it may be dealt with in that chamber and disposed of not later than Thursday next, I move -
That the question be now put.
The committee divided. (Chairman - Mr. Prowse.)
Majority . . . . 8
Question so resolved in the affirmative.
Question - That the words proposed to be omitted stand part of the proposed amendment (Mr. Beasley’s amendment)- - put. The committee divided. (Chairman - Mr. Prowse.)
Majority . . . . 12
Question so resolvedin the affirmative.
Amendment of amendment negatived.
Amendment. (Mr. Abbott’s) agreed to.
Clause, as amended, agreed to.
Sitting suspended from 12.56 to l.30 pm.
Clause 7 -
Any moneys granted to a State under the last preceding section shall be paid upon the following conditions: -
The moneys shall be used by the State . . . for the purpose of discharging, in whole or in part, the debts of farmers by means ofcompositions or schemes of arrangement between farmers and their creditors.
.- It is necessary that care should he exercised in the allocation, of the money in order that it shall go into the right channels. Under the largest rehabilitation scheme I have ever heard of - I refer to the great experiment in the United States of America which, apparently, has not proved the success anticipated, in that, we are told, unemployment has not decreased in that country- £1,000,000,000 sterling has been allocated and the press of that country is calling a halt in the expenditure. Compared with that huge expenditure, the sum of £12,000,000 which is to be made available for rural rehabilitation in Australia is a small amount, but extreme caution is necessary to avoid waste. The suggestion of the honorable member for Martin (Mr. McCall) that a board, with powers similar to those of the Tariff Board; be appointed to consider the best method of distributing the money; is one which I commend tothe Government. The Acting Prime Minister has suggested that if the men on the land are unable to make a success of their holdings they willhave tobe transferred to the cities. That of course, will necessitate increased protection of secondary industries. The interdependenceof primary and secondary production is obvious. The success of the one group is dependent on the success of the other: We must preserve our rural industries as it is far better for farmers to remain on their land, where they are, at least, able to produce sufficient food to supply the needs of themselves and their families rather than swell the population in already overcrowded cities. I suggest that the remedy lies in the exploring and opening up of new overseas markets, as in the East, for instance. The Acting Prime Minister is adopting a conciliatory attitude to our manufacturing industries. The secondary industries should be carefully . fostered, particularly in view of the uneasiness which has beencreated by the negotiations for trade treaties with overseas countries. But much more certainly must they be fully protected if, as suggested, they are to expand sufficiently to increase their hands, even to the extent of providingwork for those who may find themselves compelled to leave the country areas and seek aliving in urban occupations. Just as our urban populations provide the best markets for the produce of our rural producers - and at enhanced prices - so in turn our factories need a prosperous rural population to purchase the goods they manufacture.
The Acting Prime Minister now gives an indication that the Government intends to have a most careful investigation of claims, and this will be appreciated by taxpayers. We have a long, hard row to hoe, but our people are made of the right stuff, and are facing the position manfully. With courage, complete rehabilitation will be consummated. [Quorum formed.]
– I move -
That after the words “ farmers and “, paragraph a, the words “ any or all of be inserted.
The reason why this amendment is considered necessary is that the paragraph, as it stands, might be construed to require compositions or schemes of arrangement to be made between farmers and all of their creditors. The Government desires to provide that compositions or schemes of arrangement may be effected between farmers and some of their creditors, with the aid of the money to be made available under this measure.
.- I oppose the amendment, because it seeks to differentiate between creditors. The paragraph as it stands provides that the money shall be used by the States for the purpose of discharging, in whole or in part, the debts of farmers by means of compositions or schemes of arrangement between farmers and their creditors. Under this provision all the creditors would have to come to some scheme of arrangements. I desire to force all the creditors to arrive at the same arrangement to bring about an adjustment of farmers’ debts, hut the Minister seeks to make it possible for arrangements or compositions to be made under which some, but not all, of the creditors will be involved in the sacrifice.
– I support the amendment submitted by the Minister (Mr. Hunter) because it is clear that this measure is not designed to cover the whole of the debtors in rural industries, and the amendment is necessary if proper effect is to be given to the paragraph to which it relates. It is essential to give serious consideration to every aspect of the provision of immense sums of money for expenditure in the States. It is generally admitted by those who understand the position that the farmers are engaged in the basic industries on which all other industries in Australia depend in the last resort. The fact that this expenditure is required to enable primary producers to escape from their financial difficulties shows conclusively that there must be something wrong with the policy that has been followed in Australia since the inception of Federation. Rural producers are in financial difficulties largely as the result of action taken by this Parliament.
– The remarks of the honorable member are not relevant to clause 7.
– The farmers are in difficulties because high production costs over which they have no control have made it impossible for them to sell their produce at a profit in the markets of the world. Several speakers complained that it appeared as if the wheat-growers would receive a large share of the money appropriated under this scheme. It must be evident to all thinking persons that the wheat industry is the chief of those which, for the last five or six years, have been exporting their capital for the benefit of the rest of the community. Unless costs of production are reduced, more bills of this kind will have to be brought down in the near future. Therefore, legislation complementary to this must be enacted in order to enable these industries to cover costs. It is fitting that the Commonwealth Parliament should take the lead in this because it is mainly responsible for the unfortunate condition in which the farmers find themselves. As a result of Commonwealth legislation passed during the last 30 years-
– I again remind the honorable member that his remarks - are not relevant to the clause.
– I was leading up to the point that unless further legislation is introduced for the purpose of reducing costs of production in rural industries, this bill will be more or less useless.
– Mr. Chairman, I call attention to the state of the committee.
– It is not necessary. I have quite recently satisfied myself that there is a quorum within the precincts of the chamber.
– I appreciate the fact that this Parliament cannot do everything, but it may do much. It can, however, remove the super tax on income from property, and also the land tax, which, after all, is nothing short of a capital tax on the land-owner.
– Mr. Chairman, I call your attention to the state of the committee.
– Within the last few minutes I ascertained that there was a quorum within the precincts of the chamber.
– I rise to a point of order.
– The Standing Orders permit the Chair, when it believes that a concerted attempt is being made to hold up the business of Parliament by frequent calls for a quorum, to refuse to order the bells to be rung, if it is satisfied that sufficient members to form a quorum are in the precincts of the chamber.
– I draw your attention, Mr. Chairman, to the fact that when Mr. G. H. Mackay was Speaker, this same point was raised, and he ruled that honorable members must be present in the chamber before they could be counted for the purpose of making up a quorum. On the strength of that ruling the bells were rung for a quorum five times within five minutes.
– There have been other rulings on the point, and it is on those that I am acting.
Motion (by Mr. Gander) negatived -
That the question be now put.
– I move -
That the Chairman’s ruling be dissented from.
This matter should be tested once and for all. We should know whether, when important matters are being debated, two or three members are to be regarded as forming a quorum while speeches are being delivered to empty benches.
Motion (by Mr. Thompson) put -
That the question be now put.
The committee divided. (Chairman - Mr. Prowse.)
Majority . . 8
Question so resolved in the affirmative.
Question - That the Chairman’s ruling be dissented from (Mr. Lazzarini’s motion) put. The committee divided. (Chairman - Mr. Prowse.)
Majority . . . . 10
Question so resolved in the negative.
Question - That the words proposed to be inserted be so inserted (Mr. Hunter’s amendment)- put. The committee divided. ( Chairman - Mr Prowse.)
Majority . . 9
Question so resolved in the affirmative.
Amendment agreed to.
.- I move -
That after paragraph (a) the following new paragraph be inserted: - (aa) No interest shall be charged by the State to any farmer in respect of any debt adjustments.
As an interest-free grant is about to be made to the States, every honorable member should agree with the amendment. The argument of members from every side of the committee has been that the heaviest burden on the farmers is that of interest. This bill makes available £12,000,000 free of interest for expenditure by the States, and surely it is incumbent on the States to pass that money on free of interest. If that is not done, the liability of the farmer will be increased instead of reduced.
– Although in sympathy with the purpose of the amendment, the Government is not in a position to accept it. As a result of consultations with the States, the Government is of the opinion that it is wise to have a provision enabling interest to be charged, although it is not usual to enforce payment and in most cases it will not be charged. Provision is made in the bill that the interest which may be charged, as well as any capital which may be repaid, shall go. into a revolving fund to be used for the purpose of granting further relief from debts.
Motion (by Mr. Ward) agreed to -
That the Acting Prime Minister be not further heard.
Question - That the paragraph proposed to be inserted be so inserted (Mr. Garden’s amendment) - put. The committee divided. (Chairman - Mr. Prowse.)
Majority . . 8
Question so resolved in the negative.
– Some points worthy of serious consideration arise in connexion with this clause. The first relates to the extent to which relief will be afforded as the result of the expenditure of ?12,000,000, and the other to the method of disbursement of that amount by the various State governments. The effect of the Government’s proposals will be the reduction of the indebtedness of the farmers by about ?60,000,000 in the aggregate, seeing that provision is made for a maximum payment of 5s. in the ?1 to any one creditor. That should mean a considerable lightening of the load on the primary industries of this country. One point mentioned during the debate was the payment of interest on the amount of debt paid off on behalf of the farmer. I shall be glad if the leader of the Lang Labour party (Mr. Beasley) would declare his party’s policy in this connexion. Are we to infer from the remarks of some members of that party - I did not hear the speech of its leader - that they disagree with the payment of interest on money? If so, is that view confined to the money voted under this bill, or does it apply to all moneys?
– Is that subject now under discussion?
– Yes. We are discussing clause 7 which deals with the methods by which this money is to be administered. The committee must agree with the Acting Prime Minister (Dr. Earle Page) that a State government should not charge interest on money which has been loaned to it free of interest by the Commonwealth. However, it is not necessary to put such a provision in this bill. Surely the leader of the Lang party recognizes that the New South Wales legislation dealing with this matter was passed before the actual terms of the Commonwealth legislation were made known!
– That legislation was amended after the terms of the Commonwealth legislation were made known.
– That could not have been so, because no Commonwealth legislation had been framed on this matter -up to that time. It is for this Parliament to say under what conditions this money shall be distributed. This Parliament cannot tolerate a system of administration under which a State government may charge to the farmer interest on money voted for a specific purpose free of interest.
– The honorable member has just voted in favour of such a proposal.
– I have not. No State government will flout the known policy of the Commonwealth Parliament. An election is about to take place in New South Wales ; and it is only reasonable to expect that whatever political party is returned to power in that State will amend the legislation of which the Lang party complains in accordance with the principle enunciated by the Commonwealth Parliament. It is a cardinal principle of this legislation that no government or government instrumentality may participate in the distribution of this money. Consequently, the State governments will be heavy losers as a result of having to wipe off certain debts. In dealing with the “ terrible mortgagee,” as he will be affected by these proposals, we must recognize the methods which have governed moneylending for a century or more. Under the Real Property Act, a person who pledges his property as security enters into a certain covenant. But already State governments, in trying to keep men on the land, have deliberately disregarded the methods, practice and procedure governing the lending of money, to the extent” of making their claims a first charge in front of the security guaranteed under the Real Property Act. The fact that governments are in that position will be of great advantage to the farmers when their debts are being adjusted. It stands to reason that no State authority will pay even 3s. in the £1 to a secured creditor in satisfaction of part of the debt owing by a farmer unless that creditor is prepared to do a fair thing. This power in the hands of governments will have the effect of placing the farmer in a far better position than he otherwise would be in when an attempt is made to effect an equitable adjustment of his debts. “When honorable members on the opposite side of the House suggest that banks and financial institutions will take advantage of this legislation in certain ways, they show themselves unacquainted with State legislation, and without knowledge of the real situation. Until it is found that this legislation is a failure, and I do not think it will prove to be a failure-
– The honorable member will not be in order in discussing the whole bill. He must confine his remarks to clause 7.
