14th Parliament · 1st Session
Mr. Speaker (Hon. G. J. Bell) took the chair at 3 p.m., and read prayers.
– In view of the great importance of the trade dispute with. Japan, is the Minister directing negotiations for trade treaties in a position to make a statement as to the outcome of the protracted negotiations which have taken place between the governments of the Commonwealth and Japan?
– Notatthe present time.
– Has the attention of the Treasurer been drawn to a speech reported to have been made by Professor Bland, of the . Sydney University, in which he made several comments in connexion with the last Commonwealth budget?
– I have seen the report published in the press, and that is my sole source of information on the subject.. The remarks which Professor Blandhas given himself leave to make are based almost entirely on comments of the exAuditorGeneral, Mr.Cerutty. Igivea complete and forthright denial to the charge that there has been any underestimating of federal revenue whilst I have been associated with the Commonwealth Treasury. With regard to remissions of taxation, I would point out that it has been the policy of this Government to make such remissions as are possible in view of the obligations which rest upon it, and of the estimated revenue at the beginning of the financial year. Customs and excise revenue is exceedingly difficult to estimate. The best estimate possible is made of the Government’s obligations, and remissions of taxation are based on it. The Government considers it to be an unsound plan to overestimate customs and excise revenue, and to make remissions of direct taxation accordingly. Professor Bland’s remarks in respect of trust funds are merely a re-hash of those made earlier by Mr. Cerutty. These latter, I have answered at length in this chamber. The trust funds are in no sense hidden reserves. Theyare not hidden, and they are not reserves. They are fully accounted for in the financial papers which are presented to this House. They cannotbe drawn upon by the Government in case of need. They are for a specific purpose, and until that purpose is accomplished no part of them may be transferred, to general revenue. In conclusion, I consider that I am justified in expressing the hope that in the material which Professor Bland prepares for his students at the University-
– Order !
– I hope that more care and thought are given to its preparation.
– Order !The honorable the Treasurer should only reply to the question.
– Has the attention of the Minister for Commerce been drawn to certain strictures which were recently passed by the Premier of Queensland, Mr. Forgan Smith, in relation to Australia House in London, and to a reply tothem made by Mr. A. E. Hyland, the Director of Australian Trade Publicity in London? If so, having recently returned from abroad, has the right honorable gentleman any comment to make upon the letter sent by Mr. Hyland to the Dairy Produce Export Control Board, the concluding sentence of which reads as follows : -
I would like tosee the Board deal sharply, if a way could be found, with critics like Mr. Forgan Smith, who do not know what they are talking about; who do not seek expert guidance in making their inquiries; who do not try to benefit in reaching their conclusions by the experience of those who hare made themselves familiar with local conditions.
– Order ! The honorable member is merely drawing attention to an opinion expressed by some outside person. A question may not contain comment.
– This is an official letter written in his official capacity by one of our officers in London to an official board in Australia.
– It expresses certain opinions upon a particular subject, and that is not permissible in the asking of a question.
– I am not commenting personally upon the matter.
– The honorable member, when asking a question, may not express either his own opinion or that of any other person.
– I bow to your ruling, Mr. Speaker. I ask the Minister whether he has any comment to make with respect to these strictures and the reply to them, and to say whether Mr. Hyland is justified in declaring that the Queensland Government contributes nothing, either morally or financially, towards the subject of the criticism?
– I have not seen the original strictures of the Premier of Queensland, but my attention has been drawn to the article published in the Primary Producer last week, which contains Mr. Hyland’s reply to them. All that I have to say with regard to Mr. Hyland, who in this case speaks of butter, is that, as the result of his activities in connexion with publicity and advertising, Australia has been able to increase its sales of butter in Great Britain during the last four years from 41,000 tons a year to 109,000 tons a year. In addition, the margin of some 6s. per cwt. between New Zealand and Australian butter, which at one time existed, has now disappeared. In fact, duringthe whole ofthe time when I was in London, New Zealand butter was selling at practically the same price as Australian butter. I know that there has been a good deal of criticism of Mr. Hyland’s method?. He does not believe as strongly as others do in advertising by means of big placards on buses and so forth. His method is to win the goodwill of the grocers of Great Britain. Under his direction, the number of shops which sell Australian produce has increased from 8,000 to 40,00.0 in the last six years. I know that he is always ready to listen to any suggestions for the improvement of his methods. Before I left London I asked him specially to get in touch withthe Agents-General of the States to enable them, if possible, still further to improve his methods.
– I rise to a point of order. The Standing Orders forbidthe asking of questions in such a way as to give information, or to provide a vehicle for comment by the questioner. The common practice, if not the Standing Orders, restricts Ministers in their replies to the giving; of information, and they should not be allowed to insert comment or argumentative statements.
– I made no argumentative statement.
– From time to time I have ruled that it is not in order for an honorable member to offer comment, or to quote the opinions of others when asking a question. However, honorable members sometimes ask a Minister whether he has any statement to make on a particular subject, or whether he has any comment to offer upon a statement they have quoted. Strictly speaking, it is out of order for a Minister to comply with such a request, but they have always been allowed some latitude in giving information bearing on a question of interest to the House. If a Minister wishes to make a statement which contains argument, or is lengthy, the permission of the House should be sought.
– Has the attention of the Postmaster-General been drawn to the frequent delays which occur in the telephone service between Bendigo and Melbourne? If so, what steps are being taken to rectify the trouble?
– I am unable to say whether the attention of the Postmaster-General has been drawn to this matter, but I shall bring it before him now that it has been mentioned by the honorable member. I am quite sure that he will take immediate steps to see that the trouble is rectified.
– Does the Prime Minister concur inthe resolution carried by the Victorian section of the United Australia party in regard to the adoption of universal military training in Australia? If he does not, will he make a statement to the effect that the Government disapproves of compulsory military training, and will he take steps to ensure that the United Australia party does not continue this form of propaganda?
– If a Minister were permitted to ask a question, I should ask the honorable member whether he is prepared to accept every recommendation of every branch of every union in the Labour movement. The honorable member was not justified in using the word “ compulsory “ in his question. The resolution referred to by the honorable member does not contain that word, and as it does not press for the introduction of compulsory military training, and the Government does not favour it, the Government and the United Australia party seem to be fairly well in line with regard to the matter.
– Has the Prime Minister received a reply from the British Government to the proposals for a modification of the control clause of the agreement in connexion with the Empire flying boat air mail service from London to Sydney? Will the Prime Minister inform honorable members of the nature of the suggested modifications, and when it is expected that full details of the new service can be announced?
– A brief statement on this subject was made recently by the Minister for Defence. The Government has been in communication with the
British Government,but no reply to its representationshas yet been received. As soon as we are in a position to make a pronouncement, we shall do so to the House.
– Does the Minister forTrade and Customs approve oftheGilbertian policy in film censorship which aims , at establishing Australia’s moralguardianship over other countries, while admitting the failure of Australia to observe the moral standards which it seeks thusto impose ?
Mr. JOHN LAWSON.In view of the widely varying nature of recent officialdecisions as to the worthiness or otherwise of films, will the Minister take stops to ensure greater uniformity in censorship,?
– I cannot agree that the present position is Gilbertian. The Commonwealth Government controls film censorship, under regulations associated with the Customs Act, by virtue of which (Control is exercised over films that are imported or exported. The States have sights of censorship over films circulated within their borders, whether produced there, or brought in from outside, and they have exercised those rights. Recently, a fiimcalled Stingaree, which has been circulated andexhibited freely in Victoria, was banned in New South Wales. If the honorable member has in mind the film Uncivilised mentionedin recent press reports, I may inform him that only five cuts were made in that film, amountingtoaboutsix feet in all, by the censorship board, consisting of two men and one woman.
Mr.Ward. - What is the name of the film?
– One that the honorable member will appreciate - Uncivilised. The company which owns the film has the right of appeal, and the agitation worked up in the press regarding the censoring of this film will not influence the appellate authority in any way. . The matter has not yet come before him, but when it does, he will be allowed to deal with it without interference from the Government.
– As a large number of skilled artisans are now temporarily employed at the Cockatoo Island Dockyard, can the Minister for Defence give an assurance that, when the naval construction programme is resumed, these men will receive further employment at that dockyard ?
-I can give an assurance that a large number of men of the description indicated will be given work there, and that a decision in regard to the naval construction programme will be expedited as much as possible.
Mr.BLACKBURN. - Can the Minister representing the Postmaster-General state whether the department has received a protest from Victoria against the practice of employing postmenas inquiry agents to ascertain whether applications for the maternity allowance are bona fide? If so, what action will be taken in the matter?
-I am not aware whether such a protest has been forwarded to the department, but I shall inquire into the matter, and inform the honorable member as tothe position.
– Is it a fact that light military tanks are in process of manufacture at Maribyrnong, and, if so, when will any of these vehicles be completed?
– I understand that one light tank has been constructed at Maribyrnong. I shall ascertain the number proposed to be built, and inform the honorable member as to the result.
– Is the Minister for Railways aware that the number of people now applying for bookings on the Commonwealth railways from Western Australia to the Eastern States, and vice versa, find it difficult to secure berths, and are sometimes delayed several days waiting for vacant berths? In view of the largely improved and sustained traffic of the last few months, will the Minister have the question considered of increasing the service from a bi-weekly to a tri-weekly one, the same as was in operation in former years? If the matter is already being considered by the department, what is the obstacle tin the way of an increased service?
– I was not aware of the facts set out by the honorable member in the first part of his question, but I shall go into the whole matter with the Commonwealth Railways Commissioner.
Privy Council Appeal
– Have any legal proceedings been taken by one James, who has sprung to fame as a successful litigant with the Commonwealth?
– Order !
– The words which I have used describe the man about whom I am talking. Has a claim beenmadeby James, and have legal proceedings been taken? If so, what is the nature and amount of the claim?
– I shall place the question before the AttorneyGeneral, who will supply the honorable member with an answer.
-Has the Government yet reached a decision with regard to the taking of a referendum respecting section 92 of the Constitution? If not, how is it possible that the Minister for Commerce was able to explain the proposals of the Government during the week-end in Sydney?
– As to the first portion of the honorable member’s question, I have previously stated that, as soon as there is a pronouncement to be made, the Government will make it, and that, I take it, will be in the form of the introduction of the necessary measure to be considered by the House. In regard to the latter part of the question I am afraid that the honorable member for Werriwa did not quite understand what was said by the Minister for Commerce.
Misdirected Document: Disclosure of Contents
– I desire to address the following question to you, Mr. Speaker : -
– As to the first part of the honorable -member’s question, the matter raised is not one for action by the Speaker. The second portion of the question should have been addressed to the Minister representing the PostmasterGeneral. The third paragraph seeksan expression of legal opinion, which is not in order in asking a question, and the concluding portion of the question is undesirable.
Censorship of Books
– Is it a fact that the Perth Literary Institute wasraided the other day by officers of the Customs Department, and that a number of books were seized? Has the Minister a list of the books taken, and why were they so seized ? Are they on the prohibited list, and was the Perth Literary Institute informedregardingthe books that are on the prohibited list ? Furthermore, does the list include An EssayonLiberty by John Stuart Mill?
– I cannot say whether the book last indicated by the honorable member is an essay on liberty or license, but some people find it difficult to distinguish between these two subjects. No raid was made upon the institution mentioned by the honorable member, but, by mutual arrangement, it handed over to the Customs Department certain books, all of which, I understand, are on the banned list. Some of them, I understand, have been banned by the board controlling censorship, and, if the honorable member desires it, I shall let him have the opinions of the board on these particular books. I think that the honorable member himself advocates that indecent and obscene books should be prohibited, and I point out to him that some of the books to which he has just referred come within that category. They may have come into the possession of the institute inadvertently, the institute being unaware that they were on the banned list.
– I ask the Minister representing the Minister for Health - How long has the Commonwealth Nutrition Committee been conducting its inquiry? When can it be expected to make its report available? How many persons have been employed on the inquiry? What isthe total cost to date of the inquiry?
– I shall referthe honorable member’s questions tothe Minister for Health.
– I ask the Minister representing the Postmaster-General if it is a fact that a licence has been granted for the establishment of a B class relay station, to be known as 3LK, with a licensed power of 3,000 watts? Will this power make it the strongest B class station in Australia? Is it a fact that this licence is to be held by, or on behalf of, 3DB Broadcasting Station Proprietary Limited, in which the Melbourne Herald holds all the issued shares, according to the statement made in this House on the 3rd December, 1935, by the Minister for Defence, as shown on page 2366 of Hansard ?
-I have no knowledge of the matter raised by the honorable member, but I shall obtain full information from the PostmasterGeneral, and inform the honorable member thereon.
Assent to the following bills reported : -
Supply Bill (No. 2) 1936-37.
FinancialRelief Bill (No. 2) 1936.
Mr. SPEAKER (Hon. G. J. Bell).I have received from the Leader of the Opposition (Mr. Curtin) an intimation that he desires to move the adjournment of the House this afternoon for the purpose of discussing a definite matter of urgent public importance, namely, “ The acceptance in principle by the Commonwealth Government of an undisclosed agreement with the Government of the United Kingdom with regard to air mails, and the failure of the Government to assure national control of the internal air mail services.”
Five honorable members having risen in support of the motion,
– I move -
That the House do now adjourn.
I do so in order to direct attention to a matter of urgent public importance, namely, the position in respect of the Imperial air mail service and the agreement between the Commonwealth Government and the Government of the United Kingdom, which has been the subject of questions in this House, and which, I contend, revealsthe failure of this Government to safeguard adequately national control of the internal air services of Australia. Since the commencement of this session, the Government has been pressed for definite information upon this subject, and the answers given to all of the questions asked can be described as indecisive. As late as to-day the right honorable the Prime Minister (Mr. Lyons), in reply to a similar question, gave honorable members the impression that finality had not been reached. On the adjournment last Thursday the Minister for Defence (Sir Archdale Parkhill), in intimating that he intended to visit Nev Zealand, and would leave on this mission at the end of this week, said that, after careful consideration, the Commonwealth Government had conveyed to the Government of the United Kingdom certain suggestions for the modification of the scheme. Obviously, suggestions for the modification of a plan submitted by the British Government do not involve disagreement with the substance of the proposals, and it would appear that, in principle, the Cabinet has agreed to the British Government’s plan. 1 believe that the British scheme involves a seven-day bi-weekly air service with flying boats from London to Sydney, and there is substantial evidence that this Government has been opposed to the use of flying boats in respect of that portion of the service which at present is being operated under the control of Australia. I challenge the Prime Minister, or the Minister for Defence, if the latter proposes to speak instead of the Prime Minister on this matter, to say whether the decision of this Government, that is, to the extent that it has made a decision - and to some extent it has done so, because the Minister for Defence is going to New Zealand on this matter this week - means that the existing Service between Singapore and Brisbane will be replaced by a through flying boat service from London to Sydney. To .that question to-day the Government ought to give a decisive “Yea” or “Nay.” This Parliament has a right to know whether the substantial element of the proposals of the British Government has the support or opposition of the Australian Government. I venture the opinion that it is with a view to affording some excuse for the adoption of the flying boat plan that the Minister for Defence has been commissioned to go to “Wellington to consult with the Government of New Zealand, concerning arrangements for the proposed flying boat service to continue across the Tasman, with its terminal at Wellington or some other New
Zealand city. I believe that, if the New Zealand Government can be dragged into this scheme on this, or some other, basis, the usual propaganda will be put forward by the Commonwealth Government to the” effect that, in order to . link up New Zealand with the system, it is not practicable to employ land planes on any portion of the route. I remind the Prime Minister that, on the 31st January last, he said that the Commonwealth Government found difficulty in reconciling the proposals of the Imperial Government with Australian conditions and local requirements. That statement was very conclusive, and at that stage the British proposal obviously was unsatisfactory in principle to the Australian Government. Parliament has the right to know whether the Commonwealth Government has altered its view or whether the British Government has so varied its proposals as to make acceptable now a plan that early this year was irreconcilable with Australian conditions. One of the two Governments must have revolutionized its ideas during the year as to what was regarded as necessary for Australia in connexion with the scheme of imperial air mail services. The statement of the Prime Minister was reiterated a few days afterwards by the Minister for Defence, who said that the Commonwealth Government had decided that it could not accept the proposals outlined in the Empire air mail scheme.
We are warranted, however, in construing the present situation as indicating a change of policy on tho part of the Commonwealth Government for reasons that I shall indicate. Quite recently the Attorney-General (Mr. Menzies) and the Minister for Commerce (Dr. Earle Page) have returned from a visit to London, and have had the opportunity to impart to their colleagues views which I venture to say are in absolute contradistinction to those furnished previously by the Minister for Defence, and which are not supported by the officers of either the Civil Aviation Department or the Defence Department. I say that because in the explanation of the defence policy of the Government, which the Minister for Defence gave honorable members only a few days ago in the course of a carefully prepared speech, he intimated in the clearest language, that at the recent meeting of the Council for Defence, recommendations to revise the Salmon d scheme of air defence against raids included -
Having regard to the great importance of this subject it is imperative that before the Minister for Defence leaves Australia for New Zealand next Saturday this Parliament should decide whether or not the use of flying-boats is preferable to that of land aeroplanes between Darwin and Sydney.
I understand that the British Government’s plan means that a British company will be the responsible contractor for operations over the route not only from London to Singapore, but also from Singapore to Darwin and from Darwin to Sydney, pooling the fleets and the personnel of its Indian and subsidiary companies with its own resources. If that be the case - and the Government has not given us enough information to permit us to know just what the position is - it would appear clear that Australia’s control over vital internal air mail services will be jeopardized if not destroyed by its adoption of the scheme.
– In what way?