– I am dealing with clause 7, which governs the allocation of this money. It cannot be expected that the provisions in this clause will be 100 ‘ per cent, successful, even under the most favorable conditions. It is only reasonable to expect that, in times like these, when we are endeavouring to make adjustments in such a wide field, several matters now unforeseen will come up for consideration from time to time. It is a great pity that there is no one in this committee capable of advising members of the Lang party with respect to this matter, so that they might avoid making statements such as they have made to-day.
– The honorable member is the most swollen-headed man in this Parliament; if he is not careful he will burst.
– I can only reply to the honorable member in the words of Bismarck to the Kaiser, “ I never offer advice to a genius; I never waste it on a fool.”
– The honorable member is the biggest fool who ever entered this Parliament.
.-I have found it difficult to understand really what the honorable member for Barker (Mr. Archie Cameron) was endeavouring to prove. I take it he was arguing that we need not make any provision in this measure that on the money granted by the Commonwealth to the States interest should not be charged to the farmers because the States would be on their honour not to do so.
– That is so.
– My point is that we are perfectly entitled to say what shall become of the money granted to the States and that we should determine in this Parliament whether that money should be free of interest when it is distributed to the farmers.
– It was left to the States to implement such a big undertaking as the Premiers plan.
– The Acting Prime Minister (Dr. Earle Page) has argued in favour of interest being charged by the State governments on the understanding that repayments will be made into a revolving fund for the further assistance of the farmers. I can understand a State government saying to a farmer, who is in a more favorable position than others, that he will be expected to refund some of the principal as quickly as possible, so that that money may be placed into a revolving fund, but I do not think that it would be right to charge interest also in such cases.
– That is my view too.
– Well then, why does this committee not lay down that point clearly ?
The honorable member for Barker asked whether the suggestion made by honorable members on this side of the committee meant that we are against the payment of any interest at all. I emphatically deny any such implication.
– The right honorable member voted for the amendment of the honorable member for Cook.
– I did so because I believe that the States should not be left free to charge interest to farmers on money they are getting from the Commonwealth Government free of interest.
– Suggestions have been made in this debate that if it is not expressly provided in this measure that the State governments shall not charge interest on this money, certain States will take advantage of their own legislation to impose certain hardships upon the farmer. Because the New South Wales act provides that in no case shall more than 2£ per cent, interest be charged - the charge is not obligatory - it is suggested that that State will act harshly towards its farmers. Let us examine the efforts made by the New South Wales Government in the interest of the farmers. It has led the way in giving complete power to the farmers’ relief board to write down any Crown debts without reference to the Crown, where the board is of the opinion that fanners will be able to carry on if given such relief, and also to apply such relief where there is no doubt that other secured creditors are prepared to do likewise if the Government gives a lead. Secondly, the Government of New South Wales made available £400,000 which it had at its disposal as a result of collections under a flour tax imposed some years before, giving this sum to its Agricultural Department for the express purpose of carrying out proposals similar to those proposed on a greater scale under this measure. Furthermore, the State Government has undertaken to administer the provisions of this measure absolutely free of cost to the farmer or the Commonwealth Government, and has undertaken also that where interest is charged, it will automatically go with repayments of principal under this scheme into the revolving fund in order that the benefits of this legislation may be extended to other farmers. Briefly, this is an outline of the attitude of the Government of New South Wales in dealing with this problem. It will be unnecessary for this Parliament to lay down that this money shall be distributed free of interest by the Government of South Australia, because that Government is making an absolutely free gift of this money to the farmer to enable him to compound his debts. That Government is also prepared to give creditors 5s. in the £1, if they will write down and carry for a certain length of time a compounded balance of the debt. The reason for this action of theirs is that it is hoped that such a policy will be the means of extending the benefits of this legislation over a wider field. The policy being pursued by the New South Wales Government will effect a bigger measure of relief immediately to individuals, and by providing for a system of repayments, will probably be more permanently effective than the South Australian scheme in the opinion of the New South Wales Government. We have heard no word from honorable members in commendation of the efforts of these two governments. Any one would imagine, judging by this discussion, that all the credit for this legislation, or all the credit for the efforts to relieve the farmers financially, is due solely to this Parliament. As a matter of fact, the State governments have been attempting to do something along these lines ever since the depression, and most of them have done very well indeed in this respect. Some States have not, up to the present time, adopted schemes or passed legislation to enable them to co-operate with the
Commonwealth. However, practically every State has sent along some scheme. As the Queensland scheme involved not so much dealing with past debts as the provision of means to enable farmers to improve their position in the future, we pointed out to the Queensland Government that the proposals definitely agreed to between the States in December last precluded the acceptance of proposals of the nature it had submitted and we suggested that immediate’ measures must be confined solely to debt adjustment. The Queensland Government is now reconsidering its proposals and trying to formulate a scheme that will come completely within those three definitions.
Motion (by Mr. Archdale Parkhill) put -
That the question he now put.
The committee divided. (Chairman - Mr. Prowse.)
Majority . . 7
Motion agreed to.
Clause as amended agreed to.
Clauses8 to 10 agreed to.
Title agreed to.
Bill reported with amendments; report - by leave - adopted.
Motion (by Dr. Earle Page) - by leave - proposed -
That the bill benow read a third time.
.- I take this last opportunity I shall have during this period of the session to express disgust at the manner in which this bill has been bludgeoned through Parliament. In my second-reading speech I stressed the importance of this legislation, involving as it does, not only the expenditure of £12,000,000 of borrowed money, but also the whole problem of rehabilitating primary industries closely associated with which are all other industries. This was the most important issue during the last general election campaign, and it is so vital to the welfare of the nation that not only the Commonwealth Parliament, but also the State legislatures, should have had weeks and even months to discuss it before a decision was reached. The debate on the bill commenced about 4 o’clock yesterday afternoon, and its passage has not been obstructed at any stage. I heard a good deal of constructive criticism.
– And a lot more the right honorable member did not hear.
– Yes, because some honorable members who sat here until after 1 o’clock this morning were denied the opportunity to express their opinion on a subject in which their constituents are vitally interested. The “gag” has been applied again and again. That is not the correct procedure to adopt. I occupied only a few minutes during the committee stage, and quite a number of the speeches of honorable members in opposition did not occupy the same time as did some speeches by honorable members opposite. If it is the desire of the Government to expedite the passage of this measure, the least it can do is to extend ordinary courtesy to honorable members, and particularly to the leaders of parties. The Leader of the New South “Wales Labour party (Mr. Beasley), who, after entering into an arrangement with the Acting Treasurer (Mr. Casey) concerning another measure, was, by the application of the gag, prevented from replying to accusations against his party. The Acting Treasurer was courteous enough to consult us concerning a proposed change in the order of business to which I and the honorable member for West Sydney agreed. But how can we be expected to adhere to an agreement when the “ gag “ is applied as it has been this afternoon? In future, I do not propose to enter into any such agreement. The Government will have to use its majority to get its business through. I suggest that a little decency on the part of Ministers towards the members of this Parliament would pay. Do honorable members think that Parliament is entitled to commit the country to a total expenditure of £12,000,000 and, in addition, an annual commitment of approximately £500,000 for interest without adequate discussion? During the short period in which the bill has been before the committee to-day, there was an adjournment of half an hour for lunch,so that actually we have had only about 7-J hours to discuss it. The proposals embodied in this measure are only a first instalment. I should like to obtain an honest and frank expression of opinion from the members of the United Australia party and the Country party concerning the method adopted by the Government. The honorable member for Cook (Mr. Garden) moved an amendment to clause 7, but we were denied the opportunity to hear the Government’s views upon it.
– The right honorable member can scarcely blame me for that.
– I am not blaming the right honorable gentleman.
– The Opposition refused to assist in providing a quorum.
– I do not know to what the honorable member refers. I know that it is the responsibility of the Government to keep a quorum. I know that we were allowed only half an hour for lunch, and the incident to which the honorable member refers probably occurred during my temporary absence. Half an hour is not a reasonable period to allow for luncheon. However, I do hot propose to dwell on such a trivial incident; 1 rose to make a dignified protest against the policy which the Government is pursuing. I am not likely to protest if the “gag” is applied when there is deliberate obstruction, but there has been no obstruction to the passage of this bill.
– There has been.
– There has not been adequate discussion. I listened to the honorable member for Watson (Mr. Jennings) this morning who obviously delivered a second-reading speech during the committee stage. I do not object to that; he is fully entitled to express his opinion whenever the opportunity offers.
– But he supported the “gag”.
– Having spoken himself, the honorable member for Watson then voted to prevent others from doing so. I object to that. I inform the House, quite frankly, that I gave weeks of consideration and extensive research to this subject. I believe that other honorable members did the same, and that there was an earnest desire on the part of all honorable members to consider the subject fully. They were robbed of the opportunity to place their views before the House. I was able to expound my views, because I have the privilege of being the Leader of the Opposition; but I have the right to protest on behalf of my supporters against the sacrifice which they were compelled to make. Honorable members generally will admit that during the course of the debate yesterday many useful suggestions were made. The speeches then delivered contained much useful data and many valuable criticisms. I listened to speeches by members of all parties. Even the antagonistic speech of the honorable member for Martin (Mr. McCall) embraced a lot of facts. Can we say that all the information available has been placed before us? This is a vast subject. Its ramifications extend throughout every industry in Australia. Primary industry is but the basis upon which other industries are built up. We are trying to place primary production on a firmer foundation, and to that end are entitled to have all the facts. The second-reading debate should have been adjourned over the week-end, so that other contributions might have ‘been made to it before the committee stage was taken. The principle involved in the question as to whether interest should be charged by a State on a grant from the Commonwealth was disposed of in the twinkling of an eye. If ever there has been a measure of considerable magnitude which has been treated by private members with the greatest seriousness and without any attempt at obstruction, it is this one, which is fundamental to the progress and prosperity of Australia. But the way in which it has been handled by the Government is a disgrace to the Parliament.
– Although I did not contribute to the second-reading debate, there are some points which I think ought to be considered before the ‘bill is finally dealt with. With some of the remarks of the Leader of the Opposition (Mr. Scullin) I am firmly in agreement. The time devoted to the consideration of this measure was totally inadequate.
– Why, then, did the honorable member vote for the application of the “gag”?
– W - When we are faced with a campaign of organized obstruction, as we were this afternoon-
Mr. SPEAKER (Hon. G. J. Bell).The remark which the honorable member has just made is out of order.
– Just before this House adjourned last year, I asked the Prime Minister whether this would be one of the first measures taken inthe second period of the session, and was assured that it would be. We have listened to speeches upon all manner of subjects which have had very little relation to the prosperity of primary producers or of the working people who are dependent upon them. A great deal of time has been devoted to the discussion of matters of second-rate or thirdrate importance. Therefore, the responsibility for what has happened does not rest entirely with the Government; it must be shared by both sides of the House.
The Leader of the Opposition has very rightly directed attention to the magnitude of the subject with which this measure deals. I say that there can be no solution of the unemployment difficulty with which Australia is confronted so long as primary industry remains where it is to-day. If every farmer in Australia who will be affected by this legislation were enabled to employ one additional person, there would be practically no unemployment.
Another point that is deserving of consideration relates to the subject of dead capital. We have arrived at a stage in the world’s progress when a very careful investigation must be made of what is a capital commitment, what is the duration of capital, and what amount of interest can be drawn over a period of years out of capital invested. When that investigation is made, it will lead to some conclusions that would not be considered orthodox in certain circles to-day; but which, nevertheless, must be faced. To my mind, one of the big faults of the present financial system lies in the attempt to collect interest on dead capital over a number of years. To put the matter quite crudely, and with all respect to certain honorable members, dead men cannot earn wages nor can dead capital earn interest. If the existing system is perpetuated, there are only two sources from which interestcan be drawn in respect of capital that has disappeared - either from the wages of those who are in employment, or from the interest due to live capital which is playing a part in production.
There is another point which affects the financial system. The break-down that has occurred was largely due to the fact that we have endeavoured to repay debts in a currency altogether out of proportion to the value of the currency in which they were contracted; in other words, the currency has depreciated. The contention that we are off the gold standard does not cut any ice withme. I say that, to all intents and purposes, we are onthe gold standard. Every honorable member knows what happens when gold is taken to a bank and exchanged for the prevailing currency. By tinkering with exchange, tariffs, and other matters, we may attempt to blind our eyes to the facts, but the time will shortly arrive when this Parliament will be bound by the seriousness of the position to take very careful stock of actualities. I compliment the Government upon what it has so far done, but warn it that its work has barely started. He will be a very foolish man who believes that the subject of debt adjustment will be disposed of by the passage of this legislation. So far as the Commonwealth is concerned, this is only the first step along what may yet be a very awkward and disagreeable road for both the Commonwealth and the States to travel. Since the State parliaments have been passing debt adjustment legislation for a number of years, it may be asked why it is necessary for the Commonwealth to step in. The reason is that the bankruptcy law is administered by the Commonwealth, with the result that, at every turn, a State Parliament which attempts to legislate in regard to debt adjustment finds itself confronted with the overriding power of the federal law. Consequently, it has been found necessary to embody in this bill provisions which give to the States authority under the Bankruptcy Act to effect the schemes of adjustment they have in mind.
I agree with much of what has been said in regard to interest being a big burden on primary production, but I cannot ignore the challenge of an honorable member on this side that the tariff no longer figures in the cost of production. I say that the tariff is still the second biggest item in the cost of practically every primary industry. I could quote statements by Professor Giblin which go to prove the opposite of what the honorable member for Martin (Mr. McCall) sought to prove yesterday by a quotation from the same authority. Professor Giblin was a member of a commission which was appointed by the Commonwealth in 1928. Some of the statementsin the commission’ s report concerning the obstacle to the success of primary industries represented by the Australian tariff, are well worth reading to-day.
– The debate on the third reading must be confined strictly to the bill as reported. A much wider scope is allowed on the second reading. The honorable member is introducing subjects that are far removed from the bill.
– On the second reading, very important statements were made which could not be answered because of lack of opportunity.
– The honorable member must realize that the Chair is not responsible for that; its ruling cannot be influenced by the fact that some honorable members did not have an opportunity to speak on the second reading.
– I was not attempting to influence the ruling of the Chair, but was merely endeavouring to explain why I was mentioning certain matters. I say in conclusion that this bill has most far-reaching possibilities. I feel that too limited a period was devoted to its consideration, and that possibly for every day saved we shall have to give four or five days to the further consideration of the matter before we are very much older.
– The evidence adduced during the debate on the bill proves conclusively that honorable members generally have not a proper knowledge of its provisions. In effect, it is merely the framework for action that the Government proposes to take. The most important stage will be reached when the grant has been made available and the administration is handed over to the States. It is with that phase that honorable members of the Opposition are mostly concerned. Although we regarded the proposed grant as inadequate, we knew that at this stage, on account of the Parliamentary procedure, we could not effect an alteration in that respect. We consider, however, that we were entitled to more information concerning the administrative methods to be adopted by the different States. Honorable members who sit in this corner, referring to the New South Wales law, pointed out that if this money was to be made available to the States free of interest it was logical to assume that the States would follow the example set by the Commonwealth. The honorable member for Barker (Mr. Archie Cameron) claims to have an extraordinarily wide knowledge of the affairs of this country. He contends that in the application of this law no State would so lower itself as to attempt to charge interest upon money which had been advanced to it free of interest. It cannot be argued that the States were unaware of what the Commonwealth intended, because for weeks the matter has been under consideration by both authorities. As a matter of fact, the Commonwealth has been encouraging the States to pass the necessary legislation to give effect to what it proposed. Therefore this bill really follows upon what has been done by the States, or at least what was expected of them. The States had not to await the passage of this bill, before making preparations for the administration of the grant. We are not in possession of all the information that we should have had; but at least we know that, under the New South Wales legislation, interest at the rate of 21/2 per cent. will be charged upon some of this money that is made available to farmers.
– “ May “ be charged.
– We have been told also, that as the State authorities will administer this legislation this interest charge will be some recompense; but I point out that, irrespective of anything that we have done, several States have had legislation of this character in operation for some time. The Government of New South Wales, for instance, has been administering such matters for at least twelve months, and would continue to do so whether this bill had been introduced or not.
– The State is charging for administration by the payments for supervisors.
– That is so. The State governments were compelled by the pressure of public opinion to take up the subject of debt adjustment. I believe that the Lang Government, as a matter of fact, first took action with the object of reappraising values, and readjusting debts to the Crown. That was first done four years ago.
– I must remind the honorable member for West Sydney of my direction in regard to the thirdreading debate.
– I wished mainly to direct attention to the fact that interest would be charged on the money made available to farmers. The Government has led us to believe that the money would be in the nature of a revolving fund; but if the Acting Prime Minister believes that, he must be classed as the super-optimist of the depression. All that the expenditure of this money can possibly do is to stave off the evil day for various farmers by meeting the most pressing demands that are being made upon them. No new money is being made available that will permit of any real progress being made on their part. The effect of the policy of the Government, both at home and abroad, is that the position of the primary producer is becoming steadily worse. The Acting Prime Minister may, by a mass of mathematical calculations and the utterance of many nicely-phrased sentences, mislead some individuals into believing . for the time being, that beneficial results will accrue from the passage of this, bill; but time will tell the true story. It is worth remarking that during the debate on this measure some honorable members who support the Government have expressed much more radical opinions on this subject than they would have permitted themselves to utter twelve months ago. . This is because they and their friends are passing through a period of stress, the like of which many people first met with several years ago and are still experiencing. The fact that interest at the rate of 21/2 per cent, is to be charged on certain advances that may be made to farmers will entirely destroy whateverhope there was that this legislation would have any beneficial effect in rehabilitating our rural industries. During the last election campaign it was made very clear on behalf of the Government that a debt adjustment scheme would be put into operation on an interest-free basis, and this led many people to regard the proposal favorably; but, unfortunately, we now find that that promise, lite many others made on behalf of the Government, is to remain unfulfilled. Time will tell the real worth of this measure, and I believe that, ultimately, the Government will find itself subjected to the severest possible condemnation for having introduced the measure in the form which has now been adopted by the House.
– It is quite impossible to deal adequately with a measure of this kind in the time that the Government has made available for the purpose, and I take this opportunity to declare that I am very much afraid this method of dealing with important legislation will redound greatly to the discredit of our parliamentary institutions. It would, perhaps, have been better had the Executive itself dealt frankly with this subject than that a pretence should be made of permitting Parliament to deal with it. Although I do not represent a constituency of farmers, my constituents are all taxpayers and workers. We cannot deal with important subjects in this House, in watertight compartments, and assume that one honorable member has an interest in them while others have not, especially subjects which involve not only the expenditure of large sums of money, but also the application of highly important constitutional principles. Under this measure, for example, £12,000,000 is to be made available to the State governments which will have practically a free hand to do as they like with it. I admit that certain so-called conditions are laid down in the bill, but they are not effective conditions.
– What was done in the case of the grants-in-aid to various State governments?
– The time is not available for me at the moment to deal with that aspect of the subject. The general object of this bill is to make a certain sum of money available to enable farmers to make compositions, or schemes of arrangements, with their creditors. The bill sets out what are said to be conditions, but it is clear, on a careful perusal of the measure, that the conditions will be actually determined by the State authorities. Therefore, this
Parliament, which is primarily responsible to the taxpayers for the expenditure of the money it votes, is, under this measure, handing £12,000,000 to the State authorities, to administer with practically a free hand, so that farmers may be assisted. The term “ farmer “ is defined so as to include not only wheat farmers and other persons generally regarded as farmers, but also others not usually so regarded. The passage of this bill in this form illustrates the fact that this Parliament is operating under an unworkable Constitution. Although it is supposed to be clothed with sovereign powers in the matters of taxation and the spending of money, it is being called upon to shed those powers. This is most regrettable. In fact it is an impossible situation which is destined to break down eventually. We vote money; we lose control of it; we assume that it will be well spent; but we have only the vaguest notion of what will be done. We are told that we must trust the States. This should be the sovereign parliament of the Commonwealth, with direct responsibility to the taxpayers. It should be able to control every penny of the money it votes. But we have sown the wind and now we are reaping the whirlwind. I am practically forced to accept this measure, for unless I do so, I should be misunderstood and accused of a lack of sympathy with the farmers. I am not out of sympathy with the farmers and their difficulties. The difficulties of the farmers are the difficulties of the workers, and the difficulties of the workers and farmers alike arise, in large measure, from the failure on the part of an otherwise intelligent people to recognize the inevitable necessity for a fundamental alteration of our social relations.
Motion (by Mr. Archdale Parkhill) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. G. J. Bell.)
Majority . . . . 7
Question so resolved in the affirmative.
Motion agreed to.
Original question resolved in the affirmative.
Bill read a third time.
Bill received from the Senate, and (on motion by Mr. Casey) read a first time.
Bill returned from the Senate “with an amendment.
Motion (by Mr. Casey) proposed -
That Order of the Day No. 2 be postponed until after consideration of Orders of the Day
.- The Acting ‘Treasurer (Mr. Casey) has given us no reason for the proposed alteration of the business-paper.
– I spoke to the honorable member’s leader about it.
– The honorable member for West Sydney (Mr. Beasley) is, unfortunately, out of the chamber at the moment, but he has stated that any arrangements which he entered into have been called off, because of the ruthless use of the gag by the Government during the committee stages of the bill with which we have just dealt. Probably the Acting Treasurer, when making the original arrangement with the honorable member for West Sydney, gave some reasons for wishing to vary the order of business, but we are now entitled to hear them again. This sort of thing happens almost every day. Honorable members prepare themselves to discuss those measures that are coming before the House, and then, at the last moment, the order of business is altered.
– The alteration of the order of business is merely to enable the sales tax measures to be brought up again.
– I object to this persistent changing of the ‘business-paper.
.- Mr. Speaker-
Motion (by Mr. Archdale Parkhill) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. G. J. Bell.)
Question so resolved in the affirmative.
Motion agreed to.