– Our air mail services are an integral feature of the general development of the Commonwealth and our national control of them is, I submit, of vital importance and is indispensable to theproper development of Australian aviation generally.
– How would external arrangements affect our development?
– The policy pursued by the company in Australia would not be subject to control by the Commonwealth Government, but would be dictated very largely by the arrangements which the company was able to make with the Imperial Government. The Commonwealth Government would have hardly any control, because, whenever the company wanted to do a certain thing; it would justify itself by a reference to its relations to the Imperial service, rather than the Commonwealth.
– Is the honorable gentleman speaking of external services?
– I am speaking of the internal service between Darwin and Sydney. Apart from the considerations which I have just outlined, which involve the general principle, there is grave reason for disquietude regarding the suitability of flying-boats for Australian conditions. Mr. Harold Gatty delivered an address while he was in Australia two months ago in which he said that flyingboats did not fit in with the scheme of defence in Australia. Major Brearley,. who has had as long experience of aerial services in Australia as any other executive, and is most competent to givea fair judgment on the subject, has said -
Control of the Singapore-Brisbane section must be retained by Australia, and must continue to be operated by Australians.
I refer honorable members, also, to the following remarks by Major Brearley -
Atpresent, this service is one of the cheapest and most efficient in the world.
It is’ regular, and always on time, and latterly our planes, owing to repeated delays in the service from the London end, have been flying beyond Singapore to Bangkok to pick up the mails. A land-plane service between Singapore and Brisbane, supported by efficient ground organization, is of vital importance to Australia, because of the experience it gives our airmen of our internal routes.
In time of war, those routes are of tremendous strategical importance, as they are the vulnerable points in our defence.
I feel warranted in saying that the flyingboat plan is an integral part of the agreement which the British Government has apparently insisted upon, and refused to modify. Apparently, the Commonwealth Government has withdrawn itsopposition. If so, Australian aviation development will be greatly retarded in the next fifteen years, and our airmen will not have the advantage of the experience which would have been theirs had the original policy of which the Minister for Defence informed us early this year been strictly adhered to by. the Government. The general consensus of authoritarian opinion is that it will be impracticable to prepare the route between Darwin and Sydney for flyingboats of the type which it is understood the British Government contemplates using. I am forced to the conviction that the Commonwealth Government is unjustifiably yielding to British pressure, and is being forced to a decision which threatens thu reliability of our own aerial services. Notwithstanding the repeated assurances that the Government had rejected the proposal for a flying-boat service on the Australian section of the route, it now appears almost settled that it has allowed its opinion of the undesirability of this type of craft to be overborne.
I shall be content if the Minister for Defence, in the course of his reply, will say definitely that flying boats will not be used on the Australian section of this air mail service. If he makes such a statement, definitely and emphatically, we shall know where we are. I submit to the honorable gentleman that the Government should retain complete control of the whole of our inland air mail service, and, in particular, that part of it operating between Singapore and Sydney. I put it to him that the Imperial Air Mail Service, by and large, will be regarded by the Imperial authorities, not so much from the point of view of Australia,, as from its own point of view; our requirements will be subordinated to the Imperial requirements, and even our defence requirements may be overlooked. In. considering the defence of the Pacific, and of our own country, the Government should not be guided by the opinions of British Ministers, who do hot. know our circumstances and outlook; nor should it be influenced unduly by its members who have recently been on a short visit to England. Full weight should be given to the views of the officers of the Defence Department and the Civil Aviation Department.
Can the Minister for Defence tell us that there is justification in the advice he has obtained from his officers for the Government’s apparent change of views and its decision to scrap the land-plane service in Australia, and adopt the flyingboat service advised by the British Government ?
I regret that time will not allow me to say more on the subject.
– In the first place, I desire to clarify the position so far as the New Zealand aspect of the aerial mail services is concerned, and the objective of my visit to the dominion. The full proposal of tho British Government in regard to the oversea air-mail scheme is for the establishment, of a service from Great Britain to Darwin, extending thence to Sydney, and finally to New Zealand. The chief matter which I propose to discuss on my visit to New Zealand and in fact which I have been invited to discuss, is the arrangement concerning the section between Australia and New Zealand. The circumstances arose in the following way: A representative of the British Aviation Department is visiting New Zealand to discuss with the government of that dominion matters affecting the New Zealand end of the air-mail proposal, and, in view of the fact that we were concerned with- the Australian end of the service, the Government of New Zealand invited a member of the Commonwealth Government to be present at those discussions. I emphasize that the Commonwealth representative ha? not been invited by the Government of New Zealand to discuss details of the whole route, nor the proposals for the service between Great Britain and Australia, although there may be an interchange of views on these matters. As a matter of fact, the Postmaster-General of New Zealand was present at a conference which took place here on this subject some time ago, but although he heard the discussions respecting the service f rr.in Great Britain to Australia, he took, no part in them. He participated only in the “discussions which affected the New Zealand end of the service. The object of my visit to New Zealand, at the invitation of the government of that dominion, is to discuss the New Zealand-Australia section of the route.
The proposal itself dates back a considerable time, and is one of very far-reaching importance both to Great Britain and to Australia in respect to the carriage of mails, and aviation generally. For that reason, and in view of its effect on both countries, it is not a proposal which can be accepted offhand, without being made the subject of the fullest investigations. It may be contended that the scheme has been in existence for a considerable time, and that negotiations in this connexion have been somewhat protracted. 1 am prepared to admit that, but the fault cannot be attributed entirely to the Commonwealth Government. After the scheme, was first proposed, a conference took place in Sydney which was attended by representatives of the Post Office and the Civil Aviation Department of Great Britain, and the Commonwealth then asked for further details in regard to important aspects of the proposal. Those important aspects involved such considerations as control, in its effect on Australian aviation and defence, the cost, and the nature of the services to be carried out - whether the route should be operated by flying boats or by large land planes. Some months elapsed before this additional information came to hand, and then, in view of the fact that the Minister for Commerce (Dr. Earle Page) and the Attorney-General (Mr. Menzies) were shortly to be in London, I submitted to this House that it was reasonable that the Commonwealth Government should request those Ministers to ascertain by personal conversations with the Air Ministry in Great Britain the nature and full import of those further details, and other information generally which the Commonwealth Government required on the matter. Those Ministers have obtained the information, and, in reply to the criticism by the Leader of the Opposition, I state that it is in no sense in conflict with the views held by the Commonwealth Government on this subject. It deals with other aspects of the matter entirely, and I emphasize that it in no way conflicts with the opinions oxpressed by the Civil Aviation Department or the Defence Department. I suggest, with great respect, that the Leader of the Opposition is confusing two very distinct matters; first, the external service to Australia ; and secondly, the internal services. The proposal with which I am concerned at the present time involves the external service from Great Britain to Australia. To-day the mails between the two countries are carried under contract by the Orient Line and, to some extent, by the Peninsular and Oriental Line of steamers. It is now proposed to substitute for the carriage of mails by steamship, a bi-weekly air service, and the scheme, as at present put forward, includes the use of large flying boats for this purpose.
– Will the flying boat service have its terminus at Darwin, or at Sydney ?
Sir ARCHDALE PARKHILL.According to the proposal, the terminus for the flying boats Will bo at Sydney, and thence to New Zealand.
– That is the catch. ‘
– The Minister for Defence has given me complete justification for my criticism.
– I do not really know the point of the criticism of the Leader of the Opposition, because it has been all “ over the place,” and I submit, with very great respect to the honorable gentleman, that it has not been in accordance with the facts. I have no desire to mislead the House. The proposal, which is clear and defined, is to bring by air all first-class mail to Darwin, thence to Sydney and finally to New Zealand. At the moment, the Commonwealth Government is concerned with the proposal for the transport of these mails from Great Britain to Darwin and thence to Sydney. That is one aspect of the matter, but the internal services are an entirely different consideration which are not wholly bound up at all with this proposal.
– Surely the service from Darwin to Sydney is an internal one?
– That is a matter of definition. I do not regard a service by flying boats which follow a route around the coast of Australia from Darwin to Sydney as being part of our internal aviation system. To make the position quite clear, I point out that there ha3 never been any suggestion of control with regard to our internal services, by which I mean services which are internal, which are within the coastline of Australia. The object of the Government envisages the continued extension of these aviation services in the interests of the public of Australia and of aviation generally, and nothing is contained in the proposals for an air mail service between Great Britain and Australia, which would interfere with that objective or affect the control of them in any sense, shape or form.
– Would there be a sufficient volume of business to enable the internal services to continue to operate?
– The Minister for Defence previously opposed the scheme for the operation of the service by flying boats.
– Yes, I opposed certain aspects of the scheme, and I am still opposed to some of them; but I am exercising my right as a member of the Commonwealth Government to put forward those views in the proper place.
At present a further proposal is adumbrated for a night flying service between the capital cities of the Commonwealth for the carriage of firstclass mail matter, and ‘this, in itself, would again increase the activities of internal aviation. I mention this matter to show that, so far from these activities being decreased, all the evidence is in the direction of their being continually increased.
– Will the flying boat pass over-land from Darwin to Sydney, or follow the coastline?
– It will go round by sea.
– All the way from London to Singapore?
– Not all the way from London ; it passes over certain land.
– Exactly. Then why does it not pass over land in Australia, and by that means save time?
– I am only giving the proposal as it has been put forward. I do not think that I should be asked to deal with the technical reasons which prompted this proposal. I am giving to the House the fullest information with respect to the present proposal.
– Would the Government be justified in maintaining the route from Darwin to Charleville and Cootamundra?
– That question will arise later. In my opinion, the maintenance of a service over those areas would still be required.
– Then why duplicate it? Why not have the one service?
– I was referring to the delay that has occurred in these negotiations. May I repeat a statement which I made in this House last Thursday? It was to the effect that the Government, after very careful consideration, has conveyed to the Government of the United Kingdom certain suggestions for the modification of the scheme. The Leader of the Opposition (Mr. Curtin) read my statement only to that point. The subsequent portion reads, “ in the interest of more effective Australian control of the section between Singapore and Sydney”. That indicates clearly that the control of that section has not been surrendered.
– The Government has accepted the principle of the flying-boat service as against its own service.
– I shall deal with that in a moment. The House was informed by my statement that control of the route between Singapore and Darwin has not been surrendered, and that it is the subject of discussion at the moment.
– If it is the subject of discussion, the Government has not arranged to retain control over it.
Sir ARCHDALE PARKHILL.It is known that this agreement has not yet been finalized. The Leader of the Opposition is perfectly well aware that ‘negotiations involving money and other important aspects cannot be conducted in public. It is only with a view to dealing effectively with the matter that the House is not made aware of every step as it is taken. Honorable members must agree that such a course could not be followed. The Prime Minister has intimated that, as soon as an agreement is reached, the House will be told of the proposed arrangements, and will be asked to say whether it agrees with them or disapproves of them.
– It will be somewhat late then.
– The honorable member for Perth (Mr. Nairn) will. I think, admit that in his own profession negotiations involving the sale and purchase of real estate cannot be conducted publicly. By reason of the negotiations which have already been con ducted in connexion with this service, the Commonwealth has improved the financial position from the viewpoint of Australia by at least £100,000 a year.
– How are we to be sure that that is so?
– I am affording as much information as I can. It would be manifestly unfair to place before this House the proposals that have been made to the British Government, before that Government has had an opportunity to examine them.
– It was robbing Australia previously.
– The honorable member is not right when he says that ; it i3 not a fact. Modifications were suggested which enabled the proposal to be put forward under which Australia was saved £100,000 a year. That is the position to-day. I am not able, noT is any other honorable member, to say whether the flying boats which are being constructed in Great Britain today, or multiple land planes, are the better form of aircraft for use in this service:
– The honorable gentleman held definite views on that matter previously.
– My views in regard to it have never been definite. I know my own mind. What I said months ago in an address to the Imperial Service Club was that the nature of the aircraft to be used was a matter which should be decided by experts. I still hold that view, and so does the Government, which is not prepared to accept any other that might be placed before it. It will come to a decision after the most complete information has been obtained from the most expert sources, and the fullest consideration has been given to the matter.
– If flying boats are found to be the better, could they not be under Australian control over our portion of the route?
– The Government will be guided by the best advice which can be obtained. When the nature of the aircraft has been determined, the question of control will a r 1 s e If agreement is reached”, it will be quite competent for control by Australia to be maintained over that portion of the route between Singapore and Darwin.
– Could not that be now laid down as a principle?
– The honorable member has been informed that modifications in that direction are being sought from the British Government. Until ‘a final decision has been made, it is not practicable to say more than I am saying at the present time.
– How can negotiations be carried on with New Zealand if a decision has not been made?
– In the negotiations which I shall conduct with the Government of New Zealand, I shall not have plenary power. I shall discuss the proposals, and obtain the views of that government, and of the representative of Great Britain. It has to be remembered that since this proposal was advanced there has never been any personal communication between the Governments of Australia and New Zealand.. The very great advantage of such an interchange of views to both governments, and certainly to the Government of Australia, must be obvious to every one. My view of the object of my visit to New Zealand is, that it is largely to obtain the view of the government of that dominion on this and other important matters, so that the existing position may be clarified.
– Is it proposed to continue the services between Darwin and Cootamundra, and Darwin and Brisbane, or will they be scrapped?
– They will not be scrapped, but there may be some modification of them. My view, and that of the Civil Aviation Department, is that those services should not only be maintained but also increased. The Government intends to provide foi’ the outback portions of this country the same service as is being provided at the present time.
– The only broken link will be that between Singapore and Darwin ?
– I do not say so. That is a matter for negotiation. All that I am. at liberty to say is, that the Government has never deviated from its desire to maintain the right of Australia to settle these matters for itself. [Leave to continue given]. The Government has always kept in mind, and is keeping in mind now, the necessity to maintain full control over Australian aviation, especially in its relation to defence. The extension of aviation, particularly in relation to defence, is of the utmost importance to the people of this country. It is hardly necessary to say that the Government is determined that the views of Australia on this important matter will he definite and clear, and that it will contend for them to the fullest extent.
I would only add in conclusion that I personally regret my inability to give fuller information, in view of the negotiations which are now proceeding. Every other Minister is in the same position. I believe I speak for the Prime Minister when I say, however, that as soon as the negotiations reach finality a full statement will be made by him to this House. While the negotiations are proceeding it is not reasonable to seek to obtain piecemeal statements that may have to be altered on account of the nature of subsequent proceedings.
Mr,FORDE (Capricornia) [4.13].- I consider that the Leader of the Opposition (Mr. Curtin) has done valuable service in having brought forward this matter for the consideration of honorable members. We know that other agreements have been entered into by the Government behind the back of Parliament, and that Parliament has been asked to endorse them holus bolus; it has been told that no amendment of them could be accepted. Obviously, the Minister for Defence (Sir Archdale Parkhill) was distinctly uncomfortable. Evidently a good deal of pressure is being applied to him on behalf of overseas authorities, with a view to weakening the Australian attitude which he adopted when this matter was brought forward six or eight months ago. Are we to assume that the flight which the Minister for Commerce (Dr. Earle Page) made to Australia in a flying boat has caused the Minister for Defence to weaken? We know that the Minister for Commerce was given a right royal time.
Did the Commonwealth Government pay for that flight, or was it provided gratis by Imperial Airways ? Is it having repercussions in the Federal Cabinet to-day? The Minister for Defence has not definitely told us that the Sydney to Singapore link of the Imperial Air Mail service will be controlled by Australia and manned by Australians. The honorable gentleman has talked all around the subject. He has said that there are many things which he would like to tell us, but that he is not in a position to do so. As representatives of the people, we have the right to know everything before adefinate agreementis signed and sealed. When that stage is reached, it will be too late to take action. We now have the opportunity to make a protest on behalf of Australia, and particularly in the interests of aviation in this country. Major Brearley can be regarded as an authority on this subject. He pioneered commercial aviation in Australia, and he is spokesman for sixteen companies which are apprehensive that the interests of Australian aviation will be sacrificed. He has stated that control of the Brisbane-Singapore section of the route must be retained by Australia, and that the service must be operated by Australians. Is it too much to ask the Government to state definitely that control of the service from Singapore to Sydney will be kept by Australia, and that the service will be manned by Australians ?
– I think the honorable member will find, when everything has been arranged, that control of this section hasbeen retained.
– Will the Minister state now that the Government will be adamant on that point ? Our fearis that the Government will weaken, as it weakened in regard to the trade diversions scheme, and in regard to other important matters of policy. We know what the Minister for Defence would like to see done, but we have grave fears that he may be overruled as the result of the visit abroad of the Minister for Commerce (Dr. Earle Page) and the AttorneyGeneral (Mr. Menzies), who were feted and made much of in Great Britain. We have been told that the Imperial Airway? flying boats will follow the east coast of Australia, and for that reason will not compete with Australia’s internal air services. In this connexion, Major Brearley says -
The acceptance of the Imperial Airways flying boat plan would reduce Australian participation, in its own aerial services, to a mere “ omnibus “ plane route between Sydney and Darwin.