Original question put. The House divided. (Mr. Speaker - Hon. G. J. Bell.)
Majority . . 10
Question so resolved in the affirmative.
In committee: Consideration resumed from the 3rd April (vide page 680).
Clauses 1 and 2 agreed to.
Clause 3 -
After section twelve of the principalact the following section is inserted: - “12a. - (1.) Notwithstanding the provisions of any Sales Tax Assessment Act (other than provisions relating to objections and appeals) or of any regulations made under any such act, where any person has, in purported pursuance of any Sales Tax Assessment Act, paid any amount as or for sales tax in respect of any goods, by reason of any transaction, act or operation effected or done in relation to those goods, that person shall not be entitled to any refund of that amount -
if the amount was paid prior to the thirteenth day of December, One thousand nine hundred and thirtyfour - upon any ground to the effect, expressly or impliedly, that those goods had gone into use or consumption in Australia prior to that transaction, act or operation; or
if the amount was paid either before or after that date - upon a prescribed ground as defined in this section, unless that person finally succeeds in an action, upon that ground, brought, in pursuance of this section, for the recovery of that amount. “ (2.) Where any amount has been or is paid as specified in the last preceding sub-section by any person, and that person has paid or pays the amount under protest, as provided in the next succeeding sub-section, upon a prescribed ground as defined in this section, that person may, within six months after the date on which the amount was paid, bring an action upon that ground against the Commissioner, in any Commonwealth or State court of competent jurisdiction, for the recovery of the amount so paid. “ (3. ) A person shall notbe deemed to have paid any amount under protest in pursuance of this section unless, at the time of the payment, that person has lodged or lodges, at the office at which the payment is made, a statement in writing bearing the endorsement ‘ Paid under protest’, and stating the prescribed ground upon which the protest is made. “ (4.) For the purposes of this section - goods ‘ includes -
goods or commodities which have gone into use or consumption in Australia; prescribed ground ‘ means -
in relation to any amount paid by a person as or for sales tax in purported pursuance of the Sales Tax Assessment Act (No. 1) 1930 or that act as amended from time to time - any ground to the effect, expressly or impliedly, that the goods in respect of which the amount was paid were not, within the meaning of that act, goods manufactured in Australia by that person -, and
in relation to any amount paid by a person as or for sales tax in purported pursuance of any other act relating to the imposition, assessment and collection of tax upon the sale value of goods manufactured in Australia - any ground to the effect, expressly or impliedly, that the goods in respect of which the amount was paid were not, within the meaning of that act, goods manufactured in Australia.”.
– This is the principal clause of the bill, and has, in particular, two functions. The first is to debar claims for refunds in respect of sales tax on secondhand goods paid until the time of the High Court judgment, except in circumstances that are dealt with in a Government amendment which I propose to move shortly. The second is to provide for circumstances such as these in the future, and to limit the right of claim to refunds to those persons who, first, lodge objection or protest, and, secondly, within six months, follow that protest up by action before a court. Two sheets of amendments are now in course of being circulated to honorable members. One contains six short drafting amendments, all applicable to this clause. I move the first two of them as follows : -
That the words “ in purported pursuance of any sales tax assessment act “ sub-section ( 1 ) of proposed new section 12a be omitted, and that the words “ as or for sales tax “ be omitted with a view to insert in lieu thereof the words “ either as sales tax or for sales tax “.
Amendments agreed to.
.- I move-
That at the end of sub-section (1.) proposed new section 12a, the following proviso be inserted: - “Provided that where any person has paid any amount either as sales tax or for sales tax by reason of the sale of any goods which prior to that sale had gone into use or consumption in Australia and the Commissioner, upon the production of such evidence (other than, or additional to, the statement, whether by statutory declaration or otherwise, of that person) as the Commissioner considers sufficient, is satisfied -
that the amount was paid within one month after the close of the month in which the sale took place or within such further time as had been allowed by or under the authority of the Commissioner upon a request made by or on behalf of that person during that first men tioned month; and
that the amount has not been passed on by that person to the purchaser of the goods in the total sum paid by the purchaser bo the vendor in respect of the sale, the Commissioner may refund to that person the amount so paid by him.”.
This proviso arises out of the Government’s consideration of the arguments advanced in this chamber by honorable members in respect of refunds to those persons who can satisfy the Commissioner, by evidence other than their own statements, even if they are sworn statements, that they have not passed on the sales tax during the period when they were what may be called current taxpayers - that is, the period when they paid their sales tax from month to month. In those circumstances, about which I shall speak at greater length later, taxpayers from the inception of the sales tax up to the date of the High Court judgment will be able to get refunds.. I said in my second-reading speech that there was a considerable measure of doubt as to the ability of taxpayers to convince the Commissioner in this regard, and gave my reasons for so thinking. Those doubts still remain in my mind with the same force as when I made my secondreading speech; but representations have been made to the Government from both sides of the House, and from many other quarters, to the effect that there are people in this community who can satisfy the Commissioner perfectly reasonably that they have not passed on their sales tax. The Government is willing to accept those statements, which have been made from both sides of the House with some fervour. The Government does not wish in any way to impose any hardship, disability, or injustice where it can be proven that a trader has not passed his sales tax on. The Government is, therefore, glad to have the opportunity to bring down this amendment to provide for refunds in those circumstances. In order that there shall be no doubt as to the Government’s intention in this amendment, I should like to enlarge a little on the purpose of it Sales tax payers can be divided roughly into two classes: first, those who have for a long or a short period, during the currency of the tax on second-hand goods, defaulted - that is to say, have not paid their tax ; and, secondly, those who have defaulted or have not paid the tax for a period and then continued again to pay the tax monthly. This amendment, allowing for a certain reservation which J shall explain later, affects only those persons who paid their sales tax currently, that is, during the period in which it was due, month by month. It does not seek to confer any right on sales tax payers for refunds during the periods in which they were in default. So that if a sales tax payer from the beginning of the sales tax for a period of, say, twelve months, neglected entirely to pay tax no matter for whatever reason, from either ignorance or design, he will have no claim under this amendment. Such a taxpayer cannot claim any refund from the Commissioner with respect to any period in which he defaulted for any reason whatever, but having ceased to default and having paid up arrears of tax and then having commenced to pay currently month by month, as is provided for under the act and regulations, during the whole of the new period as a current payer, he is among the persons who can claim a refund provided they can prove to the Commissioner, other than by even their own sworn word, that they havenot passed on the tax. As I have said before, I think it will be extremelydifficult to prove, but we have been assured by honorable members that there are quite a number of people who can satisfactorily prove that, for some reason or other, they did not pass on this tax.
– It will not prejudice a claim if there has been default for a time after a taxpayer first started paying tax and subsequently resumed payments.
– The fact of his having subsequently defaulted does not wipe out his right to claim refunds for the previous period or current period. For the period inwhich he defaulted, the taxpayer will have no right to claim a refund at all. It is only current taxpayers who can claim this refund.
– The amendment is not giving back anything.
– I am assured by honorable members that quite a number of tax payers will benefit under this amendment. Sub-clause a provides that this benefit shall apply where the Commissioner is satisfied -
Thus, where the Commissioner, on the taxpayer’s own application, has given him time to pay, he will be able to claim a refund in respect of payments for the month in which he would ordinarily have paid.
– Even though an inspector of the department was instrumental in bringing that man to book?
– Would not such an individual be a defaulter?
– No, at present the man has 21 days in which to make a return, but as this provision is worded the words “within a month” gives an additional period beyond the 21 days in which sales tax normally was returnable. I do not think it is necessary to expand on this explanation. However, I do not want honorable members to think that this concession goes beyond what it actually says. It is as clearly expressed as possible, and means just what it says. The Government assures the House that the Commissioner will leave no stone unturned to assist any taxpayer to produce evidence to prove his claim for a refund. I am glad to be able to introduce this amelioration of the provisions of the bill. I move -
That at the end of sub-section (1.) of proposed new section 12a, the following proviso be inserted : - “ Provided that where any person has paid any amount either as sales tax or for sales tax by reason of the sale of any goods which prior to that sale had gone into use or consumption in Australia and the Commissioner, upon the production of such evidence (other than, or additional to, the statement, whether by statutory declaration or otherwise, of that person) as the Commissioner considers sufficient, is satisfied -
that the amount was paid within one month after the close of the month in which the sale took place or within such further time as had been allowed by or under the authority of the Commissioner upon a request made by or on behalf of that person during the first men tioned month; and
that the amount has not been passed on by that person to the purchaser of the goods in the total sum paid by the purchaser to the vendor in respect of the sale, the Commissioner may refund to that person the amount so paid by him.”.
.- The Minister concluded his remarks by saying that he was glad to be able to move this amendment. I think he should be. First of all, we had a strong debate in this chamber which apparently had no effect on the Ministry. Then the “ furphy “ went round that the matter was more effectively debated in another place - and I do not mean the Senate chamber. However, now that I have seen the amendment, I am not so sure that that debate was more effective in moving the Government than that which took place in this chamber. Rut the honorable members who, led by the gallant honorable member for Wentworth (Mr. £. J. Harrison), made such a great showing had to have their faces saved, and this is a very clever amendment to bring about that result. It certainly will not do the justice which the honorable member forWentworth demanded, and in which demand he was so valiantly supported, I understand, by a majority of the Government party.
Examining the amendment we find first of all that it proposes there should be refunds to certain taxpayers who can satisfy the Commissioner that they did not pass on the tax.
– That is all we wanted.
– This does not apply to all who paid the tax. That is what the honorable member wants, if he gets it. But I will show him that he does not get it.
– I am prepared to take the Minister’s assurance on that point.
– I am prepared to take the amendment, as printed, and consider it in conjunction with the Minister’s explanation. I do not say that the Minister has misrepresented the amend ment ; he has possibly confused the mind of the honorable member who now believes there is something more in it than is actually the case. The great bulk of the money that should be justly refunded will not be refunded by this amendment. One reason for this discrimination is an assumption that those who do not pay regularly are deliberate defaulters. I say that that is a wrong assumption. It has been pointed out by the honorable member for Wentworth that there were a number of taxpayers who honestly believed that they were not liable to pay this tax, and because of that belief did not pay it, but when called upon to pay, and being satisfied that they were liable, did pay. Apparently, under this amendment, these people are not to receive one penny by way of refund, yet those who were defaulters just as much as any of these people, who merely defaulted in ignorance, can be so described, and who continued to default, defying the Commissioner in doing so, are not to be called upon to pay. This is discrimination in excelsis ! I ask the honorable member are those people who defaulted through ignorance and subsequently paid not to be regarded as better than those who deliberately defaulted and would not pay?
– There are very few of that latter class.
– There is a lot of sales tax on second-hand goods outstanding, and I challenge the Acting Treasurer to have a return prepared showing what it amounts to. I propose to ask for such information later. I know that one of the biggest firms in Melbourne dealing in expensive items has not paid this tax. It is very easy for the Minister to say there are very few in this class. I do not think many honorable members will accept his statement. There is always a considerable amount of tax outstanding, especially in a case of this kind where a tax is new, involving an entirely new system of taxation, and is not understood by those who come under it. In any case there is always a hang-over in any tax. In this amendment certain people are called defaulters, yet they have paid the tax, although through ignorance they may have delayed doing so for a year or more. Others who delayed through ignorance or for any other cause and did not pay at all are not to be called upon now to pay the tax. This amendment will make the position more complicated than ever before and will lead to more discrimination. It is a mere subterfuge of the weakest possible character to save the faces of the Government supporters who took a noble stand for freedom and for justice, and then ran away when the’ whip was cracked in caucus. I move -
That paragraph (a) be omitted from the proposed proviso.