The Labour party asserts that it is vital to Australian defence that Australia should retain control of the section of the route between. Singapore and Sydney, and its opinion is endorsed by both the civil and military aviation branches of the Defence Department. I agree with Major Brearley, who says that the AustraliaSingapore section of the service is one of the most efficient and cheapest in the world. Now we are being asked to hand over this efficient service to an inefficient company and even before the suitability of flying boats for this work has been established. The new service will be manned by British pilots and mechanics, so that employment in Australia will be reduced. For every overseas pilot or mechanic employed in Australia, an Australian will bo put out of work. With a network of regular air mail and passenger services throughout the States, and encircling the continent, Australia is rapidly taking its place amongst the airminded nations of the world, and nothing should be done to check the expansion or reduce the efficiency of these services. Aerial services in all States, including the bi-weekly service between Brisbane and Singapore, now cover a total of 16,876. miles. Last year, 1,320,000 miles were flown on subsidized services with only one fatal accident. The record on unsubsidized services was even better, 1,100,095 miles being flown without accident of any kind. No fewer than six’teen different companies are now operating services in Australia. I should like to know whether the Minister for Defence proposes to stand by the policy he enunciated more than six months ago, in regard to the control of the Singapore-Sydney section of the overseas route. Will he give a definite assurance that nothing will be done to weaken Australian control over this section until the people have been consulted on the issue? The Minister has stated his opinions, which are satisfactory, but we know that he can be overruled. In regard to other important matters Ministers have defended themselves for abandoning their opinions by stating that they were compelled to bow to a Cabinet decision. I hope that the same thing will not happen again. We have only too much reason for fearing thai, as a result of the trip overseas of the Minister for Commerce and the Attorney-General, influence is being brought to bear to make the Minister for Defence abandon hia principles.
– I support this motion, and I believe that the criticism of the Government in this connexion is entirely justified. It was evident during the reply of the Minister for Defence (Sir Archdale Parkhill) that he felt very uncomfortable. I know that he favours the retention of the present system of control, and that he would regret to see that system abandoned; but his speech indicated clearly that he ha* retreated from his original position, and that he is now trying to defend a policy in which he does not believe. No doubt he has been overborne by the Minister for Commerce (Dr. Earle Page) and the Attorney-General .(Mr. Menzies), who have but recently returned from Great Britain. The first consideration of the Government should be the welfare of Australian aviation, and the needs of Australian defence. It is difficult to learn from the Government what is taking place. I have repeatedly asked questions in this House on the subject, but Ministers are very reluctant to supply information. However, as far as it is possible to learn from the newspapers, it appears that the flying boats which will come to Australia will be built in England, and will be manned by English pilots, to the exclusion of Australians. The new service must have a detrimental effect upon Australia’s existing internal air services. At present, we have services operating from Cootamundra to Darwin, and from Charleville to Brisbane, only because the mails are being carried overland. It would be impossible to retain the same services if overseas mail were carried in flying boats round the coast. At the present time, the Government provides money for work on aerodromes only if they are onsubsidized routes. Therefore, when the subsidized overseas mail services follow the coast, the aerodromes along the internal routes will be neglected, and will probably fall into disrepair, thus endangering human life. Aviation can be made popular only if high standards of safety and efficiency are maintained, and all aerodromes and machines are regularly inspected to see that they comply with requirements. It is proposed that mails carried by the flying boats shall be subject to only ordinary postage rates. 13 it intended that the same shall apply to all Australian airmail services? If so, the Postal Department will incur a very substantial loss. Major Brearley has stated that he is gravely suspicious of the efficiency and suitability of the new Imperial Airways flying boats, which it is proposed to put an the Australian service. He says that the construction of these boats is being rushed, and that they will be too low ia the water to be safe in case of rough weather. The American flying boats, on the other hand, stand high, out of the water, and are much more suitable for all-weather flying. The record of Imperial Airways has not been wholly satisfactory, and there have been many accidents attended by fatalities. The speed of the planes at present on the service is 130 miles an hour, and it is proposed that the new flying boats will operate at 150 miles an hour, whereas the Dutch planes, already operating along the same route, fly at ISO miles an hour. The present scheduled time for the service between London and Singapore is eight days, but the Dutch planes cover the same distance in five days. Imperial Airways have not, up to the present, been able to operate their section of the route as efficiently as we have operated curs. During the last twelve months, the mails from London to Singapore have been late on 25 occasions, while on only two occasions have they been late from Singapore to Australia. Recently, it was stated in the press that Imperial Airways had only two machines fit to cross the Mediterranean, and one of those has since been lost. An aviation authority, dealing with this aspect of the matter, states -
The plain fact is that Imperial Airways left it too long before renewing their fleet, end, now that they have only obsolete aircraft, and practically no reserve, they are in a mess.
I hope, therefore, that Australia will not hand over control of. the SingaporeSydney section to an organization that has proved itself unsatisfactory and inefficient. I trust that the Minister for Defence will stick to his principles, and will not again attempt to advance arguments in which he does not believe.
– During the whole course of my public life I cannot recall any public matter regarding which there has been more unintelligent anticipation than in regard to this. Up to the present, this anticipation has been indulged in mostly by the press; but it has now spread to Parliament. Every point raised by the Opposition, as well as a great many others, has already been discussed by the Commonwealth Government with the Government of Great Britain. The Opposition’s criticism is confined to two main points. According to the motion, the Government has accepted an undisclosed agreement, and this acceptance will interfere with the - national control of local services. The Minister for Defence (Sir Archdale Parkhill) has given an emphatic denial in regard to both those charges, but the general effect of the criticism by the Leader of the Opposition (Mr. Curtin), is that the Government has been unmindful of the interests of Australia. If anything bo needed to show that that suggestion is totally unwarranted, it is only necessary to recall the protracted nature of the Government’s discussion on this matter with the British Government, which indicates the Commonwealth Government’s unwillingness to give way on any point of the slightest importance to Australia. All that has been discussed up to the present time is the question of improving the service to the greatest possible extent in the interests of Australia, because surely there is nobody who does not believe that there is room for improvement in the connexion between Australia and the outside world. This country suffers more perhaps than any other by reason of its isolation, and we desire to see no mistake made in regard to the means to be adopted to. remedy that drawback. This Government has fought hard to secure that result.
It is evident, as has been shown throughout the whole of the negotiations, that the Government has fought to secure a continuous improvement of the internal services as a result of the agreement, its chief desire being that the local control of that part of the service which Australia has pioneered from Singapore southward should still be in Australian hands, and be one of the means by which civil aviation is encouraged in the Commonwealth. We have fought for the right to impose a surcharge on. the air mails sent from Australia.. Why did we do that? Because, by that means, we should be able to obtain, a certain additional amount of revenue which would enable us to improve our internal services. That is the direction in which we are using the money now’ being obtained by reason of the internal surcharge. There is no question as to whether we shall maintain our internal air lines. Personally, I consider that, if we can get a first-class air service from Europe to Australia, bringing about 50 or 60 passengers a week from Europe to this country, it will be found that these passengers, being already sufficiently air-minded, will use increasingly our internal air services.
The- question whether flying boats should be employed in, the service, is largely a technical one, which should be settled by experts, a3 the Minister for Defence- has already announced will be done. We have made certain suggestions to the British Government with regard- to the modification of its proposals, and we believe that many of our suggestions will be accepted; but the paramount consideration is the maintenance of Australian control of our section of the service. Prom the very beginning of the negotiations, there has been no intention on the part of the British Government, or of Imperial Airways Ltd., to take that control away from us. From the first intimation by the British Government in regard to its proposals, it was always surmised that the company which has pioneered the air service from Singapore to Australia, and has carried the ma-il<*, should continue that work in connexion with the new service. Therefore, in these circumstances, I can see no reason why. the Leader of the Opposition should raise, this point to-day. lt must be obvious to everybody that negotiations of this kind that are still in progress cannot be discussed in public. When they are concluded, the Parliament will be acquainted with the terms of the agreement reached, and will then have an opportunity to express its satisfaction or dissatisfaction with the agreement. There is no other way of dealing with this particular matter. The Parliament has the right to decide the fate of a government which acts in a. manner incompatible with national interests’; but this Government has never shown the slightest intention to do anything derogatory to those interests. I thought that the only charge that could be brought against it was that it had done too much in the defence of. Australian interests, and in its resistance to outside pressure. In negotiations of this kind, no- advantage is. to be gained by publicly emphasizing points of difference which, in all probability, will ultimately be overcome. Everybody hopes for an agreement that will result in an improvement of the air service between Europe and Australia, and I venture to say that if the sugges1tions which we have made to the British authorities are favorably received, an agreement will be reached which will have the approval of every honorable member and of the people of Australia generally.
’. - The Minister for Commerce (Dr. Earle Page)- made reference to the unintelligent attitude that had marked fie discussions in regard, to this matter.
– I spoke of “unintelligent anticipations in press discussions “.
– The Minister also said that this attitude was spreading to this chamber, and, therefore, he made a reflection upon the members of this House. But no definite information has yet been given by the Government on this matter. The Minister has talked all around the subject, and has referred to the need for overcoming Australia’s isolation from the rest of the world, but his statements are nebulous, and give no definite indication as to what the Government has been, doing in this matter during the last three years. If the Government has been concerned about the protection of Australia’s interests, it is remarkable that a good deal of difference of opinion has arisen among Ministers themselves as to the attitude which the Government should adopt.
Whilst the Minister for Defence (Sir Archdale Parkhill) has been outspoken in his determination to safeguard the interests of Australia, it seems that other members of the Cabinet, in his opinion, are not following the course which should be taken with regard to the service. The object of the Opposition is to ascertain precisely what the Government intends to do on the important matters of principle that are involved. We have not asked to be furnished with details of the negotiations, nor do we expect to be supplied with them. We appreciate the fact that the negotiations are of a delicate nature, but certain principles are at stake, and their maintenance is vitally necessary in the interests of this country. The first important principle for which the Opposition stands is that the Australian section of the service should remain under Australian control. The Minister for Commerce said that the Government had been fighting for that principle, yet there is no assurance that the Government will stand hard and fast for it.
– I remarked that the British Government had never suggested that the Commonwealth should not retain control of this end of the service.
– But has the Government decided to stand hard and fast for Australian control of it absolutely?
– That matter has never been in doubt.
– Than may we say that that is definite ?
– I take it, then, that the control of the Australian section of the service will be in the hands of the Commonwealth Government, and that Imperial Airways Limited will have no control over it.
The next important point isthe location of the terminal point for the delivery of mails in this country. This affects the whole system of aviation in Australia, and it is equally important from the point of view of defence. When the Minister spoke of this service from Darwin to Sydney and Auckland, and said that he was going to New Zealand to discuss the matter, members of the Opposition had the right to draw the deduction that the Government intended to allow the flying boats to make Sydney their terminal point, and had in mind the crossing of the Tasman Sea by flying boats as a reason for the maintenance of a flying boat service from Darwin to Sydney. Has the Government come to a definite decision regarding this aspect of the matter? No answer comes from the ministerial bench, but that is the veryquestion to which the public wants an answer. Is Darwin or Sydney to be the terminal point? There is still no answer. The people must now conclude that Darwin will not be the terminal point, that the Government has agreed to make Sydney the terminus, and that the Minister for Defence is going to New Zealand to discuss the final stages, as far as Wellington is concerned.
– Nothing, in fact, has been decided in regard to that.
– But should not the Government lay down a principle on this point, apart from the details of the negotiations? Let us know the decision reached as to where the terminal point will be?
– It depends on whether we use landplanes or seaplanes.
– What is the Government’s view? Does it approve of landplanes or does it prefer seaplanes.
– We are entirely in the hands of the technical authorities, who know more about these matters than we do.
– But the Government has the final say in the matter, and for three years it has had the benefit of technical advice. Is more technical advice to be obtained, or is the opinion of influential persons on the other side of the world involved ? The Minister for Defence, I think, will stand “ pat “ on this question, and I hope he wins out. We believe that he stands for the maintenance of the internal service by making Darwin the terminal point of the overseas service.
– The Government stands for the same principle.
– We have always stood for that.
– The Government believes in this and that, but it has to wait until it gets the advice of experts. Does it stand for nothing except what the experts say?
– We stand for an agreement that will be satisfactory to everybody.
– Every honorable member, whatever side of the House he sits on, is at least entitled to examine the main aspects of this important issue. In my opinion, we have not obtained a clear explanation of the Government’s intentions, but we may be able to obtain further information if we persist in seeking it.
The Government declares that the development of the internal services is of vital importance. The only way to develop them, according to the Minister for Commerce, is to have a flying boat service which will increase the number of tourists to Australia.
– No, I said that the more important consideration was the surcharge.
– The Minister’s argument was the weakest I have yet heard him put up. He said that the service would attract tourists who, as the result of their experience of flying boats on the overseas portion of the service would be inclined to use the internal portion, and by that process the internal service would secure full patronage. I am prepared, however, to overlook that very weak argument. Every honorable member will agree that mail services offer a greater fillip to our internal air services than anything else can provide at the present time; it was on the basis of mail services that our internal services were pioneered. A mail service guarantees continuous service independent of the patronage of passengers. Therefore, any change which would tend to weaken this incentive must necessarily weaken the services themselves.
– It will strengthen them.
– If we deprive these services of what I, with every one else, claim to be their very backbone, namely, the mail subsidy, the services which play a vital part in the maintenance and development of our air routes will be maimed. This House is not completely satisfied to continue these services “as they operate to-day, because if we accept them as the best that can be obtained we admit that we have reached the peak in regard to this matter and are prepared to let them develop only to that extent which would result from the patronage of ordinary passengers.
– The honorable member has exhausted his time.
.- The Minister for Commerce (Dr. Earle Page) said that the Minister for Defence (Sir Archdale Parkhill) was quite emphatic in his reply on this subject, but I confess that I thought he was less emphatic than he usually is. To me he appeared to be on the defensive. I do not blame him altogether in this regard, because in dealing with matters which are subjects of negotiations with another government this Government cannot state the position from day to day, or report on each step to this House. We must rely upon the Government to use its discretion in such a way as will enable it to arrive at the best arrangement possible. One point on which the reply of the Minister for Defence was not completely satisfactory waa whether or not this contract was going to be handed over entirely to the Imperial Airways or any company other than an Australian company. I do not think that this service should be handed over to any company. In fact, the control of it and the profits to be made out of it, should be kept strictly under the sway of the Government of the day. The people of Australia, as a whole, are very much concerned about the development of aviation in this country, and they look to civil aviation to supply the means of development. From that point of view it is desirable that we should maintain the trans-Australian route from Darwin, although Australia’s decision on this matter, I take it, is properly one for experts. I -believe that every honor able member will agree that Australians should bc employed on the Australian section of the England-Australia service. I should not like to see an agreement brought before this House which would hand over this service entirely to Imperial Airways, giving them the right to employ only British airmen and to exclude Australianswho have rendered a great service to flying in this country. I am now referring to those companies which pioneered air services in Australia.
– The honorable member can rest assured that the very fullest consideration is being given by this Government to that aspect of the matter.
– I would not agree to any arrangement under which our airmen might be excluded from employment. I feel sura that this Government has the interests of Australia at heart in this matter, and, feeling that it will do the right thing, I suggest that this House should not request it to detail the present negotiations, but should be prepared to accept the settlement which it will eventually place before honorable members.
.- I feel sure that all honorable members who listened to the speech made by the Minister for Defence (Sir Archdale Parkhill) was just as wise when the Minister con- cluded as they were when he started. I believe that if the Minister were free to speak his mind on this issue, honorable members would be given the fullest information. A few days ago, in his lastminute appeal on this matter to the Cabinet, he said -
If Australia acceptedthe British scheme she would virtually exclude herself from a share in international aviation control.
– It is obvious that a statement made at a Cabinet meeting would not be published in the newspapers.
– Is the honorable member reading from the Labor Daily?
– This statement was published in the official organ ofthe United Australia party - the Melbourne Herald. I point out that the Minister for Commerce (Dr. Earle Page) and the Attorney-General (Mr. Menzies), who recently returned from London, where they were feasted and banqueted, are now more concerned about British than Australian interests in this matter. As. British interests have found it so easy to convert the Attorney-General to their way of thinking, they now say he is the man to represent Australia at the coronation. To-day he has allied himself with the Minister for Commerce in trying to persuade the Cabinet to twist on the declarations made publicly by the Minister for Defence on this matter. In passing, it is worth noting that Lord Sempill, who is closely associated with aviation, proposes to visit Australia shortly. If British interests are satisfied in this matter, I have no doubt that theonly interest this Government will havein the England-Australia air service will be as the payer of a subsidy for that service; it will have no effective control whatever; the control of the service, including ships and pilots, will be centredin England.
The Minister for Defence has stated that, from a defence view-point, Australia must, as a Pacific power, develop its aviation to the fullest extent. He recognizes the danger confronting this country should we submit to the proposal now being forced down the throats of members of this Government. Civil and defence aviation experts are unanimously opposed to the British Government’s plan. The Minister for Defence has said so. While we are told that we cannot be given information, this Government directs the Minister for Defence to proceed to New Zealand to discuss this matter with the Government of that dominion and a representative of the British Government, and despite this fact, the Minister says that no plan has been decided upon by this Government, and that he has no authority to come to any decision in consultation with the Government of New Zealand. What is the reason for the Minister’s visit to New Zealand? Is it thought that the Government of New Zealand can be forced to come into this scheme? Once New Zealand becomes a party to it, an additional argument will be provided for Australia’s acceptance of the proposal of the British Government to employ flying boats on the England-Australia air service. I am not an expert on such matters, but I point out that the Dutch aviation authorities will have nothing to do with the use of flying boats on a service of this nature, and American aviation authorities adopt a similar attitude.
– The United States of America is instituting a frying boat service from San Francisco to Shanghai this month.
– That is the first I have heard of it.
– That route is entirely over water; consequently, that proposal cannot be compared to this one.
– The American authorities certainly do not operate flying boats on the overland service from San Francisco to New York.
– Dealing with the internal portion of the England-Australia service, I ask if it is Seriously suggested that very many persons in Melbourne, Sydney, or Brisbane would want to use it merely to travel as far as Darwin, or vice versa. I contend that if the mail subsidy is withdrawn the internal service will be ruined. It is clear, therefore, that if any alteration of the present control of the internal service is made, it will be made merely to satisfy the greed of British interests. I am not using this, argument against the Minister for Defence; I believe that honorable members generally support him in the stand he has. taken on this matter.
– He. has weakened a little.
– No doubt pressure is being brought to bear on him. Iknow that before they journeyed overseas both the Minister for Commerce and the Attorney-General supported the view of the Minister for Defence. Since their return from overseas, however, they have supported British interests in the fight now being waged in the Cabinet. The Minister for Defence has toldus that under the British plan a British company would be the responsible contractor in respect of theservice on the whole route from London to Sydney, and that it would use the personnel and equipment of its Indian and subordinate services. What then is left for the people of this country? Apparently they will have to provide the subsidy, but will have no right of control. The Minister for Defence was obviously in difficulty in replying to the speech of the Leader of the Opposition (Mr. Curtin), for he did not know what to say. Under existing conditions, I can not see that any good purpose will be served by the honorable gentleman discussing this subject with the representatives of the Government of New Zealand, and I appeal to honorable members opposite to support the motion as an intimation to our Government that it should provideus with fuller information than it has so far submitted to us.
– I welcome the opportunity to discuss this subject. I think that the Government should be informed of the views of private members upon it. Unfortunately, the Leader of the Opposition (Mr. Curtin) did not make any contribution towards the solution of the major problems as to whether land planes or flying boats should be used in the overseas service. The obvious thing, I suggest, is that we should use our. northern and eastern littorals for such a service, affording as they do a wonderful natural runwayright to Sydney. The Leader of the Opposition should have applauded, rather than chided, the Minister forDefence (Sir Archdale Parkhill) for his decision to visitNew Zealand to discuss this subject with the dominion authorities. I cannot see any need to consider tactics in relation to this subject, forour geographical conditions suggest the obvious answer to the problem that faces us. . Surely we do not desire the people of Great Britain to regard us as the “ mugs “ of the South Pacific. It would be ridiculous if we did not use the Timor Sea, the Arafura Sea, and the waters of the Western Pacific as the route for this imperial airmail service. It is highly desirable that every effort should be made to link together the various countries of the British Empire which such a service could serve. We should be able to advise Great Britain on such a matter as this, but, apparently, all. that some honorable members wish to do is to criticize. They forget that British finance will be an important factor in the service.
At the same time we should’ take care not to sell our birthright. Personally,. I wish to see Australia in a position to exercise a fair measure of control of the service. On that point, the Leader of the Opposition was on firm ground. It must be obvious to honorable members generally that such a service requires unified control,, but Australia should be invited to co-operate in such a way as to make its co-operation more than a mere gesture. This country should articulate its views, not only on memorable occasions, but also as to the general management of the service, lt must also see that its young airmen are given the opportunity to become pilots of the service, and that that famous pioneer aviation company, Qantas, shall not be thrown on to the scrapheap. In my view the establishment of the imperial air-mail service will enable the Qantas machines to. be relieved of a great deal of the heavy loading which they are at present, called upon to accept. The Qantas service is being subjected to undue strain, and on many occasions so many passengers from overseas are on board that I find it difficult to. get a seat when I wish, to travel from Darwin to the south. If the Qantas machines could be relieved of much of the heavy loading, now offering, a better service could be given to the people in the interior. This refers to- Queensland, as well as the Northern Territory. Under such conditions, the Qantas machines would be able to make a much more effective contribution to the real development of the interior than is- at present possible. Actually, nothing very effective is being done in developmental work in the interior to-day in consequence of the establishment of the aviation service, for all the facilities which the planes provide are being strained to meet the exigencies of through traffic.
I disagree entirely with the opinions expressed by the honorable member for West Sydney (Mr. Beasley) on the subject of speed. I am not concerned about whether the people of Sydney, and of the south generally, are able to obtain their mails from England and fashion plates from Paris a day or two earlier by means of the new air-mail service than they get them to-day. It is not the welfare of the people living on the -Sydney side of the Great Dividing Range- that should be considered principally, but that of the people of north and central Australia. If as I have suggested, the Qantas machines were relieved of the heavy loading they could be used to encourage real development. Hitherto, their contribution to effective development has been trifling for- the inherent value of the soil over which the machines fly is very little greater to-day than when the service was instituted. If the mail matter and heavy loading generally be carried by the Imperial air-mail machines* around the coast to Sydney it will mean that a circular route will be developed. So far, Australia has been without an adequate circular service except that provided by the machines which circumnavigate the continent and stop at various ports. Effective circular air routes should be developed.
In conclusion, I remind, honorable members that the weight-carrying; capacity of seaplanes- is practically only limited by economic conditions, whereas that of. land planes is definitely restricted^. Seaplanes at present carry from 17 to 20 tons of loading, and I have no doubt that, their capacity will Soon be lifted to 50. tons, and that it will rise, in out time, to as much as 200 tons. This means that we may look forward to the day when seaplanes will be available to lift produce from one place to another. Only economic circumstances will limit the utilitarianvalue1 of flying boats. If we have the work available for them, craft of this kind will be able to render remarkable1 service to> primary producers in different parts, of the Commonwealth. In the circumstances, I am glad that the Minister for Defence intends to visit New Zealand to discuss the conditions of the service with representatives of the Government of that dominion. I sincerely hope that we shall make good use of the natural runway which our coast provides: I am definitely of the opinion that the development of the Imperial air-mail service by the use. of these routes will render possible the performance of much more useful service by Qantas machines for the people of the interior.
Mr. FISKEN (Ballarat) f 5.10]. - I welcome the opportunity that this- debate gives- private members to voice their views on some salient aspects of the proposed Imperial air-mail scheme. I appreciate the1 difficulties that the Minister for Defence (Sir Archdale Parkhill) had in- dealing with this subject, for it is more or less public knowledge- that, divergent views are held on it within the Cabinet; but I regret that for this and other reasons it was impossible for the. honorable gentleman to furnish us with more information. The Minister for Commerce (Dr. Earle Page) very skilfully told us absolutely nothing. Ono aspect of the subject which has caused me a good deal of concern has relation to the measure of control which Australia is to exercise. The Minister for Commerce told us in one breath that it had not been proposed that the control should be in any other than Australian hands, but in his next breath he said that the Government was pressing strongly for an adequate power of control. Those two statements do not tally. I should like a much more definite statement from the Minister on this point than we have so far had. I do not think that any honorable member would accuse me of being unBritish. I claim to be as strongly imperialistic as any honorable member of the Parliament, but3! shall need a great deal of ‘ persuasion before I cast my vote for any agreement on this subject which will take the control of the Australian section of this service away from Australia. Many other honorable members on this side of the chamber are in a similar position. As to the relative merits of flying boats and land planes, I think very few of us are capable of offering a useful opinion. Considerations of empire defence enter largely into the subject, and the necessity to establish seaplane bases around the Australian coast may make it desirable to use seaplanes rather than land planes for this service. One thing I stress is that whatever the nature of the service may be it should be conducted under Australian control and manned by Australians.
– I strongly support the views expressed by the Leader of the Opposition (Mr. Curtin). Every right thinking Australian must agree that Australia should control the section of the service from Singapore right to Sydnev, and possibly to New Zealand. We should bear in mind that Australians pioneered this service. No aviation enterprises are more justly entitled to derive benefits from the control of air-mail services within Australia than Australian companies. It is deplorable that successive Commonwealth governments have never given Australian aviators the tame opportunities as other countries have offered to their great airmen. I regret to say that many distinguished Australian aviators have lost their lives in attempting hazardous feats because the Commonwealth Government has not made provision for them, similar to that which has been granted by the United States of America to the aviators who pioneered its air routes. In view of this lack of support from the Commonwealth Government, Australian aviators have been obliged to go barn-storming from country district to country district in order to earn a living, and they have been compelled to take extraordinary chances in pioneering air routes. Honorable members have witnessed the deplorable spectacle of this Parliament passing motions of condolence upon the death of many of its foremost aviators, for whom positions were not found in Australia. Just prior to his .departure for Great Britain, I received a letter from the late Sir Charles Kingsford Smith, in” which he expressed grave concern at the prospect of Imperial Air-‘ ways obtaining the contract in preference to Australian aviation enterprises, and he hoped that the company in which he was interested would receive some consideration in connexion with the granting of tenders for the transport of mails between Australia and New Zealand. I believe that the same gentleman communicated with the Minister for Defence (Sir Archdale Parkhill) in regard to that matter, and from the general terms of Sir Charles’s letter, I assume that the Minister stated in reply that he was sympathetic towards Sir Charles’s views. Since then, the Minister has demonstrated his desire to retain Australian air routes for Australian aviation companies. In an official bulletin which was issued recently, the Government stated definitely that it waa not in accord with the proposals made by the Imperial Government for taking over the control of the Australian section of the oversea air mail route. I hope that the Government will not permit the Imperial authorities to dictate to it as to how our interests will best be served. The bulletin stated -
The Commonwealth Government has therefore found itself unable to agree to these proposals, and has decided to retain the existing arrangements of Australian control and responsibility of services from Sydney to Singapore.
That statement definitely indicates that the Commonwealth Government is opposed to any change, but I should like to know how it has come about that pressure has apparently been brought to bear upon it. The Commonwealth Government alone should be responsible for the control of the conveyance of mail matter within Australia, and it should not have to yield to any demands for that control which might be made by the Imperial authorities. In my opinion, the airmen who pioneered the route in question have not received any consideration. I am reminded that no Englishman found the way by air to Australia, but now that aerodromes have been prepared and contracts have been placed, Great Britain desires that its interests shall take precedence over those of Australian aviators, when it was Australians who pioneered the establishment of the services, some of them paying the extreme penalty in doing so. My contentions are equally applicable to the Tasman sea section of the route. The Imperial authorities seem to be under the impression that they have only to say that their requirements are in the best interests of the Empire in order to have them conceded. Before giving preference to Imperial Airways, the Commonwealth Government should give first consideration to the interests of Australian aviators and the Australian public. In adopting such a course, it would encourage airmen, whom we have been proud to honour, to remain in Australia instead of engaging on hazardous adventures in other parts. Unless the Commonwealth Government does show some such consideration, there is no guarantee that Australian airmen will ever be given employment in the Commonwealth. What we have we should hold, and therefore we should always control the section of the air route from Singapore to Sydney and Melbourne. I direct further attention to the bulletin from which I have already quoted -
The Commonwealth Government hopes that these suggestions will be acceptable to the British Government, as it is believed their adoption ia in the best interests of Australia, and -will certainly provide better scope for the development for Australian aviation which ia desirable from many aspects.
Although that was the opinion of the Commonwealth Government, it appears to me that it now desires to alter its view. The Minister for Defence praised the capabilities of Australian aviation, and I recognize that his sympathies are with it. Before any contract is signed to give the control of the Australian section of the overseas airmail route to the Imperial authorities, it should be submitted to, and receive the sanction of, this Parliament. It is to the advantage of the Commonwealth to retain the right to control its internal air routes, and I hope that the motion moved by the Leader of the Opposition will be heeded by the Minister for Defence when he is negotiating with the representative of the Imperial authorities, who is shortly to confer with the representatives of the Governments of the Commonwealth and New Zealand in the latter dominion. In those discussions, I urge the Minister to stand by his guns and not to retreat from the views which he communicated to his constituents at Mosman, and which were reported in the Sydney Morning Herald. In regard to those opinions, he has been complimented by the electors of Warringah, members of the Opposition, and the late Sir Charles Kingsford Smith, who was given an undertaking by the Minister that the company in which he was interested would receive, consideration in the granting of airmail contracts upon his return from England. As honorable members know, Sir Charles, unfortunately, did not return. I urge the Government to give full consideration to this motion and to ensure that Australian interests are guarded, because we have given in the past, and may continue to give in the future, more consideration to the demands of the Imperial authorities and to overseas interests than, we are prepared to grant to Australian citizens.
– I have listened with particular interest to the speeches which have been delivered during this debate, and with other honorable members, I take the keenest interest in the arrangements which will be made between Great Britain and the Commonwealth Government in connexion with airmail services. I realize that the Government will shortly have to make a decision in regard to an Empire all-letters airmail service, providing for the transport of mails by flying boats between London and Sydney. I have read that the ultimate objective of the British Government is to extend this airmail route to New Zealand, Canada, and back to England, thus establishing a service which will encircle the Empire. So far as we have been alble to gather, England is irrevocably committed to flying boats. I point out that PanAmerican Airways, which is the leading American aviation company, is now inaugurating a world-wide route expansion, and for this purpose is using flying boats. Both Germany and France operate regular services with such machines across the South Atlantic. Naturally, they would employ flying boats for such a purpose; one does not require to be an expert to realize that the interests of safetyare better served in the operation of a transAtlantic service by flying boats than by ordinary land planes. Italy is another country which uses flying boats upon certain routes. I am not so greatly concerned as to whether flying boats or land planes are used in the Anglo- Australian service. As the Minister for Defence has stated, experts alone can decide that matter.
Mr.BLAIN. - It should be a matter for honorable members to decide.
– I do not claim to be an expert on this subject, and I have no doubt that the respective governments will be guided by the advice of their experts. I appreciate the assurance that the Minister for Defence gave to the honorable member for Moreton (Mr. Francis), in reply to a question, that if the service from Darwin to Sydney is carried on by flyingboats, the internal services throughout Australia will in no way be affected. I am sure that honorable members must have shared my gratification upon hearing thatassurance. TheMinister for Commerce (Dr. Earle Page)went even further than the Minister for Defence in saying that those services would be increased ; and such a statement must have been most pleasing to honorable members, because Australian aviation companies deserve every encouragement. In this connexion I refer particularly to Qantas Limited, the great pioneer of commercial services, not only in Australia, but also throughout the world. I have a most vivid recollection of introducing two young aviators who had completed their term on active service with the air force to the then Prime Minister, Mr. Hughes, and the then Minister for Defence, Sir George Pearce, in Melbourne in 1922. At that meeting the pilots put forward a proposal to inaugurate a service in western Queensland, the route to be over a short distance from Longreach to Cloncurry. They were told to proceed with their plan, and that if at the end of twelve months their service had been successful the Government might be prepared to subsidize it. So excellently did they operate the route that, at the conclusion of the prescribed time, the Government called for tenders and the Qantas company which they formed was fortunate enough to be granted the contract. Since that date the company has carried on an evergrowing . service and has established a record that is both admired and appreciated throughout the world. The part played by this original company, as a member of Qantas-Empire Airways Limited in the operation of a service which has beencarried on for two years between Singapore and Brisbane is a splendid example to commercial aviation in any part of the world. One of the young pilots I introduced to Mr. Hughes and Sir George Pearce in 1922 was Mr. Hudson Fysh. He is now managing directorof Qantas-Empire Airways Limited, and an international figure in commercial aviation. If this Parliament were to take any action which would affect the progress of this Australian company and others, it would be an absolute tragedy. No one can fail toappreciate the value, quiteapart from the airmail services, of civil aviation to Australia. I fail to see, in this great Empire service which will be -arranged between Great Britain and Australia, why the Commonwealth should not he given the control of the Darwin to Sydney section, or perhaps the Sydney to Singapore section. The Australia to New Zealand and the New Zealand to Canada sections are quite another matter, but in view of the marvellous record ofcivil aviation in Australia it is justified in its claim that the Government should take no action which might affect its ability to carry on and extend its operations. If we were assured on those two points, I believe that every honorable member would be quite satisfied that the Government would make the best agreement possible for Australia.
Mr. E. J. HARRISON (Wentworth) 15.31]. - I approach the consideration of this matter from the view-point of the effect which this agreement may have upon the defence and the development of Australia. I am not concerned with the aspect of either speed or cheapness. Those factors, I contend, must be made subsidiary to the defence and the development of Australia. I, suggest that, as sacrifices are being made by taxpayers generally, the commercial world must be prepared to make sacrifices in the interests of the defence of Australia. Let us examine the likely effect in that direction. We know that a scheme of Empire defence may be wrapped up in these proposals. Should the Empire be involved in war, however, the danger to Australia would lie iu the raids which most likely would be made along its coast. I do not believe that a seaplane service, or a service embracing the whole of the Empire, would be of benefit to Australia from the view-point of its defence. In such a crisis, means for defence must exist within Australia itself. Therefore, the question is, whether the best results would accrue from seaplanes or from land planes. I suggest that land planes are necessary to Australia’s defence. In case of raids, obviously seaplane bases would be of little use, because they would quickly be put out of action by seacraft. Consequently, bases must be established inland, and that presupposes the use of land planes. The discontinuance of the overland service from Darwin to Sydney would destroy the incentive which is necessary to the development of a solid, landplane defence force.
The second point that I wish to make is in relation to Australia’s development. The use of seaplanes would merely lead to greater concentration of population on the seaboard, to the detriment of the development of the interior of the continent. Land planes may be expected to open up the back country to an extent equal to that achieved by our existing principal means of development, the railways which radiate from different centres into the heart of the continent. In his discussions in New Zealand, the Minister for Defence (Sir Archdale Parkhill) should keep in the forefront of ‘bis mind the two points that I have raised. It seems -obvious to me that, if we deprive the aerial services of the opportunity to carry mails across Australia’s interior, ‘ we shall withdraw ‘an incentive -to the development of those centres. Their enthusiasm and interest in such ‘development must be maintained and encouraged.
Debate interrupted under Standing Order No. 257b.
The following papers were presented : -
National Debt Sinking Fund Act - National Debt Commission - Thirteenth Annual Report, for year 1D35-30.
Canned Fruits Export Control Act - Regulations amended - Statutory Rules 1930, No. 124.
Science and Industry Endowment Act - Report by the Auditor-General on tho Science and Industry Endowment Fund for year 1035-30.