That amendment will accomplish what the honorable member for Wentworth set out to accomplish. The Minister’s amendment is a travesty on the honorable member’s speech and on his aspirations. Tt was handed to me only a little while ago, but it did not take me five minutes to see through it. Anybody who can read will see that it does not meet the suggestion made by the honorable member for Wentworth previously. The honorable member has apparently had the wool pulled over his eyes. If he is satisfied with the Minister’s amendment, then he is more innocent than I imagined him. I can see many complications being caused by the amendment. I recall the impassioned reply made by the Minister to the debate the other night, when he declared that the honorable member’s suggestion could not possibly be adopted. The biggest guns in the department have evidently been brought to bear upon this matter. But the whole contention was that there was no proof as to whether the tax had been passed on or not, and that consequently no refunds could be made. I point out that that proof has still to be furnished. I agree that it should be. I have said throughout that the onus should be on the taxpayer to prove that the tax had not been passed on. This is where the subtlety of the amendment is noticeable. I should like honorable members to focus their attention on the central point. Those who are in an unchallengeable position to prove that they did not pass the tax on are those who did not pay it during the process of the sales - those. who did not pay it for a year or two years, but continued to sell the goods believing that they were not taxable. Obviously, they can show that they did not pass the tax on. But they are not to participate in the refunds.
– How does the right honorable member make that out? A man who believed that he was not taxable and did not pay the tax may still have passed it on by means of an increased price.
– No one can argue along those lines. If he could increase his price without having paid the tax, he could do so whether the law was in existence or not. That is a different proposition. It is to be assumed that persons who sell goods in competition with others obtain whatever price they think they can get which will enable them to carry on. But when they have to pay a tax upon their sale3 they add the amount to their price. Does the right honorable gentleman say that they would add the tax to their price if they did not believe that they were liable to pay it? That is too ridiculous an argument to put forward in an assembly of intelligent persons. With perhaps a few exceptions, these are probably the only taxpayers who will be able to satisfy the Commissioner that they have not passed the tax on. Others who paid it as they traded may not have been able to pass it on because of competition. Unless they have kept strict accounts, they will experience considerable difficulty in furnishing the necessary proof, and, therefore, will not get a .refund. The great bulk of this tax has been paid after a lengthy delay by people who did not think that they were liable to pay it. They are being excluded, on the assumption that they are deliberate defaulters. The Government should have greater warrant for that assumption. I have had in this Parliament the reputation of being rather severe on taxpayers, because I have been prepared to chase defaulters to the last ditch, not because of a desire for high taxation, but because I wanted to make it possible to lower taxation by making those who were liable pay their fair share of it; but I have never yet assumed that the bulk of the community are tax defaulters and evaders. But because of that assumption, certain taxpayers are now to be denied what is to be granted to the worst defaulters, those who have not yet paid. These are to go scot free.
. - I was rather interested in the speech of the Leader of the Opposition (Mr. Scullin). I listened with equal interest to his second-reading speech, in which he stated, without equivocation, that it was the intention of his Government when it introduced the sales tax legislation to tax second-hand goods.
– That does not arise here.
– The right honorable gentleman pointed out that proof of the intention of his Government to tax second-hand goodswas furnished by its refusal to accept an amendment moved by the honorable member for Swan (Mr Gregory). I submit that if that were the intention, ignorance of it cannot be justified. Neither in my amendments nor in the speeches that I have made have I endeavoured to justify ignorance. I have demonstrated concisely and clearly that my proposed amendments did not aim at the protection of the tax dodger. I would not on any account protect the man who deliberately defaulted. I have no intention of subscribing to the suggestions or of acknowledging the insinuations of the right honorable gentleman. I tell him now definitely “and decidedly that if he can honestly assure the committee that it was the intention ofhisgovernment to tax second-hand goods, thenignorance of the law cannot be pleaded and he should not be the one to protect defaulters. Say what he may, he is protesting on behalf ofdefaulters. I suggest that he is not honest with the committee when he purports to make an explanation drawing attention to the fact that it was his intention, when introducing the sales tax legislation, that second-hand goods should be taxed, and then endeavours to protect men who have deliberately broken a law that he enacted. He lays it down as a fundamental that he passed legislation to tax secondhand goods, and then has the temerity to say that those who ignored the intention of his government and defaulted should be protected by the legislation of this Government. His argument is groundless. The amendments that I foreshadowed clearly set out my intention. If amplification were needed, it is to be found in my second-reading speech. Since then I have consulted one of the gentlemen who comprised the deputation, and can say that he is in accord with the amendments that have been brought down by the Government. Is there any necessity for me to argue the matter further ? As I understand the position, the amendments will not apply for the period during which a man has defaulted. The taxpayer who has defaulted for a period will receive no consideration even though he may be able to plead ignorance of the law, and to show that he has paid the tax voluntarily from the time that he became aware of his liability. A man may have paid the tax for a period of eighteen months and then have honestly defaulted on account of financial embarrassment. The Government is displaying leniency in such cases. If that man at a subsequent date either approached the Commissioner voluntarily or was picked up by an inspector, and under an agreement paid according to his financial position, he will not lose the benefit of his payments during the earlier period of eighteen months, and from the resumption of payments up to the time of the court’s judgment.
– That is correct.
– No man who is fair or reasonable can expect more than that. That is all that I had in mind, and that was the understanding of those honorable members on this side who supported me. The present proposal was agreed to without a dissenting voice when it was placed before the party by the Acting Treasurer (Mr. Casey). I commend the Government for what it has done. It has understood what was intended, and while not condoning the offence of the defaulter, has granted a measure of justice.
.- After the somewhat impassioned speech of the honorable member for Wentworth (Mr. E. J. Harrison) I should like the committee briefly to consider what the consequences would he if the amendment of the amendment, as proposed by the
Leader of the Opposition (Mr. Scullin), were agreed to. The amendment which the right honorable gentleman submits to the amendment moved by the Acting Treasurer (Mr. Casey) means that, where a person has paid the tax and satisfies the Commissioner, by evidence other than his own statement or statutory declaration, that the amount which he has paid has not been passed on by him to the purchaser of the goods in the totalsum paid by the purchaser to the vendor, the Commissioner may refund to that person the amount so paid by him. That is the effect of the amendment which the Leader of the Opposition has submitted to the committee. I challenge the honorable member for Wentworth, in the light of the stand that he took in the earlier stages of this bill, to show cause why the person who paid the tax, and furnishes other than statutory evidence that he paid it and did not pass it on to the consumer, should not have the tax refunded to him. By what process of equality is it suggested that, after the taxpayer has proved, in the very difficult circumstances which this amendment imposes upon him, that he paid the tax out of his own pocket, and has paid it to the Crown-
– Does the honorable member refer to the defaulter?
– I refer to the person who paid the tax. It is beyond my comprehension that a person who has paid the tax should still be regarded as a defaulter in respect of his obligation under that tax.
– I am afraid that I am not clear as to the honorable member’s meaning.
– The word “default” is used. I submit that a person who is liable to pay, say, £100 in taxes, and does pay that amount, can no longer be called a defaulter. Having satisfied the obligations of the law, it seems to me to be ridiculous to presume that he is a defaulter. He has met his obligations. Therefore, as this tax was invalid during the period that he paid it, and while other persons were contesting it and did not pay, the difference between the attitude of the Leader of the Opposition and that of the honorable member for Wentworth now is that the latter proposes to confiscate for the Crown certain moneys that were paid to the Commissioner under this invalid tax, without at the same time taking any steps whatever to recover from other persons who did not pay the tax at any period.
– They are the real defaulters.
– If I understand the position taken up previously by the honorable member for Wentworth, it was that this tax was proved to be an invalid tax ; but prior to the investigation of the matter by the courts, a considerable number of persons, believing that it was invalid, resisted payment, and as the result of the decision of the Government, following the judgment of the High Court, are no longer to be levied upon by the Taxation Department, notwithstanding that, so far as this tax is concerned, they have paid absolutely nothing to the Crown. The honorable gentleman pointed that out. He said that there were other persons who were in doubt about the tax, but were not in a position to hold up payment, for fear that it might be declared to be a valid tax, and after prolonged delay paid substantial lump sums and satisfied their obligations under the tax.
Mr.Casey. - They were forced to do so.
– The Minister professes to believe that it is fair that he should impound the tax collected from those potential taxpayers against whom the tax was enforced, but that he should make no endeavour now to recover the tax from their competitors who successfully evaded the tax and any enforcement of it.
– What would the honorable gentleman do?
– We should return to those persons from whom the tax was improperly collected the money paid by them, provided that they can prove, in the difficult circumstances set out in the amendment, that they paid the tax out of their own pocket, and did not pass it on to the consumer. Does the VicePresident of the Executive Council (Mr. Hughes) say that it is fair to perpetuate the. discriminations which were implicit in the bill as first introduced, and in the amendment which the Acting Treasurer (Mr. Casey) now favours ? That amendment removes none of the inequalities that were the essence of the original hill. What the Acting Treasurer does now is to say that, provided a person can prove that he did not pass on the tax, and, further, that he paid the tax currently - that is, month by month - the amount so paid will be refunded. It is pointed out that there was considerable doubt about the legality of the tax. Many taxpayers who have paid the tax did not pay it currently, although the totality of the tax that they would have paid currently was paid by them in a lump sum.
– Does the honorable member say that the incidence of the tax depends upon the state of mind of the potential taxpayer?
– The justification for these proceedings depends upon such elementary principles of justice as this committee possesses.
– Who introduced this class of taxation in the first place?
– This legislation had been introduced to clean up the mess left by the Scullin Government.
– My Government had to clean up a bigger mess bequeathed by the Bruce-Page Government. .
– In his second-reading speech, the Leader of the Opposition laid down certain essential principles. He said that the tax was either lawful or not lawful, and that in the latter event it was the duty of this Parliament to validate the collection of the tax if it believed that the tax should have been imposed and ought to be continued. That would have involved recovery proceedings against all persons who would have been equally liable to pay the tax, but did not pay it. In that respect it differed from the proposals of the Acting Treasurer. The essence of the distinction between the attitude which, apparently, the VicePresident of the Executive Council takes up, and that which I adopt is that, so long as all persons who were affected by this tax are placed on a basis of equality, we can say that we are doing the fair thing. Hitherto, it has been impossible to act on an equitable basis for the reason that many persons have not paid the tax. Unless we devise fresh legislative measures, it will no longer be possible to recover from them if the Government abandons this field of taxation. The Government will not take the necessary steps to impose on those who have not paid the tax the same obligation as has been imposed on those who have paid it. Because of this essential inequality in the treatment of two groups of citizens, the attitude of the Opposition is that we should refund the money to those who have paid it, because we do not propose to recover the tax from those who have not paid it. The honorable member for Wentworth put the position most eloquently in his secondreading speech, and I have no doubt that it was the common justice of that plea, effectively urged in another part of this building, that resulted in the submission of this amendment. I support the proposal of the Leader of the Opposition because of its simplicity and justice. It means that any person who paid the tax and proves by other than statutory declaration to the satisfaction of the Commissioner that he did not pass the tax on shall have the amount so paid refunded to him. The onus of making a claim and also of substantiating it is on the taxpayer. This Parliament will completely satisfy the requirements of equity if it furnishes the requisite means whereby taxpayers may establish their right to have refunded to them the money which it is now admitted was invalidly collected from them.