Wine Overseas Marketing Act - Regulations - Statutory Rules 1930, No. 125.
Wool Tax Act - Regulations - Statutory Rules 1930, No. 96.
The following bills were received from the Senate find (on motion by Mr. Casey) read a first time: -
Bills of Exolian.ee Bill 1030-37.
Commonwealth Public Service Bill (No. 2) 1936-37.
Bill brought up by Mr. Casey, and road a first time.
– by leave - I move -
That the bill bc now read a second time.
This bill sets out to exempt from the incidence of sales tax goods to an annual wholesale value of £25,000,000, with a consequent annual loss to the revenue of approximately £1,000,000 or, for the balance of this financial year, about £650,000.
I do not propose to rehearse the exemptions which have been made in the past. I merely say that they have not been made haphazard, but have followed along lines designed to give relief where it was, and is, most needed.
Id 1932, exemptions were made mainly in aid of the farming and pastoral indus- tries, which, as honorable members will remember, were then struggling for their existence. Since that year the general plan has been to provide ‘for exemptions in respect of aids to primary production generally; necessary foodstuffs, and other prime necessaries of life, in order of set purpose to lessen the burden of the tax on persons on the lower ranges of income; building materials, in order to stimulate the building industry and thus assist towards the absorption of the unemployed; those things which are needed by the sick and the afflicted; and the requirements of religion, education, science and the like.
The list of goods which the Government proposes that this measure shall exempt, with the estimated loss to the revenue, is, briefly, a3 follows : -
Those, broadly, are the classes of exemptions which the Government is submitting. More than one-half of the relief which the bill proposes to give is represented by the two items, footwear and tea, which, between them, involve a loss of revenue of over £500,000. They will add substantially to the already very large field of exempt goods which come within the category of necessaries of life.
– Has the Treasurer any guarantee that the benefit of the exemptions will be passed on to the purchasers of the goods?
– I believe that I shall be able to give an assurance in that direction when the bill reaches the committee stage. Footwear and tea figure prominently in the regimens adopted by the Arbitration Court for the measurement and adjustment of the basic wage. The Government has always had closely in mind the items which enter into the Arbitration Court’s regimen, when selecting items for exemption. In making footwear and tea the principal items in the present list of exemptions, it believes that it is acting in the best interests of those who are on tho lower ranges of income and thus are in the least favorable position to pay sales tax. When the present list of exemptions becomes effective, the amount of sales tax payable by the average worker on the basic wage will be approximately Id. a day. I state that in order to indicate that the Government has been continuously concerned to ensure that the sales tax burden shall fall as lightly as possible upon those sections of the community which are least able to bear it.
Clothing represents practically the only field which remains for the provision of further relief of a similar nature. The possibilities of this field have been explored very carefully, but not with very promising results. Apart from the fact that clothing as a general term includes articles of luxury as well as. articles of necessity, it appears that any attempt to make clothing of a wide range - that is, other than footwear - fully exempt from sales tax, would be productive of a large number of serious commercial and administrative difficulties. However, the position of tailors has been specially investigated in response to the many requests made both in and out of Parliament that such persons should be excluded from the field of registered taxpayers. The investigation disclosed many reasons why such requests could not be acceded to. It became clear, for example, that many competitive anomalies would ari.?e if all tailors were deregistered. Nevertheless, the Government feels that some concessional adjustment in favour of registered tailors is desirable in view of the fact that over 40 per cent, of the tailors in Australia are unregistered because their turnover is within the exemption limit of £1,000. It is hoped that the reduction of the taxable sale value from 66 per cent, to 50 per cent, of the sale price in the case of registered tailors will materially improve the position, and will go far to remove the competitive inequality which may at present exist between registered and unregistered tailors.
Another most important feature of the bill is the proposed exemption of what may be briefly described as “ consumable aids to manufacture.” This will involve an annual loss of revenue amounting, at 4 per cent., to £156,000. The bill also contains provision for the exemption of lubricating oils and greases - involving a loss of £100,000 per annum - which, in many of their uses, fall within the category of consumable aids to manufacture. “ Aids to manufacture “ may be divided roughly into three classes. The broad description of aids to manufacture may be said to be those things which are used in the production of goods, but which do not enter into the finished goods themselves. The factory building, and the plant therein are, broadly speaking, within this category. Again, jigs, moulds, tools and dies are aids to manufacture, as well as a wide range of materials, mostly chemicals, which are used up or consumed in the course of manufacture. It is this latter class alone that the bill seeks to exempt from sales tax. The exemption will not apply to factory building, machinery, plant, jigs, moulds, dies, &c.
To tho manufacturer these aids to manufacture are just as much direct charges against his output as aTe the raw materials which become ingredients of his products. In many cases it is a matter of great difficulty to determine whether they are merely aids to manufacture or whether they are entitled to be treated as raw materials on the ground that they leave some essential element in the finished product. This has been a constant source of trouble to the Taxation Department and to the manufacturers. I have been given to understand that, ever since the introduction of the sales tax, pressure has been brought to bear by the manufacturers for the exemption of consumable aids to manufacture, and I know that during the last three years, while I have been at the Treasury, representations along these lines have been very frequent. At a later stage I shall circulate a memorandum containing a list of fifteen typical industries, and typical aids to manufacture associated with them.
– On what basis was the list prepared?
– A comprehensive inquiry was conducted by officers of the department in conjunction with a large number of manufacturers in order to arrive at the definition contained in this measure.
– I know of some big manufacturers who knew nothing about the inquiry.
– If manufacturers are in any doubt, it is a simple matter for them, to approach the department with a list of materials which they believe should be exempt, and a description of the conditions under which they are used. The department will then be able to inform them whether the materials are exempt or not. The difficulty in the way of granting a. general request for exemption of aids to manufacture has always been, ‘ first, the unknown but necessarily large amount of revenue involved, and, secondly, the apparent impossibility of achieving a satisfactory definition of the class of goods to be covered. After the most painstaking inquiry, extending over many months, the department has now arrived at a definition which it is believed will enable a satisfactory exemption to be provided. This definition appears in clause 3 a of the bill. Except for the goods specifically included , in. paragraph g of that definition, and specifically excluded in paragraph h, the definition is necessarily in general terms.
I shall explain the definition in detail during the committee stages of the bill, and shall also provide honorable members with lists of the principal items to be exempt in typical industries. The exemption will not apply to any goods which come within the category of machinery, tools, implements or other plant. I desire to make that perfectly clear, because I am aware that some manufacturers are seeking exemption for what might be described as “ disappearing tools “, or other mechanical aids which may, in certain circumstances, be used up with such rapidity that they are just as directly a charge upon output as are consumable aids in the nature of chemicals,. &a. For instance, in some manufacturing processes files may last for only a few hours. However, the possibility of a practical exemption of disappearing tools was rejected after the most careful and sympathetic consideration. It was found that tools which were rapidly used up in certain circumstances were usually capable of prolonged or indefinite use in other circumstances, and the conclusion was reached that, short of a complete exemption of. all manufacturing machinery and plant, any attempt to exempt disappearing tools and like aids to manufacture would involve the impossible task of laying down, detailed rules- for. application to each- industry, and even to. individual manufacturers who pursued varying methods of product-ion within a particular industry. An attempt was made under the Canadian sales tax law to do this very thing. For a few years, the Canadian act contained an exemption to all aids to manufacture except permanent plant and equipment, but the provision was found to be impracticable, and the exemption was- repealed in 1933. It is interesting to point out that the definition of aids to manufacture contained in this bill is very closely comparable with that in the Canadian act,: although the two were arrived at independently.
One other important point to note is that the main provision for the exemption of consumable aids to manufacture will be contained in a regulation authorizing registered manufacturers to quote their certificates when purchasing or importing such goods. The established procedure in connexion with the quotation of certificates has been found to work more smoothly and more satisfactorily than that of furnishing certificates that the goods purchased or imported will be used for specified purposes. The definition in this bill of aids to manufacture will be adopted for the purposes of the proposed regulation which will be promulgated on the date of assent to . the bill. The exemption in the bill is limited to unregistered manufacturers, and is necessary, because such persons arc unable to quote registration certificates. In addition to the various provisions already
Mr. Cose?/. referred to, there will be an exemption of goods manufactured by any person, and applied to his own use as aids to manufacture, so long as these aids come within the definition in the bill.
The exemption of lubricating oils and greases is designed to apply to oils and greases for use as lubricants of machinery, implements and apparatus of every possible description and use, such as industrial, private and domestic implements and machinery. Oils and greases for lubricating manufacturing machinery would be covered by the exemption of aids to manufacture. An attempt, has been made to cause the. exemption to be as nearly as possible unconditional, and, as I have already stated, the relief involved by this exemption is estimated’ at about £100,000 per annum.
– Will the exempt tion. apply to motor car oil ?
The past practice of granting exemptions that were conditional on the goods being used for some specific purpose has caused- a considerable amount of trouble and inconvenience, and the opportunity presented by the introduction of this bill has been taken to extend the range of the. most outstanding and vexatious of these conditional exemptions by making- them unconditional. Relief from sales tax. to the extent of £104,000 a year will be provided to this end. The essential cause of the trouble lies in the necessity, in order to prevent wholesale fraud or eva- sion, for obtaining reasonably satisfactory evidence from vendors- that the goods for which they claim exemption will be used by consumers under conditions which satisfy the terms of the exemption. ‘Certain merchants are disposed to treat the goods as exempt without bothering to obtain the required supporting evidence. The more conscientious merchant - and he is in the great majority - is faced with the alternative of alienating custom by insisting upon the required evidence, or of absorbing the- tax himself where, his customers will neither produce the required- evidence, nor accept a charge for the tax: These are burdens which add materially to the merchants’ sales tax costs, and which the bill is designed to remove.
The Government is sympathetic with the merchants concerned, and, for the last twelve months, the Taxation Department, with the approval of the Government, has been examining the wholeposition with a view to discovering ways and means by which the difficulties of the merchants - and there are complementary administrative difficulties - can be alleviated.. The. remedy which suggests itself is the removal of the conditions of all exemptions. It requires little examination to realize that such a remedy is- impracticable. For example, take the case of goods- for use by goverment departments, and public hospitals. To remove the conditions, as to use in such case would mean the exemption of all goods.. Most of the sales tax exemptions are. conditional in. greater or lessee degree,, and investigation has shown that there are definite limitations to the relief which can be provided in the manner suggested. Nevertheless,, the Government proposes to follow the policy of removing the conditions of exemptions: wherever tha-t is practicable,, and whenever revenue requirements permit; also to avoid as far as possible the provision of further exemptions to which troublesome conditions are attached. This bill contains an important instalment of provisions prepared in pursuance of this policy. Actually the items now selected for the removal of conditions of exemption constitute the whole of the items which, as far as investigations have gone, can be dealt with in that manner without the creation of new difficulties. The items mainly affected cover certain classes of goods sold: by wholesale hardware merchants who, because of the enormous variety of taxable, exempt and conditionally exempt goods in which they deal, are the worst sufferers from the troubles of conditional exemptions.
Tha main hardware items, are piping, glass, copper, muntz metal and lead sheets. The bill provides for the exemption of these items in all circumstances. The details can be dealt with at the committee stage. Explosives are now exempt for mining, and clearing land, but not for quarrying. Fuel oil is now exempt for power, but not for heating. Bitumen and bituminous emulsions are now exempt for public road-making,, but not for. parks- and gardens or private foot* paths. These items will be unconditionally exempt.
Before turning to the remaining features of the bill, I should statethat the removal of exemption conditions is only one of several proposals’ in contemplation for the alleviation of the sales tax difficulties of taxpayersSome of these proposals will be- contained in machinery measures to be brought! down within the next few weeks ;. others will be provided for by amendment of the regulations. It would not be appropriate for- me to anticipate the- provisions that will be; .contained in the amend-‘ ing bill or- bills, other than to say that they have- been the result of a very great deal of thought and investigation by the officers, of my department over the last twelve months, and I feel sure that they will be greatly appreciated by the- trading community. They will not affect the revenue to any appreciable, extent.
The features of the hill which I have not. yet touched upon, probably take up tie greater part of the measure, but are of relatively minor significance as- far as’ the revenue- is- concerned. I refer to exemptions- designed to remove competitive anomalies. The cases to be provided for have been selected in the course of the careful survey which is being continuously made of the incidence of the sales tax, and of the. operation of the sales tax exemptions, and, amongst the hundreds of cases surveyed, they represent the most outstanding of the anomalies which are capable of correction by way of exemptions. I shall give a few illustrations of these cases by reference to exemptions proposed by the bill.. Butter printing, moulding: and wrapping machines are exempt when far use. by butter manufacturers,, but taxable when for use by organizations, representing butter manufacturers,. Lines,, hooks, &c, for use in the fishing, industry, are to be exempt. This is designed to: place “ hooking “ ports on a. par with “ netting “ ports, as the latter now enjoy an exemption, of fishing nets, &c. The exemption of- dried hops is to cover kiln-dried hops, which- are: in competition with exempt sun-dried hops. Icing sugar mixtures are merely icing, sugar plus- a slight addition of other materials. Pure icing sugar is exempt. The distinction is a competitive anomaly, which is provocative of evasions which are difficult to detect. SolidCO2, or “dry ice,” is in direct competition with ordinary ice, which is exempt in the packing of ice cream, chilled meat, &c, for transport. Stereotypes, &c, are at present exempt. Metal used in their production is exempt when the stereotypes are for newspapers, but are taxable in other circumstances. Stereotypers cannot tell when they purchase stereotype metal whether it will bo used for taxable or exempt purposes. When the stereotype is made, the task of separating its taxable and exempt uses has proved to be impracticable. The bill proposes to exempt these goods and the raw materials in all circumstances. Anomalies in all of the other cases provided for are equally clear, and will be fully explained, if necessary, atthe committee stage.
At this point, I should like to refer to a matter which, although not specifically related to any of the provisions of this measure, has an overall bearing on the administration of the sales tax legislation. I speak of the arrangements that have been made for giving full and prompt publicity in the future to theeffect of the sales tax law. In the first place, an official publication, entitled The Sales Tax Law 1930-1935, was published at the beginning of the present month. This book, together with a supplement which was published at the same time and a few supplementary rulings which have since been published, is a complete and up-to-date consolidation of official rulings on the sales tax law. It replaces the original Sales Tax Handbook of 1933, and also the red book which dealt separately with exemptions. The exemptions are contained in a separate section, which not only sets out the exemptions and rulings thereon, according to the classifications of the schedule to the Sales Tax Exemptions Act, but also shows the progressive development of the exemptions from the 1st August, 1930, with rulings on the exemptions as in force at the various stages. The book also contains a complete and up-to-date consolidation of all sales tax and other associated acts and regulations. There is a single cross-index of the whole of the publica tion. The book is published at the modest price of 15s. The arrangements for keeping it up to date are the prompt and regular publication of supplementary rulings, free of charge to purchasers of the book, and the publication of an annual supplement, in January, containing a consolidation of all rulings not contained in the main book, and also a consolidation of the acts and regulations as they stand at the date of the supplement. The succession of supplements will not involve a multiplicity of references, because the latest supplement will consolidate all rulings not contained in the main book. Possessors of the main book and the latest supplement need refer only to those two publications for all rulings up to the date of that supplement. The annual supplements will be sold at approximately the cost price, but, even so. the scheme outlined will be far more satisfactory and less costly, both to the public and to the Government, than the frequent publication of revised editions of the main book. I sincerely hope that taxpayers, in their own interests, will acquire this volume, and take advantage of the full andregular publicity proposed to be given to this matter by the department.
Sitting suspended from 6.15 to 8 p.m.
– I submit the proposals contained in this bill with considerable confidence that they will be acceptable to the House and to the taxpaying community generally. They represent the result of a very great deal of arduous investigation over the last twelve months on the part of the officers of my department, in an effort to improve the sales tax legislation in the interests of all concerned.
– How many hundreds of regulations are contained in that book?
– It is not a matter of regulations; the book contains rulings given at various stages. The retrospective taxes dealt with are still payable at rates of 6 per cent., 5 per cent., and the current rate, and, in order to enable sales taxpayers to. keep in touch with their liabilities, it is necessary to have the whole matter covered in one volume. I am under a debt of gratitude to the Deputy Commissioner of Taxation, who has charge of the collection of sales tax, and other members of the Taxation Department who, during the last twelve months, have carried out what I might describe as a colossal investigation into the incidence of sales tax.
Many hundreds of claims have been considered in the course of deciding upon the contents of this bill, and I can assure honorable members that all proposals that have been put forward, both in this House and by private individuals, have already received the most careful consideration. As regards any proposals for additional exemptions that honorable members may have in mind, I point out, as I have done before, that bitter experience has proved that it is against the interests of commerce and of the general community to provide for exemptions without the most careful investigation of their competitive, commercial and administrative consequences, and without the most careful preparation of their terras. . I am prepared to give the assurance that any requests for further exemptions will be carefully noted for investigation and future consideration.
– Who makes the investigation?
– Officers of the Sales Tax Department at the central office in Canberra, and in each of the capital cities, and the sales tax inspectors.
– What is the reason for retaining the sales tax on tractors required by local governing bodies whose work is subsidized?
– There is a very proper answer to the honorable member’s inquiry which I shall deal with fully in committee. I conclude by emphasizing the progress which has been made in recent years, particularly in the last twelve months, in the reform and betterment of the sales tax law and administration. It is only through the experience of several years that constructive reform has become possible. I maintain that the fullest possible advantage has been taken of that experience within the time available. I point particularly to the following:
I anticipate that there will be a good deal of inquiry by honorable members concerning the details of this bill which, I admit, is a complicated measure, but I hope to be able to satisfy any questions raised during the course of the secondreading debate, and particularly in the committee stages, of the bill.
Debate (on motion by Mr. Forde) adjourned.
SALES TAX BILLS (Nos. 1 to 9) 1936.
Debate resumed from the 18th September (vide page 336), on motion by Mr. Casey -
That the bills he now read a second time.
Mr.CURTIN (Fremantle) [8.7].- It is unfortunate that, before the introduction of this legislation which relates to a reduction of tax, honorable members were not given an opportunity to consider the policy of taxation as a whole. It is true, as he said in his budget speech, that the Treasurer (Mr. Casey) is anxious to secure, as soon as possible, the passage of special legislation arising from the general principles embodied in his budget statement, in order to provide relief for those taxpayers for whom the budget makes such provision and also, of course, to give effect to that part of the budget which deals with increases of expenditure. Nevertheless, I cannot disregard the fact that, as the result of this method, Parliament is asked to deal with each instalment of consequential legislation arising from the budget in piecemeal fashion, before it has dealt with the budgetary position as a whole. Consequently, it finds itself in the position of having to consider each bill as it arises strictly within the limits of the terms of litebill, without reference to the wider financial considerartions involved.
– The fact that it may have been the practice does not increase the competence of this Parliament to decide the financial policy of the nation. It is true that the Government is responsible for the introduction of the measures relating to taxation and expenditure, but it would be a distinct surety to the authority of Parliament if we were to deal with thebudget first and consequential legislation afterwards. Once the principles of the budget were confirmed, it would be quite an easy matter to decide how far theproposals in a bill before the House at a particular time should be agreed with. This legislation, for example, contemplates a reduction of the rates of sales tax from 5 per cent. to 4 per cent., and itdeals with nothing else. Even the exemptions bill, which has just been introduced, can be regarded as involving the rate of tax, because if the rate be not reduced, as this bill seeks to seduce it, it is clear the Treasurer might be able to increase the contemplated list of exemptions. Again, if the proposals for the reduction of the rates of income tax are not endorsed by the Parliament, thenthe revenue which would arise asthe result of retaining the presentrates of income tax would make it possible for the Treasurer to reduce sales tax to a figure lowerthan 4 percent. insteadof merely from 5 per cent. to 4 per cent. Taxpayers generally ‘should be taken “into account whendealing with any particular form of taxation. In the present circumstances, the Treasurer can immediately reply to any question as to why sales tax shouldnot be reduced to afigure lower than 4 per cent. by saying that such actionwould upset the whole ofhis budget proposals. Consequently, we are not in a position to indicate how he could compensate the Treasury for the amount of money lost through a further contraction of sales tax.
The Opposition, however, will not oppose this legislation as it stands. Disregarding exemptions, it will save the taxpayers about £2,000,000 in taxes. But I question whether the reduction to be effected by the rates bill will be of any value to the poorer sections of the community. This bill proposes to effect a reduction of tax to the extent of £1 for every £100 worth of goods purchased. The average workman purchases goods in quantities of a considerably less value than £100. Usually, he buys £1 worth of goods. This saving of £1 in the sales tax on every £100 worth of goods represents, in practice, a saving of 21/2d. for every £1 worth of goods purchased. In all probability the retailer will not reduce prices by the infinitesimal amount of tax thus saved on every -retail transaction. I doubt whether the Treasurer would attempt to dispute that statement.
– An increase of the rate to 6 per cent. would be reflected in an increase of the cost of goods.
– Yes, but a reduction of tax does not necessarily mean a corresponding reduction of the price of goods. I am pointing out that the piecemeal reduction of taxation, which daring the period of its imposition tended to harden the prices of commodities, will not reduce the cost of living. It would have been far wiser if the Government had not provided so extensive a list of exemptions in previous legislation and had reduced the rate of tax, for any advantage gained in that way might have been spread over the whole community. Originally the sales tax didnotapply to any foodstuffs. To that extent care was taken not to increase the cost of living insofar as it was related tothe cost of food; but if I understood the meaningof a bill which was beforeus a few moments ago, the tax on shirts, which has been at the rate of 5 per cent., will hereafterbe at the rate of 4 per cent., whereasthe tax on footwear, which hitherto has been at the rate of 5 per cent., will be entirely lifted. It is somewhat anomalous that the Treasurer should find it imperative to retaina tax of 5 per cent. on shirts while completely removing the tax on footwear. It seems to me that while the: price of footwear may be reduced by 5 per cent., the price of shirts is unlikely to be reduced at all, for the amount of the remission is so infinitesimal that traders will not consider it sufficient to justify a reduction of price. If that should be the case, consumers will receive no benefit from this remission-. It may happen’ that the- “ slice off “ from the revenue of £2,000,000 may benefit the business community without giving any corresponding benefit to the consumers.
I am perturbed lest this amount of revenue which the Commonwealth Government is sacrificing may not be reflected in an aggregate reduction of the cost of living to the same amount. If the honorable gentlemen opposite can show me that the workers will get their proportionate share of the amount which this remission of taxation represents, I shall have greater confidence in allowing, the bill to pass than I have at present. It can, of course, be said that the sales tax legislation was enacted primarily as a measure of financial emergency, and. that with the improvement in the financial position of the Commonwealth it isnot unreasonable that the two principles implicit in the legislation, tax and exemption, should be, in the first instance, gradually reduced, and, in the second instance, gradually widened. That might be a justifiable argument for the Treasurer to advance in. support of this bill, but, in my opinion, it would have been wiser, on the balance, to maintain the rate of direct tax in respect of incomes at a somewhat higher level than that contemplated by the Treasurer in his budget speech and to have made possible thereby an increase of the amount of savings which this measure contemplates in respect of the cost of living. Let me put it in another way. In order to make an effective reduction of indirect taxation, it might have been necessary to retain the rate of direct taxation at a figure higher than that contemplated in the budget. However, the Treasurer has made his choice. He says he prefers to maintain a very considerable rate of tax upon commodities, thus affecting the cost of living, rather than to maintain income taxation at its present figure. The Standing Orders preclude me from proposing an. amendment to this bill tei provide an alternative course to that suggested by the Treasurer. If I urge that, the- rate of tax be reduced, the honorable gentleman will, immediately saythat he needs the revenue. As I cannot, move in this measure in such a way as to affect exemptions, and cannot propose) any variation- of the forms of taxation in order to ensure greater relief to the taxpayer, I am- compelled to- support tha measure.
.- The Government and the Treasurer (MrCasey) are- to be congratulated on being, in a position to introduce thi3 bill. As the Leader of the Opposition) (Mr. Curtin) has pointed out, this tax was originally imposed in a time of financial emergency. No one expected; that at this stage it could be entirely abolished. That being the case, the. Treasurer has adopted the course which will give most satisfaction to the business community generally, in that he has. reduced the rate of tax by 20- per cent, and’ has also enlarged the- list of exemptions, thereby opening the way for the removalof many anomalies which have beencausing a. certain amount of discontent among manufacturers and the business’ community generally. I wish to spend a few moments in replying to the criticismof the Leader of the Opposition that thebenefit of this remission may not be passed on to the poorer sections of thecommunity. It is my view that benefits? of this kind will inevitably spread themselves over the whole community, either by effecting a reduction in the cost of thearticles purchased by the consumer; or by leaving to the manufacturer an additional amount of capital for investment in other directions. If the price of the article affected is reduced, the consumer receives a direct benefit; if the manufacturer retains the benefit of the tax remission he has more capital available for investment, and thus additional’ employment is provided for the people- In either event, the reduction of taxation now comtemplated will release purchasing power to the value of £2,000,000’. I do- not. think that that statement of the rasp can be controverted. It is- a short-sighted policy not to pay regard to the real but: perhaps not superficially obvious effects of such a remission of taxation. To me a remission of taxation of this kind must ultimately benefit every section of the community and not only the people to whom it is immediately applicable. I congratulate the Government upon releasing an additional £2,000,000 worth of purchasing power by this direct remission of taxation, and I believe that there will thereby be effected a general improvement ofthe economic conditions of the whole community.
.- If any additional justification were needed for the fears expressed by the Leader of the Opposition (Mr. Curtin), it has been provided by the speech of the honorable member for Fawkner (Mr. Holt), who asserted that the passage of this legislation would be a source of great satisfaction to business interests. That statement is a complete vindication of the protest of the Leader of the Opposition against this method of reducing taxation. Many honorable members on this side of the House feel that the poorer section of the people will not participate inthe benefits that will follow this reduction of taxation. If the full amount of the £2,000,000 had perforce to be passed on by the business people, it would be a matter of indifference to them what method the Government pursued toachieve that end, and they would have expressed neither satisfaction nor dissatisfaction with the bill. But that is not the case. Business interests will undoubtedly retain a substantial proportion of the amount of money which the Government is sacrificing. A much more satisfactory method could have been adopted to grant relief to the community generally with the object of reducing the cost of living.
– Does the honorable member for Hindmarsh object to the passage of this bill?
– I do not. I say that any remissions of taxes should be made in such a way as to ensure that every section ofthe community receives its proportion of the benefit. That cannot possibly be the case when remissions are made in the manner now proposed by the Government. The passage of this bill will simply mean that certain business interests will receive what amounts to a bonus. In these circumstances the Leader of the Opposition was thoroughly justified in expressing the fear that the working people will not obtain any relief by reducing the sales tax in this manner.
– Although the honorable member for Hindmarsh (Mr. Makin) has worked himself up into a fine state of righteous indignation about the sales tax, he is surely aware that many business people have never been able to recoup themselves the amount of sales tax they have had to pay in the past. The honorable gentleman should remember that competition is a great leveller,’ and will ensure the adjustment of prices in accordance with this remission of taxation. It is evident that neither the Leader of the Opposition (Mr. Curtin) nor the honorable member for Hindmarsh appreciates allthe ramifications of business relations, or understands how effectively competition controls prices. Certain honorable gentlemen opposite who are interjecting may rest assured that competition will force the prices of the commodities affected by the reduction of sales tax to fall to their proper levels; but in any case I have sufficient knowledge of business practices to rest content that the competition that develops between manufacturers and the wholesale traders will bo reflected in the retail trade, and that the whole of the amount of tax now being remitted will be passed on to the people who should benefit. The Government has done a good job of work in introducing this bill and I commend it for its attitude.
– I desire to make it clear that honorable members on this side of the House are not opposed to this measure, and I hope that no wrong impression will be gained from speeches made by certain honorable gentlemen supporting the Government. I do not refer to the Treasurer (Mr. Casey).
I, for one, do not suggest that the Treasurer and his staff have worked out this elaborate scheme . of relief from taxation with the desire to favour any one particular class of the community. This matter is purely one of economics, and that being so, there is room for an exchange of views as to the best means of carrying out the aim of the Government. Honorable members will agree that the depression hung on for so long, because of the consistent falling off of demand by the consuming public, entirely due to the lack of purchasing power among those persons who spend every penny that comes their way as fast as they can get it. If I were criticizing this measure in any way, I should say that the best means of helping the public generally, including the struggling business man, would be to select certain lines of goods, and remit the sales tax altogether on them. To this end the Treasurer has selected the boot industry. Unless there is some criminal avariciousness displayed by the manufacturers, which I do not suggest, the people who purchase footwear must immediately obtain the benefit of the removal of a sales tax of S per cent. There will be no difficulty about passing on the concession, and it will increase the number of boots, shoos and slippers which are used by the general public. .Furthermore, that increased demand will assist the manufacturer by enabling him to add to the number of units which are turned over by him. Perhaps the Treasurer was influenced by this possibility. Actually the boot industry is an outstanding illustration of over-capitalization ever since the war period. Indeed, it has not yet gor back to an even keel, and therefore, there can le no suggestion that any saving of sales tax which might be retained by the employer, because it is too small ro pass on, may help him to extend his operations, add to his plant, or recapitalize more money into his business. The industry already has gone too far in that direction. The only advantageous effect it would have on the average manufacturer would be to give him some new impetus by the extra demand for the goods he produces. The only way to achieve that end is to remit the tax altogether on a section of trade as the Minister has done in regard to the boot industry.
– I remind the honorable member that this bill does not deal with exemptions.
– If the Treasurer had selected a group of industries, and remitted the tax on their products, the remission would immediately have been passed on to the consumers, and the in creased demand occasioned thereby would have assisted the manufacturers. At least that is how I understand economics. Regardless of the goods that a manufacturer produces lie cannot reduce his prices unless the Government takes some action to add to the purchasing power of the people in order to increase the demand. During the boom years a manufacturer will add to his plant, and will recapitalize every penny of to-day’s profit for the morrow. But in depression years he cannot follow that policy, and thereby the people of Australia suffer. For instance, they are suffering because of the over-capitalization of industries in Lancashire. Where the sa les tax has been remitted altogether, the benefit can be at once passed on to the consumers who will receive an immediate advantage from it. The manufacturers thu in selves will also profit thereby, because a. greater demand for their goods will bc (.tom led. By remitting only i per cent, of sales tax, however, no section of the community will he assisted. The reduction will not be passed on, not because a manufacturer is a criminal, but because, in many instances, he is not in a position to pass it on to the public. The advantage he gets will go into “ cold storage,” as it were, because his plant is not running at full capacity, and he does not de-sire to add to ii. For this reason, a manufacturer will not consider the recapitalization of any more of his money by putting up more pulley wheels, and another foot, or so of shafting. The only means by which he can be assisted is by the total abolition of the tax upon certain lines, in order to create a greater demand for goods and services, and increase the turnover, which in turn will increase the units which will bring him profits.
.- The sales tax is being reduced by successive singes. Originally it stood at 6 per cent. Then it was reduced to 5 per cent., and the bill now before the House further reduces it. to 4 per cent. This measure deals actually with nine sales tax bills, and on each occasion that these have come before the House, I have opposed them, because I did not think that they were in the best interests of the business and trading community. In my opinion the sales tax hampers business considerably, ‘although it, undoubtedly, provides an excellent means of raising revenue. At the present time I would have preferred tosee thetax reduced to33/4 per cent., which wouldhave simplifiedthe calculationofreturns. Ihope that the timeis notremotewhen that tax will be remitted altogether, because it is difficult to calculate and compelsbusiness men to employ many more clerks than their business justifies. Generally, I support the bill,and hope that subsequently the sales taxwillberemitted altogether.
. - In supporting the bill, I congratulate the Treasurer (Mr. Casey) on making provisionfor the reduction of 1 per cent. an the sales tax, which will remit taxation from this source to an amount of £2,000,000. There is a good deal to he saidfor the contention of the honorable memberfor Melbourne Ports (Mr. Holloway) that it would be far more advantageous to the consumer if the sales tax exemptions provided for the exemption of a list of certain commodities from the imposition, instead of areduction of 1 per cent. of the total. It would assure to the consumer the possibility of securing some advantage from the reduction, and it would not in any way mitigate against his securing the advantage of the concession of £2,000,000, because thereduced price of the goods so exempted would be the means of providing him with it. The Treasurer has had many lists of proposed exemptions submitted to him, and they include many items whichcould make up the total of £2,000,000. Whilst the adoption of such acourse would have been advantageous to the consuming public, it would also have benefited the manufacturer. There is also an important reason, that has not been stated by honorable members, for taking the course which I have suggested. The sales tax, even with the exemption of 1 per cent., is still difficult for the business man to calculate, and the reduction docs not lighten the work of book-keeping and the general ramifications of the collection of a tax, which is very difficult. The reduction of the tax from 5 per cent. to 4 per cent. actually makes the position more difficult for the business community.
If we were to exempt £2,000,000 worth of goods altogether from sales tax, we should be lifting from the business : man a burden which he seeksto have removed, and which he genuinely claims it is our duty asearly as possible to remove. ‘There are excellent reasons why, in. future, when ‘further remissions ofthesalestax are contemplated, the tax should be liftedfromcertainlines in theirentirety, instead of spreading the reduction over all classes of goods. That course would be of considerable general advantage.
.- During the year the Treasurer (Mr. Casey) has listened very carefully to the claims of many interests for exemptions from sales tax, and I fear that honorable members of this House have continually placed before him the desirability, not of granting further exemptions, but of reducing the tax to at least21/2 per cent. In my opinion, the sales tax is such a moneyspinner to the Treasury that, even if the Opposition were in power to-morrow, it would not attempt to remit the tax. The Scullin Government imposed it, and I have no doubt that, if a Labour govern - ment were to come into office, it would continue the tax because in its incidence the money comes to the Treasury whenever goods are changing hands. In my opinion, however, a sales tax is unfair and unjust. It was imposed as an emergency measure, and if there is any possibility of lifting it, it would be better to do soeven though such a course involved an increase of direct taxation. Such a burden asthe sales tax shouldnot be borneby the poorer sections of the community. Commercial interests regard the reduction of the sales tax by 1 per cent. as being of little or no value to them, because the expense of preparing returns for submission to the Commissioner of Taxation costs infinitely more than is represented by the proposed reduction. Genuine complaint is made by every individual who is required to prepare returns for the purposes of sales tax. Many men in business have not the requisite educational qualifications and either have to employ an outside accountant or muddle through as best they can. If the returns which they furnish are not considered satisfactory by the department, it demands from them a record of all sales, and that is most difficult to keep. This Government and every other government in Australia will have to recognize the necessity to lighten the burden of taxation which is at present borne by men who conduct small businesses. The big manufacturer who produces on a large scale has every facility at his disposal for the preparation of the necessary returns, and does not experience any difficulty in furnishing them. But the business of the small man who commences with limited resources is seriously interfered with. I am acquainted with a man, 60 years of age, who is hardly able to either read or write.His books are kept by his wife and daughter. A taxation officer who inspected them could not procure from them the particulars which the department needed, with the result that this man was prosecuted and fined £12 10s. for not keeping proper books of account. I believe that thousands of small men are placed in similar circumstances.