– Does not the amendment introduced by the Acting Treasurer provide for that?
-No ; the honorable member for Fawkner (Mr. Maxwell) apparently has not appreciated the limitation contained in thesub-clause a of the Acting Treasurer’s amendment, which the Leader of the Opposition desires to have deleted, which sets out that those who paid the tax concurrently may obtain a refund in certain circumstances. We contend that all those who subsequently discharged their obligation in full shall be entitled to a refund. As every one knows, a considerable amount of uncertainty existed as to the validity of this tax. Those who could afford to test its validity took the risk of not paying anything at all, whereas those who could not afford to take such a risk, delayed payment for some time in many cases, but ultimately paid a very largo sum of money to the Treasury. I make it clear that I am not defending the rights of the rich or poor in this instance. I endeavour to disregard the considerations of wealth or poverty, and to look at the essential justice and propriety of the measures introduced into this Parliament, regardless of whom they may affect. The general substance of the contentions raised in the second-reading debate on this measure, no doubt ultimately led the Government to recast its bill; but honorable members on this side of the committee will not be satisfied unless a further amendment is made. I therefore trust that the proposal of the Leader of the Opposition will be approved.
.- I cannot help wondering whether the Acting Treasurer (Mr. Casey) really thought that honorable members would accept his amendment, without question, as a satisfaction of the submissions made on this clause during the second-reading debate. I congratulate the houorable member on his subtlety. He has certainly been skilful in sidestepping the arguments, not only of his own supporters, but also of honorable members of the Opposition. I disapprove of the blustering way in which the honorable member for Wentworth (Mr. E. J. Harrison) tried to get out of an ugly corner by abusing other persons. It has been demonstrated to us clearly that the roller was put over the honorable member and those who supported him when this subject was discussed in the party room. [Quorum formed.] I object to the use of the term “ default “ in respect of those persons who did not pay this tax. During the second-reading debate many honorable members referred to letters signed by responsible officers of the Sales Tax Branch of the Taxation Department, which had been sent to what were described as reputable firms - I do not know whether they were reputable firms or not - to the effect that second-hand goods were not subject to sales tax. In these circumstances there can be no justification whatever for accusing taxpayers of default, because they did not pay the . tax. The amendment provides that taxpayers may obtain refunds in certain circumstances, provided that they paid the tax month by month, currently. I have in mind the case of a man who could not possibly pay all the tax in one sum. Even now he has only paid a portion of the amount alleged to be due. ‘Will he be regarded as a defaulter because he has not paid all the money demanded of him?
– Very few will obtain a refund.
– Exactly. The amendment moved by the Acting Treasurer (Mr. Casey) has been drafted with that objective. It is easy to imagine that the brains of some have been very active during the last few hours. The Minister in charge of the bill can be regarded as an “artful dodger” in that he is again sponsoring a proposal under which it is proposed to avoid refunding any portion of the £250,000 illegally collected. The amendment of the Leader of the Opposition provides that refunds will be made to such taxpayers who can prove that they have not passed on the tax. Numerous business men can prove that the tax has been passed on and in such cases refunds should be made to purchasers. Many sales have been accurately recorded, and are known to business men and to the customers, and could readily be identified. Surely in such cases the Government will refund the amount of tax paid, and thus benefit a large number of persons. In connexion with taxation generally, it is not unusual for taxpayers to receive amended assessments which may affect the position from time to time. I received amended income tax assessments covering a period of two years. Apparently the officials of the income tax department, after having examined my returns microscopically, discovered that I should have paid an additional sixpence in taxation. The Government having attempted unsuccessfully to use its majority to defeat the decisions of the High Court is now adopting this subterfuge to enable it to retain the money which it has collected illegally. If honorable members opposite intend to support the amendment moved by the
Minister, they are disregarding completely their obligations to the electors. The Standing Orders should be amended to provide that honorable members must vote in accordance with the views they have expressed. The amendment of the amendment moved by the Leader of the Opposition ensures that justice shall be done, and if it is not adopted, we might as well refrain from discussing the subject further. We are safe in assuming that very little money will be refunded.
– We shall make an honest endeavour to assist the taxpayers.
– The Acting Treasurer is praying that it will be exceedingly difficult for taxpayers to prove their claims. The Government is making it almost impossible for any taxpayer to obtain a refund. So far as I can see, it will be only the wealthier section of traders who will benefit at all. The Minister’s amendment is a sham, and an endeavour to make the Parliament and the people believe that the Government is doing something which it has no intention of doing.
.- The honorable member forWentworth (Mr. E. J. Harrison) in a tempestuous speech, consisting for the most part, of irrelevancies, sought to cover up his complete abandonment of the cause which yesterday he so valiantly championed. Three classes of taxpayers or potential taxpayers are envisaged in the amendment. To those who paid immediately, and without question, refunds are proposed. Those who did not pay, and who resisted payment of the tax from the beginning, and who, either individually or through their representatives, urged that they were being illegally taxed, are not being classed as defaulters. They are to get away with it. They have the money which they might have paid just as effectually as if it were being handed back to them by the Government. There is no reflection upon them as being defaulters; but others who paid the tax, but not without argument are classed as defaulters, and are being punished as such. If I understand this amendment aright they are not to obtain any refund under the amendment moved by the Acting Treasurer (Mr. Casey) if, as is stated in this amend ment, they have postponed payment but ultimately paid. I said a moment ago - and the Acting-Treasurer affected to regard what I said as merely a cynical remark - that those taxpayers belonged to the most meritorious class. I repeat that statement now, and I expect the ActingTreasurer to take it seriously. They stood out against this tax on the ground that it was an invalid and, an illegal impost, and they have been proved to be right. They had the courage of their convictions and their judgment has been proved sound. However, notwithstanding their conviction that the tax was illegal and invalid, they were overcome by force majeure; they succumbed and paid. They were not defaulters, but that is what the Government is calling them; and it refuses to refund any of the tax they paid, though a refund is being made to those who did not object to the tax, who did not examine it, who did not fight its unjust incidence, but “ shelled out “ at the first demand.
– The parties who actually took the Case to the court may not receive a refund.
– I understand that they will.
– But not those who were unofficial parties to the case, those whose money probably went into the fight.
– I cannot understand how the honorable member for Wentworth (Mr. E. J. Harrison) has been prevailed upon to abandon the stronghold he so stoutly defended yesterday. He abused his position by making an utterly irrelevant assertion that the Leader of the Opposition himself, when Prime Minister, was associated with the imposition of sales tax on second-hand goods. The Leader of the Opposition admits that, and the Acting-Treasurer knows it well, because, although he came into the chamber fortified with a vast volume of evidence to show that the Leader of the Opposition advocated the tax on second-hand goods, he found its use to be unnecessary in face of the open admission of the Leader of the Opposition.
We are now dealing with the refunding of a tax collected under a mistaken view of the law by the Commissioner of Taxation. In a word, the High Court has declared that this tax was illegally collected. Moreover, it has been stated that the tax was not only illegally collected, but that to continue collecting it would be inequitable. It was, therefore, declared to be both illegal and inequitable; it has been condemned on all counts. Then, from the ranis of Tuscany there came forth a champion of justice and right, the honorable member for Wentworth. Evidently he obtained too much support; too many came to his standard, and it appeared that the Government was going to be embarrassed. He became alarmed at his own success, and at the possibility that he might be leading a fight in which the Government, to which he is supposed to give support, would be defeated. He has therefore run away from the fight; but we do not propose to run away. We are suggesting nothing new. We stand for the same principles that were the issue in yesterday’s fight, and I am only sorry that those honorable members on the other side who, yesterday, saw the light, to-day find themselves - to quote a favorite phrase of the- Minister for Health (Mr. Hughes) - shrouded in Cimmerian darkness, but still following the Government which they evidently feel themselves bound to support in any and every circumstance.
– I remember that, when I was in Opposition a few years ago, a case similar to this arose, and I made a perfervid appeal to the Government to refund certain moneys to taxpayers in consequence of a High Court decision which went against the Commissioner for Taxation. When I relate the particulars of this incident, and describe the attitude taken up at that time by the Scullin Government, of which the honorable member for Batman (Mr. Brennan) was Attorney-General, honorable members will realize and assess at its proper worth the protestations which the honorable member for Batman has just made, and the sincerity of the Leader of the Opposition (Mr. Scullin) in putting forward his amendment. I refer to the Douglass income tax case.
– It is in no way analogous.
– It was a case of double taxation, and a decision was given in the High Court in favour of Douglass. All those taxpayers who were in the same situation as Douglass immediately demanded refunds, and I supported their claim in this House. It would seem that they had justice on their side, because, in the course of his judgment, Mr. Justice Dixon said -
Justice seems to require that he (the shareholder) should receive an allowance in respect of so much of his taxable income as would not exist but for the inclusion of the dividends in assessable income.
Mr. Justice Rich added
It seems petty and mean of the Government to refuse to make an allowance in a shareholder’s assessment of the whole of the tax paid by the company on the dividends received by that shareholder.
- (Mr. Riordan). - I hope the Minister will not open up a discussion on income tax.
– No, I am merely making a comparison. The then Prime Minister, discussing the case in committee, said -
The court is not concerned with the intentions of Parliament, and we intend to prevent any further escape. Douglass escaped because he won Iris case.
– We went on with the tax. and collected the arrears, which the present Government is not doing.
Mr. ARCHDALE PARKHILL.Notwithstanding that a High Court judge stated that it was mean and petty not to refund the tax, the Government closed up the breach in the law and refused justice to citizens whose position was exactly the same as that of the man who won his verdict, and who had probably subscribed to the fund to fight the case. There is a clear analogy between that case and the one now under discussion. Therefore, when the Opposition pretend sympathy with the taxpayer in this case, I ask the committee to judge them by their actions when they were in positions of responsibility and authority; when they could have done the things which they are asking the Government to do to-day, but which they then declined flatly and contemptuously to dc
What the Government is doing in this case is fair and reasonable. The only purpose of amendments moved from the other side is to embarrass the Ministry, which is pursuing a perfectly straightforward and reasonable course. The desire on the part of honorable members opposite to induce the Government to refund the taxes collected to date seems to suggest their belief that the limited number of men comprising the Government will be forced to do something that is distasteful to them. May I remind them that Ministers are in a position of trustees, for the time being, of a nation, and that the amendment of the amendment submitted by the Leader of the Opposition is really a raid upon the Treasury, which, if successful, would necessitate the adoption of other taxation measures. I, for one, strongly resist this proposal to deplete the revenue by approximately £500,000 - I have in mind the probable effect of the amendment in other directions - which would have to be made up possibly by additional income taxation. It is idle to say, as has been said by the honorable member for Batman (Mr. Brennan), that the people concerned did not know that second-hand goods were taxable; because, as the Acting Treasurer pointed out in his second-reading speech, the regulations governing the sale of second-hand goods are only three in number, and we may he reasonably sure that those who handle second-hand goods are familiar with them.