– Are these men retailers?
– Many of them are wholesalers. The small retailer cannot pass on the tax, and consequently is hit all the time. I know of small grocers who can purchase commodities more cheaply from the cash and carry stores than from the wholesaler.
– Do not the cash and carry businesses pay sales tax?
– They do. But because they buy in large quantities, the manufacturer allows them a discount of 5 per cent. or 71/2per cent. forcash. I.X.L. jams may be purchased more cheaply from a cash and carry business than from the wholesaler who obtains his requirements from the manufacturer. I do not know why footwear should be exempt from this tax. Other clothing isjust as important.
Mr. SPEAKER (Hon. G. J. Bell).Order! The honorable member may make those remarks when the exemptions bill is before the House.
– I am asking the Treasurer (Mr. Casey) to consider during this year the reduction of the sales tax to 21/2 cent. I have passed schools where I have seen boys and girls without footwear. This exemption will not affect them. After all, the tax is only 9d. in the £1. Warm clothing is more essential than footwear. Instead of giving exemptions to large industries-
– Order! I again remind the honorable memberthat this hill does not deal with exemptions.
– If the sales tax must be continued, it should be reduced to21/2 per cent.
– in reply. - There are two schools of thought in relation to the sales tax. The first considers that there should be a low flatrate of tax with no exemptions; and apparently the second would be content with a higher rate of tax and fairly widespread exemptions.
– Surely there is another school which does not believe in the tax at all !
– We can take itas a basic assumption that no one believes in the tax. The Government has no alternative in this matter. I offer no criticism of the Scullin Government’s introduction of the sales tax. That Government made widespread exemptions of foodstuffs and some other essentials of life, and this Government has continued that system of exemptions with the set object of relieving from the incidence of the tax the men on the lower rates of wage. Normally, an indirect tax such as this falls with equal weight on the just and the unjust ; but by means , of exemptions the Government is able to relieve those who are on the lower scales of income.
– Order ! The Treasurer is almost repeatingwhat he said on another bill.
– I was merely attempting to catch up with the criticism of the Leader of the Opposition (Mr. Curtin), that the lowering of the rate of tax by only 1 per cent. would be of no consequence to the community.
– I realize that it is difficult for the honorable gentleman to avoid justifying exemptions. He will be quite in order in replying to the remarks of the Leader of the Opposition.
– The Leader of the Opposition made a worthy attempt, with which I had every sympathy, to “ run with the hare and hunt with the hounds. “ In other words, while welcoming the bill and, I believe, supporting it, the honorable gentleman did everything that he could to discount the value of 1 per cent. reduction of the tax. I cannot conceive of honorable members opposite believing that the proposed reduction is not a good thing. I have every confidence that the saving of £2,000,000 will be passed on to the Australian community. As the honorable member for Wentworth (Mr. E. J. Harrison) has said, the only portion of it which will not be passed on is that which was previously imposed but had to be borne by the merchants because they could not pass it on. It will be retained by them to make up for past losses. That, however, represents a very small proportion of the total. If it may be said that the reduction of 1 per cent. is not worth while, it may just as well be said that there wouldbe no harm in raising it by that percentage. The adoption of such an argument, if carried to its logical conclusion, would mean the maintenance of the present rate of 5 per cent. As the Government is financially able to do so, it believes that it should reduce this tax in common with other taxes. I have yet to learn that in Australia competition is not so intense that the reduction of 1 per cent. on wholesale prices will not be passed on.
Question resolvedin the affirmative.
Bills read a second time, and passed through their remaining stageswithout amendment or debate.
– In moving -
That the bill be now read a second time,
I ask leave to make a speech embracing the three measures which deal with grants by the Commonwealth to certain of theStates.
Mr. SPEAKER(Hon. G. J. Bell).I rule that the three bills may be debated together.
– How will that affect an amendment to the Western Australia Grant Bill, of which I have given notice?
– Although I have ruled that the bills may be debated together, they will be put to the House separately. The honorable member may move his amendment when the bill dealing with the grant to Western Australia is before the House.
– In accordance with your permission, Mr. Speaker, and following the practice adopted in previous years, I am addressing my remarks in this speech to the three bills covering the proposed special grants to South Australia, Western Australia, and Tasmania, for the financial year 1936-37. The grants for which provision is made in this bill are those which have been recommended by the Commonwealth Grants Commission, whose third report, the one for 1936-37, was recently laid on the table, and copies of which have been made available to all honorable members.
The grants proposed for the current year, compared with those for last year, are as follows: -
Before making any comment in regard to the grants now proposed, and the recommendations of the Commonwealth Grants Commission, it may be of interest to honorable members to give an indication of the trend of these special grants to the three States during the last nine years. This will be seen from the following table: -
The grants paid for 1934-35 and 1935-36, and those proposed for 1936-37, are in each case the grants recommended by the Commonwealth Grants Commission.
Honorable members are no doubt aware that the special grants to be paid to the three States under notice have constituted a very difficult problem for many years. The grounds upon which these special grants were originally claimed were the disabilities due to federation, or the effects of federal policy, and a number of attempts has been made by various bodies and authorities to assess in terms of money the effects of such disabilities on the finances of the States concerned, without any permanent solution of the problem being reached.
In 1933, the Commonwealth Grants Commission Act was passed by this Parliament, and under that act the commission was established. It was hoped at the time that the commission would be able to formulate a policy which the Government could adopt, and under which the grants to the States could be placed on a more stable, and, possibly, a more permanent basis. The commission has now submitted three reports, the last of which, as I have mentioned, was recently tabled. The recommendations of the commission for the last two years, 1934-35 and 1935-36, were adopted by the Government, and grants were passed by Parliament in accordance with those recommendations. On each of those occasions the grants recommended represented an appreciable increase on the grants of the preceding year. It is proposed that the recommendations of the commission this year shall also be accepted, and it is on this basis that these three States grants bills are submitted to the House.
As I have said, prior to the appointment of the Grants Commission, the claims of the States were based on the grounds of “ disabilities,” and were considered from that aspect. The commission has, however, since its first report, stated that it found itself unable to assess the grants on the basis of “ disabilities,” and has consistently based its recommendations on “financial needs”. In its second report, the commission made the following comments in support of the basis of assessing the amounts of special grants according to the financial needs of the States concerned: -
The adverse effects of federation may be the cause, in whole or in part, of the inferior financial position of a State. It is, however, the relative financial position (i.e., of any one State compared .with the other States) which determines whether a grant ‘ is justified. (Paragraph 72.)
Special grants are only an extension of the normal system. The problem of recommending them is to determine how much the transfer should be for any particular State in excess of the amount provided by the normal system. We find that this should be the amount necessary to enable the State Government to function at some minimum standard, and that this amount must be determined by a searching examination of the comparative financial position of the State.
We have found no ground for compensating the people of a State for disabilities due to federation or any other causes. Disabilities due to federal policy may he the cause of the inferior position of a State’s finances, but a variety of other causes may have the same effect. (Paragraphs 78 and 7B.)
– The Government a little while ago was strongly in favour of assessing grants on the basis of disabilities due to federation.
– And it still is. If the honorable member can show us how to assess the net disabilities of a State under federation, I shall be obliged to him.
In its third report, the commission has repeated its opinion that the grants payable to the States should be based only upon financial needs, as will be seen from the following extract: -
JC4. In our second report we developed the tentative principles of the first, and concluded that the relative financial position of the States, when analysed with sufficient care and understanding, was the only basis on which special grants should be made. Further consideration and another year’s experience have Icd us to the following conclusion: -
Special grants are justified when a State through financial stress from any cause is unable efficiently to discharge its functions as a member of the federation and should he determined by the amount of help found necessary to make it possible for that State by reasonable effort to function at a standard not appreciably below that of other States.
The view is still held in certain quarters that payment of grants to the States should be based upon the financial effect of disabilities due to federation or federal policy. This is borne out by evidence which was submitted as recently as this year to the Grants Commission by the representatives of certain of the State governments concerned. On this point, it is interesting to note what the commission in its latest report has had to say upon that particular phase of the subject. The attitude of the commission has been that, in considering the effects of federation or federal policy on the finances of the States, it is necessary to take into account, not only the adverse effects, but also the benefits which a State may derive from federation or federal policy. The commission has made a genuine effort to place a monetary value upon the net effects of federation. Let me quote what the commission has to say in regard to this -
It follows that unless the adverse effects of federal policy on the claimant States exceed the benefits due to the allocation of Commonwealth revenue and expenditure, there are no adverse net effects of federation. (Paragraph 120).
The measurement of the total net effect of federation is clearly an impossible task. . . We can, however, makesome rough approximation. (Paragraph 127).
The commission has made an attempt to ascertain in an approximate way the effects of federation, and, after weighing all the evidence, concludes with the following finding: -
It appears then that without reckoning any benefit from exchange, benefits and burdens from federation almost balance for South Australia and Western Australia, while for Tasmania there isa net benefit of nearly£ 1 per head. It follows that no substantial part of the special grant received was made necessary by the effects of federation.We may conclude that these States unfederated would have been at least in the same financial difficulties as at present. (Paragraph 140).
This is the conclusion to be drawn from the estimates of tariff effects offered by the States themselves. For the reasons given above they cannot be regarded its satisfactory, nor are they put forward by the representatives of the Statesas giving a complete and valid answer to the question of tariff effects. We may say, however, that on the principles adopted it appears that the Western Australian figure understates the burden for that State, while the figure for South Australia is probably too high. No possible correction, however, will sensibly modify the conclusion that the major cause of the relatively inferior financial position of the claimant States is not to be found in federation or federal policy. (Paragraph 147).
Although there may be some room for honest difference of opinion as to whether grants to the States should be based upon disabilities or upon financial needs, I submit that it would be difficult to gainsay the carefully worked out opinion of the Grants Commission in this regard, the gist of which I have just quoted.
I have said sufficient, I think, to indicate the reasons why the commission has accepted the basis of measured financial needs in arriving at its recommendations as to the grants to be made, and I wish now very briefly to indicate the manner in which the financial needs of the States havebeen measured. The commission holds that special grants are justified when a State, through financial stress from any cause, is unable efficiently to discharge its functions as a member of the federation, and that the special grants should be determined by the amount of help necessary to make it possible for that State, by reasonable effort, to function at a standard not appreciably below that of other States.
For the purposes of arriving at this standard the commission has adopted the plan of comparing the financial results of the claimant States with those of the non-claimant States, after making such adjustments as are necessary to put them on a comparable basis. In making this comparison the commission has decided that the nearest approach to an Australian standard would be obtained by taking the simple average of Victoria and Queensland, as was done in the previous year, 1935-36.
– The exclusion of New South Wales invalidates the whole mathematical formula, because New South Wales is the most important State of the Commonwealth, having regard to the population and wealth.
– Yes, but it might not come out any betterfor theclaiment States if New South Wales were included. In any case, so many special factors operated in the case of New South Wales that it was not thought to be a suitable State for purposes of comparison.
– Due allowance couldbe made for those special factors, but New South Wales should have been included with Victoria and Queensland for the purpose of the calculation.
– In its first report the commission did include New South Wales when making a comparison, but the calculation was so involved that, in the two succeeding reports, New South Wales was omitted.
The present formula produces the following result: In those cases where the claimant States disclose: a lesser improvement than that of the non-claimant States, a larger grant is recommended. Where the finances of the claimant States show an improvement which is greater than the degree of improvement revealed by the finances of the non-claimant States, the amount of that grant is decreased.
In the third report the commission bases its recommendations for the year 1936-37 on the finances of the States for the year 1934-35, which were the latest figures available at the time of its inquiry. In that year the budget results of South Australia and Western Australia revealed a degree of improvement greater than that which was shown by the budgets of the non-claimant States, andthe grants for those two States are accordingly recommended to be reduced. On the other hand, the finances of Tasmania during 1934-35, whilst better than for the preceding year, did not disclose an improvement equal to that revealed by the non-claimant States. The grant recommended in the case of Tasmania is, therefore, greater than that for 1935-36.
I have, I think, said sufficient to give honorable members a bird’s-eye view of the methods included in the commission’s latest report, and upon which the recommendations for the grants for 1936-37 have now been based. It would be impossible in a speech of this kind to give more than a sketchy outline of the commission’s report, and I would strongly commend the report to honorable members for their perusal. Some criticism may arise from the fact that the recommendations for this year are based upon the budget figures for 1934-35, that is, representing a time lag of more than a year. As the commission has pointed out in its reports, this factor is not open to very serious objection. Whilst admittedly paving the way for some degree of error, the commission points out that the error is not cumulative. It adds that, while general conditions are deteriorating, the grant on these lines will be too small. On the other hand, when conditions are improving it will be too great. The differences will balance out over a term of years. As, during the last two years, conditions have been improving, it will be seen that this principle at the present time operates to the advantage of the States concerned.
– My protest is not against the amount recommended, but against departure from the principle to which the Government agreed.
– The report of the commission furnishes the answer to the honorable member in that regard.
The Government makes no apology for its acceptance of the recommendations of the commission for this year, notwithstanding that the grants recommended in the aggregate are £320,000. less than the total grants recommended for 1935-36. The Grants Commission was appointed as an independent body to make complete and thorough investigation into the question of the financial relations of the Commonwealth and the States as affecting Commonwealth grants to the claimant States. The commission has been confronted with an arduous task, and has carried out its responsible duties in a painstaking and thoroughly impartial manner. When it recommended increased grants in each of the last last two years, involving, in the aggregate for the two years, £890,000 more than would have been paid if the 1933-34 grants had’ been continued, the Government accepted those recommendations without question, and obtained parliamentary approval for the grants recommended. The grants now recommended are, in the total, £320,000 less than those approved last year, and the Government sees no reason why those recommendations should not be accepted in this instance, particularly in view of the generally accepted improved conditions obtaining in each of the claimant States.
It may be of interest, in view of the observations that have been made by various State Premiers recently, that the time is ripe for a variation of the financial relations between the Commonwealth and States, to hear what the commission has had to say in regard to the constitutional aspect of this case. The following is an extract from the commission’s latest report: - 344. It has been suggested that somereform of the Constitution might so alter the relative burden of the Commonwealth and the States that no financial adjustment would be necessary. The opinion was also held in some quarters that the commission would be able to recommend fixed grants for a long term of years, or at least a mechanical formula which could be used to determine grants indefinitely 345. After a close study of the public finances of the Commonwealth and the States and of the general economic conditions of Australia, the commission feels that neither a constitutional amendment nor an automatic formula could really solve the basic problems which govern the financial relations of the Commonwealth and the States. The relative position of the States and the Commonwealth fluctuates so considerably that any mechanical formula or constitutional change may speedily become inapplicable and unjust. The commission considers that it is not possible for different governments functioning over an economic and political unit like Australia to divide their financial powers and resources into separate water-tight compartments. Some principle of adjustment is necessary and as conditions change considerably from time to time the adjustment should be elastic. This view is consistent with the experience of all federations.
I commend this bill and the cognate bills to the favorable consideration of honorable members.
Debate (on motion by Mr. Curtin) adjourned.
Motion (by Mr. Casey) proposed -
That the bill be now read a second time.
Debate (on motion by Mr. Curtin) adjourned.
Motion (by Mr. Casey) proposed -
That the bill be now read a second time.
Debate (on motion by Mr. Curtin) adjourned.
In Committee of Supply: Considera tion resumed from the 18th September (vide page 346), on motion by Mr. Casey -
That the first item in the Estimates under Division 1 - the Senate - namely “ Salaries and Allowances £7,900 “ be agreed to.
– I congratulate the Government upon the excellence of its budget, and I feel sure that every section of the community gives it the credit which is due to it for the favorable financial position revealed, and for the prosperous condition of the country compared with the conditions obtaining a few years ago. Whilst I congratulate the Government on the relief afforded to taxpayers, I sympathize with the Leader of the Opposition (Mr. Curtin), who had a most difficult task in endeavouring to find fault with the budget. He is to be complimented upon the speech which he made under most adverse circumstances. No doubt at the behest of the Labour caucus, he was expected to make a bitter attack upon the Government in an endeavour to create hostility towards it, and in the circumstances he certainly made a valiant attempt to carry out his instructions. Every fair-minded member of the community, however, will be prepared to give the Government credit to which it is entitled. Opinions expressed by overseas journals indicate that the meritorious work of the Lyons Ministry isrecognized throughout the British Empire. The economic recovery internally in the last few years has been made possible by good administration and the increased prices which primary producers have received for their exports. The benefits of the wise administration of the present Government are reflected in the expansion of trade and the development of primary and secondary industries throughout Australia.
The savings deposited in the Commonwealth Savings Bank alone amount to no less a sum than £225,000,000, which is an increase of £32,000,000 since 1931. The further reductions of taxation that arecontemplated will probably increase the people’s deposits, and lead to further development and greater activity in all sections of industry and among all classes. The relief from taxes proposed in the budget means a reduction of £5,275,000 a year. This relief, added to reductions of taxation in previous years to the extent of £10,000,000, will give a yearly reduction of £15,275,000. Under the new agreements with the States with respect to road construction by means of the revenue collected in petrol tax, no less than £3,600,000 is to be given to the States. Had it been possible to reduce the petrol tax to 4d. a gallon, it would have been the lowest in any part of the world, but the rate is to remain at 7d. a gallon. The States have asked for an increase of the road grant, and they are to receive an increase of 20 per cent, upon the amount paid under the present agreements. Personally, I should have been inclined to resist the demands of the States for such an increase under present circumstances, and give petrol users some benefit. Although the Commonwealth Government gave way to the States in this regard, I commend it for resisting their further request for an increased payment from Commonwealth revenue. If the Commonwealth Government finds that it does not need any money which it has collected in taxes, it should return the surplus to the people through remissions of taxes rather than hand it over to the State governments to squander. If this were done I feel sure that the people of Australia would be better able to appreciate budgetary measures of relief.
One honorable member contended that the less fortunate sections of the people will not receive any ‘ benefit under the relief provisions of this year’s budget. That is not, so. The relief from sales tax alone is £3,000,000. The invalid and oldage pension has been increased by 2s. a fortnight, this concession accounting for a. total increase of the Government’s pension payments by £1,000,000 a year. It is all the more remarkable that this relief has been given after provision has been made for the remission, of £5,250,000 in taxes. The invalid and old-age pension will now be 19s. a week compared with 15s. a week a few years ago. Although its total pensions bill will have increased to over £13,000,000, 1, hope that the Commonwealth Government will soon find itself in a position to increase the rate of the pension to the full 20s. a week.
Another section of the community who will benefit under the Government’s latest proposals, are the public servants, who have been responsible, in no small degree, for the wonderful achievements of the Commonwealth and the State Governments in recent years. As 82 per cent, of this Government’s employees are engaged in post offices, these employees have earned nil the relief to be given to them through a full restoration of their salaries. [Quorum formed]. It is not difficult to prove that the relief provisions of the budget will apply to the community generally. The war pensions provisions have been extended and additional facilities for hospital and medical treatment have been provided. The service pension has also been increased by ls. a week and the pension payable to the children of invalid soldiers by ls. 6d. a week. These and other concessions to returned soldiers account for a total cost to the Government of £285,000 annually.
The benefits of remissions of taxes made by this Government, will be enjoyed by the people generally. The reduction of sales tax will affect every individual. The Government is sincerely endeavouring to continue its policy of reducing this tax, and thi3 year’s budget provides for a. reduction of £3,000,000 a year, this concession being made up of £1,000,000 through further exemptions and £2,000,000 through a reduction of 1 per cent, in the rate of tax. Every section of the community will readily give credit to the Government for such relief measures. Remissions of income tax amount to £2,105,000 annually, whilst primage duty has been reduced by £170,000 a year, making a total reduction of taxes of £5,275,000 a year.
Dealing with indirect concessions made by this Government I point out that if the amount of £2,750,000 now paid as special grants to the States annually were abolished, this Government could’ remit an equivalent amount in further reductions of taxes. I suggest that it should follow this course, because, if this were done, taxpayers throughout the Commonwealth would benefit by a more substantial reduction of taxes, and the States would not be treated unfairly. New South Wales might urge its claim for assistance whilst hints have already been given that Victoria would press a claim. As a Queenslander, I suggest that the Commonwealth Government instead of paying grants into the coffers of the States, should remit the amount now absorbed by these grants to the people as a whole through reductions of taxes. The benefits thus accruing to the people would be more definite and effective, and the results of this Government’s administration would be even more fully revealed than they are at present, by the displayed confidence in Australia within the community and overseas. During the term of office of the present Government an amount of £4,000,000 annually has been saved to Australia in the conversion of loans. This represents a direct benefit to the Commonwealth of only £850,000 a year, but the “States receive a direct benefit of £3,150,000 .a yeo. In claiming further assistance from this Government, the State Governments contend that the Commonwealth Government has been relieved of its war debt payments to the extent of about £3,000,000 annually. Yet we find that this Government has saved -the (States no less than £3,150,000 annually in the conversion of State loans -in Britain. The one more than balances the other. Furthermore, we must remember that the Commonwealth Government is responsible for the defence of Australia, and by its budget this administration has shown that it is prepared to face that responsibility. From its revenue and savings it has provided no less than £8,809,000 for expenditure this year to safeguard the interests of every section of the people in maintaining sufficient defences in order that we may have at least some chance of defending ourselves in time of war. On a *per capita basis this expenditure compares very favorably with similar expenditure by Great Britain. Furthermore, this Government has not found it necessary to borrow this sum ; it had the foresight to make provision in previous years for this purpose, out of revenue which, I suggest, is something further to its credit.
Probably no better illustration of the benefits resulting from the sound administration of this Government is provided than the increased building activity throughout Australia at the present time. In our capital cities and suburban areas the expenditure on ‘building construction during the last three years has increased by £15,122,000. The prosperity of the building industry is of great importance to the unemployed, the artisans, the manufacturers and the people of Australia generally. Yet this is only a minor illustration of the industrial and economic recovery resulting from this Government’s administration. That recovery is not due entirely to the policy of the Government; it is influenced also by increased prices of commodities which we export overseas where our markets have been protected and expanded. This Government has spent considerable money in providing more efficient marketing and in safeguarding markets once they have been obtained, and effective trade publicity lias been carried out with the result that -even in Britain markets for o.ur products have been considerably expanded. Sales of wool last year .contributed no less than .£58,000,000 to the national income.
A few years ago Australia was supposed -to be bankrupt. Many of our people would have sold out, but there were no buyers. In any case, conditions were probably worse in other parts- of the world than in Australia. To-day, it may be said that no country, with the probable exception of Great Britain, has made such a notable recovery as Australia.
I direct attention, for a moment, to the great wheat industry of this country. Our wheat-growers have suffered for a long while because of the depressed price of wheat, and during the period of depression they were granted relief from Commonwealth sources to the extent of £14,000,000, not from loan moneys, but from revenue. Happily, however, the price of wheat recovered during the latter part of last season, and for the seven months ended July, 1936, averaged 3s. 7£d. a bushel. Our wheat crop last year yielded £26,740,000.
It cannot be claimed that conditions hi the dairying industry have improved very rapidly, but there has, nevertheless, been some betterment, and prices, although still low, are in advance of those of a couple of years ago. The dairying industry provides housing and sustenance for probably more individuals than any other single industry in the Commonwealth, and is therefore deserving of the utmost consideration from the Government. I realize the value of the great wool industry to Australia, but I also know the importance of dairying.. The value of this industry cannot be measured by its export trade, for about half of its production is consumed in Australia. Moreover, a good deal of the dairy produce of Australia is turned into cheese or consumed as milk. Last year this industry yielded production worth about £40,000,000 to the Commonwealth, and, because of the fact that it sustains so many people on small farms, it is exceptionally useful. To enable effective dairyingto be carried on, scrub lands have to be cleared, and intense settlement has to be fostered. This results in small townships being establishedwherever dairying is pursued, and such settlement should be encouraged in every way.
I amglad to say, also, that the beef and mutton exports from Australia have increased. This is not a great beefproducing country, and hitherto we have been unable to supply our full quota to the British market, but there is reasonable ground for the hope that very shortly we shall be able to do so.
The imports into Australia last year of non-competitive goods reached the high value of £85,000,000. As these goods did not enter into competition with locally-manufactured articles, the trade they represented was worth cultivating in the interests of export trade. Such imports were made possible only by the sound administration of the finances of the countryby the Government, which resulted in an enlargement of the purchasing power of the people. It is gratifying also that the motoring industry of the Commonwealth has developed to a point never before reached. This fact demonstrates beyond any question, the reality of our financial recovery. Inmanycases, even the peak figures of the pre-depression years have been passed.
It should be realized that the Commonwealth Government is responsible for the provision of many social services for the welfare of the community. Our actual expenditure last year on war service homes, war pensions and other repatriation activities, totalled £18,240,000. Payments to the States absorbed £14,500,000. Notwithstanding this fact, some State authorities arc making increased claims on the Commonwealth Treasury, desiring to do most of the spending while the Commonwealth does more taxing.
– Some of that money was paid for sugar.
– I have no doubt that the people who paid for sugar got it.
– And Queensland got it.
– I remind the honorable member that a great deal has been done to help the apple, pear, and small fruits industries of Tasmania. Sugar is provided by the Australian industry for our fruit-growers at a price which, taking all the facts into consideration, is very reasonable. Some honorable gentlemen would like permission to he granted to certain interests to import sugar from countries where black labour is employed, but they should bear in mind that if primage and a reasonable duty had to be paid on such sugar, and that if a bounty were provided on the production of beet sugar, as is done in Great Britain, the price they would have to pay for the imported sugar would be higher than that which they pay for Australian-grown sugar. I do not look upon the sugar industry as belongingto Queensland. It is a great Australian industry. The people of Tasmania should realize that Australia has its tropical as well as its southern regions, and that these must be developed.
The Commonwealth Government is also responsible for the payment of invalid and old-age pensions, and the amount expended under thisheading last year exceeded £13,000,000. I sincerely hope that -our financial position will continue to improve so that the Government will shortly find itself in a position to increase the payments to these old people who did such fine pioneering work in the early days.
– It could do so now if it had not handed out so much to its wealthy supporters.
– I do not know about that. Not much of it has come their way. I hope the honorable member is not double-crossing his own friends.
– I have no doubt that some of the people who helped to pay the honorable member’s election expenses have benefited.
– The people who help to pay my election expenses are the small dairy-farmers, and I assure the honorable member that I very much dislike die thought that they should ever be compelled to join any political organization.
Another obligation which the Commonwealth Government has to meet is the payments to interest and sinking funds. These, as most honorable members are aware, are inescapable and no one can accuse the Government of extravagance in meeting these calls upon Government f unds.
I am glad that an amount of £2,000,000 has been provided for public works to assist the unemployed. The budget also contemplates the, usual assistance to those engaged in the citrus fruit, and apple and pear industries. The amount provided under this heading is £82,000. It is gratifying also that the subsidy for the use of fertilizers is being continued, though at a lower rate.
Taking a bird’s eye view of the country we arc entitled to express our pride at the recovery that has been achieved. I hope that in the- next two! ve months further financial improvement will be experienced so that additional reductions and remissions of taxation may be granted. The downward trend in taxation is undoubtedly beneficial to the whole community. I am sure that Queensland, in common with the other States which are chiefly responsible for the provision of money for grants-in-aids to necessitous States, desire that some better method may be devised to assist those States than the provision of doles from the Treasury.
House adjourned at 10 p.m.
The following answers to questions were circulated: -
n asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follows : -
I and 2. At the Manufacturers’ Conference in Adelaide it was contended that tha Customs Tariff (Industries Preservation) Act was ineffective and the conference was informed that if it could be shown that the act was generally ineffective steps would be taken, where necessary, to amend the act.
Postal Department: Payment, of Junior Rates.
y asked the Minister representing the Postmaster-General, upon, notice -
– .The answers to the honorable member’s questions are as follows: - 1 and 3. Ivo employees were reduced in status under financial emergency legislation, but, owing to the effect of the general financial depression on departmental staffing, suitable adult positions were not available for a number of officers as they reached 21 years of age. As an alternative to the termination of their services, these officers were retained in junior positions at appropriate rates of pay. They have now all been given adult status with sal a rv accordingly.
n asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows: - 1 and 2. Work has been carried on in Western Australia and Victoria and is now being carried on in Queensland, but no report has yet been furnished which is available for publication.
s. - On the 16th September, the honorable member for Bass (Mr. Barnard) asked me a question, without notice, in regard to the introduction into Australia of frost-resistant potatoes. I now desire to inform the honorable member that 54 varieties of wild potato tubers from South America were received at the end of March last by the Council for Scientific and Industrial Research from the Bureau of Plant Genetics, Cambridge. These included five which were supposedly frost-resistant. The tubers were grown under glass and have been harvested for propagation and study, but they were, unfortunately, badly infected with virus diseases. As these supposedly frost-resistant varieties do not produce commercial types of tubers, thereby involving crossing, and bearing in mind the difficulties associated with the eradication of the virus diseases with which they have been infected, some years must elapse before these experiments are brought to conclusion. It is understood that similar difficulties are being encountered in Germany in the development of a frost-resistant type of potato of commercial value from tubers obtained from South America.
– On the 17th September, the honorable member for Perth (Mr. Nairn) asked the following questions, upon notice: -
I am now in a position to furnish the honorable member with the following answers to his inquiries: -
Naval Welfare Committees.
– On the 18th September, the honorable member for East Sydney (Mr. Ward) askedthe following question, without notice: -
Yesterday, in reply to aquestion which I asked him, the Minister for Defence informed me that welfare committees are not now functioning aboard naval vessels because they are not desired, and, further, that naval ratings have every opportunity through other channels to bring before the authorities any complaints they may wish to make. I now invite the honorable gentleman to say by whom the continuance of these committeesis not desired, and to give details as to the other channels which are available to ratings for the making of complaints?
I am now in a position to inform the honorable member that the regulations provide that any petty officer or man who wishes tomake any representation affecting his welfare, or who has any suggestion to make connected with the service may bring the subject to the notice of his divisional officer through his divisional petty officer. They also provide that, if any officer, petty officer, or man thinks that he has suffered any personal oppression, injustice or other ill-treatment, or that he has been treated unjustly in any way, he may make an oral request to see the captain to whom he may then make his complaint orally. If the complainant is not satisfied with the decision of the captain, he may complain to higher authority. In place of the system of welfare committees, which was abolished by the Admiralty in 1932, and the Naval Board in 1933, arrangements have been made for a periodical review of service conditions to be carried out by the Naval Board in accordance with admiralty procedure. Representatives of each division in a ship bring forward any requests to their divisional officer, which are considered by a ship committee. These are sent to the flag officer commanding the squadron, who establishes a fleet committee to consider and co-ordinate requests from all ships. He then makes his recommendations to the Naval Board. A review of service conditions took place in the latter part of 1935, and the decisions of the Naval Board on the various matters raised have been communicated to all concerned.
– On the 18th September, the honorable member for Watson (Mr. Jennings) asked the following questions, without notice : -
Can the Minister for Defenceindicate the carrying capacity of the flying-boats proposed to be employed in the England-Australia air service, as compared with that of the aeroplanes now in use? Will arrangements be made, for the seaplanes to be accommodated at Cook’sRiver, near Mascot, or in the Sydney Harbour, and will the new vessels be fitted with short-wave wireless equipment?
I informed the honorable member that the details to which he referred would be considered at a later stage, and that I would ascertain the carrying capacity of the respective aircraft. I am now in a position to inform the honorable member that under conditions providing for a nonstop range of 500 miles against a 40 miles an hour head wind, the “ Empire “ type flying boat was expected to have a commercial load in the vicinity of 6,860 lb. The actual performance and load capacity of this new type will not be known-, however, until the results of the recent official trials in England are available. At present, Imperial Airways Limited utilize different types of aircraft with varying load capacities on the EnglandSingapore section of the EnglandAustralia service. The D.H.86 aircraft used by Qantas Empire Airways Limited on the Singapore-Brisbane section of the route have a commercial loading of 1,680 lb. under conditions similar to those previously mentioned.
Airport for South Australia.
– On the18th September, the honorable member for Boothby (Mr. Price) asked the following question, without notice: -
I ask the Minister for Defence whetherhe will make inquiries as to the stage reached in the negotiations for an airport for South Australia? Is the honorable gentlemanaware that land is available for an airport in South Australia, and also for the necessary buildings for the manufacture of aeroplanes there?
I am now in a position to inform the honorable member as follows: -
The Commonwealth Governmentis not negotiating for the establishment of another airport at Adelaide. It is understood that no decisionhas yet been made in the negotiations between the Government of South Australia and the syndicate concerned for the establishment of an aircraft factory in the vicinity of Adelaide. The location of this aircraft factory is a matter primarily for consideration by the syndicate.
Broadcast of Speeches Through National Stations.
– On the 11th September, the Leader of the Opposition (Mr. Curtin) asked the followingquestions, upon, notice:
The information sought has been obtained from the Australian Broadcasting Commission, and I am now in a position to furnish the honorable member with the following answers to his inquiries : -
asked the Prime Minister, upon notice -
In view of the fact that on the 3rd May, 1932, the Postmaster-General (Mr. Fen ton) gave an undertaking to theHouse that no political propaganda would be allowed, and that equal opportunity would be given to all parties, will the Prime Minister see that facilities are provided for representatives of the Opposition to address the people over the national network on the various subjects which have been dealt withby himself, the AttorneyGeneral, the Minister for Defence and the Minister for Trade and Customs!
s. - No political propaganda has been engaged in on any subject dealt with by the Prime Minister, or any other Minister who has broadcast over the national broadcasting stations. The honorable member will observe, on perusal of the answer which has been made to the honorable the Leader of the Opposition by the representative of the PostmasterGeneral in the House of Representatives, that, so far as members of the Government are concerned, that has been the ease. These matters pertaining to the programme services of the national stations are theresponsibility of the Australian Broadcasting Commission. nuffieldgift.
– On the 18th September, the honorable member forFawkner (Mr. Holt) stated that the budget papers showed a balance of £41,000 in the Lord Nuffield Gift Fund, and asked whether that fund is at present lying idle or is being used.
In accordance with the Government’s policy, the money donated by Lord Nuffield was vested in the Minister for Health as trustee, and is beingused as the capital of the fund. Bothinterest and capital will be expended gradually over a period of five years. The gift was received in March, 1935, and was invested in Commonwealth inscribed stock. No expenditure was incurred prior to the 30th June, 1935. Up to the 30th June, 1936, the receiptsof interest of the fund were £1,368 and the expenditure £9,008, leaving a balance of £42,280. It will be seen that the fund is not lying idle but is being used carefully to the best advantage. For a very full statement ofthe working of the fund I would refer the honorable member to the report of the Australian Conference on CrippledChil- dren held in Canberra in April last, copy of which can be consulted in the Parliamentary Library.
Cite as: Australia, House of Representatives, Debates, 23 September 1936, viewed 22 October 2017, <http://historichansard.net/hofreps/1936/19360923_reps_14_151/>.