– Can the Minister for Defence (Mr. Parkhill) say whether the amendment of the Acting Treasurer excludes any taxpayer who can satisfy the Commissioner that he paid the tax but did not pass it on?
– As I understand it, the amendment is of a nature described by the honorable member for Fawkner (Mr. Maxwell).
I rose principally for the purpose of citing the Douglass case, which, in my opinion, is on all-fours with the present position, and to comment upon the extraordinary attitude of the right honorable the Leader of the Opposition when he was leader of a government and his attitude to-day.
.- The Minister for Defence (Mr. Parkhill), with a broad smile upon his face and producing a bound volume of Hansard, came into the chamber a few minutes ago for the evident purpose of proving inconsistency on my part. In the first place he proved, if he proved anything, that he alone was inconsistent, because he admitted that when the Douglass case came up for discussion on an earlier occasion, he fought for refunds and the rights of those whose interests were affected by it, whereas now, being a member of the Ministry, he is entirely opposed to any refund of taxes collected. The honorable gentleman was unable to prove any analogy between the two cases, and certainly he did not prove inconsistency on my part.
At the outset, I should like to make clear to the honorable member for Fawkner (Mr. Maxwell) the position under the Government’s amended proposal, because I feel sure that the answer given by the Minister for Defence did not do that. If, however, the honorable member is satisfied. I shall not pursue that aspect of the subject further. He asked the Minister for Defence if the amendment introduced by the Acting Treasurer (Mr. Casey) excluded any person who had paid this tax, but who could show that he had not passed it on. The Minister’s answer, as I heard it, was evasive, if not misleading. I say definitely that the amendment does exclude such persons from the benefit of refunds.
– They have to prove that they did not pass it on.
– I say that it does exclude them unless they satisfy the Commissioner that they did not pass it on and it excludes every person who did not pay his tax regularly.
– Those who defaulted.
– Who are the defaulters?
– The people who did not pay the tax.
– Some of those people, because they considered that the law did not require them to pay, did not pay for two years or more. Eventually they were forced to pay under duress, but the High Court held that they were right.
Now, the Acting Treasurer describes them as defaulters.
– Certainly not.
– The only difference is that some taxpayers challenged the law, but eventually paid, while others challenged the law but did not pay. Those who challenged the law and paid will get no refund, whereas those who challenged the law and did not pay, will not now be called upon to pay.
I come now to the Douglass case which the Minister for Defence cited in order, as he thought, to prove inconsistency on my part. The Douglass case was analogous to, I think, about twelve- other cases, that were brought before the House by Dr. Earle Page when he was Treasurer in the Bruce-Page Government. They arose owing to a defect in the act which subsequent legislation remedied. The Government passed retrospective legislation, retained the taxation which had been collected, and went on collecting the tax. Parliament then took the view that it was a just law and should be continued. Is there any analogy between any of those cases including the Douglass and the cases involved in the amendment now before the committee? The court held that the action of the Government in the Douglass case was illegal, but the Government and Parliament took the view that it was a just cause, legalized the collections made under the act, and collected the outstanding taxes. In this case the court has held that the action of the Government was illegal, and the Ministry, by its amendment, admits that it was inequitable, and does not intend to go on with it. But it will not make refunds. In connexion with previous cases the then Treasurer cited a number of instances which were affected by it and I supported him in the fight against even some of his own supporters. In this case the Government is forcing through committee legislation which is inequitable. I am frank enough to admit that it was my law, that it was our intention to tax these goods, and that the law proved to be inequitable. If a law proves to bo inequitable it should be discontinued, and the money collected under an inequitable law should be refunded. There is nothing inconsistent in that attitude. The Minister for Defence (Mr. Parkhill), when in opposition, believed in making refunds when the court gave a decision, but he does not believe in it now.
– No; this is a different matter.
– It is indeed different, and the difference makes the Government’s action wrong. The honorable member for Wentworth (Mr. E. J. Harrison) made charges against me this afternoon. He said that I came into the House and stated that we intended to put this tax on, and that now I had the audacity to come along and protect defaulters. I throw that charge back in his teeth. I am not here to protect defaulters. This has been admitted by the Government itself to be an inequitable tax. The money collected under it should be refunded, not because there was a flaw in the act, but because the act was inequitable. I have the honorable member’s speech here, but am not allowed to quote from it.
– I did not make that point, and I challenge the right honorable member to show me any passage in my speech to prove that I did.
– The honorable mem ber said in his speech that some people were registered and some were not, and that the competition was unfair.
– Is not that inequitable ?
– It has nothing whatever to do with the payment of the tax. It was simply stressing the fact that there was unequal competition under the incidence of the right honorable member’s act.
– All I said was that the honorable member stressed the fact that it was inequitable - that the payment of the tax itself was inequitable. The honorable member proved that the tax was inequitable, because competition was unfair.
– No, I did not.
– I have the honorable member’s speech here. The honorable member pointed to that fact. He stressed the inequity of the tax on the ground that those who paid it were unable to compete with those who did not. He stressed the fact that some were registered and some were unregistered. It is there in the honorable member’s speech.
– My speech does not bear the construction that the honorable member is trying to place on it.
– The honorable member is impossible. He would wriggle out of a paper bag. Did he not accuse the Government of nullifying the court’s judgment? Was not that the basis of his charge? I did not charge the Government with wrongdoing because it was prepared to legalize what the court had found to be illegal. . I pointed out myself that there were dozens of instances of action of that kind by every government, and that any government was justified in legalizing what had been done, provided it was satisfied that the law was just, and that the tax collected under it was equitable. That is the whole basis of the thing. In this case the Government admits that the law was not just, and that the tax collected under it was not equitable. It is not going to collect the outstanding tax, because it was not equitable. It is not going to continue the tax, because it was not equitable. That is the basis of the whole case. The intention of Parliament when it passed the act is not the point at issue at all. I admitted frankly that the Government intended to tax these goods, and that Parliament intended it also. There was never a franker speech made in the House than mine was. I pointed out where we stood. I said I was not criticizing the Government for the fact that the tax was inequitable. I admitted frankly that it was my own law, and that I had introduced it. No man could be fairer than that, and the Minister representing the PostmasterGeneral (Mr. Hunter) admitted that my speech was fair. The honorable member for Wentworth cannot fasten upon me a charge of being the defender of defaulters. My record in this Parliament, whether on the Government or Opposition side, is proof against that. The honorable member also said that men who took part in and contributed towards the cost of the test case were not going to be given a refund, because their names had not been cited in the case. The honor able member claimed that that was inequitable and unjust. After stressing the fact that the money was wrongly collected, and should be refunded, the honorable member used these exact words -
To bring down arbitrarily a validating law that is entirely opposed to the decision of the court is not the way to create confidence or disseminate justice.
That was the basis of his case. Added to that, he stressed the injustice of it. He pointed out that people who were parties to the test case could get no refund. He said they included many who paid the tax and others who did not pay it. Those who paid it will get no refund. Those who did not pay it will not be called upon to do so. I repudiate the suggestion that we are defending defaulters. Nobody can be described as a defaulter under this tax, which the court said was not legally imposed, or legally collected.
.-I do not attribute wrong motives to any honorable member on the other side. The position, as I understand it, is simply that the tax was imposed by the Scullin Government, and continued by this Government. It was open to this Government to legislate still further in order to make it legal and carry it into effect. The Government did not take that course. It decided that difficulties would surround the continuance of the tax. It was prepared to be generous, and announced that it would not continue it. It said that it would not collect the tax that had not been paid up. It appears to me that, as the Estimates have been based each year, since the first inception of this law, upon the tax that would be collected under it - showing that it had parliamentary sanction from the beginning - the tax cannot justly be described as in any way inequitable and unjust as regards second-hand goods, any more than it is in relation to ordinary trade and commerce. As I said in my previous speech, thousands of small shopkeepers are at a disadvantage in having to pay the sales tax in competition with large chain stores, which can buy in large quantities at wholesale rates, and sell retail cheaper than the small shopkeepers can buy wholesale. There is inequity in the tax on secondhand goods aswell as in the tax as applied to ordinary commerce, but the
Government cannot be charged with unfairness or injustice in doing what it did. The only thing that brought me to my feet was the charge that there was something immoral and wrong in the whole transaction. I never shared that view, because it has been demonstrated that, from the inception of the tax, it was the intention of Parliament that this money should be collected and paid into the Consolidated Revenue of the Commonwealth. When the High Court gave its decision, I presume that the Government could have appealed. If it had done so, I understand that the High Court would have said, “You need not appeal; all you have to do is to go back to Parliament and amend your legislation, putting it in order in accordance with what we have stated to be the law.” If that had been done, the Government would have been quite justified in tightening up the law and making it proof against any defaulters. I do not think there is much in the amendment which is now before the committee. I think there has been a good retreat on both sides. I do not believe that the Government will have to refund much of the tax that has been collected on the sale of second-hand goods. The dealer who has defaulted altogether in regard to the payment will not repay any of the tax, and the man who challenged its legality for twelve months, and refused to pay it, will continue to refuse it. If, on being pressed by the department, he eventually paid up, that very fact would be almost prima facie evidence that he had never passed the tax on. He would have no books to show that it had been passed on. The man who had been called upon to pay sales tax every month would say, “ I can show that I added the tax to my price”, so it is not likely that any refund will be made. The 5 per cent, sales tax is not recognized by a second-hand dealer when putting on his profit. He probably makes a profit of 50 per cent, or 100 per cent, on the sale of an article, and a 5 per cent, tax is a mere bagatelle to him. In 99 cases out of 100, he will have no record of having passed on this tax.
– Then he will never get it back.
– There is not much to argue about over this matter. I am glad that both the Government and the honorable member for Wentworth (Mr. E. J. Harrison) are satisfied. The honorable member for Wentworth does not deserve half of what has been said about him this afternoon. I do not think that it will ever be possible to show that this tax has been passed on in connexion with the sale of second-hand goods. The seller of a second-hand suit of clothes probably does not know how much he paid for it. I traded in a motor car recently, and was told that I would be allowed £75 on it, but I have no doubt that the car was sold to another person for £100. A sales tax payment of 5 per cent, would scarcely be taken into consideration by the motor dealer.
.- I am delighted to see the way in which the Government has “ put it over “ an honorable member who would have us believe that he was trying to do heroic work by obtaining the return of the tax paid on second-hand goods. The amendment submitted to-day will leave the position practically as it was before. The honorable member for Wentworth (Mr. E. J. Harrison), who has taken up the cudgels on behalf of the Sydney Pawnbrokers Association, has completely backed down, and the Government, through its caucus, has given him a thorough whipping. His change of attitude is most interesting, having regard to his charge that the Government had acted immorally in collecting sales tax on these goods. He claimed that as a moral citizen he would not allow this or any other Government to do this immoral thing. Yet, not one of the pawnbrokers will benefit by the amendment submitted by the Minister. These dealers always get as much as they can out of the public. In effect, they pass taxes on before their sales are made. A Scotchman would have to be shrewd, indeed, to put anything over a Jew. If an article is worth 10s., it is probably offered for sale in the pawnbroker’s window at £1, but the dealer will readily accept an offer of 15s. Thus the tax is wiped out before the customer even looks at the article. The honorable member for Wentworth, who claimed heroically that . he was about to lead a revolution, has now meekly accepted, an amendment by the Minister, which provides for the opposite to what he wanted in the first place.
– I regret that the withdrawal of my amendment has not satisfied honorable members opposite. It was not my intention to draft an amendment to suit their ideas on this subject. My object was to crystallize my own opinion as to the course of action which the Government should take. The Government has given me the assurance which I sought. If honorable members opposite desire to submit other amendments, they are at liberty, of course, to do so. Owing to the publicity that has been given to this matter, and, possibly, because the objection to the Government’3 proposal came from one of its own supporters, rather than from a member of the Opposition, honorable members opposite apparently feel that their thunder has been stolen. They are now endeavouring to capitalize all the publicity which this matter has received. Any member of this committee is entitled to criticize the Government. Although I have taken exception to the sales tax as a whole, I have not submitted a proposal for its abolition. I was content with the amendment which I drafted, and believe that it would have meted out reasonable treatment to those concerned, although it would not have achieved all that I desired. The collection of sales tax on second-hand goods was not legalized, even though it may have been the intention of the Government that it should be law, until the Supreme Court of New South Wales gave its judgment in the Searl case. It was certainly legalized by that decision. The Government had a right therefore to collect it up to that date, and since it has collected and expended it, with other revenues, to the benefit of the taxpayers generally, the taxpayers who paid it and benefited by the expenditure of those moneys have no right now to come to the Government and say that they want a refund. From 1932 onward certain taxpayers, who were aware of the decision given in the Searl case, continued to default, and they should be shown no consideration now. I submit that the Government’s amendment is satisfactory.
The Leader of the Opposition (Mr. Scullin) stressed the fact that I said in my second-reading speech that men who took part in and contributed towards the cost of the test case were not going to get a refund and he endeavoured to prove by that reference that I was sacrificing the rights of these people in the future. May I remind honorable members that I referred to a specific case in which photographers are jointly contesting the opinion of the Commissioner. I have the assurance of the Acting Treasurer (Mr. Casey) that the interests of not only those photographers, but of the whole of the photographers throughout Australia, will be safeguarded if the judgment of the court favours them in this particular case. I do not want to anticipate the Minister’s statement with regard to the Government’s intentions in regard to that case, but I think I am justified in referring to it at this stage in answer to the Leader of the Opposition. Having received that assurance I think that the right honorable member should be satisfied. It is a gesture on the part of the Government which should be responded to by honorable members on both sides.
.- The special pleading in which the honorable member for Wentworth (Mr. E. J. Harrison) has indulged does not clarify his own position in this matter. On the contrary it discloses a bewildering lack of consistency on his part. The honorable member has reasoned in a queer , way. He argued that those who had paid the tax had no cause to complain of the amendment under which they will not receive a refund, because the taxation which they had paid had been expended by the Government in their interests. I point out that the money has not been expended exclusively in the interests of the taxpayers who paid the tax, but for the benefit of the taxpayers in general, including those who failed to pay any tax at all, and who will not now be called upon to make good their default. The honorable member’s attempt to clear his conscience is unconvincing, and I feel that his explanation does not satisfy even himself. The case presented by the Leader of the Opposition and other honorable members on this side of the House is so convincing that honorable members opposite have no argument to refute or destroy it. I feel the Government is committing a grave injustice by seeking to impose a disability upon people who endeavoured to ascertain their own responsibilities in this matter by instituting a test case. I agree with the honorable member for Batman (Mr. Brennan) that these taxpayers deserve credit for having taken action to prove whether or not this class of legislation was legal, and I regret that they are now to be submitted to special penalties. The action of the Government is opposed to every principle of justice, and this House should see to it that justice at least is done. I have in mind the case of Horwood, Bagshaw and Sons Limited, a firm which, as I have already mentioned, indicated to me that when this legislation was first enacted they sought a ruling from the department as to whether they were liable to pay the tax. The department definitely informed them that they were not liable. Later, however, the department made a claim against the firm for the payment of the tax, but, because of the earlier ruling given by the department, the claim was at first disputed. Under duress they ultimately agreed to pay the tax by monthly instalments. In this case a reputable firm of business men, who made every endeavour to conform to the law and consulted the department with regard to their obligations, will now be denied a refund.
-I do not wish to interrupt the honorable member, but will he pardon me for saying that the basis of his argument, as put up to him by this firm, is untrue,
– I shall be astounded if the Minister is able to show that the information forwarded to me by this firm, which has a splendid reputation, is incorrect. Judging the case on the facts put before me by this firm, I am convinced that the Minister’s suggestion is baseless, and I promise him that as soon as I have had an opportunity to consult further with the firm, I shall raise the matter again in this House. I have every confidence in the honesty and integrity of that firm, and I have no reason to think its statement of the case is untruthful.
I do not challenge the truthfulness of the Minister; possibly he is under some misapprehension in this matter, but even if that were so he would not be justified in imputing dishonesty to a firm in whose honour and integrity I have implicit confidence. The case presented to me by Messrs. Horwood, Bagshaw and Sons Limited has been substantiated by another, that of Messrs A.W. Dobbie and Company Limited, a prominent firm in Adelaide. I do not think that either of these firms would descend to putting their case untruthfully before me. Other firms have made similar representations on this matter and I urge the Government, even at this late hour, to mete out justice to all concerned and not to one class only.
.- Mr. Chairman-
Motion (by Mr. Archdale Parkhill) put -
That the question be now put.
The committee divided. (Chairman - Mr. Prowse.)
Majority . . . . 6.
Question so resolved in the affirmative.
Motion agreed to.
Question - That the paragraph proposed to be omitted (Mr. Scullin’s amendment) stand part of the proposed amendment - put. The committee divided. (Chairman - Mr. Prowse.)
Majority . . 7
Question so resolved in the affirmative.
Amendment of the amendment negatived.
Amendment (Mr. Casey’s) agreed to.
– In respect of what may be called the second leg of this amending clause, namely, proposed section 12a (2), which will limit the right to refunds of tax to people who start an action in the court within six months, the Government has been led to understand that a test case has been launched in Sydney on behalf of a number of’ photographers protesting against the sales tax having been made applicable to them. They base their opposition to the tax on the ground that photographs are not manufactured goods. The application of this new provision would take away from these photographers some right which they might have expected should be preserved to them, and consequently the Government is prepared to give an undertaking that, in the event of the test case being taken to court and ‘won by the litigants, it will protect the interests of photographers generally to the extent that it will deem all photographers to have been associated with the actual litigant in this case, and will refund all sales tax paid from the date of the initiating of the proceedings in October last until the date of the High Court’s decision, insofar as that decision affects the necessity far them to pay the tax.
Several drafting amendments have been found necessary. They are covered by the following amendments, which I now move -
That the word “ Commissioner “ sub-section 2 of proposed new section 12a be omitted with a view to insert in lieu thereof the word “ Commonwealth “.
That the words “ as or for sales tax in purported pursuance of “ in the definition of “ prescribed ground “ sub-section 4 of proposed new section 12a be omitted with a view to insert in lieu thereof “ eitheras sales tax or for sales tax payable under “.
After the word “ Act “ third occurring, in the definition of’ prescribed ground’, subsection 4 of proposed new section 12a insert “ or of that act as amended from time to time”.
That the words “ as or for sales tax in purported pursuance of “ in paragraph 6 of the definition of’ prescribed ground ‘ subsection 4 of proposed new section 12a be omitted with a view to insert in lieu thereof the words “ either as sales tax or for sales tax payable under “.
That the following definition be added to sub-section 4 of proposed new section 12a “; ‘sale’ includes a lease of goods under a hire purchase agreement.”
Amendments agreed to.
Clause, as amended, agreed to.
Title agreed to.
Bill reported with amendments; report adopted.
Bill read a third time.
Bill received from the Senate and (on motion by Mr. Casey) read a first time.
Mr. WHITE (Balaclava- Minister for
Trade and Customs) [6.3]. - I lay on the table reports and recommendations- from the Tariff Board on the following subjects : -
Arsenate of lead.
RoadRollers: Wheeled tractors and tractors (caterpillar typo) and ports of tractors whether wheeled or caterpillar type for use in the manufacture of road graders, road rollers, power shovels, power louden, winches,locomotives and similar appliances; sleeves for tractors.
Ordered to be printed.
Debate resumed from the 21st March (vide page230), on motion by Mr. Casey -
That the hill be now rend a second time.
.-in reply- Thisbill has practically nothing to do with the trade in second-hand goods with which we have just dealt in the Sales Tax Procedure Bill, except to amend the definition of “goods” to include second-hand goods. The remainder of the bill concerns a number of small amendments found necessary in the administration of the existing legislation. One amendment exempts from sales tux goods which are manufactured in Australia and exported out of Australia by the manufacturer, not for sale, but for his own use. Another clause gives effect to the promise made by the Government during the last sittings of Parliament, that the penalty provisions of the Sales Tax Assessment Act (No. 1) would be made less stringent and would conform more to the provisions of the Sales Tax Procedure Act. I give the committee the assurance that the bill contains nothing else of any major consequence.
Question resolved in the affirmative.
Bill read a second time and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
Debate resumed from the 21st March (vide page 231), on motion by Mr. Casey -
That the bill be now read a second time.
- in reply - Sales Tax Act No. 9 imposes sales tax on the leases and hire-purchase of goods. The position, if this amending bill is agreed to, will be that sales tax will be imposed on leases ofnew and second-hand goods but not on hirepurchase transactions of second-hand goods. Hire-purchase is taken to be substantially a sale, and as the sale of second-hand goods does not involve the payment of sales tax, neither will the hire-purchase of second-hand goods. These amendments are ancillary to those with which we have just dealt. The measure does not include any other important provisions.
Question resolved in the affirmative.
Bill read a second time and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
In Committee of Ways and Means:
Motion (by Mr. Casey) agreed to -
That on and after the date of the commencement of the act passed to give effect to this resolution the goods leased by a taxpayer upon the sale value of which tax is imposed by sub-section (1.) of section three of the Sales Tax Act (No.9) 1930-1931, as affected by section nineteen of the Financial
Relief Act 1933, shall include goods which have gone into use or consumption in Australia, and which are leased bya taxpayer on or after that date.
Standing Orders suspended ; resolution adopted.
That Mr. Casey and Mr. Archdale Parkhill do prepare and bring in a bill to carry out the foregoing resolution.
Bill brought up by Mr. Casey and read a first time.
– I move-
That the bill be now read a second time.
The object of this measure is to give effect to the amendment made to Sales Tax Assessment Bill (No. 9), which has just been passed. It includes nothing new and is entirely formal.
Question resolved in the affirmative.
Bill read a secondtime and reported from committee without amendment or debate; report adopted.
Bill read a third time.
House adjourned at6.14p.m.
The following answers to questions were circulated:
Wine Export Bounty.
– The answers to the honorable member’s questions are as follows : -
(a), (c). and (d). The investigations are not yet complete. The honorable member was, however, advised on the 13th December, 1934, that it was not considered desirable to make public the result of such investigations.
Wool Exports : Imports of Motor Vehicles.
– The information is being obtained, and will be furnished as soon as possible, in answer to a scries of questions asked by the honorable member for Bourke (Mr. Blackburn), regarding the payment of invalid and old-age pensions.
Cite as: Australia, House of Representatives, Debates, 5 April 1935, viewed 22 October 2017, <http://historichansard.net/hofreps/1935/19350405_reps_14_146/>.